guilty to securities fraud, conspiracy to commit fraud and money laundering, according to the monthly newsletter Inside Bermuda.

The publication states that US businessman Michael Gause changed his plea to guilty on six counts on January 3, 2001 and is due to be sentenced on May 4.

He faces up to 20 years in prison and a fine of double the $300 million lost on the scheme by thousands of victims.

The Bank of Bermuda is currently defending itself from three separate suits in relation to the Cash 4 Titles. The bank's Cayman offices was the banker for the pyramid scheme operation.

On Monday The Royal Gazette reported that almost half of the $300 million "may have passed through the Bank of Bermuda (Cayman) Ltd.'' according to the bank's shareholder report.

The bank claimed that as soon as it became aware of the ponzi scheme, it conducted an investigation and fired three members of staff from Cayman.

The bank, in its annual report, reiterated its intention to "defend the cases vigorously''. It has denied any wrongdoing 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 cheques to financial institutions in the United States to perpetuate the business.

The scheme was allegedly the brainchild of businessman Gause, who was indicted in the US in October 1999 on conspiracy, securities fraud and international money laundering.

Forty-five year-old Gause said he "transferred much of the ($300 million) to an offshore account at the Bank of Bermuda''.

Scheme accused pleads guilty According to the complaint, Gause and partner Charles Horna raised funds from investors from the mid 1990s to October 1999, by offering returns of between two and 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''.

BUSINESS BUC