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Lawyer Frank Elizabeth wins another case against FIU!

Prolific lawyer Frank Elizabeth has won another case against the Financial Intelligence Unit (FIU) last week. The FIU is the unit set up by the government within Central Bank to monitor and prosecute money laundering cases amongst other criminal activities. The Unit is essentially run by three Irish nationals, Declan Barber, Director, Liam Hogan, Deputy Director and lawyer Barry Galvin. This brings the total cases won by Elizabeth against FIU this year alone to two. This also reflects the efficiency and speed with which the Chief Justice is dispensing with his cases. Sadly, the same thing cannot be said about the other judges of the Supreme Court. It is to be remembered that Elizabeth represented another company, Mares Corp Ltd recently and on the 4th June 2012, FIU was ordered to release the bank account of the company after Elizabeth successfully argued that the freezing order issued by FIU against his client’s bank account was unlawful. FIU appealed against the judgment and on the 21st June 2012 Justice Fernando ruled against FIU stating “The Applicant cannot make freezing orders and then drag its feet in obtaining the orders under sections 3, 4 and 5 of POCCA as happened in this case. This will seriously affect the credibility of the FIU and have drastic consequences on the offshore banking industry.” On the 28th September 2012, the Chief Justice Frederick EgondeNtende, ordered FIU to unfreeze the bank account of Cyber Space Ltd, a Russian owned company,“immediately.” It is to be noted that both Mares Corp Ltd and Cyber Space Ltd maintained bank accounts with BMI bank, a bankmanaged by Seychellois Frank Hoareau, and it is indeed that bank which issued a Suspicious Transaction Report (STR) to FIU which resulted in FIU freezing both accounts. Whilst the account of Mares Corp Ltd had a balance of $1.2 million, the case of Cyber Space Ltd concerns the sum of $235,000.00 which FIU alleged was the proceeds of crime. FIU even brought one witness from UK, at great expense, to prove that the company was involved in online piracy and that the proceeds in their bank account were obtained as a result of such illegal activity. However, when the case was eventually heard by the Chief Justice FIU failed to prove their allegation and the company was able to show that the money in their bank account was payment from another company Darton Software Ltd for advertising on their website, www.torrent.net.

In conclusion, the Chief Justice lamented the effectiveness and efficiency of FIU’s investigation when he stated “Before I take leave of this matter I find it somewhat odd that no report was made to the Serious Fraud Office in the United Kingdom by the Financial Intelligence Unit to report what they perceive to be a serious offence committed in the United Kingdom.”

LNSW asked Mr. Elizabeth to comment about his recent victory and he said thus: “It is my personal opinion that the laws governing the offshore banking in Seychelles are too draconian in nature and it is about time that the government conducts a comprehensive review of those legislations. Justice Fernando has even stated in one of his judgments that the Anti-Money Laundering (Amendment) Act “is very poorly drafted.” The Financial Services Sector is a very important industry for this country and we risk losing out to our competitors if we continue to intimidate investors and grab their money on the pretext of money laundering.” Earlier this year, Mr. Elizabeth also represented EODC Operations Ltd represented by Mr. Marc Davison and managed to get an order from the Supreme Court infavour of his client compelling the Liquidator, Mauritian Gerald Lincoln, to pay his client the sum of SCR 125, million and $1 million. FIU has intimated to the Court that they intend to appeal against the judgment in the case of Cyber Space Ltd.

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