A Bahamian securities trader, formerly from New Zealand, who once had hopes of building a World Trade Center replacement is in jail after being busted by the FBI for allegedly swindling millions of dollars.
Derek Turner, in his mid-50s, is being held in the 1800-inmate maximum security Nassau County Correctional Center in New York, charged with defrauding hedge fund investors of $US1 million ($NZ1.37 million). He has pleaded not guilty.
Turner’s high-profile New York lawyer, Joseph Conway, told The Dominion Post that prosecutors plan more charges that would lift the total to $US4 million.
The charges carry a maximum sentence of 20 years’ jail.
The Bahamas-based Turner, who described himself as a securities trader, was arrested by Federal Bureau of Investigation agents at his office in Long Island, New York, on April 16.
Newsday reported Turner was nabbed with the help of a former conman Barry Minkow, who uses his skills to track down swindlers, in a sting reminiscent of the movie Catch Me If You Can.
Mr Conway said Turner would fight the charges, and would focus on “interesting elements” such as the role Minkow played in the investigation.
AdvertisementAdvertisementTurner was “holding up well despite the situation” in the prison.
The FBI alleges he swindled $US1 million from a father and son with the promise of 40 per cent annual returns. He told the pair he had $US500 million in the hedge fund, but it only contained $US300,000, according to court documents.
Mr Conway said prosecutors had indicated they had evidence suggesting $US4 million had been swindled.
Turner disputed this and said the money was still in the fund. If freed, he would be able to prove this, Mr Conway said.
Mr Conway will apply for bail at a hearing tomorrow. The pair would then work on a strategy to fight the fraud charges, which will be heard in the federal court.
Newsday reported Minkow ﾖ once convicted of a $US300 million share fraud but now running a company specialising in tracking down fraudsters ﾖ told the FBI of his suspicions about Turner’s company, Turning International Ltd.
Minkow, 38, borrowed millions of dollars from mobsters to finance his own scam, which involved a public share float of a nationwide carpet-cleaning company he set up in his parents’ garage when he was 16. He was so convincing that the Los Angeles mayor declared a Barry Minkow Day.
The scam fell apart and a desperate Minkow turned around and ripped off not only the mobsters, but several Wall Street high-fliers too. He became an evangelical minister and set up the scam-busting business in San Diego after serving seven years in prison.
Minkow recorded conversations with Turning employees in which they discussed what profits could be made by investing in the fund.
The FBI has refused to comment on the role Minkow played in Turner’s arrest, or whether the agency uses conmen or reformed conmen in its work.
Mr Conway said Turner lived in the Bahamas with his Taiwanese-born wife, three children and three stepchildren. They had been living there since 2000 after Turner emigrated from New Zealand.
Turner hit the headlines in 2002 when he unveiled a design for a building to replace the World Trade Center, which was destroyed in the September 11 terrorist attacks. The futuristic 533-metre-high building, which would have been the world’s tallest if built, was overlooked by officials.
Mr Conway, a former Brooklyn prosecutor, has appeared in several high-profile trials, including that of Peter Paul, accused of a multimillion-dollar share fraud in a company he ran with legendary comic-book creator Stan Lee. Paul also has close ties to former US president Bill Clinton and his wife Hillary, but is suing the pair for alleging fraud of millions of dollars on an unrelated matter.
Neither the Foreign Affairs and Trade Ministry nor New Zealand police were aware of Turner’s arrest, though spokespeople for both said this was not unusual.
By: CHALPAT SONTI, Manawatu Standard
