David Smith — trying to withdraw funds from personal accounts from some local financial institutions. (File photo)

Olint’s boss, David Smith pulled over $20 million from a local financial institution, one of several holding millions in personal accounts, according to well-placed sources.

This latest development along with requests from Smith to other local financial houses triggered a warning from the Financial Services Commission (FSC) to local financial institutions to be careful as to how they release funds to the beleaguered Ponzi scheme boss.

But in the absence of a world-wide freeze on Smith’s accounts, the FSC warning seems useless, as financial institutions have no legal legs to stand on if they fail to honour Smith’s request.

Smith was forced to draw down funds from local sources because the Turks and Caicos Islands (TCI)government has frozen the $13 million in liquid assets discovered by the authorities and he knows that local institutions would have to honour his claims in the absence of a local freeze on his accounts.

Responding to a question as to why there was no freeze on the local assets of Smith, Cadian Campbell, who is an agent of the liquidator stressed that he could not answer that question, while stating that his boss, liquidator Joseph Connolly would be in a better position to respond to it.

He also suggested that contact be made with the FSC to find out why this was not and still has not been done. The job of the liquidator is to locate and distribute the assets of a failed company, based on a certain formula, which would lead to the payment of taxes, creditors, agents and servants first and then shareholders with whatever is left.

The Sunday Herald understands that the FSC also wrote securities dealers a year or so ago to find out how much money they held on behalf of Olint, however, the funds were never frozen.

Many securities dealers confirmed that they have received copies of the letter from the SDA, but stressed that they would have to honour their commitments to Smith if no freeze is imposed on his local assets.

Several efforts made to get comments from FSC executive director, Rohan Barnett, and deputy executive director, George Roper, proved to be futile up to press time.

In a report submitted recently, liquidator Connolly confirmed that Olint was a Ponzi scheme because the US$220 million invested by its 6,000 clients was not being traded on the global foreign exchange market, as Smith led them to believe.

He also pointed out that Olint TCI, which was established on April 2006 with a share capital of only US$1,000, split 60:40 between Smith and his wife Tracy Smith, was supposed to be an investment manager of public funds through various subsidiaries such as Hallmark Bank and Trust.