Businessman accused of US fraud

  • Businessman accused: Gregory Tolaram is from Paget

    Businessman accused: Gregory Tolaram is from Paget

A Bermudian businessman has been accused in a $135 million fraud claim in the United States.

Great Western Insurance Company, based in Utah, has launched allegations against seven insurers and investment funds in Manhattan federal court last week.

Gregory Tolaram, from Bermuda, is listed as one of the defendants alongside parties from the Cayman Islands, Bahamas, the United States and Canada.

The complaint said: “This is an action for damages stemming from systematic breaches of fiduciary duty, fraud and other misconduct resulting in losses to Great Western that are in excess of $135 million.”

Mr Tolaram, a 54-year-old father-of-one from Paget, is the managing director of Mercury Group Ltd, Hamilton, which provides specialised management and administrative support to its family office and corporate clientele.

He has held a number of roles in Bermuda, including co-owner of the Louis Vuitton store, director of Atlantic Luggage Co Ltd, managing director of Hamilton Capital Ltd, and director and vice-president at Solar Enterprises Limited.

He is also on the board of trustees at Saltus Grammar School.

Offshore Alert, an online newsletter about the offshore financial world, outlined the documents filed with the Manhattan court.

The site said Great Western deposited $152 million into a trust account in return for reinsurance, at first provided by Ability Reinsurance (Bermuda) Limited and later Cayman-based Alpha Re.

Great Western said it “does not know the whereabouts” of more than $135 million of the money that should be in the trust account.

It accused the defendants of providing false accounting statements to hide “misconduct, breaches of fiduciary duty and fraudulent activity”.

Alpha Re was formed in Cayman in 2011 and its website lists Mr Tolaram as one of its directors, along with Edward Lynch, of the Bahamas.

The Alpha Re page said: “Mr Tolaram is managing director of Mercury Group Limited, based in Hamilton, Bermuda since 1996.

“Mercury Group is a management company which provides corporate and specialised support to its funds and family office clientele.”

Offshore Alert reported that Alpha Re went into voluntary liquidation in January after the federal court in Manhattan upheld a $127 million arbitration award Great Western obtained in New York.

Saltus Grammar School’s website said: “Gregory Tolaram has been involved in the financial services industry for over 25 years and in the private equity industry since 1986.

“Gregory’s passion is design and building and during his long career in finance, he and his counterparts sponsored and developed several commercial and residential projects in London and Europe. Gregory is married to Molly and they have one young son.

“They support a number of charities and travel often to see contemporary art and design exhibitions.”

The other defendants in the case are Mr Lynch, Alpha Re Limited, Alpha Re Holdings (Cayman) Limited, Atlantic Specialty Finance, Blue Elite Fund LP, Blue Elite Fund Ltd, Blue II Ltd, and Sancus Capital Blue Credit Opportunities Fund Ltd, all of the Cayman Islands,

Also included were John Drake, of Ontario, Canada, Mark Graham, Donald Solow, Ability Insurance Company, Blue Alternative Asset Management LLC, Blue Capital Management Inc, Christiana Trust, Cygnet 001 Master Trust, Cygnet 001 Master Trust Series 2011-A, Cygnet 001 Master Trust Series 2011-C, Cygnet 001 Master Trust Series 2013-A, Regatta Holdings LLC, and Wilmington Savings Fund Society, FSB, all of the United States.

It is The Royal Gazette’s policy not to allow comments on stories regarding court cases. As we are legally liable for any libellous or defamatory comments made on our website, this move is for our protection as well as that of our readers.

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