Olint anger

CREDITORS hoping to recover money from failed investment club Olint were left disappointed and angry yesterday after liquidator John Connolly told them he had so far only identified US$10 million in liquid assets, less than a sixth of total claims.

Connolly made the revelation at two meetings with club members held at the Jamaica Conference Centre in downtown Kingston.

"I've spoken to the creditors today... I met with the unsecured creditors and I met with the trustee creditors," Connolly told the Observer after the meetings, which were closed to the media.

"We've identified US$6 million in the Turks and Caicos, US$4 million in the United States and we have additional amounts of approximately US$2 million which we think we can recover... and, of course, we are still working on the records to see what else is available," he said.

In a report published at the end of last year, Connolly deemed Olint -- an unregulated financial organisation which was operated by David Smith -- a Ponzi scheme purporting to make high returns from foreign currency trading.

"The pattern of receipts and payments indicates that the main function of the Hallmark/Olint account was to collect money from members (US$220 million) and then meet redemption requests from members (US$156 million)," Connolly said in the report. "We can find no evidence in our analysis of the source and application of funds of any trading profits being received in the bank account to meet these redemption requests."

He said 6,000 people had invested US$220 million in the operation and that 376 people had claimed some US$67 million since it folded.

Members of the club openly expressed anger as they left the Conference Centre after the meetings -- some expressing bitterness at the proceedings, some towards Smith and some, even, towards the Government.

"It was garbage," said one man who declined to give his name, adding that he invested "millions of dollars" in the club.

"The long and short of it is that there is no money... after hearing that, I'm even less hopeful than I was before," he added.

One woman, who said she called in "sick" at her place of employment just to attend the meetings, told the Observer she was even more frustrated because the liquidator had indicated to members that trustee creditors would get preferential treatment on claims.

According to Olint TCI's website, Trust Fund beneficiaries are claimants who had deposited funds directly to Hallmark Bank & Trust Limited in the Turks and Caicos Islands between the period April 2006 and July 2008 and had entered into a Private Club Members Agreement with Olint TCI. On the other hand, unsecured creditors are claimants who also entered into a Private Club Members Agreement with Olint TCI, but did not deposit funds directly to Hallmark.

"Basically, there is no money to pay the unsecured creditors," argued the woman, who said she and two family members invested US$30,000 in Olint.

When the Observer relayed these allegations to Connolly he said: "The legal advice that we have... separated the claims between the trust beneficiaries and unsecured."

Many Olint members have expressed concerns over how Connolly is handling the matter and have openly called for the appointment of a replacement. Questions have also been raised by creditors about how much money Connolly is being paid for the liquidation, which, they claim, is a significant amount.

"Questions were asked about how much the liquidators are paying themselves but they didn't disclose that," said one irate club member who attended the meeting.

Olint emerged with a bang on the local financial scene several years ago after attracting thousands of investors with an offer of 10 per cent per month return on investments. However, under mounting pressure in Jamaica because of its unregulated status, Smith moved Olint's operations to the Turks and Caicos Islands in 2008, where he shortly after ran into legal troubles. He and his wife, the principals of Olint, were arrested and slapped with several criminal charges in relation to investors' money.

Smith and his wife are to face the courts in the Turks and Caicos Islands in March after posting bail.

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