Guernsey FIU’s No-Consent Orders result in Jurats agreeing that the proceeds were not from crime.

In a complex legal dispute, Dr Richard Tucker Loero, the settlor and beneficiary of the Fraternite Trust, has taken Credit Suisse Limited (CST) to court after Guernsey’s Financial Intelligence Unit (FIU) repeatedly refused to consent to the release of trust funds.

KEY FACTS

1. Dr Tucker Loero [DTL] had settled funds into a trust governed by New Zealand law. Credit Suisse Trust Limited (CST) was the trustee.
2. DTL sought to revoke the trust and transfer the trust funds to him.
3. The trustee formed a suspicion that the funds in the trust were the proceeds of crime and lodged a suspicious activity report (SAR) with the Financial Intelligence Unit (FIU).
1. CST’s SAR indicated that RTL’s income was disproportionately high for his role, raising suspicions.
2. The trust’s association with Venezuela, a high-risk jurisdiction, and adverse media reports further supported CST’s concerns.
3. Although dismissed, RTL’s past involvement in criminal investigations and a recent incident involving a falsified arrest warrant in Venezuela added to the suspicion.
4. Once a SAR had been lodged, the funds in question were effectively frozen unless the FIU consented to their transfer. The FIU did not consent, and since the trustee's suspicion was not challenged,
5. DTL could only obtain his funds by getting a declaration from the Royal Court that the funds were not the proceeds of crime.
6. He had the burden of proof to do this. To satisfy this burden, DTL needed to provide the Court with evidence supporting the provenance of the trust funds. Witnesses were cross-examined at trial on the evidence they provided.
7. In 2024, Dr Richard Tucker Loero (RTL) secured an order from the Royal Court declaring that Dr Tucker Loero's funds held in a trust in Guernsey were not the proceeds of crime, for the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law, 1999 (the Law).   

TIMELINE

1. RTL established the Fraternite Trust on July 23, 2010.
2. On May 26, 2021, RTL filed a Deed of Revocation seeking to revoke the trust entirely.
3. CST, the trustee regulated by the Guernsey Financial Services Commission, declined the request on July 12, 2022, citing legal and regulatory reasons, advising RTL to seek legal counsel.
4. After CST's refusal, RTL initiated legal proceedings on October 21, 2022.
5. The defence, filed on November 16, 2022, revealed that CST had reported the trust to the FIU under its statutory obligations, suspecting suspicious activity.
6. On October 25, 2021, the FIU confirmed it did not consent to releasing the trust funds, leaving RTL with no choice but to pursue legal action.
7. In November 2024 –
1. The court Jurats unanimously concluded that it was appropriate to exercise the court’s discretion to make the first declaration sought in the amended Cause, namely that the Trust funds are not the proceeds of crime.
2. As set out in the judgement, having discussed the nature of the remainder of the relief sought in the amended cause with counsel, no further order was necessary, on the basis that CST had confirmed that once it has the comfort of the Act of Court it would comply with the revocation of the Trust following the Deed of Revocation and the request by RTL to pay the funds away per his instructions [Dates of hearing: 15 - 19 April 2024 / Judgment handed down: 6 November 2024]
3. https://www.guernseylegalresources.gg/CHttpHandler.ashx?documentid=86212

Source

• https://www.guernseylegalresources.gg/CHttpHandler.ashx?documentid=86212
• https://www.ogier.com/news-and-insights/cases/ogier-succeeds-in-obtaining-a-decision-that-trust-funds-were-not-the-proceeds-of-crime-1/