Sigrún Davíðsdóttir's Icelog

Investigations in Luxembourg into the operations of the Icelandic banks

with 19 comments

After much effort by former clients of Landsbanki Luxembourg – mostly foreign pensioners in Spain and France who took out equity release loans at the bank – it now seems their efforts have caught the attention of authorities in Luxembourg. In France, a judge has halted the recovery of these loans by the Landsbanki Luxembourg administrator

According to the Luxembourg paper Wort, there are now two investigations ongoing in Luxembourg related to Landsbanki’s operations there. This surfaced in the Luxembourg parliament as the minister of justice Octavie Modert responded to a parliamentary question from Serge Wilmes, CSV. Ms Modert said that both cases related to alleged criminal conduct in the Icelandic banks and great progress was being made in one of them.

According to Wort the progress relates to the Landsbanki equity release scheme, extensively covered on Icelog. It is not clear if both investigations relate to Landsbanki or if the operations of Kaupthing and Glitnir in Luxembourg are also being investigated.

The website of the Landsbanki Victim Group is here. This group has hired lawyers both in Luxembourg and Brussels. Considering the fact that the banks collapsed in October and that there have been efforts in Iceland to investigate operations there, also with assistance from authorities in Luxembourg it can only be said that if there is much progress made now, little was done for a long time. It seemed that Luxembourg was more than reluctant to pay any attention to the financial sector this little Duchy lives so well off.

The latest move is that efforts by the Landsbanki Luxembourg administrator to recover assets from the equity release clients have now been halted. As an investigation is ongoing in France into this scheme sold through Luxembourg, a judge in Paris has thwarted the recovery efforts while the legality of the scheme is still unclear.

Follow me on Twitter for running updates.

Written by Sigrún Davídsdóttir

July 10th, 2013 at 9:39 pm

Posted in Iceland

19 Responses to 'Investigations in Luxembourg into the operations of the Icelandic banks'

Subscribe to comments with RSS or TrackBack to 'Investigations in Luxembourg into the operations of the Icelandic banks'.

  1. I wish I could believe that actions by the administrator were being halted. Just 2 weeks ago we were visited by the bailiffs, in France, on an order from the administrator of Landsbanki Lu in administration Madam Hamilius, starting civil proceedings to seize our home.

    This despite all the actions in France by Juge Van Ruymbeke. So the fight goes on to prove the fraudulent actions of the bank and what we believe to be the inappropriate actions of the administrator.

    Tom Paige

    12 Jul 13 at 7:08 pm

  2. Bailiffs are still banging on our doors despite everything and the mounting evidence of fraud both before and after the late declaration of insolvency.

    2 weeks ago Arnaud and Patrick’s had victory over Mme Hamilius who stops at nothing to seize our homes regardless of all Criminal proceedings.

    We are all hoping that the new Justice Minister, Octavie Modert, who said the Luxembourg investigations were leaping ahead, is right, but so far we see no one controlling the hubris of Mme Hamilius. We see bailiffs and demands for money we do not owe.

    All this, in spite of the fact that the court dismissed the Bank’s foreclosure action as Landsbanki LOST the appeal in French Civil Court.

    The court ordered the suspension of proceedings initiated by order of foreclosure to our fellow victims Arnaud and Patrick for payment of the sum Mme Hamilius said was owed under
    the mortgage deeds drawn up on 19 July 2007, published in the first
    mortgage office of Draguignan on August 6, 2010, Volume 76 No. 2010S

    The following conclusions from this judgement are important:

    1.The bank does not have an enforceable right.
    ( ‘La banque ne detient pas un titre executoire’)

    This is very important for everyone because the bank does not have an enforceable right written into the mortgages and recorded by the Notaries.

    2 a) The clause governing the infamous SCR Security Cover Ratio that triggered the demand for immediate payment of unjustified and manipulated demand for funds and cut off the anticipated 20 year period of the loan IS NOT CONTRACTUAL.

    b) The SCR clause invoking the payment demand under the ratio of coverage is a postulation, a hypothetical calculation or averaging which is non-contractual and fixed UNILATERALLY by the bank, sustained by the administrator which allowed the bank to choose to reduce the value of the assets( shares,bonds, cash, property value etc.) that the bank was responsible for managing, WITHOUT ANY REFERENCE TO ANY REALISTIC VALUATIONS.

    3.The bank cannot seize the asset as the mortgage loan has been frozen by the Judge Van Rumbeyke in the Criminal High Court of Paris. The bank cannot action for it’s benefit what has been already blocked by the judge.

    According to article 706-145 of the Criminal code it is not possible to seize assets in the framework of a Criminal proceeding other than in the particular cases cited in the code.

    So, in summary, as we understand it,
    Mme Hamilius can no longer intimidate the French victims with the threats of losing their homes which has been the case for some of us, since 2009.
    Despite all this, the bailiffs are still bashing on the doors and demands for money we do not owe continue to haunt us, cost us and destroy us.
    This is our 5th year of hell.

    George Ward

    12 Jul 13 at 9:34 pm

  3. Max WOLFF said :

    ” The failure to face the problem of FRAUD constitutes a huge barrier in the path of economic recovery.

    The banking system can’t be restored until it is taken apart, cleaned up and rebuilt in a transparent and honest manner.”

    It is about time Luxembourg took an honest look at it’s banking system and the judiciary with a lazy eye.

    Luxembourg does not have the courage Iceland does to face the problem of fraud within Luxembourg even during a Luxembourg Insolvency with Luxembourg accountants and a Grand Duchy administrator.
    They still call it an “ICELANDIC AFFAIR”, when the scandal of the insolvency is surely a LUXEMBOURG affair?!

    Rachael Williams

    13 Jul 13 at 7:03 am

  4. Of course it is a Luxembourg affair. The bank was registered in Luxembourg hence it was Landsbanki Luxembourg. Bit of a no brainer.

    Nina Foster

    13 Jul 13 at 3:06 pm

  5. In her role as administrator of the Landsbanki Luxembourg estate was it not her duty, under EU directions, to investigate reasons behind the collapse of the bank and to determine that there was no dishonest dealings performed by the officers of that bank against that banks clients ? Whilst we would perhaps consider that Madam Hamilius is a talented lawyer she cannot surely consider herself to be an expert in all dealings financial.
    We are not in a position to comment about loans forwarded by certain individuals to companies as there are court cases already underway in Iceland and the UK which rightly are being heard in court to determine the legality of these loans.
    However we consider that we have now become well informed about the structure of the equity release scheme that has ensnared so many pensioners in Europe. So much so that our lawyers, Maitre’s Maingain and Bodig commissioned an inquiry on our behalf from a leading expert in the financial world to confirm our worst fears.
    This highly regarded expert, Professorr Eric Briys has studied at great length the entire scheme and briefly his conclusions are that there was never a chance that the scheme could work and that it was set up by Landsbanki Luxembourg for Landsbanki Luxembourg and not for the good of their clients.

    The report by Prof. Briys can be read on our face book site

    Nina Foster

    13 Jul 13 at 5:10 pm

  6. There is little doubt that Landsbanki set up this scheme fraudulently. It is good to hear that after all this time the true facts are finally coming to light. I am sure that more documents, reports and court judgements will be discovered, which will show this and other equity release schemes peddled in both France and Spain for what they are FRAUD PURE AND SIMPLE

    Peter James

    14 Jul 13 at 9:08 am

  7. Professor Eric Briys is not the only person to state that these schemes could never work. Erva has commissioned a similar report from an Independent Financial Expert who concludes the same. For the simple reason that.
    The interest rate is not fixed and could rise to such a level that the schemes are unworkable.
    The return on the investment could also fall to such a level, which would have the same effect, making it unsuitable for retire persons who would not have the funds or be in a position to pay off the so called mortgage loan
    The question arises therefor that were Landsbanki and the other banks aware of this situation before embarking on the road to selling these obnoxious products. Of course they were. They must have been aware that these type of products, where mortgages were taken out on unencumbered properties, tied into the the financial markets, were outlawed in the UK for exactly this reason. There are many instances to show this. In fact in 1991 the City watchdog this exact scheme and the West Bromich Building Society had to pay out some £30 million in compensation. Knowing that these schemes were not permitted in the UK, they chose to bring them into France & Spain, where the legal system is somewhat different.

    One bank has alreaady ready been reported to the Cssf for carrying out Tax Evasion in Spain in their equity release scheme sold in Spain. Documents from the Spanish Tax Ministry have sent erva a Binding Consulta (Tax Law) stating, that to take out a mortgage on a previously unencumbered property and take the money out of the Spanish jurisdiction placing it in Luxembourg with the intent to avoid/ evade taxes is tax fraud. In effect these banks are effectively inciting people to commit this fraud. It is the intention of erva through its lawyers Antonio Flores of Lawbird, Marbella, to send the dossier to the European Authorities as it would appear that Luxembourg have once again brushed this under the table having failed to respond to the allegation.

    Erva

    14 Jul 13 at 9:47 am

  8. ERVA has done so much excellent work and really put the Equity Release fraud on the map in Spain by taking the delinquent banks to Court at every opportunity and finding the serious flaws the various banks have made which break Spanish and European Laws.

    Would it be a good idea to put the special report ERVA had done, alongside the one that Professor Eric Briyce done through Brussels , side by side on the Internet sites as well as sending it to the European proceedings we are all going into?

    So many of the toxic scams have always run through Luxembourg.

    Rachael Williams

    14 Jul 13 at 10:07 am

  9. It is interesting to compare how bankrupt banks across Europe have handled the netting off of clients’ accounts against the liabilities of the bank to its customers and the obvious breach if contract incurred by the failure of the bank?

    There should be a standard procedure netting or an outline procedure banks follow as do companies with clients.

    We are getting inputs on this from banking sources as they are following these cases closely and Luxembourg is in the spotlight .

    George Ward

    16 Jul 13 at 3:00 pm

  10. We have all seen the precedent set in France a couple of weeks ago with the Arnaud, Patrick case appeal victory in Aix en Provence.
    The judge upheld all that was in the first case and they had asked for the same sum in damages as was their debt. The judge went further and ordered costs to be paid by Landsbanki.
    What the judge said backs the professor Eric Briyce expertise on the criminality of this toxic product .
    The SCR which was false and grossly manipulated in many cases in order to take money fraudulently and give it to other parties and seize 3 to 7 times what was taken or lose a property worth more than double the false sum the liquidator is demanding .
    Taking money fraudulently gained and transferring this ill-gotten money to a third party is considered laundering. Fraud is fraud. Taking part in fraudulent activities is criminal.
    Attempting to cover-up fraud is colluding and assisting crime.
    This attempted laundering as our lawyers see it, has been upheld by the administration since 2009 and every time we receive the bailiffs and the registered letters making these fraudulent demands to those of us who have had the SCR manipulated and the contracts breached in this way makes the position of the administration and those responsible for the supervision in Luxembourg totally untenable.

    Charles

    18 Jul 13 at 8:06 am

  11. Nina Foster, is there anyway we could have the Professor’s report on Equity Release in English? Perhaps Sigrun could link it if you did?

    Rachael Williams

    20 Jul 13 at 6:29 am

  12. Rachael, yes you can, just getting it translated at the moment, will post it asap

    Nina Foster

    20 Jul 13 at 9:21 am

  13. Incidentally, the report proves beyond doubt that the whole scheme was corrupt from the beginning. I hear through the grape vine that some other banks have tried to get an “EXPERT” to produce a report to the contrary but some 8 months on they have failed to find a single person willing to put their name to such a report. What a surprise !!

    Nina Foster

    20 Jul 13 at 9:28 am

  14. I am also given to understand that the administrator has been cited in a complaint for failing to formalise the position of the victims when she took control in December 2008 with regards to their open positions in the currency market.

    This was despite it being part of her brief and European requirements.

    This surely means that not only was she failing to protect these elderly naive investors but was possibly leaving them exposed to increase the amount that could be wrung from them at a later date

    Nina Foster

    20 Jul 13 at 10:13 am

  15. No reputable, respected expert would ever write a report for Yvette Hamilius saying the Equity Release Scheme was valid as that position is completely without foundation.

    As for the present position of the administrator, it is untenable as how could any lawyer be more negligent of her duties?

    George Ward

    20 Jul 13 at 8:20 pm

  16. In spite of the careful acknowledgement by the new Justice Minister of Luxembourg Octavie Modert, that there are several Criminal proceedings across Europe against Landsbanki in which Landsbanki Luxembourg is implicated,( which is of course not referred to) Mme Yvette Hamilius is still permitted to sent bailiffs and order payment of money not owed as if nothing were wrong in Luxembourg despite the clear links to the Criminal indictments in Iceland.

    Alexander Edwards

    21 Jul 13 at 8:08 am

  17. It would indeed be very difficult to challenge the report of Professor Briys. His CV is quite astonishing to say the least. As stated previously the reports we have seen at erva are very similar to that of Professor Briys, although not as detailed. We have also heard that the banks are unable to find any Expert to back these schemes, yet still they carry on hoping that their victims will die and their beneficiaries may not have the will to carry on. Perhaps they are not aware that we have very good committed lawyers,who will not give up the fight, who now know that they will win the cases for their respective clients. We at erva feel that 2013 will be the year where a number of these cases will come before the courts.

    erva

    25 Jul 13 at 10:26 am

  18. Many more pensioners have had the bailiffs banging on their doors, even in London, on the orders of Mme Hamilius and they have been told their rent will be seized and that they have no right to live in their homes once the Court order has come through.

    The Luxembourg authorities are still pretending there has been no wrong done in Luxembourg Landsbanki, that the shocking administration of Landsbanki Luxembourg has done no wrong and that anything that is wrong, is an ICELANDIC PROBLEM!

    Luxembourg is wiping it’s hands and placing the dirt onto Iceland.

    Never has there been such total disregard for ongoing Criminal proceedings by any other European nation as the courageous Icelandic Attorney General and the top French Criminal Judge Van Rumbeyke as well as the Spanish Criminal judge’s proceedings are arrogantly and recklessly IGNORED and the harassment and intimidation of hundreds of European pensioners and their families continue unabated.

    This has gone on for 5 years now. 16 pensioners have died anguished that they leave behind such injustice for their remaining loved ones. Hundreds have developed serious stress-related illness and most have suffered irreparable financial damage as all their plans for retirement have been devoured by Luxembourg abuse of the consumer and determination to turn a blind eye to all crime perpetrated by those in the corrupt financial place they wish to protect.

    It is high time European Justice had the courage to stand up and say: “ENOUGH IS ENOUGH”, to the Luxembourg delinquency as there should be no place in Europe for such malpractice.

    Alexander Edwards

    17 Sep 13 at 4:36 pm

  19. Alexander

    The UK is dealing with these kinds of malpractices as you will see from the link below where AXA has been selling similar products to pensioners and is now paying the price.

    Why is it still allowed to happen in Luxembourg ?

    http://www.international-adviser.com/mobile/articleview?apath=/News/UK/axa-fined-1-8m-for-serious-investment

    Nina Foster

    18 Sep 13 at 6:14 am

Leave a Reply