Sanctuary Bay Saga: AIBL Appeal
As we wait for the management plans, let us move laterally to an Appeal Case brought by the defendant Atlantic International Belize Limited (AIBL) earlier this year and ended a couple weeks ago in June. Going back to last year November 2018, AIBL had alleged innocence in any Real Estate Fraud. The disgraceful record of being involved in the largest International Real Estate scam in US history isn’t an appealing tag.
In the USA this is usually deemed a White Collar Crime. The persons involved are usually the Chief Executive Officers, Finance Officers, Brokers, Bankers, Lawyers, Clerks and other non-manual labour.
The Sanctuary Bay Enterprises (SBE) Scam is so unreal for Belizeans because of the international flavour and how deeply it went. Usually the land it simply just taken, sold for a few thousand, resold secretly and then government compensates someone, maybe $400,000, because they need to acquire it for public purpose.
The illegality and complexity of the SBE procedures are nonetheless real and they hurt people in this case American retirees thinking of heading to the jewel. Ahead is an appeal case, which threads a little deeper into this Saga. Some of the details are not new but it is nevertheless part and parcel of, as said before, of a political game when the Prime Minister of Belize, in the wilderness of pre-referendum scurrying, stealthily stated that “The question is how to reconcile the FTC’s interest, as they put it, victim compensation and our interests which also has to be in their interest as well.”(May 6 days before the ICJ referendum)
This is still a live issue.
USCA4 Appeal: 19-1925
IN THE UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
FEDERAL TRADE COMMISSION, Plaintiff-Appellee,
ATLANTIC INTERNATIONAL BANK, LTD., Defendant-Appellant.
Whether the district court correctly asserted personal jurisdiction over appellant Atlantic International Bank, Ltd.
STATEMENT OF THE CASE (excerpts)
Atlantic International Bank, the appellant in this case, played a key role in assisting the Sanctuary Belize scam. Although it is chartered under Belizean law, Atlantic (AIBL) has no Belizean depositors or borrowers—by law it may transact business only with people who do not live in Belize.
- For years, Atlantic helped Sanctuary Belize sell its worthless plots, in return gaining access to the only customers it was legally entitled to serve.
- Sanctuary Belize lured consumers to buy properties in its phantom resort community through a multi-step process; Atlantic (AIBL) was there the whole time.
- Atlantic (AIBL) was a key part of the Sanctuary Belize sales pitch. Consumers are unlikely to buy bare land without believing that they can build on it. By partnering with Atlantic, Sanctuary Belize convinced consumers that they would be able to obtain construction financing, which was often essential to closing sales.
- Partnering with a local bank also served to make Sanctuary Belize appear more legitimate to consumers; Sanctuary Belize therefore included Atlantic in its marketing materials and its telemarketers touted Atlantic in their calls. (all AIBL)To draw them in, Atlantic (AIBL) developed a “special package” for Sanctuary Belize customers, giving them higher interest rates on deposits and offering construction loans with lower interest rates and more favourable loan terms.
- The latter offer, however, was largely illusory—Atlantic financed very few loans for construction in the doomed development. App. 2382. Nevertheless, it encouraged Sanctuary Belize customers to open multiple accounts, obtain credit cards, and even move their retirement accounts to the bank. To help Sanctuary Belize make property sales and sell the bank’s services, a team of Atlantic employees, including its CEO Ricardo Pelayo, traveled to California to personally train Sanctuary Belize’s telemarketers. App. 257; 300-363; 2383.
- Atlantic explained to the telemarketers: we really wanted to sit with you guys because we know that you do webinars with your clients before they come down to Belize, and we wanted to see if we could emphasize to them exactly what we are explaining to you so that when they come to Belize, they are really prepared for what is going to be coming on the banking side.
- Unknown to consumers, Sanctuary Belize often seeded tour groups with plants who were paid to attend and express enthusiasm about the project.
- Consumers who asked sceptical questions, meanwhile, were discretely removed from the group. App. 88. Sanctuary Belize customers reported that almost everyone who attended the tours ultimately purchased from Sanctuary Belize—and many of them also opened accounts with Atlantic. (AIBL)
- The relationship was productive for Atlantic, which saw its deposits grow by more than 15% in a single year and opened accounts for more than 100 Sanctuary Belize customers.
- In a whitepaper to the Belizean government, Atlantic’s CEO gushed: “Without a doubt, the success of Sanctuary Belize has contributed to our growth and raised the profile of our bank.”
- Atlantic’s services were vital to Sanctuary Belize because, as one of the heads of the scam put it, Atlantic was “the single bank that is willing to house our money.” App. 849. Through its correspondent banking relationships with U.S. banks, Atlantic facilitated more than 100 transfers for Sanctuary Belize, moving millions of dollars between the US and Belize. App. 260; 1046-1047;
- Further, many of the Sanctuary Belize defendants maintained personal accounts and conducted Sanctuary Belize-related business with the bank. App. 259, 1047-1048.
- At the same time, Atlantic (AIBL) understood that those promises were false. Atlantic personnel began attending Sanctuary Belize property tours by 2012 and over the next several years gave 126 sales presentations to potential Sanctuary Belize customers.
- Sanctuary Belize customers were important enough to Atlantic that once their deposits exceeded $1 million in the aggregate, Atlantic gave them a higher deposit interest rate and also extended that rate to new Sanctuary Belize customers.
- And by helping Sanctuary Belize close property sales in Belize, it assisted with the illegal object of the scheme.
- The judgment of the district court should be affirmed.
Next Week: OWNERS’ PROPOSAL FOR FUTURE OPERATIONS AND DEVELOPMENT AT THE RESERVE
The Reserved (Sanctuary Bay) Management plans suggestions: Scheduled to be in Maryland court July 9th at 1:00pm///