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New Details Surface In Second Caribbean `Ponzi Scheme`

CaribWorldNews, RALEIGH, North Carolina, Weds. July 8, 2009: A Raleigh, North Carolina banker, accused of running an $80 million Ponzi scheme which he fronted as the Millennium Bank of St. Vincent and the Grenadines, reportedly used the money to live a lavish lifestyle, attorneys freezing his assets say.

The lawyers documents, recently obtained by WRAL News, show that William Wise, 58, used about $5 million to $7 million to buy an estate in St. Vincent, where the bank was said to be based.

He also reportedly spent $1 million on wine, $40,000 a month on interest for a private plane and $400,000 to pay off his Raleigh mortgage.

His wife in Raleigh was paid $12,000 week, according to the documents cited, while an unknown number of female companions were each paid $6,000 to $10,000 a month.

Investigators alleged there is no evidence Wise made any investments for the people who trusted him with their money.

A federal judge has so far frozen Wise`s assets, including all property in his million-dollar west Raleigh home, and turned them over to a receiver to be auctioned off to repay investors.

The Securities and Exchange Commission filed suit in March against Wise and others, saying they were using the bank as a front for a Ponzi scheme that has stolen more than $68 million from 375 investors, including at least 12 in North Carolina.

The SEC suit alleges Millennium Bank advertised certificates of deposit that guaranteed 7 to 9 percent returns in luxury lifestyle magazines and on its Web site. The returns were more than four times the interest rates offered on CDs by most commercial banks, authorities said.

`As alleged in our complaint, the defendants disguised their Ponzi scheme as a legitimate offshore investment and made promises about exuberant returns that were just too good to be true,` said Rose Romero, Director of the SEC`s Fort Worth Regional Office in March. `This case demonstrates that investors need to be especially cautious when placing money with entities that may be outside the reach of U.S. regulators.`

According to the SEC`s complaint, at least $68 million was raised from more than 375 investors since July 2004. Millennium Bank, a licensed St. Vincent and the Grenadines bank, solicited new investors for its CD program through blatant misrepresentations and glaring omissions in its online solicitations and in advertising campaigns targeting high net-worth individuals.

For example, in offering materials, Millennium Bank claimed that its parent, United Trust of Switzerland S.A., provides Millennium Bank with `over 75 years of banking experience, correspondent banking relationships, decades of knowledge in privacy and confidentiality as well as extensive training for our customer services professionals.` In fact, the SEC alleges, United Trust of Switzerland S.A. is not a Swiss-licensed bank or securities dealer. Potential investors visiting Millennium Bank`s Web site also were falsely informed that Millennium Bank is not affected by the global financial crisis and has a 100 percent client satisfaction record going back close to 10 years, and has its own affiliate asset management company with highly seasoned professionals who invest meticulously.

Critics say the island government failed to take strong action, even when its own regulators tried to close Millennium.

Prime Minister Ralph Gonsalves told The Associated Press in March, however, `The wrongdoing which has been alleged in the complaint has taken place in institutions based in the U.S.`

Wise has not been charged with a crime and the SEC charge is merely a civil case. The Wise case came on the heels of the Allen Stanford ponzi allegation. Stanford has been jailed until his trail.