Fighting Fraud: The strange case of the internet conman

silicon.com's 'Fighting Fraud' campaign can reveal the intricate web of lies behind one of the conmen colonising the internet, posing as investment specialists.

Dan Latham currently resides in prison, serving a conviction for fraud, but the organisation he set up to extract six figure sums from investors is still operating, even though it has been proved in US courts to be a front for an investment scam.

Island Resources.com - a Republic of Nauru-based investment scheme - is the online front of the Panacea Bank and Trust, an organisation that has been cited in a number of warning lists put out by financial watchdogs across the globe, including the IRS and the FSA.

The site - www.islandresources.com - promises returns of up to 200 per cent per month on investments over $100,000, to entice gullible investors to part with huge sums.

On 28 September 1999 a New York district court found Latham guilty of wire fraud. At the centre of the case was a lending scheme administered in part by Latham, where advance fees were extracted from two loan applicants.

Two sham Manhattan companies, John J Barney and Associates, and Barney International Holdings, told the victims that an overseas lender, Panacea Bank and Trust, would finance their loans.

The court also heard how Latham had falsely informed a US government appointed investigator, Michael Keeley, that Panacea Bank and Trust had billions of dollars in assets and that it was pending an audit by Deloitte and Touche

Latham faxed the victims documents which stated that Panacea's international department was directed in part by one Oaheyoh Two-Feathers. Latham later conceded that Oaheyoh Two-Feathers was an alias used by him.

Latham appealed against his two-year custodial conviction on 3 May 2000, but it was turned down. In summing up, the court said: "The jury was entitled to find that Latham deliberately created the fraudulent impression that Panacea was a legitimate institution& this false impression was an integral part of the scheme to defraud."

According to Eric Simonson, the Dallas-based owner of Alpha Internet Presence and an Island Resources.com administrative contact, the site was the subject of a FBI investigation, which in the end proved fruitless because the bank lies outside US jurisdiction.

The FBI cited Latham in its investigation to Simonson, who admitted to having dealt with him - albeit under an alias.

"The FBI contacted me about this not so long ago," said Simonson. "They mentioned this guy, though it wasn't the name of the person who contacted me to do the work and asked me about the website. They said they wanted the website closed because it's a fraud."

Still boasting a London Barclays bank account for Island Resources and associated ventures like the Quantum Trust of Nauru, the Panacea Bank continues to arouse the interest of the world's financial watchdogs, having appeared on alerts for the US Office of the Comptroller of the Currency, and a string of other financial regulators, including the IRS, the FSA and the International Chamber of Commerce.