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Following a paper trail across two continents, U.S. and British fraud investigators have moved to subpoena accounts in Miami and San Antonio in their search for at least $240 million allegedly swindled from investors. Documents filed in federal court in Miami this month by the U.S. Attorney’s Office describe a huge, still-evolving scam in which a confederation of con men allegedly peddled bogus “high-yield” bonds to well-heeled victims in the United States and the United Kingdom. British prosecutors are considering possible criminal charges of conspiracy to defraud and money laundering against 11 U.S. and British citizens named as targets of the investigation, according to court papers. In Miami, authorities are after the financial records of a Houston-based entity, the Avenger Fund, described in court papers as a recent twist in the fraud in which fund units were pitched to investors as a quick way to rack up large returns of up to 100 percent a year. The Avenger Fund had a bank account at Citigroup Private Bank in Miami, “into which it is believed that investors’ funds were deposited and transferred as part of the overall fraud scheme,” Assistant U.S. Attorney John J. Delionado told U.S. District Judge Ursula Ungaro-Benages this month. A spokesman for the U.S. Attorney’s Office declined to comment. An executive with Citigroup Private Bank in Miami referred comment to a regional Citigroup spokesman in Palm Beach County. The spokesman did not return telephone calls before deadline. Among those who apparently lost big money was Norris McWhirter, the founder of the Guinness Book of World Records, who died in April. The London Sunday Telegraph reported that McWhirter filed a �500,000 claim in February in the forced liquidation of English accounting firm Dobb White & Co. after the Financial Services Authority — the British equivalent of the Securities and Exchange Commission — accused the firm of “running an unlawful investment scheme.” “To date, some 700 victims have been identified as depositing approximately $240 million into bank accounts controlled by the suspects using numerous companies set up around the world to disguise the nature of their criminal activities,” Delionado said in court filings. An FBI investigation and civil proceedings brought by the British Serious Fraud Office “have caused the suspects to set up different companies and investment ploys in order to continue their fraudulent practices,” Delionado said. UNDER MICROSCOPE The Avenger Fund account at Citigroup Private Bank, on the 31st floor of the Miami Center, was one of many corporate accounts set up to around the hemisphere to “facilitate the fraud,” the Miami court papers say. Gary McDuff, a U.S. citizen, and Terence de’Ath, a trustee of the Avenger Fund, established those accounts not only in Florida and Texas, but in California, Costa Rica, Mexico, Belize and Panama, the court papers say. There was no answer at a phone number for the Avenger Fund’s Houston office. Citigroup’s international private banking operations recently have been the focus of controversy. Citigroup agreed in September to close its private banking operations in Japan after regulators there found that bank employees had failed to prevent transactions tied to possible money laundering, and extended loans to manipulate a publicly traded stock. Sought in Texas were Wells Fargo bank records about Secured Clearing Corp., a company that Delionado said was “established and controlled by the conspirators” and through which “large amounts of victims’ money were moved.” “The request from the Serious Fraud Office is seeking information on the bank account[s] mentioned above in order to determine the size of the fraud and the source and disposition of the funds invested by the victims,” the court papers said. British law enforcement asked for U.S. assistance under the terms of a mutual aid treaty. By law, federal district judges must approve all requests from foreign countries to appoint a “commissioner” with the power to collect evidence and interview witnesses in the U.S. As judges here routinely do, Ungaro-Benages approved the arrangement. Delionado was appointed commissioner on Oct. 13. TIE TO FAMED COMPOSER At the top of the list of those being considered for prosecution in Great Britain is Shinder Singh Gangar, 43, a partner at the now defunct Dobb White accounting firm. Other Dobb White partners, who like Gangar are British nationals, identified in the court papers as suspects are Alan White, David Taylor, Rhys Roberts and Michael Steptoe. The Financial Services Authority began to scrutinize Dobb White in 1998 after learning the firm had accepted investment deposits and put the money into a number of corporate bank accounts in the Channel Islands. At the time, neither the firm nor Gangar were authorized to take such deposits, the court papers said. In January 2001, the Serious Fraud Office raided Dobb White’s offices, as well as the homes of Gangar, White, Taylor and Roberts. More evidence of an ongoing investment scheme was found, the court papers say. Later that year, Gangar and White were charged with laundering the proceeds of crime, according to the Times of London. Last month, however, a judge threw out the charges after the Crown Prosecution Service took too long to bring them to trial, according to Accountancy Age of London. “The trail should have been brought in a reasonable time,” Gangar was quoted as saying. “This would have enabled me to clear my name and attempt to reverse the negative publicity in time to limit the massive damage caused.” He also demanded an apology from British law enforcement officials, according to Accountancy Age. While out on bond, Gangar and White channeled about $2 million into Oscar-winning composer Andrew Lloyd Webber’s Really Useful Group, mostly to fund a tour of the stage musical “Sunset Boulevard,” the Times reported in December 2002. Lloyd Webber told the newspaper that he barely knew Gangar. Gangar is identified in the Miami court papers as having worked with one of two U.S. suspects in the fraud, Terence Dowdell, to trick investors into thinking that one bogus company used in the bond trading scam, Emerged Markets Securities, was legitimate. “We suspect that Gangar and Dowdell sought to deceive the victims by allowing them to believe that they were associated with a genuine company known as Emerging Market Securities LLC, which had offices in New York,” wrote Richard Day, an investigative lawyer with the Serious Fraud Office. Dowdell, identified in the Miami court papers as having controlled bank accounts that received “a substantial portion” of the defrauded funds, was sentenced to 15 years in prison in June by a federal judge in Charlottesville, Va. Earlier, Dowdell had pleaded guilty to charges related to a Ponzi scheme he ran that cost investors as much as $70 million.

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