Police make arrest in fund fraud

George Town (CNS): An unnamed 47-year-old man has
been arrested on suspicion of theft, false accounting and uttering
false documents in connection with the collapse of the ‘Grand Island
Fund’. The Royal Cayman Islands Police Service (RCIPS) said the arrest
was made yesterday (Wednesday, 16 July) as part of investigations into
the collapse of the local funds by the Financial Crimes Unit (FCU ).
The man has been released on bail pending further enquiries.

In a statement concerning the arrest, the FCU said the collapse of the
funds is thought to represent millions of dollars and that the FCU was
unsure how many people are affected by its collapse. Investigations
are ongoing into the matter and detectives would like those with
information or knowledge to come forward. Anyone who can assist should
contact Detective Sergeant Claire Jackson on 949-8797.

The RCIPS did not state exactly which of the funds – Grand Island
Commodity Trading Fund I, Grand Island Commodity Trading Fund II, and
Grand Island Income Fund, which were registered by CIMA in 2006, and
Grand Island Master Fund, which is unregulated – the arrest related
to. However, the funds are interlinked.

David Walker and Nicholas Freeland were appointed by the Joint
Voluntary Liquidators (JVL) in the wake of the voluntary liquidation
last month of all four funds, which were domiciled in the Cayman
Islands. At least one was founded and directed by local businessman
Naul Bodden, and CNS understands that Close Brothers (Cayman) Ltd were
the Fund Administrators. Not only were the funds locally managed, a
considerable number of local investors are also said to be involved
and to have lost significant amounts of money.

Last week, PwC Corporate Finance & Recovery (Cayman) Ltd, wholly
owned by PricewaterhouseCoopers Cayman Islands, was appointed as
Receiver over various accounts held at ScotiaMcLeod in Canada, which
are believed to be related to the funds. PwC said that this would
facilitate the repatriation of monies currently held in accounts in
Canada back to the Cayman Islands until the proper allocation is
determined. The liquidators were expecting to have made an application
to the Grand Court to have the funds placed under its supervision and
heard this week.  

Anyone with information about crime taking place in the Cayman Islands
should contact their local police station or Crime Stoppers on
800-8477 (TIPS). All persons calling crime stoppers remain anonymous,
and are eligible for a reward of up to $1000, should their information
lead to an arrest or recovery of property/drugs.