According to the weekly news letter Offshore Alert a publication based in the US which keeps a close eye on the financial services industry here and in other offshore jurisdictions, ex-Segoes director James Fontanetta has settled with liquidators.
The former director of what was allegedly a fraudulently-operated, offshore stock-brokers has agreed to pay US$74,000 said to be some 75 percent of his total assets, and to settle a civil complaint brought by the firm’s liquidators.
As part of his settlement agreement, James Fontanetta has also agreed to co-operate with the liquidators’ investigation into the business affairs of SEGOES Services Ltd which was based in the Cayman Islands, and the civil prosecution of the company’s principal, John Kaweske, Off shore Alert reported.
Liquidators Kenneth Krys and Christopher Stride, of RSM Cayman Islands, obtained a default judgment against Mr Fontanetta at the Grand Court of the Cayman Islands on 22 September last year, “for his part in the failure to implement proper systems and controls and allowing assets of the Company to be misappropriated”, the liquidators had said.
So far the liquidators have also reached settlement agreements with Howard Gostfrand and SEGOES’ insurer, Great Lakes Reinsurance (U.K.) Plc.
According to the liquidators. Gostfrand, who allegedly received illegal transfers from John Kaweske, has agreed to pay US$250,000, plus interest, while Great Lakes, against whom the liquidators were seeking US$2 million, has agreed to pay US$300,000.
Gostfrand has paid US$100,000 already and will pay the balance in eight quarterly installments of US$18,750.
The ultimate net insolvency of SEGOES is still unclear but the newsletter stated that the liquidators expect it to fall between US$4 million and US$9.5 million.
September 30, 2006, the liquidators controlled assets totalling US$1,981,551 but almost all of this, US$1,964,438, is already spoken for by Campbells and RSM, who have deferred fees and costs of US$1,114,761 and US$849,677, respectively, leaving SEGOES with a net asset position of just US$17,113.
