Corallo’s companies continue fight for RBC bank accounts

POSTED: 05/26/14 3:13 PM

“Alternative is closure or the creation of a cash economy”

GREAT BAY – Atlantis World Management NV and two other companies of which Francesco Corallo is the ultimate beneficial owner demand (again) that the Royal Bank of Canada continues its banking relationship with them. Otherwise, the companies demand that RBC release the balance of all accounts (an estimated $8 to $9 million) in cash within 48 hours after the court has ruled in favor of this demand. Last Friday, Corallo’s attorneys squared off with RBC in summary proceedings. The court will render its decision on June 6.

It is not the first time the Corallo-companies took RBC to court over the bank accounts. On October 29 of last year, the Court in First Instance ruled that RBC’s decision to terminate the relationship was justified.

Atlantis World Management NV manages four casinos in St. Maarten – Atlantis, Beach Plaza, Paradise Plaza and Dunes; a second company, Dawn Beach Properties Ltd. (established in Nevis) owns the Paradise Mall in Simpson Bay. International Financial Planning Services Ltd. manages the business complex with several restaurants near the Atlantis Casino. The companies have been banking with RBC 14, 7 and 16 years respectively. The October 2013 court ruling identifies Corallo as “indirect shareholder of Atlantis c.s.” and as registered at RBC as beneficial owner of these companies.

RBC informed the companies on February 15, 2013 that is would terminate the banking relationship a month later, per March 16. The reason for this decision was the bank’s fear for reputation-damage due to the persistent negative publicity about Corallo.

Atlantis c.s. objected, saying that the fear for reputation-damage is unfounded and that the companies are no longer able to take part in the local economy because no other bank wants to open accounts for them. Last year, Atlantis c.s. presented letters from the Windward Islands Bank, CIBC First Caribbean and Banco di Caribe to substantiate this claim. With RBC, the court rejected this claim, because all three banks offered different options in their letters.

Since the October court ruling, the bank accounts at RBC have remained open but inactive, due to differences of opinion about who will have to pay the fees for transferring the balance to other accounts. Atlantis c.s. maintains foreign bank accounts, amongst others in Anguilla.

“Everything has to be done in cash,” attorney Willem Nelissen told the court on Friday. “Rents have to be collected in cash, 350 employees have to be paid in cash, Gebe and the tax office have to be paid in cash. The minister of finance is not a proponent of this. Our clients have nowhere else to go.”

The attorney said that his clients have attempted to find a solution with other banks. “Without success. They will be forced to close down companies that are performing well. Jurisprudence of the Supreme Court states that, if a company is unable to find another bank, they must be allowed to continue with their old bank.”

Nelissen’s co-counsel Jeroen Veen pointed out to the court that it would become “a national problem” if casinos are unable to establish bank accounts in St. Maarten. “The companies are legal. On the one hand, they pay their taxes but on the other hand, they have to leave their bank. They pay $250,000 to Gebe and $130,000 to the receiver every month and millions a year to suppliers. If everything goes wrong, RBC will have to pay the balance in cash and it remains to be seen whether they are able to do that.”

Veen noted that all those millions would then have to be stored in a vault and that the companies would have to pay everything cash. “It cannot be that banks terminate relationships at random and make it impossible to do your banking. We have to address this with the minister of finance and the Central Bank.”

The attorney said that RBC had recently opened an investment account in Canada “for the same beneficial owner without any problem.”

The scenario that will become reality if RBC persists in putting Atlantis c.s. on the street is “terminating the companies and dismissing 400 employees, or the creation of a cash economy. That will lead to suspect transactions with Gebe; the MOT (Financial Intelligence Unit – ed.) will get a lot of work this way,” Veen said. “And we have not even started about security issues.”

Veen admitted that the chances for a solution are not zero, because his clients are still negotiating with one bank. “However, there is a better chance of finding a solution with the minister of finance.”

If the court backs RBC’s decision, Veen wondered about the situation for others. “What if they are no longer able to maintain a bank account after a conviction? In the Netherlands, there is a solution for such a situation to keep people within the banking system. Today casinos are banned, tomorrow it could be attorneys.”

Veen said that his clients are willing to leave RBC, but that they are unable to do this. He said that the negative publicity – in particular articles that have appeared since 2010 in Today and in the Antilliaans Dagblad – have never linked the companies or Corallo to the RBC.

RBC’s attorney Richard Gibson Jr. expressed his surprise that Atlantis c.s. went back to court over this dispute. “There is a clear court ruling from October 19, 2013, that states that the fear for reputation-damage is justified and that this is a valid reason for terminating the relationship.”

Gibson said that the companies have already had more than a year to find another bank, and that the RBC has not closed the accounts immediately, but that it is now time for them to withdraw the balance. “The RBC is under no obligation to enter into a new relationship,” he said.

Gibson pointed out that the negative publicity surrounding Corallo continued last year after RBC terminated the relationship. “Those reports were about the manipulation of a court ruling and misleading the media.”

The attorney furthermore referred to the link between Corallo and Curacao’s former Prime Minister Gerrit Schotte who was arrested last week on charges of money laundering and forgery. Gibson quoted from an article in Antilliaans Dagblad that dealt with payments from Corallo’s Italian company BPlus to accounts of Schotte’s girlfriend Cicely van der Dijs.

“The RBC does not want to be associated with Corallo and his companies,” Gibson concluded, adding that making the bank balance available in cash within 48 hours is impossible. “RBC is however prepared to talk about solving practical problems.”

“That is not enough,” Jeroen Veen responded. “The biggest frustration of my clients is that Corallo has never been convicted anywhere for anything. I know many clients who have been convicted for money laundering and drugs and they are all banking with RBC. It is impossible to link Corallo to RBC. This is only due to the fact that Hilbert Haar wrote about it in the Today newspaper.”

Veen told the court that practically all banks have a casino as client. “We have asked for meetings with other banks, but they just do not respond.”

Richard Gibson got in the last words before the court closed the hearing. “The accounts are still open and RBC has asked Atlantis c.s. several times to deal with them, but instead they come with new lawsuits. In the meantime the negative publicity in the newspapers continues. I doubt the stories about the need for traveling with suitcases full of money from Anguilla to St. Maarten. There is no evidence that transferring money from those foreign accounts is impossible.”

Francesco Corallo has in the meantime told the Curacaolenean newspaper Extra that he never “personally” gave money to Gerrit Schotte. (See related story on page 5).


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