Local gets prison time in Ponzi scheme
A Lake Oswego man was sentenced to six years in jail Monday, after pleading guilty of being involved in a $170 million investment scheme.
Laurent Barnabe, 68, of Lake Oswego, got six years and an additional three years of supervised release.
Barnabe, who is a Canadian citizen, was also ordered to forfeit his interest in money held in a foreign bank account and to pay restitution of more than $26 million.
In the sentencing in U.S. District Court in Portland, federal prosecutors described the scheme as 'easily the largest Ponzi scheme in the history of the District of Oregon and one of the most devastating anywhere.'
Barnabe was one of four Oregonians who promoted a $170 million fraudulent investment scheme in the name of the First International Bank of Grenada.
Also sentenced were Robert J. Skirving, 59; Douglas Ferguson, 74, and Rita Regale, 54, all of Portland.
Skirving was sentenced to eight years, to be followed by a three-year term of supervised release. He was ordered to pay restitution of more than $32 million.
Ferguson was sentenced to four years, followed by a three-year term of supervised release. He was also ordered to pay restitution of more than $26 million.
Regale was sentenced to a year and a half, followed by a three-year term of supervised release. She was ordered to pay restitution of more than $32 million.
The sentencing followed an eight-year investigation and prosecution into a fraud scheme operated out of Grenada with ties to Oregon.
The defendants were indicted in October 2003 on conspiracy, fraud and money laundering charges arising out of the creation and promotion of the First International Bank of Grenada.
Established in 1997, FIBG offered interest rates to depositors as high as 300 percent. It claimed to have earned more than $12 billion in high-yield trading, and to have acquired assets in excess of $26 billion.
In reality, it was a Ponzi scheme, attracting deposits of approximately $170 million dollars and using that money to make phony interest payments to depositors, invest in phony high-yield investment schemes and pay significant sums to the defendants.
Some of the money generated by persuading victims to roll-over pension and IRA money into FIBG. When FIBG was taken over by the Grenadian government in August 2000, it had less than $2 million in real assets.
Several Oregon depositors lost significant sums of money. The prosecution was undertaken in Oregon because almost $50 million dollars raised during the scheme were funneled through a bank account in Forest Grove.
The government outlined the extravagant spending by the defendants:
n Barnabe purchased a $350,000 yacht he called the 'Offshore Funs,' and wire transferred more than $1 million from Grenada to accounts in Austria.
n Skirving purchased a $1.3 million home in Clackamas, and a $2.8 million home in Las Vegas. He also invested more than $1 million in an organic tomato farm in Mulino, Ore.
n Regale chartered private planes to travel between Grenada and the U.S. at a cost of $30,000 per trip, purchased three Mercedes at a cost of approximately $200,000 and rented a beachfront home in Naples, Fla., for more than $300,000.
n Ferguson and his girlfriend received more than $25,000 per month during their involvement in the scheme.
'Through their deceitful scheme, the defendants shattered the retirement hopes and dreams of thousands of victims throughout the world to lavishly enrich themselves,' stated U.S. Attorney Karin J. Immergut. 'This was an extremely difficult case that required federal prosecutors and agents from the Internal Revenue Service/Criminal Investigation Division and the Federal Bureau of Investigation to relentlessly hunt down evidence all over the world.'
In addition to contacting and coordinating with thousands of victims worldwide, the investigation required several unusual steps, including obtaining the bank's records from Grenada, locating and seeking forfeiture of assets throughout the United States, Grenada, Austria and Uganda, and the arrest of two people - one of whom was Douglas Ferguson - in Uganda in early 2004.
In preparation for trial, witness depositions were taken in Grenada, Barbados, Canada, and Britain. In addition to these defendants, four other individuals - including two attorneys - have been charged in related indictments or as part of getting them to cooperate.
The case was prosecuted by Assistant U.S. Attorneys Claire M. Fay and Kent S. Robinson, and U.S. Department of Justice Fraud Section Attorney Amanda Riedel.
'This case demonstrates the level of greed and manipulation that some individuals will go to when placing their own financial welfare above that of their clients,' said Kenneth J. Hines, the IRS special agent in charge of the Pacific Northwest.