Exit Madoff, enter the global ponzi scheme fraudsters

This response from HSBC sounds unconvincing.

After all, with Swiss regulators liquidating what little is left of Dividium, there really isn’t much of a client to protect.

Equally mum on the topic of Dividium is Risk Reward.

A person answering the phone for the risk management firm declined to comment.

Dean Louw, owner of the accounting firm that bears his name, says his company never did any audit work for Dividium.

He says all the firm did was collect mail for Dividium — originally called International Invest — and then forward it on to the firm’s offices in Switzerland.

Mark Benedict, an American who sunk money into Dividium a year ago, faults HSBC for not doing adequate due diligence on Dividium’s backers.

Benedict says he invested with Dividium in part because he had been led to believe by Dividium’s representations that HSBC had vetted the investment fund and its promoters.

HSBC’s “failure to know its customer has directly cost myself and 3,000 other investors upwards of ¤33 million ,” he says.

Martin Sach, an attorney with the German law firm Winheller, says his firm represents about 20 investors in Dividium and it too is considering pursuing claims against HSBC.

Depository bank

“A lot of money was transferred to HSBC,” says Sach. “It was their depositary bank. Dividium was not allowed to hold client money for financial supervisory reasons. It’s possible that HSBC is also liable for losses.”

The questions about controls at HSBC comes as the bank appears to be a victim in a separate dubious scheme.

Federal prosecutors in New York say that HSBC is one of three giant banks defrauded by financier Hassan Nemazee in an apparent $293 million Ponzi scheme.

Nemazee, a major donor to Democratic political candidates like President Obama, has been indicted on charges that he defrauded HSBC, Citigroup and Bank of America into providing his company with hundreds of millions of dollars in bank loans.