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SEC Halts CD Ponzi Scheme Involving Caribbean-Based Millennium Bank


Here's an excerpt of the SEC press release that was issued today:
The Securities and Exchange Commission has obtained an emergency court order halting a $68 million Ponzi scheme involving the sale of fictitious high-yield certificates of deposit (CDs) by Caribbean-based Millennium Bank.

The SEC alleges that the scheme targeted U.S. investors and misled them into believing they were putting their money in supposedly safe and secure CDs that purportedly offered returns that were up to 321 percent higher than legitimate bank-issued CDs. The SEC's complaint alleges that William J. Wise of Raleigh, N.C., and Kristi M. Hoegel of Napa, Calif., orchestrated the scheme through Millennium Bank, its Geneva, Switzerland-based parent United Trust of Switzerland S.A., and U.S.-based affiliates UT of S, LLC and Millennium Financial Group. In addition to Wise and Kristi Hoegel and these entities, the SEC has charged Jacqueline S. Hoegel (who is the mother of Kristi Hoegel), Brijesh Chopra, and Philippe Angeloni for their roles in the scheme.

I first researched Millennium Bank back in October 2005. As I recommended in that post, it's best to stick with US-based federally insured financial institutions. Stanford Bank and now Millennium Bank are examples of how things may go okay for investors at these offshore banks for many years before the ponzi scheme crashes and you lose your investments. My Sunday post reviewed how a court-appointed receiver is handling the Stanford Financial mess. So far, they've found only a fraction of more than $7 billion purportedly in Standard CDs.

Below is a repeat of my advice for those searching on the web for high CD rates. If you see a website advertising a very high rate on a certificate of deposit or some other bank-like account, you should first determine if the website is from a FDIC or NCUA insured institution. Both FDIC and NCUA are agencies of the US federal government. FDIC covers banks and NCUA covers credit unions. I have more details in this 2007 post on verifying FDIC or NCUA membership. I also discuss the benefits of FDIC and NCUA membership. It's more than just deposit insurance.

One other thing to note is that there are several legitimate FDIC-insured US Banks with the name Millennium. I've posted on a few of these in the last couple of years. So make sure you don't confuse this Carribean-based Millennium Bank with these legitimate US Banks.

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Anonymous   |     |   Comment #1
Wow, to be honest I'm surprised it is only 68 million. A half dozen years ago I actually considered putting a few bucks in Millenium. Glad I followed my gut and reconsidered.
Anonymous   |     |   Comment #2
Another "excellent" example of GREED. With so many of us being honest people, looking to better our lives and families, what we read daily of these articles-- plants many seeds of doubt and freezes trust to anyone.

While we have freedom in the US, we have to realize that such freedom does not give others to commit crimes or due us in. FIGHT BACK PEOPLE! LET'S ALL DO WHAT IS RIGHT/GOOD AND NOT TAKE ANYMORE OF THIS.
Anonymous   |     |   Comment #3
What took the SEC so long? Millennium has been selling CD's to US investors for a long time.
Anonymous   |     |   Comment #4
Like the person at 2:55 PM, March 26, 2009 I'm also surprised it was”only” 68 million. I say this because it seems like I've been seeing their ads - which were clearly designed to look similar to those of reputable bank's ads - forever. Anyone who educated themselves on finances, read the Millennium fine print and followed this blog, should not have been fooled.
Anonymous   |     |   Comment #5
Aditya Mishra
Aditya Mishra   |     |   Comment #6
Even though I never invested with them but did not find their rates too high compared to many reward checking accounts.
Anonymous   |     |   Comment #7
As long as Millenium has been around I would have guessed 68 mil to be low too.

I think the first time I found Bank Deals was when I was researching Millenium, so thanks Banking guy.
On-line CD Rates
On-line CD Rates   |     |   Comment #8
Thankfully the figure is "only" $68 Million dollars. I guess most of us are smarter than they gave us credit for. Sadly, some folks will probably be losing their retirement.

I wonder too, what took so long? I think someone needs to start replacing people at the SEC. Madoff, Stanford, and now this.

These are huge mistakes.
Anonymous   |     |   Comment #9
Looks like Washington is catching the little crooks who stile millions, while giving our billions to the big league swindlers: AIG, Goldman Sachs, Deutsche Bank. Just like people lose their hard earned money at Milleneum, those who bet with Goldman and AIG also need a haircut.
Anonymous   |     |   Comment #10
Write your Congressman and Senator - no more bailouts with our cash.
Anonymous   |     |   Comment #11
Any institution headquartered in the Caribbean is there for one reason - to avoid being regulated by the regulators in the major countries. Big banks like Citibank wanted to expand their operations and do things that investment banks would do. So they also got some deregulation action to allow them to do so. Financial institutions do not like to be regulated. That stifles the ability to grow and become a major force in the financial world. Otherwise, you remain a small business and nobody likes to be at the bottom of the Fortune 500 list. A lot of these companies that were operating under the radar are going to be flushed out now. Too bad for them. Had this subprime credit default swap meltdown not come about, they might continue their operations for many years.
Anonymous   |     |   Comment #12
It seems to me their web site is still up and you can still get in on the scheme
Anonymous   |     |   Comment #13
We, who blog on this site are very fortunate to be able to and wise enough to do our own research before committing our hard earned dollars.
I feel sorry for the elderly and less fortunate people that must rely on so called "investment advisors" to steer them to various investments products, many of which, are not suited for them.
Anonymous   |     |   Comment #14
A lot of people go to "experts" to deal with medical, legal, and financial matters. They don't want to deal with the technical mumbo jumbo and let someone do all of it for them. I am not from that school. The more you know about the other businesses, the better control you have over your own life.
Anonymous   |     |   Comment #15
Do I remember correctly that this site carried ads for MIllenium?
Anonymous   |     |   Comment #16
For years I was skeptical of their 8+% yield on CD's advertised on the internet. Another scam.