Oh God! Oh no! OLINT!

Arthur Hall, Senior Staff Reporter

In the United States town of Windermere in Florida, Pastor Ainsley Blair convinced dozens of people to invest millions with the David Smith-headed Olint.

In Jamaica, a similar message went out from several church pulpits as clergymen told their congregations about the "heaven on earth" that was being offered by the huge returns on investments in Olint.

Smith was a member of Church on The Rock, the 'uptown' of local churches, and self-appointed prophets declared that God had blessed him with a special gift to cure poverty. From populace pulpits, men of the cloth encouraged congregants to invest. The message became part and parcel of the prosperity gospel, and some church leaders dared to shift their organisations' acounts - made up mostly of tithes and offerings - to Olint.

Pastor Blair believed the prophetic claim, and he announced plans to use the money made from Olint to open a shelter for the poor in Jamaica.

On paper, Pastor Blair thought he had turned US$4 million into US$11 million, but when he tried to make his first withdrawal to start work on a hospital he was planning to build in Jamaica, he found out the money was all gone.

"It's heartbreaking. It's a terrible thing, and I hope he (Smith) pays for it," Blair told a United States publication recently.

Bishop Peter Morgan of City Life Ministries was one of the few local clergymen admitting to losing money in Olint.

According to Bishop Morgan, some of his "friends and colleagues suffered more - mostly churchfolk - both locally and overseas."

That is a story that is being repeated hundreds of times over as persons in Jamaica, the Turks and Caicos Islands (TCI), and the United States come to the realisation that it is unlikely that they will get back any of the billions of dollars invested in Olint.

The Pied Piper

Instead, Smith, the man they once referred to as the "Pied Piper of the financial world", is now facing 30 charges in the TCI and 23 charges in the US.

According to a businessman who lost millions in Olint, it was the investors who sought out Smith.

"I don't remember David ever asking a man for money. He is like the Pied Piper - people just following and wanting to give him money."

This has left hundreds of people burnt in what could turn into a US$1 billion international investment scam.

The victims were all promised big returns, but many of them lost everything, and US prosecutors now claim that Smith fooled thousands of people into buying into a Ponzi scheme.

The prosecutors charge that Smith promised low-risk and high returns in one of the riskiest markets, and used money from new investors to pay old investors to trick them into believing that the foreign-exchange trading scheme was flourishing.

According to the prosecutors, Smith used his clients' money to "finance a lavish and expensive lifestyle, and from which he and others received millions of dollars in goods, services and other benefits".

Those who benefited are many; but those who got burnt are even more.

Local politicians enjoyed riding in Smith's jet, and many made no secret of their annual trip to the TCI to attend his birthday party.

Others sent him emails thanking him for his campaign contributions, which "made our annual conference a success".

Emails which have been going the rounds suggest that the Jamaica Labour Party's (JLP) general election victory in 2007 was largely funded by Olint.

The emails contained messages purportedly sent by the members of the JLP hierarchy asking Smith for funds or thanking him for his support.

Olint was also a one-time sponsor of the annual Jazz and Blues Festival, with entertainment insiders putting his contribution at US$400,000. That figure was never confirmed.

But several questions have always surrounded the operations of Olint, which promised high returns based on trading in one of the most unpredictable markets in the world.

By 2006, after almost two years of operations, the Financial Services Commission (FSC) in Jamaica turned its spotlight on Olint.

The FSC and the Financial Investigations Division of the Ministry of Finance and Planning executed search warrants under the Securities Act on the offices of Olint and LewFam Investments on March 3 and March 6, 2006, and seized documents.

The FSC determined that although claiming to be carrying on foreign currency trading activities, Olint and its associate entities were engaged in securities activities in breach of Sections 7 and 8 of the Securities Act.

The FSC issued cease and desist orders against them on March 24, 2006.

Bomb threat

By July, Olint closed its offices in Jamaica, and in an email sent to club members, Smith claimed that the closing was a result of threats to staff, including a bomb threat.

The email acknowledged that the threats might have resulted from the failure of the scheme to honour redemption, which it blamed on FSC actions, court conditions for the stay of execution, and actions by local commercial banks to close Olint accounts.

The banks, particularly National Commercial Bank (NCB), came in for immediate criticism from the Smith backers as a court battle went all the way to the Privy Council to determine if Olint's accounts could be closed.

With the Privy Council siding with NCB, Smith packed up and moved to TCI, where he set up shop.

But by July 2008, the authorities in the TCI moved against Smith, sparking what now appears to be the beginning of the end.

He was arrested and charged before being granted bail to the tune of US$1 million.

With that matter before the courts in the TCI, the prospect of investors getting back their money seemed less likely when regulators closed down the Turks and Caicos Bank which left Olint accounts entombed in that bankrupt entity and subject to the process of liquidation.

Extradition

If that was not enough, US authorities last week indicted Smith on 23 charges and hinted that they would be seeking his extradition.

But despite the obvious issues surrounding the failed foreign exchange trading club, Smith's defenders remain many.

On the social network site Facebook, there is a group christened Defenders of David Smith/Olint. One posting on the site says: "If you are like us and sick and tired of the rumours and the vampires who are trying to destroy David Smith and Olint, join this group and let us tell the world and all his detractors to go directly to hell."

Another posting says: "The man has way better intentions than most, and believe it or not, he's fighting for more Jamaicans to make some more money."

They obviously still have faith in Smith, who had worked for several years as a licensed representative of Jamaica Money Market Brokers Limited, reputedly spe-cialising in international foreign-exchange trading.

He branched out on his own, forming a "club", where a few friends would trade foreign currencies.

Flood of investments

The word quickly spread, as members reported making hand-some returns of as much as 15 per cent a month.

That sparked a flood of investments as persons sold property, sought loans, and broke open their savings accounts to cash in on what was to many easy cash.

The foreign-exchange market is the largest financial market in the world, with a daily average turnover estimated at well over US$1 trillion.

About five per cent of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency.

The other 95 per cent is trading for profit, which Smith claimed to do before being exposed by the authorities.

As the world of the 'Piped Piper' began to crumble in 2008, Smith said: "I have not appropriated members' funds for my own purposes, nor have I engaged in criminal activity. However, I need around nine months to pay back Olint members. The funds remain intact."

Those nine months have long gone, but, still, Olint investors are waiting to get back their money.