News | Sunday, 26 July 2009

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The sour deal that cost me my retirement money

Retired Air Malta captain Howard Kreiss lost €500,000 in investments and is now sceptical that the Maltese police will be able to track down his money

David Darmanin
“I thought the authorities would work for the best, but now I have lost faith,” said New Yorker Howard Kreiss, the victim of an alleged $712,000 (€500,000) investment fraud with which Maltese intermediaries have been charged in court.
Kreiss, 60, a retired Air Malta captain who resides in New York but who obtained Maltese nationality in 2002, appeared in media reports last summer in connection with the arraignment of Andrew and Patrick Zrinzo.
Prior to that he had captained the hijacked Air Malta flight bound for Istanbul. Two Turks had threatened to explode the airliner, and forced Kreiss to change course for Cologne. None of the 72 passengers and crew on board had been injured.
The Zrinzo brothers are investment consultants who stand accused of defrauding Kreiss, and are also pleading not guilty to defrauding Saviour Borg, Lorry Borg and John Mary Farrugia.
Although he was advised not to speak to the media, Kreiss says he felt the need to make the case public: “the police are only concerned with convicting the accused, rather than helping me get my money back.”
Kreiss says he was effectively robbed of his retirement money. “I realised my stock account had been closed without my express approval,” he said, of the moment when he found his investments had disappeared.
In 1991, Kreiss met reputable stockbroker Neville Curmi on an Air Malta flight where the two became friends. It was through Curmi’s firm that Kreiss started investing through a young Andrew Zrinzo, then an advisor in Curmi’s employ.
“I met Andrew twice or three times a week. There is no question, the man is smart. Zrinzo and I became friends over the years and I kept on investing through him,” Kreiss said. “I started with $230,000 but in time, my investments grew to about $3.8 million.”
Shortly after the Wall Street crash in 2000, Andrew Zrinzo, the younger of the accused siblings, opened an advisory firm of his own.
“He convinced me to pull out my investments with Neville Curmi and go with him instead,” Kreiss said.
So in November 2000, he transferred a total of $2.5 million (€1.75m) to London-based equity firm Williams de Broë, using Zrinzo as an intermediary.
“I kept track of my investments at de Broë through portfolio and cash printouts given to me by Andrew personally. Although it was not standard practice that an unlicensed stockbroker issues such printouts from his own computer, I double-checked him and everything always seemed right,” he said.
But in June 2007, Zrinzo suddenly became very hard to reach on any of his phone numbers. “I needed to contact him urgently to sell some stock, but he would not answer any of my messages,” Kreiss said.
“When I tracked him down, I asked him to give me an idea of which of my investments were good to sell.”
Although Zrinzo recommended against Kreiss’s decision, he still transferred $84,600 from his own bank account into Kreiss’s. “I thought it was strange that Williams de Broë itself had not issued a cheque, but the money came in so I did not complain.”
Kreiss however, had no idea that his account at Williams de Broë had in fact been closed; and that he actually got paid more money from Zrinzo’s bank transfer, than the actual value of the shares he thought were sold.
“I had granted Zrinzo power of attorney, which was not even endorsed by a third party lawyer. But that did not give anyone the right to transfer my money out of Williams de Broë, or worse – to close my account.”

Lost retirement
Just prior to his retirement in 2008, Kreiss decided to sell all of his stock with de Broë. From his home in New York, he spent the end of 2007 trying to reach Zrinzo by phone, but to no avail.
“So in March 2008, I called at Williams de Broë directly to check on the status of my account – only to be informed that it had been closed since March 2007.”
The person Kreiss spoke to at the London office asked him if he had received payments made to an HSBC account in Malta, to which he replied: “I don’t have an HSBC account at all.”
Williams de Broë mentioned repeated bank transfers, one amounting to $90,000, another to $77,000 and another to £40,000.
“When I asked who authorised the transaction, the de Broë representative mentioned an authorisation letter signed by Andrew’s brother, Patrick Zrinzo, who wrote to them using the letterhead of a company named Finacom – which I had never heard of.”
Finacom, whose chief executive is Patrick Zrinzo, is the Malta-based financial arm of Brazilian agro-industry group Agrenco.
Williams de Broë then produced this letter to Kreiss, which was used as evidence in a police report he later filed in Malta. In June 2008, the Zrinzo brothers were arrested and charged with fraud.
“The next court hearing was extremely disappointing,” Kreiss said. “I saw prosecuting officer Inspector Ivan Cilia shaking hands with the Zrinzo brothers. I couldn’t believe my eyes. In no way should a policeman show any sign of affection or friendship to people he arrested.”

Disappointing prosecution
Kreiss says that when the case was reported to the fraud squad, Cilia was not even conversant with the workings of the financial world. “He had just been transferred from immigration and this was the first case of this type. I had to spend half an hour explaining to him how the stock market works before giving him the case details.”
Kreiss feels aggrieved by the prosecution on more fronts than one.
“I filed civil cases against the Zrinzo brothers and Andrew’s wife Lisa, who worked at an HSBC call centre. The police seem uninterested in making a find-out of any of Zrinzo’s holdings abroad. Cilia himself told me that Lm830,000 from the sale of Andrew’s house were transferred from HSBC through Thomas Cook, but the police don’t know where the money went from Thomas Cook. I happen to know for a fact that Andrew had a Lloyds account but I very much doubt the police even checked where the account is held and how much money there is in it, if any.”
Kreiss also sought the help of Neville Curmi himself, who used his financial expertise to figure out the possible workings of the fraud. “Cilia had prepared questions that were to be passed on to Interpol, so that in turn, Scotland Yard approaches William de Broë with them for an affidavit to be produced in court. Neville rewrote Cilia’s questions so that important information is drawn, but I know for a fact that the police never sent out Neville’s version.”
As the case remains pending, Kreiss feels disillusioned as his prospects of getting back the money he lost remain bleak.
“This is like a big jigsaw puzzle,” he said. “And resolving it is not that easy. Unfortunately, it is not a matter of what you know in this country, but more of whom you know.”
Efforts to contact both Patrick and Andrew Zrinzo at their company offices proved futile.

ddarmanin@mediatoday.com.mt

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