Two Bermuda-based businessmen - Paul Lemmon and Andrew Proctor - have been arrested in a white collar crime bust after a lengthy undercover operation in the US.

The two were included along with 58 other people who were criminally indicted over the past two days according to the indictments issued by the US District Court for the Southern District of Florida.

It was not clear yesterday if the men were arrested in the US or Bermuda, and if they had been detained.

A spokeswoman at the Court for the Southern District of Florida was unable to reveal details of the arrest at press time last night.

Both Mr. Lemmon and Mr. Proctor are cited, in the indictment, as directors of Bermuda-based investment firm the Voyager Group.

A Paul Derome is also named in one of the indictments, as president of a New Anaconda Company (NANA) out of Salt Lake City, Utah. Voyager is named as a corporation with its principal place of business in Bermuda, and "purported to be a full-service financial services company".

Court papers also state that Voyager was a member of the Bermuda Stock Exchange, although The Royal Gazette company withdrew its listing last year, which may have been based on the company having its licence under the Investment Business Act revoked by the Bermuda Monetary Authority. The firm was a one-time listing sponsor on the Bermuda Stock Exchange.

Mr. Lemmon, 39, and a former employee of the Bank of NT Butterfield, was named in three separate indictments while Mr. Proctor was named in two. Both are charged with securities fraud, mail fraud and wire fraud, according to court papers obtained by The Royal Gazette.

The undercover operation, according to court papers, involved cooperating witnesses and an undercover Federal Bureau of Investigations (FBI) agent in Florida posing as a corrupt securities trader for a fictitious stock mutual fund on behalf of a number of investors who had invested approximately $800 million in the fund.

The criminal allegations made against the men date from early December, 1999 through to this year.

A number of overt acts are alleged in the court documents, including telephone conversations with Mr. Lemmon "in which he expressed a general interest in committing securities fraud with the cooperating witnesses".

In another instance, Mr. Lemmon was said to have sent a CD ROM regarding NANA to a witness and undercover agent by private carrier from Bermuda.

NANA was not traded on an exchange but was publicly traded in the US on an over-the-counter security exchange.

The firm reportedly purported to be in the business of turning fly ash into gold.

Mr. Lemmon was also named last month in an investigation centred around Mark Valentine, a once respected head of a Toronto brokerage Thomson Kernaghan & Co. Ltd. The Ontario Security Commission's statement of allegation named Mr. Valentine as being behind several Bermuda companies - including VC Advantage (Bermuda) Fund Ltd. and the Hammock Group Ltd. which received $1.3 million for a defunct debenture of an inactive company - but also named Mr. Lemmon.

At that time the Bermuda Monetary Authority (BMA) indicated that to its knowledge Voyager was not operating or at the very least "had no authority to conduct licensed investment business."

A reporter from The Royal Gazette also visited Voyager's penthouse offices at 129 Front Street and found the company was open for business.

Attempts to contact the BMA's Superintendent of Banking, Trust, and Investment Munro Sutherland yesterday were unsuccessful.