Cayman Islands: Lawsuit uncovers link to Brazil’s corruption scandal of the century

Compass Cayman reports on a lawsuit which uncovers a Cayman link to Brazil’s “corruption trial of the century“, also known as the Mensalao.

“A former Brazilian banker, who is serving a 16-year prison sentence in her home country for conspiracy to commit crime, money laundering, tax evasion and mismanagement, is suing law firm Walkers in the Cayman Islands.”

“Katia Rabello, principal shareholder and former president of Rural Bank in Brazil, claims that Walkers, acting for another client, obtained an information disclosure order while the firm still owed attorney-client confidentiality, contractual and fiduciary duties to her and other plaintiffs.”

“Ms. Rabello was convicted in 2012 and jailed last year for her role in one of the largest political corruption scandals in Brazil. The “mensalão” or “big monthly payment” case was a vote-buying scheme in the Brazilian Congress between 2003 and 2005 that used public funds to pay bribes to politicians. Banco Rural was found to have issued fraudulent loans that guaranteed the monthly payments. Certain payments were allegedly routed through its affiliate Trade Link Bank in the Cayman Islands.”

“Ms. Rabello is a plaintiff in the case, together with Cayman-registered firms Arnage Holdings Ltd., Brooklands Holdings Ltd., and East Farthing Holdings Ltd., and Fernando Toledo, a former representative of Cayman-based Trade Link Bank.

In a writ filed in the Grand Court on Feb. 4, the plaintiffs say they engaged Walkers as their attorneys from 1985 to 2010. They claim that Walkers had failed to carry out conflict of interest searches before the firm acted for “a new client with interests directly adverse to the plaintiffs.”

The full article is here.

In other Cayman news, premier Alden McLaughlin was in London recently promoting Cayman as a well regulated financial center. He was on the BBC and also at Chatham House. A sample of his talking points from the Chatham House transcript of his remarks:

“… the one segment of society that benefits greatly from the distortion of the truth is the criminals that we say we want to bring to justice. They are much less likely to operate in well-regulated jurisdictions like the Cayman Islands, where the spotlight is brightest and the attention greatest.”

“Again, truth will be the cornerstone of all effective global anti-corruption initiatives.”

“I will be forthright: no stronger interface exists between corruption and international financial centres than exists between corruption and every single country in this world.”


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