Top-secret bank in works - Rocky Mountain News
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Top-secret bank in works
'Foreign capital depository' receives conditional approval
September 28, 2005
by David Milstead
Rocky Mountain News
Colorado may soon have a second "foreign capital depository," the ultra secret private
banks that help foreign investors stash cash in the U.S.The principals at hedge fund
Geronimo Partners plan Banque Tuus, which has received conditional approval from the state
banking board. It would join American International as the only two foreign capital
depositories in the U.S.
"The wealth that's outside the U.S. is growing faster than the wealth inside the U.S.,"
said David Prokupek, the CEO of Geronimo Partners. "It's a big opportunity worldwide."
Establishing the depositories has been harder than thought. The first applicant, Liberte
International, collapsed before getting final approval.
American International got its charter in 2003, but since any fees it has paid to
Colorado are literally state secrets, its progress cannot easily be assessed.
Banque Tuus traveled a rocky road to approval as well, with American International
protesting the application. Several of Banque Tuus' founders were either American International
consultants or potential investors. Specifically, American International alleged that Ed
Hoagland, a former consultant, provided its marketing materials and confidential
information to Geronimo CEO David Prokupek.
American International's protest demonstrated that entire paragraphs and pages of Banque
Tuus' marketing materials were copies of American International's, with just the name of
the institution changed.
"Just as the banking board has given us certain responsibilities, which we take very,
very seriously, we are also very, very concerned with the effect this might have, if people
of poor character, of poor judgment, are able to do what they've done," American
International CEO Jerry James told the board at a Sept. 15 hearing.
Banque Tuus' attorneys said -Hoag land had never signed a confidentiality agreement.
Banque Tuus amended its application in August to remove Hoagland as a director and
incorporator of the depository. Prokupek and his staff have "character beyond reproach," the Banque
Tuus attorneys told the banking board.
In the end, the board decided the dispute was better settled in court and that the
application was in order as presented.
"I don't want to get involved in the outlying contractual dispute between the parties,"
board member Richard Mutzebaugh said.
Banque Tuus' charter got conditional approval, with several requirements. Chief among
them: Hoagland must not work for the company, and the name must be changed to remove the
word Banque.
What is it?
• Colorado passed a law in 2001 to allow "foreign capital depositories," which can have
only nonresident noncitizens as customers. The idea is to let foreigners take advantage of
the United States' stability and legal system while also getting the privacy normally
associated with Swiss banking. The state of Colorado profits through annual fees on the
deposits.
David Milstead is finance editor of the Rocky Mountain News. He can be reached at
303-892-2648
Top-secret bank in works
'Foreign capital depository' receives conditional approval
September 28, 2005
by David Milstead
Rocky Mountain News
Colorado may soon have a second "foreign capital depository," the ultra secret private
banks that help foreign investors stash cash in the U.S.The principals at hedge fund
Geronimo Partners plan Banque Tuus, which has received conditional approval from the state
banking board. It would join American International as the only two foreign capital
depositories in the U.S.
"The wealth that's outside the U.S. is growing faster than the wealth inside the U.S.,"
said David Prokupek, the CEO of Geronimo Partners. "It's a big opportunity worldwide."
Establishing the depositories has been harder than thought. The first applicant, Liberte
International, collapsed before getting final approval.
American International got its charter in 2003, but since any fees it has paid to
Colorado are literally state secrets, its progress cannot easily be assessed.
Banque Tuus traveled a rocky road to approval as well, with American International
protesting the application. Several of Banque Tuus' founders were either American International
consultants or potential investors. Specifically, American International alleged that Ed
Hoagland, a former consultant, provided its marketing materials and confidential
information to Geronimo CEO David Prokupek.
American International's protest demonstrated that entire paragraphs and pages of Banque
Tuus' marketing materials were copies of American International's, with just the name of
the institution changed.
"Just as the banking board has given us certain responsibilities, which we take very,
very seriously, we are also very, very concerned with the effect this might have, if people
of poor character, of poor judgment, are able to do what they've done," American
International CEO Jerry James told the board at a Sept. 15 hearing.
Banque Tuus' attorneys said -Hoag land had never signed a confidentiality agreement.
Banque Tuus amended its application in August to remove Hoagland as a director and
incorporator of the depository. Prokupek and his staff have "character beyond reproach," the Banque
Tuus attorneys told the banking board.
In the end, the board decided the dispute was better settled in court and that the
application was in order as presented.
"I don't want to get involved in the outlying contractual dispute between the parties,"
board member Richard Mutzebaugh said.
Banque Tuus' charter got conditional approval, with several requirements. Chief among
them: Hoagland must not work for the company, and the name must be changed to remove the
word Banque.
What is it?
• Colorado passed a law in 2001 to allow "foreign capital depositories," which can have
only nonresident noncitizens as customers. The idea is to let foreigners take advantage of
the United States' stability and legal system while also getting the privacy normally
associated with Swiss banking. The state of Colorado profits through annual fees on the
deposits.
David Milstead is finance editor of the Rocky Mountain News. He can be reached at
303-892-2648
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