A fraud trial began yesterday in the Principality of Monaco involving a US businessman
who is accused of defrauding investors to the tune of millions of euros after
a brokerage firm that he owned collapsed.
The Hobbs-Melville brokerage folded in 2000 leaving a EUR140 million hole in
its accounts, according to Reuters.
William Hobbs Fogwell, 71, the company's owner, was arrested in Poland in 2001
and extradited to Monaco. He now faces charges of fraud, breach of trust and
forgery.
Wealthy investors had invested sums of up to EUR8 million each in the company,
lured by the promise of returns of between 30% and 60%. While things appeared
to be running smoothly for investors in the five years prior to the collapse
of Hobbs-Melville, many suspected that things were amiss when the company began
to make late payments and failed to honour other obligations to its stakeholders.
Citing one investor in the firm, Reuters reported that Hobbs-Melville made
risky bets in the short-term money markets.
It is thought that around 500 investors have lost money, and 300 of them have
hired 50 lawyers to press their case.
Mr Hobbs was not present at the court hearing, although his daughter, Shelley,
45, was on the stand in connection with the collapse of the brokerage.
Monaco has renewed its determination to rid itself of the image as a haven
for financial criminals and money launderers.
Prince Albert II, who assumed the throne following the death in April of his
father, Prince Ranier, stated in his inaugural speech last July that: “I
intend that ethics always be the basis of the behaviour of the Monegasque authorities.
"Ethics cannot be chopped and changed. Money and virtue must go together
permanently," Prince Albert declared.
The case of Sir Mark Thatcher, son of the former British Prime Minister, Margaret
Thatcher, has highlighted how attitudes are changing in Monaco as the Principality
bids to win its removal from the OECD's list of allegedly "uncooperative
tax havens".
Sir Mark had been seeking permanent residence in Monaco, after being refused
an entry visa to the United States in April last year following his conviction
by a South African court for his part in a plot to stage a coup in the oil-rich
African state of Equatorial Guinea.
However, Monegasque officials have made it clear that Thatcher is not welcome
in Monaco and that his temporary residence permit will not be renewed.
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