Court-appointed liquidators attempting to recover millions in assets held by two now-defunct investment brokerages formerly managed by funds director Ryan Bateman have sued a former employee of one of those brokerages seeking US$582,000 plus interest payments.
It is alleged in a writ of summons filed July 23 by liquidators for Bateman & Company Ltd. that the firm’s ex-employee Fernando Mendes procured two “unauthorized payments” from the company’s accounts in 2015. One sum of US$500,000 was wire transferred on May 21, 2015 and the rest, totaling US$82,000, was transferred on July 22, 2015, court records state.
The wire payments were made to a Florida-based entity called WTM, which the writ states disbursed the unauthorized payments in accordance with Mr. Mendes’s instructions.
Some of the cash was used, liquidators alleged, to purchase a property in Patrick’s Island, Grand Cayman for US$325,000 “utilizing the funds unlawfully transferred from the company.”
On June 7, 2018, joint official liquidators Graham Robinson and Chris Johnson sent a demand letter for the funds to Mr. Mendes and his wife, who are named as defendants in the writ, for repayment of the “balance of the misappropriated funds.”
“The defendants have failed to repay any of the stolen funds,” the writ states.
Various court petitions were filed in 2016 seeking to wind up two Cayman Islands-registered companies once controlled by Mr. Bateman, who is wanted locally on a grievous bodily harm charge and whom a Grand Court judge described as a “fugitive” during court proceedings in 2014.
Attempts to recover at least CI$4.8 million in the assets held by Bateman & Company Ltd. and B&C Capital failed, according to the joint official liquidators, Mr. Robinson and Mr. Johnson.
A Grand Court petition field in 2016 alleged that Bateman & Company Ltd. failed to deliver any cash or securities held following demands from the liquidators. Bateman & Company acted as a custodian for B&C Capital, an investment brokerage, according to the court records. Bateman & Company has “no directors and no management” at present, according to the court records filed in August 2016.
“Both [B&C Capital] and [Bateman & Company] are members of a group of companies known as the ‘Bateman Financial Group’ controlled by Mr. Ryan Bateman,” the Aug. 10, 2016 petition stated.
“The joint official liquidators of the petitioner have been unable to determine exactly what cash, securities or other assets were transferred to [Bateman & Company], but have established that … the company was holding cash amounting to at least $2,381,029.63 and securities to the value of at least $2,456,753.22 on behalf of customers of [B&C Capital Ltd.].” Securities are usually liquid assets such as stocks, bonds and mutual funds, but the term is sometimes used as a catch-all for numerous types of investments.
According to a Grand Court order issued on July 22, 2016 by Justice Ingrid Mangatal, B&C Capital Ltd. was ordered to be wound up following a petition filed in June 2016 by a British Virgin Islands-based creditor of the company. Winding up is the legal, court-supervised process by which assets of a business are sold to pay off creditors. The business is typically dissolved following that process.
Mr. Bateman left the Cayman Islands in late 2014, missing a court appearance on a criminal charge of grievous bodily harm in connection with a domestic dispute. The Royal Cayman Islands Police Service has said Mr. Bateman will be arrested if he comes back to the islands.
In July 2016, the Cayman Islands Monetary Authority canceled Mr. Bateman’s director registration. The decision by the financial regulator alleged that Mr. Bateman carried on “business in a manner detrimental to the public interest, or to the interests of the covered entities for which you are appointed as a registered director.”