Cayman wealth advisor jailed following US sting

Monday, 08 September 2014
Investment advisor Joshua Vandyk, formerly of Cayman Islands firm Clover Asset Management, has been jailed for 30 months in the USA for offering to help conceal clients' funds in anonymous offshore accounts.

The clients had made the first approach to Vandyk and two colleagues, claiming to be criminals holding the USD2 million proceeds of a bank fraud in Miami. However, they were really agents of the US Internal Revenue Service agents conducting an entrapment operation against the three, whom they already suspected of being involved in concealing the assets of other US citizens.

Vandyk, who is an American, and his two Canadian colleagues Eric St-Cyr and Patrick Poulin, suspecting nothing, agreed to help the IRS agents launder the funds. Vandyk and St-Cyr advised the agents to create an offshore company with Poulin's assistance, as they and the investment firm that employed them did not want to appear to deal with US clients. The three then used the offshore firm, called Zero Exposure Inc, to move money into the Cayman Islands. Poulin, who lived in the Turks and Caicos Islands, acted as a nominee intermediary for the transactions, and served as a director of ZEI in lieu of the 'clients'.

Poulin then transferred USD200,000 of the clients' money from ZEI to accounts at the Cayman wealth management firm where Vandyk and St-Cyr worked. They then invested it in ZEI's name.

The clients were given numeric passwords that enabled them to monitor their investments online and request transfers of the funds. They were thus able to order Vandyk and St-Cyr to liquidate the investments and transfer the money through Poulin back to their bank accounts in the USA, completing the criminal offence.

The three defendants were arrested while visiting Miami in March this year. They originally denied the charges and were released on bail, but all three later changed their pleas to guilty. St-Cyr and Poulin will be sentenced next month.

The sting was orchestrated in collaboration with the police services of both the Cayman Islands and the Turks and Caicos Islands.


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