Closing First Bank was relatively easy, but actually convicting the ringleaders of money laundering was another matter entirely. Before the US Department of Justice could bring charges against Ziegler, Barnabe, Ferguson, Regale, and Skirving, it needed solid evidence against the group—prosecutors needed to be able to trace precisely how the group stole, laundered, and then spent its millions of dollars.
Leading the grand jury investigation was Assistant US Attorney Claire M. Fay, who took the case in October 1998 and started following the money. She knew from speaking to investors that they’d sent their checks to an address in Antigua, checks made out not necessarily to First Bank but to a number of fund names. Once the money reached Antigua, a Ziegler employee would stuff the checks into an envelope and mail them back to the States, to a small check-processing company called Automated Payment Processing (APP), located in a Forest Grove office building. APP, in turn, deposited the checks into its own legitimate bank account at a nearby branch of US Bank. “Then they just waited for [disbursement] instructions from Brink and Regale,” says Fay. The pair then directed the now-laundered funds to various overseas accounts. Because of APP’s affiliation with offshore banking, US Bank eventually asked the company—which was oblivious to the illegality—to shut its account. But that hardly impeded First Bank’s activities: Fay soon discovered that First Bank employed check-processing centers in Washington State, Nevada, St. Vincent, Nevis, Uganda, and the Isle of Jersey.
What she really needed to convict Ziegler and his cohorts was evidence from Grenada—which turned out to be extremely difficult to obtain, in spite of the many grand jury subpoenas issued by the Department of Justice. When the department sent one to Ferguson requesting IDIC records, for instance, his response read, in part, “It was a policy that all correspondence was shredded and e-mails deleted after being read … not for any sinister purpose, but to meet the contractual provisions for total confidentiality.”
Prosecutors needed to be able to trace precisely how the group stole, laundered, and then spent its millions of dollars.
She also had a difficult time getting testimony from investors, many of whom were embarrassed that they had been scammed or who still held out hope that First Bank would eventually come through with their money. “We got the equivalent of doors slamming in our faces, [people] saying, ‘We’ve signed nondisclosure agreements as part of our investment, and we can’t talk to you.’”
In 2002, after Wide had completed his report, Grenada finally released First Bank’s papers to Fay. There were 223 boxes that were covered in mold. A hurricane had hit Grenada in the interim, and the papers inside were yellowed, wavy, and dank. “The smell of these records—it was terrible!” says Fay. And then she began the long, tedious task of trying to make sense of what happened. “I was Alice down the rabbit hole…. The first document might look legitimate, and it might purport to be secured by a second document, which is secured by a third document, and you have to go to the third or fourth level before you find the thing that’s just a completely bogus forgery.”
While Fay was building her case, the First Bank players got back to work. Skirving proposed to Ziegler and Ferguson that they open another bank in Grenada. (“The new name could be ‘First Bank of the Caribbean’ or something like that,” he wrote in an e-mail.) Instead, Skirving started the Bank of the Nations, a nonexistent bank that he ran from Portland using many of the same lures as First Bank. (In 2002, the Oregon Department of Consumer and Business Services sued the partners of Bank of the Nations; in 2005, Multnomah County fined them more than $2.3 million.)