Alleged Montana Ponzi schemer operator had accounts at Bank of Bermuda
A front company belonging to Ponzi scheme operator Daniel Two Feathers had accounts at the Bank of Bermuda, according to Montana District Court documents.
Two Feathers faces up to 20 years in prison after admitting running a scam conning $2 million out of investors by falsely promising huge returns on their investments.
Of those profits, $1.1 million was yielded through front company TLT Holdings, which had accounts in Bermuda, according to Two Feathers' Offer of Proof, which was filed when he pled guilty to a string of offences earlier this month.
Montana State Auditor Office has previously said cash Two Feathers tricked out of investors was wired to a Bank of Bermuda account belonging to Bermudian Andre Curtis' company Harvest Investment Holdings.
Two Feathers' Offer of Proof states: “Using a front company called TLT Holdings, Two Feathers told investors that his programme was producing very large rates of return buying and selling US Treasury Bonds.
“TLT Holdings had accounts at the Bank of Bermuda, the Bank of New York and at DA Davidson in Montana.
“Approximately $850,000 of the monies provided to Two Feathers from this stage of the scheme was frozen by DA Davidson when Two Feathers attempted to get the money out of the country and into Switzerland into accounts under his control.
“That portion of the scheme attracted four investors and grossed $1.1 million between August and September 2008.”
The document states that another $800,000 was claimed from investors through another scheme, run jointly by Two Feathers, and brokers Shawn Swor and Terrance Paulin.
It provides a rundown on how that scam came about in early 2008.
Mr Swor is described as a “hard money lender” who provided high interest rate loans to people who couldn't get bank loans.
He teamed up with Mr Paulin after promoting himself on the internet as someone who could find sources of funds and people wanting to borrow money, according to the statement.
Two Feathers admits he then got involved after claiming he knew how to generate cash flow by providing large rates of return for investors and brokers.
In February 2008, the trio set up a company called DTF Consulting Group in Montana to offer high yield investments.
The following month, Two Feathers met with potential investors in Denver, Colorado, and claimed to be an international financial trader with Wachovia Bank, promoting a leveraging investment opportunity promising remarkable profits within 30 days.
In April, Two Feathers and Mr Swor promoted the scheme to potential investors in Nashville, Tennessee, according to the document.
It states: “One witness to this meeting indicated that Swor represented that he had made millions from the investment scheme that he and Two Feathers were promoting.”
Mr Paulin is then said to have manufactured a fraudulent letter of credit from Wachovia Bank, in the amount of $1.5 billion, to show DTF had cash to make its programme work.
In June 2008, Mr Paulin and Mr Swor fell out with Two Feathers and stopped promoting the DTF scheme after the letter of credit was shown to be bogus and handed over to police.
Between February and June 2008, 11 victims handed over a total of $800,000.
Montana deputy security commissioner Lynne Egan has previously said Mr Curtis, the Progressive Labour Party local campaign manager for former Premier Ewart Brown, helped operate the scheme both independently and in conjunction with Two Feathers.
Mr Curtis falsely promised investors that the purchase and sale of US Treasury Strips on a daily basis would result in double and triple digit rates of return, said Ms Egan.
Ms Egan said:
* Pennsylvania-based Dream Foundation, a non-profit group, lost $100,000 which ended up in Harvest Investment Holdings' bank account;
* John Sheaffer, the CEO of Illinois-based Sysix Technology, who committed suicide as his business suffered financial difficulties in December 2008, reported grave concerns about what happened to the money he invested in Harvest Investment Holdings as part of the scam;
* investor Eric Schultz named Mr Curtis as the account manager he dealt with most of the time in relation to the scheme;
* investor Ida Brown of Texas said Mr Curtis signed a document indicating he was a trustee of DTF Consulting Group.
Mr Curtis has previously been fined $335,000 by the Montana Commissioner for helping run the Ponzi scheme, and jailed for 15 months by the Bermuda courts for operating an unlicensed investment business. Mr Curtis has not been charged by the federal courts.
Two Feathers is awaiting sentence in June for admitting conspiracy to commit investment fraud, investment fraud, receipt of stolen property and money laundering.
The Montana Commissioner has previously ruled against Two Feathers, Mr Swor, Mr Paulin and a number of co-conspirators. Federal prosecutors have also charged Mr Swor and Mr Paulin.
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