Two top officials in Cayman Islands financial management firms appeared in court on charges of money laundering in an alleged pyramid scheme in which Bank of Bermuda (Cayman) is said to have had a "primary role''. The ponzi scheme is said to have cost thousands of victims $300 million and allegedly the Bank of Bermuda (Cayman) has been closely linked to the scheme. The Bank of Bermuda (Cayman) Ltd has been named as one of eight defendants in the class action lawsuit in the United States by the investors. The two men to appear in court in the Caymans are Lewis Denton Rowe, of Zephyr International Ltd., and Patrick Tibbetts, of Everest Management. They were charged with money laundering in connection with a business known as Cash 4 Titles in 1996 and 1997. Earlier this month, Bank of Bermuda confirmed a suit had been filed and said it therefore could not comment. It also denied that the action could be detrimental to its efforts to list on the Nasdaq Exchange. In a lawsuit filed recently in Miami, more than 1,000 former clients of Cash 4 Titles charged that the company was a $300 million pyramid scheme, in which a business uses the money of new investors to pay returns to older investors until the money runs out, leaving newer investors with little or not. The Miami lawsuit also named the Bank of Bermuda (Cayman) Ltd. as playing a primary role in Cash 4 Titles, by allegedly soliciting money for the business and wiring money and sending checks to financial institutions in the United States to perpetuate the business. The bank denied any wrongdoing. Magistrate Nova Hall granted Rowe bail of Caymanian dlrs 2.5 million ($3.1 million) bail and Tibbetts bail of dlrs 500,000 ($625,000). The alleged scheme was the brainchild of businessman Michael E Gause, who was indicted in the US last October on conspiracy, securities fraud and international money laundering. Forty-four year-old Gause said he "transferred much of the ($300 million) to an offshore account at the Bank of Bermuda.'' According to the complaint, Gause and his partner Charles Horna raised funds from investors from the mid 1990's to October 1999, by offering returns of two to five percent per month or 24 to 60 percent annually. Cash 4 Titles was allowed to charge its US customers loan interests of up to 25 percent per month. This fact made investors in the scheme believe that the returns touted were achievable. But instead of using the monies raised to fund the high interest short term loans as they had purported, Gause and Horna were charged with using the money for themselves.

The US complaint stated that senior officers of the Bank of Bermuda (Cayman) were also early investors in the scheme and had made "handsome returns on their investments''. It alleged that officers personally met with prospective investors, to assure them of the legitimacy of the scheme. According to archives in The Royal Gazette Mr. Rowe was also linked to troubles at Hemisphere Management (Cayman), which is owned by Bermuda-based holding company Hemisphere Group Ltd. back in 1995. A petition was launched in the Caymans to wind up the joint venture. According to the president of Hemisphere Chris Wetherhill at the time, the company was experiencing difficulty obtaining day to day operational detail about new clients generated by Mr.

Rowe, his Cayman partner. COURTS CTS