Two Florida men charged with grand larceny allegedly stole $6.5 million from their bankrupt offshore investment fund - Evergreen Security Ltd. - which was withdrawn from an account at Bermuda's Bank of Butterfield Ltd.

Reuters reported yesterday that the two financial advisors, Anthony Huggins, 63, of New Smyrna Beach, Florida and Jon Knight, 56, of Sorrento, Florida are each charged with one count of grand larceny which carries up to a 25 year prison term on conviction.

The two men were indicted on Wednesday and pleaded not guilty at their arraignment. The defendants were released until September 5, when they have to post a fully secured bond or cash of $1 million and surrender their passports. Both men are to appear before Manhattan Supreme Court Judge Harold Beeler on September 18 when motion schedules will be set.

Evergreen Security was marketed as an off-shore investment fund for individuals and claimed to invest in US mortgage-backed securities, promising a ten to 12 percent annual rate of return, prosecutors said.

According to the Manhattan District Attorney, thousands of investors from around the world lost $214 million.

Evergreen filed for Chapter 11 bankruptcy protection in Florida early last year.

Three other men, William Zylka, James Conroy and Martin Boelens, Jr., who worked with the Florida advisors, were charged in earlier indictments by the Manhattan District Attorney's office. Zylka pleaded guilty to fraud and faces up to 18 years in New York state prison; Boelens also pleaded guilty and faces up to 15 years in prison while Conroy is awaiting retrial.

Two other Evergreen trustees, Robert Boyd, 55, and Thomas Spencer, 51, both of Orlando, have pleaded guilty to federal fraud charges in Tampa.

Beginning in late 1997, Knight and Huggins, working with the trustees, took $6.5 million from Evergreen in the guise of a loan to pay off an earlier $2 million loan. Knight and Huggins transferred the money to Mateaka, Ltd., a Bahamas-based holding company the two owned but which had no assets and no business interests, prosecutors said.

The defendants then were accused of using Mateaka to pay off the $2 million loan and transferring $4 million to other entities owned by Evergreen trustees - including a separate Orlando-based financial services company operated by Boyd and Spencer and a Costa Rican shell holding company.

Knight and Huggins pocketed the remaining $500,000 for themselves, according to prosecutors.

Evergreen's investments, including the $6.5 million taken from an Evergreen account at the Bermuda-based Bank of Butterfield, were maintained at the Bank of New York in Manhattan.

Calls made to the Bank of Butterfield were not returned yesterday.