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Bahamas police investigate wire fraud against international investor
Published on January 31, 2014 Email To Friend    Print Version

By Alison Lowe
Nassau Guardian Business Editor

NASSAU, Bahamas -- Police have confirmed an ongoing international investigation into how an RBC Royal Bank customer in The Bahamas, who is also an international investor in the country, had over $300,000 in funds transferred from his account to a bank in Singapore following what he claims were fraudulent emails sent to RBC (Bahamas).

guy_gentile.jpg
Guy Gentile
In documents obtained by Guardian Business, Nathaniel Beneby Jr., managing director, RBC Royal Bank, Bahamas, Cayman and Turks and Caicos Islands, thanked Guy Gentile for his “patience and understanding” in the matter in April 2013, telling him that the case was also subject to an internal investigation by the bank’s Trinidad-based fraud management and corporate investigation unit.

The funds, totalling $303,150, were transferred in three tranches from Gentile’s RBC account to accounts in Singapore in late March 2013. Following complaints from Gentile, founder of online brokerage Suretrader.com, and the Sur Club Sushi restaurant, both based in the Elizabeth on Bay Plaza, Beneby had the funds reimbursed to Gentile’s account on June 13, 2013.

Yesterday Gentile said that the incident caused the company to have to delay paying 15 staff, and could have led to a shutdown in business if he did not have enough capital remaining at hand to meet regulatory requirements of brokerage firms.

“Luckily we had enough net capital to where we didn’t have to close down. If we didn’t have the capital in our firm we would’ve had to close down; we have to have a certain amount to operate as a brokerage. $300,000 is a lot of money to a relatively new firm; we were only one-and-a-half years in business. We were still trying to build out our office and expand. It took them three months to put the money back,” said Gentile.

Laying out the events in an April 6, 2013, letter to The Central Bank of The Bahamas’ Bank Supervision Department, Gentile claimed the three transfers executed by RBC – one of $89,000, one of $129,000 and one of $85,000 – came about despite a number of “inconsistencies” in the format of the transfer requests they received, purporting to be from him.

Outlining the “inconsistencies” that he suggested should have led to a decision by RBC to decline or question the transfers, Gentile said that the emailed requests were “not in the normal format” he would use to send them; they were addressed to someone he would not normally send wire requests to; they were larger than the normal amount, which is usually around $5,000; they included email addresses for him and a work colleague that were not correct; they were to a destination that Suretrader’s parent company, Swiss America Securities, “has never sent” wire transfers; and they were done based on emails which didn’t have his standard signature or footer.

Outlining how he believed the fraud was carried out, Gentile noted that on March 25 the domains sureetrader.com and stockusaanc.com were registered – the same as domain names representing his companies, but with one letter added in each case.

Two fake email addresses were then created, closely resembling his and his chief compliance officer’s addresses, but again, with one letter added.

From these email addresses, letters requesting the wire transfers were forwarded to RBC (Bahamas) on a “forged” Swiss America Securities letterhead.

He said the entire affair caused him stress, money and hurt his reputation with his employees and clients.

The investor said he is disturbed that he has not yet heard of any outcome from police or an internal RBC investigation into the matter, suggesting that someone should be held responsible for the incident, which he believes shows that the banking system in The Bahamas may not be as secure as it should be.

He also pointed to an email seen by Guardian Business where Beneby declined a request by Gentile to meet with him at his office, in which Beneby called the request “unusual.”

“At that moment I had $5 million at my bank, but my request was ‘odd’ to meet with him. If I had a client I would fly to meet with him.”

“They left it off where they said ‘Hey, here is your money back and we’re still looking into this’. And that’s it,” he said. Gentile has since closed down all of his accounts at the bank.

In a statement sent to Guardian Business late Tuesday afternoon, RBC said that the matter is under investigation by the authorities and therefore it “cannot provide any information or elaborate on this situation.”

“We can advise that RBC takes the privacy and security of clients and the bank very seriously. It’s a cornerstone of our business and remains one of our highest priorities. We have a team of fraud experts dedicated to preventing, detecting and investigating fraud. Additionally, we continually invest in fraud prevention and detection technology and we will continue to develop measures to counter future attempts made by individuals with criminal intent,” said the statement.

The bank added that fraud is a “global issue” and it works hard to protect its clients from such crimes.

“Employee training, tight internal procedures, customer awareness programs and co-operation with governments and law enforcement agencies are all part of our efforts. Despite the best prevention efforts, some fraud still occurs. In cases of confirmed fraud, clients are protected, funds will be reimbursed, and we will do whatever else is needed to protect our clients and the bank,” it said.

Assistant Superintendent Matthew Edgecombe, officer in charge of the Business Technology Crimes Unit of the Royal Bahamas Police Force, confirmed that the police investigation into Gentile’s case remains “open”.

Republished with permission of the Nassau Guardian
 
Reads: 3155





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