From OffshoreAlert

HIGHLIGHTS

Andrew Joseph Zahn was serving an SEC ban when he became a principal of CMZ Group

His ban is not disclosed in the prospectus for an investment fund that helps to finance CMZ

Zahn’s career has been blighted by allegations of fraud and debt – He denies wrongdoing

NASD halted and reversed an IPO done by firm of which he was chairman

IPO was conducted by “associates” of the Gambino Organized Crime Family

An investigation by OffshoreAlert has uncovered more red flags concerning Cayman Islands-based CMZ Group Ltd., whose operations include a hedge fund, investment manager, debt recovery firm, precious metals refinery, rum distributor, and pawn shops in the Caribbean.

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Barclays Bank v. Andrew J. Zahn: Judgment

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Hitachi Capital (UK) PLC et al v. Andrew J. Zahn: Stipulation For Dismissal

IBP, Inc. et al v. Andrew J. Zahn et al: Amended Complaint

IBP, Inc. et al v. Andrew J. Zahn et al: Joint Motion for Stipulated Dismissal

TFM Investment Group et al v. Andrew J. Zahn et al: Class Action Complaint

TFM Investment Group et al v. Andrew J. Zahn et al: Stipulation of Settlement

Bartlett Richards et al v. Andrew J. Zahn et al: Second Amended Complaint

Bartlett Richards et al v. Andrew J. Zahn et al: Settlement Agreement

Q&A With Keith Miles: February 25, 2013

Q&A with Andrew J. Zahn: February 25, 2013

For more on this story go to:

http://www.offshorealert.com/cmz-group-cashwiz-joe-zahn.aspx

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19931 / December 4, 2006

Accounting And Auditing Enforcement Release No. 2519 / December 4, 2006

Securities and Exchange Commission v. Andrew J. Zahn, Philip J. Sexauer, and Cynthia K. Berryman, Case No. 04C4948 (N.D. Ill.)

The Commission announced that on November 27, 2006 the United States District Court for the Northern District of Illinois entered a Final Judgment as to Defendant Andrew J. Zahn, based on his Consent. In SEC v. Andrew J. Zahn, Philip J. Sexauer, and Cynthia K. Berryman, each of the defendants is a former officer of DFG, L.L.C. (“DFG”), a Chicago-based company that was a subsidiary of a subsidiary of IBP, Inc. (“IBP”).

The Commission alleged in the complaint that Zahn, among other defendants, engaged in an array of accounting improprieties to inflate DFG’s earnings. These misstatements caused IBP to materially misstate its own financial results for the fourth quarter of 1999 and the first three quarters of 2000. Specifically, the Commission alleged that Zahn and others directed that DFG not charge certain expense items in the period they were incurred, but instead improperly included these amounts in inventory, prepaid expense, and accounts receivable asset accounts to overstate DFG’s earnings. The Commission alleged that Zahn was motivated by personal compensation tied to DFG’s financial performance.

In its complaint, the Commission claims that, through these actions, each of the defendants violated Section 13(b)(5) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 13b2-1 thereunder, and aided and abetted IBP’s violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder. It further claims that Zahn violated Section 10(b) of the Exchange Act and Rules 10b-5 and 13a-13 thereunder.

The Final Judgment enjoins Zahn from future violations of the federal securities laws and imposes a five year officer and director bar. Zahn was also ordered to pay a civil penalty of $50,000.00 and post judgment interest on any delinquent amounts pursuant to 28 USC § 1961.

CMZ Group Brands

Directors

Keith Miles – Chairman – CMZ GROUP LTD SEZC

Mr. Keith Miles enjoyed a 30 year career in global financial markets holding key positions in London, Asia and North America. A former CEO and shareholder of Prebon Yamane North America, inter‐dealer brokerage, Keith was responsible for all Securities, Foreign Exchange, Energy products and Derivatives in USA, Canada and Latin America. Keith oversaw 500 employees and billions in daily transactions prior to the sale of the company.

Keith gained enormous experience in operating in Emerging Markets in both Financial Instruments and Commodities. Mr. Miles worked closely with Central Bankers to help build robust markets in places as diverse as Jakarta and Mexico City.

After the sale of Prebon Yamane to Collins Stewart Tullett in 2003, Mr. Miles moved his family to Turks and Caicos. Mr. Miles, in 2005 joined Consolidated American Services as its US Chairman, now CAS Partners, to assist in expanding their network of Property Management businesses in North America. After the acquisition of Riverstone Residential in Dallas, Keith was appointed Chairman of CAS. The business grew from managing 17,000 residential units to over 180,000 within 4 years with 5,900 employees in 42 offices. This phenomenal growth rate was achieved both organically and through strategic acquisitions of prominent property management firms including the property management division of Trammell Crow.

Since May 2003, Mr. Miles has been based, full time, in Turks and Caicos and is a majority shareholder in CMZ Group LTD SEZC as well as several local businesses, including Tourism and Real Estate. Keith Miles is married with 5 children and graduated in Business studies from Bournemouth College in England.

Joe Zahn – Group Director – CMZ GROUP LTD SEZC

Mr. Zahn has served as a Group Director and Principal of CMZ Group Ltd. SEZC since November 2010. Prior to Joe’s affiliation with the CMZ Group he served as Chairman and Managing Director of Sloan Street Capital Group in London from 2001 – 2009. During his tenure as Managing Director he acquired companies in various industries for the firm, Joe had responsibility for over 6,500 employees reporting to him through the various entities in the Sloan Street Capital Group; completing over $1 billion in transactions. Highlights included; Lead Principal on 65 acquisitions, a collection of senior financed deals to acquire companies, $400 Million in Senior and Mezzanine debt on behalf of various SSCG firms, the establishment of a European network that led to advisory business in England, France and German. Prior to SSCG Joe was a principal in his family firm that had over $400 million in sales and operations through-out the globe.

Prior to being Chairman of Sloan Street Capital, Mr. Zahn was Chairman and CEO of ZG Group. ZG Group was a leading manufacturer of high-end chocolate and confectionery products and was the largest manufacturer of upscale appetizers in North America. ZG Group sold it products in North America, Europe, and South America. Before selling the company, in 2001 the collective ZG Group Companies had six manufacturing plants with approximately 1,500 employees. Mr. Zahn was also Co-Chairman of ZG Properties, a real estate development firm, specializing in industrial construction and the continued ownership in those properties and ZG Ventures, an investment fund which primarily invests in early stage high-tech companies. Prior to Mr. Zahn’s affiliation with the Company, he served as President of International Foods from 1989 to October 1995, and as International Food’s Chief Executive Officer from November 1993 to October 1995. From 1987 to 1991, Mr. Zahn was a principal in the Louis Zahn Drug Company, the largest pharmaceutical distributor in the Midwest before its sale in 1991. From 1989 to 1991 he served as President of the Louis Zahn Investment Group.

In 1994, Mr. Zahn was admitted into the Entrepreneur Hall of Fame presented by Arthur Andersen, ABN Amro Bank and the University of Illinois. Mr. Zahn has been a member of the Young Presidents Organization since 1994.

From: http://www.cmzltd.com/directors.php

CMZ Group says former official left before SEC suit

5^th Feb 2013 Miami Herald By Martha Brannigan [email protected]

A Cayman Islands firm says a former official severed ties to the company one day before the SEC filed suit against him.

Fred Davis Clark, Jr. — a Cayman Islands man who was accused of securities fraud in a civil suit filed Jan. 30 by the Securities and Exchange Commission — sold his ownership interest and resigned his posts at a separate Cayman Islands business a day before the SEC suit was filed, according to a spokeswoman for the firm, CMZ Group Ltd.

CMZ Group Ltd., a Cayman Islands company that includes a Caribbean pawn shop network among other ventures, said in a statement that Clark “is no longer affiliated with our company, and, in fact, separated from the company before (Jan. 29) the U.S. SEC complaint was filed (Jan. 30th.)’’

The SEC had identified Clark, 54, as “co-chairman of CMZ’’ in a complaint that accused him and four other former real estate executives at the defunct Cay Clubs Resorts and Marinas of defrauding nearly 1,400 investors of more than $300 million in an alleged Ponzi scheme between 2004 and 2007.

“We put in our complaint the most current information available,’’ Eric Bustillo, director of the SEC’s Miami regional office, said Tuesday. The SEC complaint is pending in U.S. District Court in Miami. A hearing hasn’t been set.

According to the SEC suit, Clark operated Cay Clubs Resorts from his home in Key Largo and moved to the Cayman Islands after the real-estate investment business closed, leaving investors hanging.

Jeffrey L. Cox, a Boca Raton attorney for Clark, declined to comment Tuesday.

For more on this story go to:

http://www.miamiherald.com/2013/02/05/3218720/cmz-group-says-former-official.html

See also iNews Cayman story published Jan 31 2013 “The SEC alleges that Cay Clubs Resorts was a $300-million” at: http://www.ieyenews.com/2013/01/the-sec-alleges-that-cay-clubs-resorts-was-a-300-million-plus-ponzi-scheme/

February 2013 Ponzi Scheme Roundup From LexisNexis® Communities

Fred David Clark, Jr., 54, David Schwartz, Cristal Coleman, 39, Barry Graham, and Ricky Lynn, all former real estate executives with Cay Clubs Resorts and Marinas, were sued by the SEC for allegedly running a $300 million Ponzi scheme in which almost 1,400 investors were defrauded. The SEC alleged that investors were promised guaranteed returns of 15% and future income through the Cay Clubs rental program. Clark has also been identified as having interests in CMZ Group, Ltd., a Cayman Islands entity that has ventures including CashWiz pawn shops, and Argentum Refineries, a precious metals processor and bullion storage operation in Cayman Enterprise City. CMZ Group also has a company called “Best4Less”, a wholesale distribution company based in Turks and Caicos Islands that manufactures Pirates Choice rum.

Government sells TCInvest non-performing loans    

Written by Richard Green Tuesday, 18 September 2012 10:03

Eighty non-performing TCInvest loans with a face value of more than $6 million have been sold to a debt management company in hopes of making $3 million for the Turks and Caicos Islands government to pay off debts.

The Outstanding Loan Company Limited (TOLCO) will soon be contacting loan holders to begin the debt restructuring.

“We will use our experience to work with clients to reschedule and stabilize as many loans as possible,” said TOLCO spokesman Kelvin Latta. “In those cases where this is not possible, then the foreclosure process will be a measure of last resort.”

TOLCO is a company owned by CMZ Group Ltd. of Cayman that operates in Caricom and other Caribbean countries. CMZ says TOLCO is “set up to acquire unloved or distressed assets that are in forced selling situations or trading at low multiples of mid cycle earnings or fundamentally undervalued.”

TOLCO says the expansion of its portfolio “will form the basis for increased participation in securitized lending and loan management in Turks and Caicos and elsewhere in the Caribbean.”

TCInvest, officially the Turks and Caicos Islands Investment Agency, was formed in 1995 to help local entrepreneurs and encourage foreign investment in the islands. The governor closed the statutory agency in January because of problem loans and inefficient operations.

In June, performing TCInvest loans to approximately 240 people and businesses began being transferred to three banks, lowering interest rates for those loans.

TCInvest’s responsibility for dealing with inward investment was taken over by the office of government’s chief executive officer. After elections, the responsibility will belong to the deputy governor. Investment, business licensing and small business support activities were taken over by the Ministry of Finance.

“Unfortunately, over time TCInvest became a multi-million dollar financial liability and became no longer able to achieve what it was set up to do — support business development here in the TCI,” said Philip Rushbrook of the Governor’s Office. “Most of its loans were to private individuals for non-business related borrowing, and its portfolio did not have enough well performing loans to repay back the debts to the international banks.

“Further, at a time when financial prudence is required to restore the islands’ public finances, it was not realistic to expect the government to be exposed to further and growing financial risk. Governments should not be in the lending business, that is what banks are for.”

Money raised from the sale will be used to pay off debts related to the original financing of the loans and held by the Caribbean Development Bank, European Investment Bank and National Insurance Board.

“It will also remove these as contingent liabilities on the public sector and put government in a stronger position when negotiations have to be started on replacing the loan guarantee in advance of is expiry in 2016,” the government said it its announcement of the sale.

“It has been refreshing to work with both TCInvest and government representatives in the stabilization plan for both non-performing and performing loans and to be able to offer a range of options to improve the active collection of outstanding loan repayments,” TOLCO’s Latta said. “We share the common belief that loan origination and management belongs in the hands of private industry and is not a good use of precious government tax revenues.”

A group calling itself “The TCI People’s Referendum Committee” will be holding a referendum Sept. 12-15 on whether the Turks and Caicos Islands should implement value-added taxes April 1 as the governor has declared by law.

“This is not a ‘No to VAT’ initiative,” Committee Co-chairman O’Brien Forbes told the fp. “This is an initiative about democracy. It is a question of whether we feel we have been informed sufficiently about the validity of VAT as a tax model.”

He would not reveal the questions on the ballot but said it has more than one question about VAT.

Anyone with legal status in the islands can vote, but the referendum has no binding effect on the interim government.

Forbes said the referendum is being conducted by a team with experience in the national census and in social development in the TCI.

“We have a number of international bodies at the ready to receive our results,” he said. “We will announce the list of receiving international institutions five days after the tabulations.”

The TCI People’s Referendum Committee includes Co-chairmen Forbes and Edith Skippings. Supporting groups include Mike Bookalam of Got It Island Supplies; The Christian Council; The Ministerial Fellowship; The Taxi Union; and The National Agenda. It is on Facebook at The TCI-People’s Referendum. E-mail the group at [email protected] .

“Unite with us because whatever the experts say about VAT, it is undemocratic and even immoral for an interim government, where the sole statutory power is an appointed governor, under a partially suspended Constitution, to alter our economic life through the imposition of a tax system, without the proper, credible consultation with the people, not merely about whether to implement VAT, but whether it is the right thing for us,” the committee said in a press statement.

The U.K. suspended elected government in August 2009 after a Commission of Inquiry found evidence of corruption among government ministers and others and with the country on the brink of bankruptcy.

His Excellency the Gov. Ric Todd signed VAT into law in July, saying that the tax is expected to provide a more stable source of income because it will spread taxes across most business sectors instead of relying heavily on a few. Government believes the future TCI economy won’t depend as much on tourism and construction as it has in the past.

The governor also has declared that there is no way to stop VAT from being implemented, and the revised Constitution set to come into effect Oct. 15 appears to give him the power to stop any such move by the government that will be elected Nov. 9. The U.K. government has said the decision is up to the TCI government, which is currently under control of the governor.

The PNP, PDM and the Turks and Caicos Hotel and Tourism Association have come out against the tax, as well as a grassroots group called the Turks and Caicos Independent Business Council (TCIBC) of nearly 300 businesses that has gathered thousands of signatures on a petition opposing the new tax.

TCIBC insists that prices will go up for almost everyone when VAT takes effect and harm the country’s barely recovering economy.

Government claims that most prices should not go up because of duty reductions and an increased number of exempt items, but it has conceded that service businesses which will have to charge and collect the 11-percent tax will result in some higher prices for consumers.