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French Push Money Laundering, Fraud Charges Against Rbc Trust Bahamas

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Royal Bank of Canada’s (RBC) Bahamian trust subsidiary is fighting a French prosecutor’s recommendation that it be charged with tax fraud “complicity” and “aggravated money laundering”.

The disclosure, made in a Wednesday results filing by RBC’s Canadian parent, reveals that the case centres on Royal Bank of Canada Trust Company (Bahamas) and one of its trust clients.

The regulatory filing says French prosecutors have recommended to a judge that the Bahamian trust company and others face these charges.

But Royal Bank of Canada Trust Company (Bahamas) made a counter-submission on February 13 to the French judge, arguing that it should not be charged, and that they should reject the prosecutor’s case.

The RBC filing said: “In January 2015, a French investigating judge notified Royal Bank of Canada Trust Company (Bahamas), an indirect subsidiary of RBC, that the French Public Prosecutor’s Office had issued a recommendation to the French investigating judge that RBC Bahamas and other unrelated persons be referred to the French tribunal correctional to face criminal charges for complicity in tax fraud, and for aggravated money laundering, relating to actions taken relating to a trust for which RBC Bahamas currently serves as trustee.

“On February 13, 2015, RBC Bahamas made a submission to the investigating judge stating why it believed it should not be charged as recommended by the French Public Prosecutor’s Office.”

The RBC filing added: “RBC Bahamas is currently awaiting the decision of the investigating judge, who may either take no action or issue an ordonnance de renvoi, which would result in RBC Bahamas being referred to the French tribunal correctionnel to face one or both of the criminal charges recommended by the French Public Prosecutor’s Office.

“RBC Bahamas believes that its actions did not violate French law. If charges are brought, it intends to contest them in the French court.”

RBC is in the process of exiting its Caribbean wealth management business, and there is nothing to suggest that this matter involving Royal Bank of Canada Trust Company (Bahamas) had anything to do with the decision, given that it was taken before the French prosecutor made their recommendations.

Still, the matter will be more unwelcome publicity for the Canadian institution’s Bahamian operations, which were caught up in the “massive wash trading scheme” that saw RBC pay a $35 million civil fine to US regulators.

While RBC “neither admits nor denies” the allegations levied against it by the US Commodity Futures Trading Commission (CFTC) lawsuit, both parties agreed that the bank’s Bahamas branch was one of the counterparties involved in the block trades of derivatives contracts.

The consent order reveals that between June 1, 2007, and May 31, 2010, RBC entities executed 1,026 such transactions, which featured derivative products based on futures contracts involving shares in US and UK companies.

The 1,026 transactions were executed through RBC’s branches in the Bahamas and Cayman Islands, and routed through its internal trading accounts, with the Caribbean entities trading with the bank’s UK and Luxembourg entities.

Comments

Well_mudda_take_sic 6 years, 6 months ago

Bahamas incorporated financial institutions are being picked off left right and centre by foreign courts that serve the interests of their foreign governments and the carnage continues to take a most serious toll on high paying Bahamian jobs and our economy. Meanwhile, our dimwitted lamed brain PM, Perry Christie, preoccupies himself with the creation of Carnival as the single most important economic initiative for our rapidly failing economy. Yessiree, our PM, better known as Perry "VOMIT" Christie, now has most literate and fair minded Bahamians puking their guts out in utter disgust at his bungling ineptitude and disgraceful incompetence!! We are in desperate need of a small team of mercenary former Navy Seals who will do the right thing by all hard working and fair minded Bahamians to restore civility to our society and financial stability to our economy. Hopefully the U.S. is on top of this as Mr. VOMIT continues to push the Chinese for whatever he and his select group of friends can get.

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banker 6 years, 6 months ago

The domiciled Canadian banks are finally waking up to the fact that the world have changed. The Bank of Montreal (now BMO) which used to operate here, sold its business and it became Bank of the Bahamas. It saw the writing on the wall long ago. The writing on the wall is this: "The concept of a tax haven is a dead man walking.". Countries no longer can thumb their noses at other countries financial, tax and currency laws in this global village with the global treaties for Anti-Money-Laundering, Criminal Rackets etc.

In the old days, the mob came to the Bahamas or went to Cuba to generate gambling money. Casinos were outlawed in the US. They were welcomed there until Fidel came to power. We started holding the wallets for people hiding money from their taxman. We called it financial services. It's real name name was "Avoid Taxation and Subsequent Prosecution". We bet our future on it. It was sort of winked-at. It was like smoking cigarettes -- all of the sophisticates did it. Well it turns out that smoking is now regulated and so is tax evasion and the lesser tax avoidance.

The global moving of funds by terrorist groups, drug cartels and criminal elements necessitated the regulation of tax shelters and the movement of money. We are still living in the past hoping and praying that it will all fix itself.

Because we have become accustomed to thumbing our noses at the laws of other countries, we have come to believe that it is our God-given right to do anything that we please, and call it a pillar of the economy.

Even the village idiot (Perry Christie included) will eventually notice that what we call "Financial Services" will eventually dwindle away to nothing.

The ironic bit, is that if settled down, revamped and modernised the infrastructure and became centres of banking excellence, we wouldn't need to be a tax haven. We could be an international banking centre for trade and commerce, and we would be sought-after if we did not expose ourselves to the vagaries of the large American banks. But we always did go after the low-hanging fruit. The low-hanging fruit gets rotten the quickest.

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Well_mudda_take_sic 6 years, 6 months ago

The lucrative offshore tax avoidance business that the Bahamas previously enjoyed still exists today and is actually thriving in places like New York, Delaware, Nevada, London, Paris, etc. All the while the IMF, FATF, OECD, etc. were promising our government a level playing field, these agencies or instruments of the highly developed countries were busy pushing the offshore financial centres to adopt new legislation and policies designed to move the offshore tax avoidance business onshore for their own economic benefit. The wealthy continue to avoid taxes today just as much as they did yesterday. The big difference though is that most of the high paying jobs associated with the tax avoidance business are now onshore rather than offshore, leaving us poor suckers in the islands with an ever diminishing portion of the lucrative pie that was once ours. These same agencies (IMF, World Bank, WTO, etc.) are now working hand in hand with their masters (the highly developed countries) to keep our hospitality industry under their control, to take away our utility enterprises via PPPs, and to exploit every other natural resource that the Bahamas has.

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banker 6 years, 6 months ago

You said the magic words "Tax Avoidance". That is legal. What the Bahamas specialises in, is "Tax Evasion". That is illegal. That was the lucrative pie, and now it is not.

I agree with the sentiment that tax avoidance professionals are now onshore.

You mention that the IMF, World Bank, WTO are working with their masters. I might point out (albeit redundantly) that these are not independent agencies, but ARE operating arms of the highly developed countries (G8, etc).

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