CL bosses operated ponzi schemes to misuse CLICO funds: Report

Former CL jefes Lawrence Duprey (standing) and Andre Monteil

Media reports Friday say the Trinidad and Tobago Central Bank is claiming that two Ponzi schemes that were in operation in CLICO contributed to the collapse of the insurance company in January 2009.

In its statement of case filed against former executives of CL Financial, associated companies and the conglomerate itself, the Central Bank outlined how the scheme worked.

It said CLICO executives operated an external Ponzi scheme in which the insurance company took in new money from policyholders and mutual fund investors without making provisions for future liabilities to them.

In addition the bank stated there was an internal scheme through which officials diverted or misappropriated CLICO money from to fund Clico Investment Bank, CL Financial or other group entities.

The Central Bank case refers to Clico as a cash cow and alleges misappropriation and improper dealing with the insurance company’s money.

The Central Bank claimed that in 2007, $200 million OF CLICO funds were paid as "management fees" and the money was diverted from Clico to CL Financial.

It is also claiming that CLICO was forced to lend billions of dollars to Clico Investment Bank consisting mainly of fixed deposits. The bank further claimed that CLICO lent more than $2 billion to its parent company, CL Financial.