Dotcom casino execs convicted of $32m Coutts bank fraud

GalaxiWorld.com gamble doesn't pay off

By Linda Harrison in New York • Get more from this author

Posted in Music and Media, 14th October 2000 08:38 GMT

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Execs at dotcom casino Galaxiworld.com got their wrists slapped yesterday for defrauding the Queen's bank of $32 million.

Company CEO Jack Banks and CFO Larry Weltman received fines totalling just $1 million, along with a five-year probation stint from a New York court. They were also banned from returning to the US and from serving as officers of a public company or holding nine per cent of stock in one, Rolling Good Times online reported.

Their crime stretches back to 1995, when they borrowed $32 million from the New York office of Coutts & Co - part of NatWest bank.

They secured the loan on stock from Laser Friendly - a predecessor company to Vegas-like site GalaxiWorld. But they artificially inflated the value of the stock by keeping the bank in the dark on one point - that they didn't have the licenses needed to operate one company Laser Friendly had bought.

The bank ended up losing $28 million of the amount loaned, and shut its New York office last year with losses of $100 million.

The GalaxiWorld site went live in December 1998 and in 1999 ceased being a public company. While Banks and Weltman apparently live in Canada, the company is based in Gibraltar and the casino is operated from St Kitts.

Although their gamble didn't pay off, the two seem to have escaped quite lightly - charges of fraud and grand larceny can apparently mean a 25-year stretch in prison. ®