Effort to revive financial sector.

Grenada is looking to relaunch its shuttered offshore financial sector after a six-year hiatus that was prompted by a multimillion-dollar fraud scheme, reports AP (April 3, 2008). A consultant was expected to meet soon with government officials to recommend what type of offshore entities would best suit the island, said Timothy Antoine, secretary in the Ministry of Finance. Grenada in February created a new regulatory body to oversee financial institutions, including credit unions and offshore brokerages, to avoid fraudulent activity, Antoine said. A similar agency existed before the fraud scheme, but only monitored offshore banks. The First International Bank of Grenada collapsed in 2000 after its owner promised investors huge returns from the bank, which he said was backed by a US$20 million ruby carved into a statue of a boy on a water buffalo. The bank's 4,000 investors were cheated out of US$170 million through a Ponzi scheme that used their cash to lure other investors without paying them back. Most were U.S. citizens hoping to boost their retirement income. Part of the money was returned to investors as phony interest payments. In 2002, Grenada suspended its financial sector's operations and later revoked the licenses of all offshore banks.