SEC accuses Caribbean bank of $68 mln Ponzi scheme

WASHINGTON, (Reuters) – The US Securities and  Exchange Commission accused Caribbean-based Millennium Bank and  its Swiss parent of running a $68 million Ponzi scheme that  misled investors about high returns on certificates of deposit,  the SEC said yesterday.

A federal judge in Texas agreed to halt Millennium’s sales  of certificates of deposit that offered returns up to 321  percent higher than those offered by typical banks, the SEC  said in a statement.

“The defendants disguised their Ponzi scheme as a  legitimate offshore investment and made promises about  exuberant returns that were just too good to be true,” said  Rose Romero, head of the SEC’s regional office in Fort Worth.  “This case demonstrates that investors need to be especially  cautious when placing money with entities that may be outside  the reach of U.S. regulators.”

The SEC lawsuit accused Millennium of raising at least $68  million from more than 375 investors since July 2004.
Millennium, which is licensed in St. Vincent and the  Grenadines, solicited new investors for its certificates of  deposit program through “blatant misrepresentations and glaring  omissions” in online solicitations and ads that targeted  wealthy investors, the SEC said.

For example, Millennium touted a 75-year banking record of  its parent, United Trust of Switzerland SA. But United Trust is  not a Swiss-licensed bank or securities dealer, the SEC said.

The SEC lawsuit also accused William Wise of Raleigh, North  Carolina, and Kristi Hoegel of Napa, California, with  orchestrating the scheme through Millennium and United Trust.  Also charged were Hoegel’s mother, Jacqueline Hoegel; Brijesh  Chopra; and Philippe Angeloni, the SEC said.

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