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Fox In The Henhouse: Regulation..... Antiguan Style
23 July 2009
Article by Ian Moncrief-Scott
According to the CAFT/GAFIC Antigua & Barbuda Ministerial Report dated 23 June 2008 on Mutual Evaluation / Detailed Assessment Report on Anti-Money Laundering and Combating the Financing of Terrorism, the Attorney General is the individual charged with the responsibility for coordinating requests from overseas regulators and enforcement agencies.
"Concerning national cooperation and coordination, the role of the Attorney General's Office as policy maker is to assess and advise on the legal criteria on which cooperation and coordination are based. The Attorney General is a Minister of Government, and in this capacity he plays a direct role in shaping national cooperation and coordination policies. The Attorney General also serves as the central authority in money laundering and financing of terrorism matters."
Justin L. Simon, Q.C. is the Attorney General of Antigua and Barbuda.
He was appointed Attorney General by the Governor General as a Crown appointee, after a change of parties in power, following the elections of 2004. He is also the current Minister of Justice and Legal Affairs.
Not so long ago, another money-laundering scandal rocked Antigua's standing within the financial community.
Described at the time by the U.S. Department of Justice as "the largest case of non-drug-related money laundering every brought to justice", the case was significant enough to warrant inclusion in a report dated February 5, 2001, produced by the Minority Staff of the Permanent Subcommittee on Investigations, entitled Correspondent Banking: A Gateway to Money Laundering.
The Application to establish Hanover Bank Ltd., filed in August 1992, lists William Cooper and Justin Simon as the company's original "incorporators," as do that company's articles of incorporation.
Further confirmation comes from the Minority Staff report, stating that "the GOAB documentation corroborates this description of Hanover Bank's formation."
There is no legal instrument available to show how Michael Anthony Fitzpatrick, an Irish citizen, subsequently took control of Hanover Bank and served as its sole owner and chief executive from 1993 forward.
During the subsequent investigation, Simon recalled a transfer of shares to Fitzpatrick in 1993, and promised to look for the official notification to the Government of the change in bank ownership.
Although neither Fitzpatrick nor Simon ever produced documentation to substantiate any explanation of how Fitzpatrick assumed control of the bank, the investigation found no evidence to contradict the existence of such control.
Fitzpatrick, who describes himself as a sometime political advisor, with no educational background or previous banking experience, was accused of running Hanover Bank, licensed on Antigua but with no physical presence anywhere, from his home in Ireland. He denied this accusation by saying the Bank was "located in his attorney's office in Antigua, which [he] visited frequently".
The address for the Hanover Bank that can still be found on various websites was and is Chancellor Chambers, Island House, Newgate Street, St. John's Antigua. It was the address for the legal practice of Simon & Associates, subsequently changed to Simon, Fuller and Associates, and now known as Simon Rogers Murdoch.
In all the permutations, the Simon in the name of the firm is Justin L Simon, currently the Attorney General of Antigua and Barbuda.
According to the Subcommittee report, in or around 1991, Justin Simon was legal counsel to the Price Waterhouse office on Antigua. He was introduced to William Cooper by Don Ward, the Senior Partner of that firm. (It is interesting to note as an aside that Price Waterhouse was at that time and for over a dozen years, the official auditor of the Government books and accounts, which were never presented either to Parliament or to the people of Antigua.)
The U.S. Senate Subcommittee report further states that "Ward of PriceWaterhouseCoopers declined to cooperate with the investigation and so was unavailable to answer questions about his role in the Bank's formation."
For a while, William Cooper flourished on Antigua. His numerous financial enterprises included the Antiguan-American International Bank, of which he was the owner, Caribbean American Bank, of which he was listed as a Director. In addition to the Hanover Bank, he founded the Antigua Management Trust, which he ran with his wife, Ilse and in association with Bruce Rappaport's Swiss American Bank, another entity
At some time during the 1990's, Cooper's activity came under scrutiny of US Federal authorities.
As part of a general offshore banking reform effort, on 24 March 1997, the Government of Antigua issued a notice of intent to revoke Hanover Bank's License and, in fact, revoked it two days later.
The specified grounds were the bank's failure to pay its 1996 registration fees and its failure in 1992 to commence banking operations within six months of receiving its license.
But Hanover Bank refused to close. Justin Simon, the bank's local director and registered agent, filed suit in Antigua's High Court to overturn the license revocation. According to Simon, the case was heard by Justice Kenneth Allen in 1997.
Although the Government of Antigua "understood" that the court had overturned the revocation as a result of that proceeding, Simon indicated that Justice Allen did not actually issue a decision on the merits of the case.
According to Simon, Keith Hurst, then head of Antigua's International Business Corporation (IBC) Unit, unilaterally reversed the government's position and reissued the bank's license. The May 30 1997 certificate reinstating Hanover Bank's license is signed by IBC Director Hurst.
Another curious coincidence was that the Justice Kenneth Allen, who presided over the Hanover license case, is the same Kenneth Allen Q.C. of Montserrat, listed as the sole Caribbean member of the four-member Board of Directors of the Stanford Investment Bank.
Eventually, U.S. Federal Authorities officially charged William Cooper with various illegal practices, including scamming American investors specifically between the years 1994 and 1997, by taking advance payments for loans he only promised to secure.
He was indicted in Florida and an extradition request was made for him to stand trial in the U.S.
While Antiguan authorities were ostensibly prepared to comply with the request, actual extradition was blocked by a High Court Judge in Antigua on the basis that Federal officials in Florida applied for Cooper's extradition several weeks before Antigua had ratified its extradition treaty with the U.S.
Furthermore, the Judge agreed with the argument put forth by Cooper's attorney that Cooper's alleged crime was not illegal in Antigua at the time it was committed, since Antigua's Parliament only outlawed money laundering in 1998.
Cooper's defense attorney was Justin Simon's partner at the time, John Fuller.
In the hearing of the claims against Cooper in absentia, three frauds in 1998 alone, involving virtually all of Hanover Bank's clients and 100% of the funds it moved through a U.S. correspondent account, raised particular concern.
Together, they demonstrated that Hanover Bank's "inadequate oversight of its few clients, associates and transactions" contributed to fraudulent activity and multiple violations of banking, civil and criminal laws in the United States, United Kingdom Jersey and elsewhere.
While William Cooper and his wife continue to live freely on Antigua, all other named defendants in the matter have been convicted and sentenced to lengthy jail terms in the U.S.
The Hanover Bank was finally closed. Its name and address can still be found on a website listing Antigua's offshore banks. Its address is still the same as that of the legal office of Justin Simon.
Justin L. Simon continues to appoint and oversee regulators.
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