Depositors and creditors of Millennium Bank Inc. – an offshore bank that had its licence revoked for its alleged involvement in a US$68 million fraud scheme – have less than two weeks to file their claims with the Joint Liquidators (JLs) of the institution.{{more}}

A public notice issued by the St.Vincent and the Grenadines International Financial Services Authority (IFSA), states that the JLs have requested creditors complete a sworn Proof of Debt form and provide documentation supporting their claim against the Bank.

“The sworn Proof of Debt forms must be returned to the JLs by the 15th of October, 2010 (Bar date),” stated the notice that was issued on August 13, 2010.

“Only claims against the Bank will be dealt with through this process. Where funds were not deposited with the Bank, a creditor’s claim is likely to be against another Wise entity and not a claim against the Bank,” the notice outlined.

The JLs have to date recovered assets in excess of US$700,000. Further asset recoveries of approximately $430,000 are said to be progressing.

IFSA disclosed that the costs of the insolvency administration (including both the provisional liquidation and liquidation) is expected to total at least $832,000. However, the JLs have distributed approximately $100,000 to creditors in accordance with legal and local statutory requirements.

But while the JLs have received unsecured creditors claims totaling approximately US$12 million, it is said that the majority of these claims do not appear to relate to deposits made with the Bank.

“The documentation received by the JLs indicates that funds were deposited with other entities connected to William J. Wise (“Wise” -Owner of the bank), although in some cases it is not clear which Wise entity received the funds,” said IFSA in its report.

The information received has shown that to date, approximately US$417,000 of depositors’ claims received by the JLs appear supported by evidence of a deposit with the Bank.

However, unless further assets are recovered, the first and potentially final distribution is expected to be made within three months of the deadline date, October 15, 2010.

IFSA in its report disclosed that so far, 123 depositors have contacted the JLs to lodge claims against the Bank. These claims total approximately US$12 million. Of these, the majority (107) appear to have claims against United Trust Switzerland or Sterling Bank & Trust, rather than the Bank, IFSA stated.

IFSA stated in its notice that it is anticipated that, by the conclusion of the liquidation, the JLs will have recovered approximately US$1.2 million.

“Creditors with claims against other Wise entities may be able to prove in the insolvency administration of other Wise entities, notably those under the control of the US Receiver, Mr. Richard Roper (www.tklaw.com/millennium—bank—receivership.cfm),” said the IFSA notice.

IFSA’s action to revoke the license of Millennium Bank Inc. was based on the findings of Kris Beighton and Charles Thresh of KPMG who were appointed to act as joint receivers before being made JLs of the Bank.

There findings revealed unauthorized activity by the Bank during the period January – March, 2009.

The U.S Securities and Exchange Commission (SEC) alleges that the ponzi scheme targeted U.S. investors and misled them into believing they were putting their money in supposedly safe and secure certificates of deposit (CDs) that purportedly offered returns that were up to 321 percent higher than legitimate bank-issued CDs.

The SEC’s claims that William J. Wise of Raleigh, N.C., and Kristi M. Hoegel of Napa, Calif., orchestrated the scheme through Millennium Bank, its Geneva, Switzerland-based parent United Trust of Switzerland S.A., and U.S.-based affiliates UT of S, LLC and Millennium Financial Group. In addition to Wise and Kristi Hoegel and these entities, the SEC has charged Jacqueline S. Hoegel (who is the mother of Kristi Hoegel), Brijesh Chopra, and Philippe Angeloni for their roles in the scheme.

According to a complaint filed by the SEC’s, the monies accumulated by the scheme were raised from more than 375 investors since July 2004. Millennium Bank, is claimed to have solicited new investors for its CD programme through “blatant misrepresentations and glaring omissions in its online solicitations and in advertising campaigns targeting high net-worth individuals”.

For example, in offering materials, Millennium Bank claimed that its parent, United Trust of Switzerland S.A., provides Millennium Bank with “over 75 years of banking experience, correspondent banking relationships, decades of knowledge in privacy and confidentiality as well as extensive training for our customer services professionals.”

The SEC, however, alleges, United Trust of Switzerland S.A. is not a Swiss-licensed bank or securities dealer.

It is said that potential investors visiting Millennium Bank’s Web site, also were falsely informed that Millennium Bank is not affected by the global financial crisis and has a 100 percent client satisfaction record going back close to 10 years, and has its own affiliate asset management company with highly seasoned professionals who invest meticulously.