Inverworld, Inc., et al. - Page 185

                                                 - 40 -                                                   
            permitted by the discretionary authorization to retain a portion                              
            of the enhanced return as its income.                                                         
                        d.     Pace Investments                                                           
                  LTD offered Pace investments (including one called Pace II)                             
            to clients who had unused lines of credit with Mexican financial                              
            institutions.  Generally, such institutions would have                                        
            insufficient liquidity to allow clients to draw any further funds                             
            on their lines of credit.  LTD offered to its clients (who were                               
            not necessarily the ones with unused lines of credit with Mexican                             
            financial institutions) a stated rate of return on funds invested                             
            for a fixed period of time.  LTD deposited such funds with banks                              
            in Mexico for a period of time coinciding with the maturity date                              
            agreed upon with LTD's clients.  LTD earned interest on the                                   
            deposited funds.  The deposit was made with the stipulation that                              
            the money be used to allow LTD’s client in Mexico to draw on its                              
            formerly unused line of credit.                                                               
                  The client, now able to draw upon its line of credit, paid                              
            LTD a fee to complete the transaction.  LTD derived income on the                             
            difference between (1) the sum of the interest earned from the                                
            Mexican bank and the fee earned from the client and (2) the                                   
            interest paid to its clients as their stated rate of return for                               
            making a deposit with LTD.                                                                    
                        e.     MMA II                                                                     
                  MMA II was a "back-to-back" operation designed to take                                  
            advantage of a loophole in the Mexican tax law that lasted                                    




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