The Financial Intelligence Unit v Finance Investment Management Ltd and Another (Civil Side No. 103 of 2011)  SCSC 58 (18 September 2011);
THE REPUBLIC OF SEYCHELLES
IN THE SUPREME COURT OF SEYCHELLES HOLDEN AT VICTORIA
Civil Side No. 103 of 2011
The Financial Intelligence Unit===========================Applicants
Finance Investment Management Limited===============Respondent No.1
Trading Financial Services Limited===================Respondent No.2
Barry Galvin for the Applicant
This is an application for an interlocutory order pursuant to section 4 of the Proceeds of Crime (Civil Confiscation) Act, hereinafter referred to as POCA, seeking to prohibit the respondents or any person having notice of this order from disposing of or otherwise dealing with or otherwise diminishing the value of the sums of money found in the euro and dollar accounts of the respondents in Barclays Bank (Seychelles) Ltd, hereinafter referred to as specified property. The applicant seeks a further order pursuant to section 8 to appoint Liam Hogan, Deputy Director of the applicant, as a Receiver of the specified property subject to further orders of this order. The applicant is a statutory body. The respondents are registered as international offshore companies in Seychelles.
This application had been made by notice of motion with a supporting affidavit sworn by Mr Liam Hogan. In spite of service the respondents did not appear at the hearing of this application. There is no evidence from the respondents.
Mr Liam Hogan believes that the respondents are in the possession of property in their accounts with Barclays Bank (Seychelles) Ltd which constitutes directly or indirectly benefit from criminal conduct or was acquired wholly or in part, with or in connection with property that constitutes, directly or indirectly, benefit from criminal conduct. The said property is in excess of R50,000.00.
The case for the applicant is that both respondents are beneficially owned by one person, who is the only director thereof, a Mr Fredric Varini. It came to the knowledge of the applicants over public media that Mr Varini and three associates were arrested in Bretagne, France and indicted for organised fraud, money laundering, and illegal practice of Bank. Mr Liam Hogan believes that the Respondent no.1 is involved in a ‘ponzi’ type fraud scheme. He describes it in the following words,
‘This is a well known and persistently successful fraud (the conviction and sentencing of Bernad Madoff is a recent example) whereby a victim is persuaded to pay over large sums of money in exchange for spectacular returns, usually monthly after a short intervening period. Money received from the capital sums paid in by subsequent investors is used to pay returns to some of the early investors thereby giving the scheme credibility and multiplying the numbers of investors. In reality there is no “marvellous” investment, the monies are mis-appropriated by the fraudsters and ultimately the scheme collapses and victims lose their money. It is believed that the large sums coming into the account of the Respondents are the fraudulently induced investments for a promised spectacular return, whilst the small sums being paid out to the same individuals who paid in are supposed to be payment for interest/profit. In certain cases a large payment is also paid out to those individuals, and these repayments constitute circumstance where the Respondents either had no alternative but to refund th sum back at which of course is from monies introduced by ‘other investors’ or in order to induce further investment from the relevant persons or create confidence in a particular area among a particular group of persons.’
An extract from the account of the respondent no.1 showing three examples of the said pattern has been annexed to the affidavit of Mr Hogan as well as other information.
I have examined the information that has been attached to the affidavit of Mr Hogan. The said information together with the affidavit of Mr Hogan are not challenged. I am satisfied that it is sufficient to lead to a reasonable suspicion that the specified property in this case constitutes directly or indirectly benefit from criminal conduct or was acquired wholly or in part, with or in connection with property that constitutes, directly or indirectly, benefit from criminal conduct.
I accordingly grant this application and issue the interlocutory order prohibiting the respondents or anyone having notice of this order from disposing of, or dealing with or diminishing the value of the specified property.
I appoint Mr Hogan, pursuant to section 8 of POCA to be the Receiver of specified property and to hold the same in an interest bearing account in Barclays Bank (Seychelles) Ltd until further orders of this court.
Costs will abide the final outcome of the proceedings in relation to the specified property in this case.
Signed, dated and delivered at Victoria this day of September 2011