Bust Evergreen Scam Collected $214m Over 10 Years

by Mike Godfrey, Tax-News.com, New York

24 July 2001

Florida's Department of Banking and Finance said yesterday that it was unable to contact many investors in defunct Evergreen Security Ltd, a British Virgin Islands fund managed from Orlando, Florida which filed for Chapter 11 protection last January.

The Department says that the fund raised $214m from thousands of investors, much of it through other participating funds with different names, and that 'the whole thing was a scam from the beginning'. Evergreen and its related funds operated for 10 years before collapsing.

The Department's investigators have found about 20 other investment funds and insurers were either part of the Evergreen fund or investors in it. Among the biggest were six funds based in Tampa that all used variations of the name "Worldwide," including Worldwide Bond Partners, Worldwide Financial Partners and Worldwide Income Partners. The family of Worldwide funds is responsible for about $30 million of Evergreen's obligations.

Other participating organisations are American Bond Partners, based in Orlando, and a number of UK-based funds including International Wealth Management, Provident Fixed Income Fund and Lionsgate Management.

The department said that two subsidiaries of First Union Corporation, Evergreen Funds and Evergreen Investments, are not related to the troubled fund in Orlando.

The Department has been able to write to about 900 of Evergreen's investors, of whom only 10% have responded; but a further 1,100 cannot be contacted because they invested through trusts or IBCs whose beneficial owners are kept secret.

Needless to say, many investors in this kind of situation will want to stay as far away from the limelight as possible, and will lick their wounds in private, hoping that the IRS or the Inland Revenue doesn't notice them.

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