Mystery surrounds the arrest of a New Zealander in Long Island, New York on Monday who is accused of bilking customers in a phoney hedge fund allegedly headquartered in Bermuda.

Derek Turner is accused of running Turning International Ltd. ? which allegedly has a subsidiary in Long Island.

But can find no such company as Turning International Ltd. on the Register of Companies and all companies with ?Turning? and ?Turner? in their names had no relation to the alleged fraudulent hedge fund.

The Bermuda Monetary Authority does not have Turning International Ltd, or any companies with Turner in their name as a registered investment company, nor does it appear on their warning list of entities that are not incorporated in Bermuda and are not licensed to conduct any form of regulated financial services business in or from within Bermuda.

The investigating authority, the US Federal Bureau of Investigation (FBI) did not immediately return calls about the case yesterday. Turner was arraigned Monday in the US District Court in Central Islip on fraud charges, pleaded not guilty and was held without bail.

According to news reports about Turner?s arrest, the FBI alleges that a man and his son invested $1 million with Turner who claimed the fund was managing $500 million when in reality the firm?s bank account only contained $300,000.

It also emerged yesterday that Turner may have been fingered by Barry Minkow, a San Diego-based evangelical minister who also runs a side business that helps authorities track down stock swindlers who often prey on Church groups.

Minkow may have tipped the FBI about Turner?s sham hedge fund which promised investors a 40 percent return on their investment.

While this may seem a strange side business for a minister, Mr. Minkow has an intimate knowledge of stock swindling.

Before becoming a man of the cloth, Mr. Minkow started a carpet cleaning business ? ZZZZ Best ? in the 1980?s when he was just a teenager.

While the business was built on inflated revenues and outright fictitious business dealings, the company held an initial public offering in 1987 that valued the company at more than $210 million.

During his 1988 securities fraud trial, Mr. Minkow admitted stealing his grandmother?s jewellery to help finance his failing business.

He was found guilty of 57 counts of securities, credit card and mail fraud and had even used mob money to help plug the holes in his sinking business according to testimony in his 1988 trial.

Mr. Minkow was released from prison in 1995 after serving seven years and moved to California where he became a minister.