Arrest:Man Claimed $14 Million BDA Bank Account

June 13, 2010

arrested logoAn American who falsely claimed he was both related to European royalty and had $14 million in a Bermuda bank account has been arrested and charged with fraud, grand larceny and forgery. The American Securities and Exchange Commission [SEC] extended their thanks to the Bermuda Monetary Authority for their assistance in the matter.

The suspect, 47 yr old Guy Albert de Chimay, was arrested two days ago [June 11] after a New York City grand jury indicted him on grand larceny and forgery charges, said Adam Kaufmann, who heads the Manhattan district attorney’s investigative division.

The SEC allege that as late as December 2009, Mr. Chimay sought a multi-million dollar bank loan on the basis of false representations that he had $14 million in liquid assets in a Bermuda bank account, saying he “brazenly falsified bank statements.” The SEC further say that the Bermuda account balance was actually zero, and that Mr Chimay also solicited investments in the region of $6 million, while claiming to be related to the current head of the Belgian Chimay royal family, the Prince de Chimay.

On Friday June 11, the Securities and Exchange Commission charged the New York-based money manager and his firm with fraud and obtained an emergency court order to freeze the assets of Guy Albert de Chimay and his firm Chimay Capital Management, Inc., alleging that they solicited investments in a vehicle known as the “Bridge Loan Facility” that was to pool investor funds with millions of dollars of Chimay royal family money to make safe and profitable short-term loans to companies.

The SEC alleges that rather than using investor money to make bridge loans, Mr. Chimay simply stole it, saying he falsified bank statements to hide the fraud while diverting at least $6 million into his personal bank account or otherwise misspending it on unrelated firm expenses.

“Chimay used the trappings of royalty to perpetrate the most common of frauds,” said George S. Canellos, Director of the SEC’s New York Regional Office. “Chimay blatantly lied to investors about non-existent investments and then used their money to bankroll his exorbitant personal and business debts.”

The SEC alleges that there is no evidence that any bridge loans were actually made, and investments were instead used to make mortgage payments on Mr. Chimay’s multi-million dollar home in the Hamptons, pay over $500,000 to lawyers in his divorce case, pay his massive credit card bills, pay Chimay Capital’s rent and payroll and more.

The SEC’s complaint charges the defendants with violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition to emergency relief, the SEC’s complaint seeks permanent injunctions barring future violations of the charged provisions of the federal securities laws, disgorgement of the defendants’ ill-gotten gains plus pre-judgment interest, and financial penalties from the defendants.

The full legal document is here [13 page PDF]. As it relates specifically to Bermuda, the document says:

In order to facilitate, and then cover-up, the fraud, Chimay brazenly falsified bank statements to lull investors into believing he had tens of millions of dollars at his disposal, most of it purportedly tied up offshore in Bermuda. As recently as December 2009, Defendant Chimay sought a multi-million dollar loan from Wachovia on the basis of false representations that he had $14 million in liquid assets in a Bermuda bank account. In reality, the account balance was zero.

The complaint also goes on to say that:

Investor B invested $2 million in the BLF in October 2008 by wiring his investment to an account at Butterfield Bank in Bermuda. Among other things, Investor B’s funds were used to fund a $200,000 personal check made out to Defendant Chimay.

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Comments (4)

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  1. Googlybda says:

    How does this happen when we have such strong KYC rukes and anti money laundering. Were SAR’s reported by bank. Perhaps that is how this fraud was found!
    But wait a minute the man “Chimay” was able to open accounts at bank and set up now defunct hedge funds!
    How come?
    Wake Up Bermuda!

  2. Mohawk says:

    Not sure how this is Butterfield’s fault? How I read it is the Chimay dude faked the statements

    • Googlybda says:

      How does he get the bank account in the first place?

  3. Thom says:

    Well, I was raised to believe what goes around comes around always and in all ways. It says, his “divorce” case? Who was this guy married to?