Money Laundering By Minneapolis Money Managers?
Five Minnesota money managers and a dozen business entities including The Oxford Private Client Group of the Van Dusen mansion in Minneapolis, have been sued by 57 investors for alleged securities fraud. The Minneapolis Star Tribune wrote about the lawsuit in "Investment fraud suit grows more complex" and earlier on July 12, 2009.
The investors' second amended complaint at part 1 and part 2 herein, pleaded causes of action for: fraud, conversion, civil theft, negligent misrepresentation, civil conspiracy, deceptive trade practices, breach of contract, and breach of fiduciary duty. It asserted that the money managers had converted about $16 million belonging to the investors by inducing the investors to place monies in a foreign currency arbitrage program.
This second amended complaint specifically claimed that some of the money managers had aired radio broadcasts to solicit investments for the foreign currency arbitrage program. One money manager reportedly described this arbitrage program to two investors, by drawing what might be nothing more than a meaningless link chart:
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The second amended complaint also specifically identifies three bank accounts through which $190 million was allegedly transferred to the money managers over the last two years. (Second Amended Complaint, at pp.132-133 ¶¶ 615-616). One of these accounts is alleged to have been maintained in the name of Crown Forex LLC at Associated Bank, which has more than one million bank customers in Wisconsin, Illinois and Minnesota.
As a July 23, 2009 letter partly reveals, the bank signatories for the Crown Forex LLC account at Associated Bank, are believed to be money manager Patrick Kiley and his assistant Julia A. Smith:
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(To Enlarge The Letter, Click On It)
The second amended complaint meanwhile alleges that Crown Forex LLC is a "non-existent, non-registered entity" located in Minneapolis at 5413 Nicollet Avenue, Suite 14-- which is a supposed fictitious address. (Second Amended Complaint, at p. 135 ¶ 635 & p. 18 ¶ 61).
If true, these allegations could raise the question: Whether Associated Bank followed a written Customer Identification Program and the customer verification procedures mandated by 31 CFR 103.121 ¶ (b) (2) (i), when Crown Forex LLC opened its bank account? Such allegations might too raise another question: Whether the Crown Forex LLC account was a nominee bank account at Associated Bank, used by the money managers for money laundering?
Images: U.S. District Court File
(Edited January 8,2010)
Copyright 2009 Fred L. Abrams
