News about the Cayman Islands in the Foreign Press

Thursday  March 31, 2005

South Florida financiers charged in alleged Cayman investment scam 

MIAMI, USA – According to the Miami Herald, two South Florida financiers, who enticed thousands of Latin Americans to invest $127 million in funds with patriotic names like ‘’Liberty Trust,’’ were charged Tuesday by the Securities and Exchange Commission with running a ‘’sham’’ program to enrich themselves.

District Judge K. Michael Moore, responding to the SEC complaint, froze bank accounts and other assets belonging to Cornide and de la Riva, issued restraining orders and appointed a receiver for a string of their companies incorporated in Florida and the Cayman Islands.

The pitch to investors for the variable annuities that included pension plans and life insurance seemed red, white and blue. Besides naming the company, Pension Fund of America, the two funds were called Liberty Trust or Capital Trust. They were told that huge banks or brokers such as HSBC or Raymond James, were custodians of their money or partners, which was untrue, the complaint said.

The two men never disclosed that as much as 90 percent of their funds - or in one case, the entire investment, were eaten up by commissions for more than 500 sales agents in Central and South America, or for fees and other costs, according to the complaint.

The complaint also alleges that Cornide and de la Riva misappropriated more than $15 million for themselves.

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