November 19, 2010 / 12:09 AM / 9 years ago

Turks and Caicos transfers accused fraudster to US

* Jamaican banker accused of defrauding investors

* He allegedly ran large Caribbean Ponzi scheme

By Kevin Gray

MIAMI, Nov 18 (Reuters) - Turks and Caicos authorities on Thursday handed over to U.S. custody a Jamaican banker accused of running a Ponzi scheme that bilked investors in Florida and the Caribbean out of more than $220 million.

David A. Smith, who was serving a six-and-a-half year prison sentence in the British Caribbean territory for fraud and conspiracy offenses, faces charges in Florida of wire fraud, conspiracy to commit money laundering, and money laundering.

A team of U.S. federal agents traveled to the islands to pick up Smith, the U.S. Attorney for the Middle District of Florida said in a statement.

“Authorities in Turks and Caicos handed Smith over to U.S. authorities pursuant to an official request by the United States government for Smith to be brought to Orlando, Florida to face federal charges,” it said.

A banker, well-known philanthropist and supporter of a popular church attended by wealthy Jamaicans, Smith lured investors with promises his investments in foreign currency trading would provide monthly average returns of 10 percent, according to U.S. court documents.

He was charged in an Orlando court in August with four counts of wire fraud, one count of conspiracy to commit money laundering, and eighteen counts of money laundering.

If convicted, Smith faces a maximum penalty of 20 years in federal prison on each count, the statement said.

The case marked the latest high-profile Ponzi scheme to affect investors in Florida, who have been hit by fallout from the massive fraud scandals surrounding convicted Wall Street swindler Bernard Madoff and accused Texas financier Allen Stanford.

Many prominent Jamaicans, including leading politicians and doctors, were also among his victims.

Smith set up an investment house in Jamaica called Olint, offering to pool investors’ money. It was eventually shut down before he relocated to the Turks and Caicos.

He is also linked to a Florida currency trading company.

U.S. prosecutors say Smith used the money to bankroll a lavish lifestyle, including collections of gemstones and jewelry as he paid early investors with new cash from investors in a classic Ponzi scheme.

U.S. officials plan to confiscate a Florida house and jewelry, as well as tens of thousands of dollars that are tied to Smith, the statement said.

Smith would remain in custody in Orlando and will be brought before a federal judge, it said. (Editing by Pascal Fletcher)

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