Lawsuit Charges Seychelles With Intimidating Children and Kidnapping In Furtherance of Financial Piracy

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Complaint Charges that Seychelles Government, with the Facilitation of Barclays Bank, Illegally Held Two British Nationals, Ransoming Them with the Threat of Manufactured Drug and Money-Laundering Charges, to Seize Their Funds

the Seychelles government is so hungry for funds, that it has resorted to kidnapping and the threat of false drug and money-laundering charges, to extort money from people who have the misfortune to deposit funds with Barclays Bank in the Seychelles

Stephen Scholes and Terence Stewart today filed a lawsuit in the United States District Court for the Southern District of New York seeking to recover $460,000 that they allege the Republic of Seychelles illegally seized from them and $5 million in damages for their three-month kidnapping at the hands of Seychelles agents.

Stephen Scholes and Terence Stewart, two small businessmen, live in the Canary Islands. According to the Complaint, Messrs. Scholes and Stewart sought funding for local projects from two entities, InProgramme SAS and Fast Trading Group that turned out – unbeknownst to Messrs. Scholes and Stewart – to be international fraudsters. As the Complaint contends, these two fraudulent companies had contracted with Mr. Scholes and two of his companies to conduct securities trades on two bank guaranties, splitting the trade profits with Mr. Scholes’ companies. The Complaint also alleges that under the contracts, Mr. Scholes, in January 2009, caused his two companies to pay a total of €700,000 (approximately USD $1 million) to the criminal entities, each of which claimed to be linked to the Qatari Royal Family. Mr. Scholes established a bank account at Barclays Bank in the Republic of Seychelles (“Barclays”) for these business ventures.

When, as alleged in the Complaint, the fraudsters failed to perform on the contracts, Mr. Scholes began to complain to the authorities. The fraudsters responded in August 2009, by returning Mr. Scholes’ funds plus apparent interest to his Barclays account. According to the Complaint, without basis and in furtherance of Seychelles’ financial piracy, Barclays already had identified the Barclays bank account as a target for the Seychelles Financial Intelligence Unit (“FIU”). As alleged, Mr. Scholes traveled to Seychelles in September 2009, to meet with Barclays employees. As portrayed in the Complaint, Seychelles then, prompted and assisted by a local Barclays employee, imprisoned Mr. Scholes based on false charges. Seychelles also imprisoned Mr. Scholes’ business associate, Terence Stewart, who had traveled to Seychelles merely to open a bank account. As the Complaint charges Barclays prompted and assisted these actions even though Barclays itself had concluded that Scholes had been the victim of fraud.

As the Complaint pleads, Seychelles imprisoned Messrs. Stewart and Scholes for 28 days and then continued their confinement on the island of Mahe for another two and a half months. Mr. Scholes had made the mistake of bringing his wife and daughters on the trip. As pleaded, the Seychelles authorities interrogated his older child, Jessica Scholes (a minor), on multiple occasions when they found her unaccompanied by a parent. According to the Complaint, during one of these interrogations, Seychelles agents threatened to arrest her mother and take the children into care by Seychelles authorities.

“Our Complaint alleges that the Seychelles government is so hungry for funds, that it has resorted to kidnapping and the threat of false drug and money-laundering charges, to extort money from people who have the misfortune of choosing to deposit funds with Barclays Bank in the Seychelles,” said Craig Weiner, an attorney at Hofheimer Gartlir & Gross, LLP in New York City, which represents Messrs. Scholes and Stewart, together with the other Plaintiffs. “As set forth in the Complaint, Seychelles and its hired henchmen of the FIU are now strong-arming little girls and holding people hostage with fear of imprisonment on fabricated drug and money-laundering charges, all in a quest to fill its coffers by almost any means necessary.” Mr. Weiner added, summarizing the allegations made in the Complaint.

As the Complaint also charges, Seychelles went through various machinations to create phony evidence and bring false charges against Messrs. Scholes and Stewart. For example, the Complaint alleges that Seychelles agents used Mr. Scholes’ e-mail account to send bogus e-mails to his contacts in an effort to create some indicia of wrongdoing. As also alleged in the Complaint, a Barclays employee submitted false accusatory statements at the request of the FIU to justify the false imprisonment of Messrs. Scholes and Stewart.

As set forth in the Complaint, the agents of Seychelles indicated that they would plant illegal drugs upon Messrs. Scholes and Stewart if they refused to plead guilty to false charges. Unable to return home and facing manufactured drug charges, Messrs. Scholes and Stewart, under extreme duress, each plead guilty to a Seychelles misdemeanor, and paid the aggregate of $460,000 in ransom. The Complaint pleads that Seychelles punished Mr. Scholes and his companies “for having been gullible victims of fraudsters” and Mr. Stewart for very little reason at all.

The Complaint also alleges that the FIU has subcontracted its operations to Barry Galvin, Liam Hogan, Declan Barber, Joe Cully and John Heelan, who are former members of the Irish national police force, Irish secret police and/or a secret Irish military unit. This is not the first time that Messrs. Galvin, Hogan and Barber have been sued for the actions they have undertaken in the Seychelles.

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JAMES GRAHAM
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