Liquidators appointed for Segoes

Ken Krys, Joint Provisional Liquidator	John Kaweske, Segoes Chairman

Friday, May  6, 2005

After allegedly operating a Ponzi fraud scheme, where funds from new investors are used to pay off older investments, Segoes Services Ltd, an internet-based stock trading company, went into provisional liquidation on 29 April.

“This case has elements of a Ponzi scheme and outright fraud,” said Ken Krys, joint provisional liquidator for Segoes. “A typical Ponzi scheme is where new funds from individuals are misappropriated for return for initial investors. The payments continue to pay off earlier investors until they can no longer meet the payments and the whole thing falls apart.”

The joint provisional liquidation was initiated by two clients who received a letter from Segoes chairman, John Kaweske stating there was unauthorized trading on clients funds. Subsequently, two clients petitioned the Grand Court for joint provisional liquidators to be appointed.

One of their primary responsibilities is to find and protect any assets of the company for the benefit of creditors according to Mr Krys and Chris Stride, appointed as joint provisional liquidators. Additionally, Mr Krys contacted the US bank and security holders to get a freeze on assets and confirm they will comply with the order, which they expect to receive on Friday, 6 May.

Mr Krys further stated that on Saturday, 30 April he intercepted a Segoes employee at Sprint attempting to courier Segoes’ books and records off the Island. Although, he did not name who the employee was, he said it was not John Kaweske, who is believed to have left the Island some time ago. More books and records were obtained at their offices and the mailbox locally as well as an affiliate location in Belize.

He explained there are two entities, Segoes Services and Segoes Trust and there is evidence that funds have been moved from one company to the trust to allegedly defraud clients of their investment.

The total amount of money defrauded has yet to be determined, but the two clients who filed the initial petition are claiming US$400,000. Additionally, the total amount of assets are still being calculated but it is believed to be less than $10 million for both entities.

Meanwhile, the involvement of John Kaweske who has a history of regulatory litigation, as well as James Fontanetta and Rebeca Gonzalez have yet to be determined according to Mr Krys.

Additionally, he explained that they are petitioning the court to shorten the time period for putting the company into liquidation, which he plans to finish by the end of May.

“We want to rush to liquidation as quickly as possible since we will have more power as the official liquidators to examine witnesses and people who have evidence,” he said.

He further explained that a complicated investigation is going to be required to fully examine and liquidate the company.

Back...