By NEIL HARTNELL
Tribune Business Editor
US authorities are attempting to seize $1.4 million belonging to a brokerage firm run by two indicted Bahamians, alleging that bank activity was “consistent with the layering of criminal proceeds”.
Documents obtained by Tribune Business disclose that bank accounts belonging to Titan International Securities, the Belizean broker run by Bahamians Kelvin Leach and Rohn Knowles, were also targeted by Danish law enforcement.
Thomas McGuire, a Federal Bureau of Investigation (FBI) agent, revealed that a court-ordered asset freeze was obtained against Titan’s bank account by Denmark on September 19, 2014, on the grounds that it contained proceeds from suspected money laundering.
Mr McGuire’s affidavit, filed in the eastern New York district court on October 29, 2014, reveals that Titan’s account with Belize-based Saxo Bank is among nine that US federal authorities are attempting to seize in connection with an alleged $500 million money laundering scheme and related securities fraud.
Referring specifically to Titan’s bank account, Mr McGuire alleged that the “sole signatories” were Messrs Leach and Knowles.
He claimed that other accounts owned by Titan received funds from the Saxo-based facility owned by the Bahamians’ broker/dealer.
“For example, on or about April 9, 2014, approximately $1 million was transferred from the Titan Saxo account to Belize Bank account number..... held in the name of Titan Securities International,” Mr McGuire alleged, “through one or more US correspondent accounts.
“In addition, on or about April 25, 2014, approximately $749,992 was transferred from the Titan Saxo account to the Titan Belize Bank account through one or more US correspondent bank accounts.”
Mr McGuire then alleged: “These funds are believed to include funds received from clients in connection with the fraudulent scheme.
‘The international transfer of funds from the Titan Saxo account to the Titan Belize Bank account with no apparent legitimate purpose is consistent with the layering of criminal proceeds.”
The McGuire affidavit then revealed that the Danish Prosecutor for Serious Economic and International crime had obtained a court order to restrain, or freeze, the Titan Saxo account on the grounds that it contained “property involved in money laundering activity”.
Referring to the September 19 order, the FBI agent said: “Danish law enforcement authorities restrained assets.... valued at approximately $1.4 million in the Titan Saxo account, pending further action by the US.”
Messrs Leach and Knowles, together with four other individuals and a host of corporate entities, including Titan, have been charged with perpetrating the scheme that involved at least 100 US clients seeking to evade taxes and conceal the proceeds from alleged securities fraud.
Messrs Leach and Knowles were arrested by the Belize authorities on September 15, as they sought to leave the country via private jet. Tribune Business understands the duo were mulling whether to return to the Bahamas and fight US attempts to extradite them from here.
Financial services industry sources familiar with the duo have revealed that Mr Leach once worked as an inspector for the Securities Commission, examining the regulator’s licensees to ensure they were in compliance with all laws and supervisory norms. Once source even recalled Mr Leach ‘leading’ the regulator’s examination of his firm.
Mr Knowles, meanwhile, is understood to have been a former employee at RoyalFidelity Capital Markets, where he worked as a securities trader, before he made his way to Belize. Mr Knowles is understood to have family connections to Sir Garet ‘Tiger’ Finlayson.
Meanwhile, the McGuire affidavit reveals how the FBI conducted a more than two-month ‘wiretap’ of phones belonging to Titan and other individuals/entities in the alleged scheme. Some 2,000 phone calls were intercepted and monitored.
Both Messrs Leach and Knowles were listened to, confirming wire transfers and taking trading orders, some from clients engaged in tax evasion and money laundering.
And some 248 boxes of documents, and 58 computers and electronic storage devices, have been seized by the Belizean authorities in their search of offices belonging to Titan and other entities allegedly involved in the scheme.
The indictment against Messrs Leach and Knowles alleges that they and Titan aided a fraudulent scheme devised by a US citizen, Robert Bandfield, and his Belizean partner, Andrew Godfrey.
The US district attorney for eastern New York, Loretta Lynch, alleged in a previous release: “Bandfield and his co-conspirators devised not only a fraudulent scheme but an elaborate corporate structure, based on lies and deceit, designed to enable US citizens to evade and circumvent our securities and tax laws.
“They set up sham companies with figureheads at the helm in an attempt to deceive US law enforcement and regulators, and bragged about their scheme to their clients.
“Today’s sweeping indictment, charging the individuals and companies responsible for this $500 million scheme, closes this fraudulent offshore safe haven and sends a strong message to those who seek to abuse the financial markets in order to enrich themselves that we will investigate and prosecute them no matter where they set up shop.”
The US attorney’s office is alleging that more than 100 US citizens and residents benefited from the scheme.
Jacon Frankel, a US attorney said to be representing Titan and its Bahamian principals, previously said his clients had no notice of the charges. He promised they would respond, and be “exonerated”.