Shareholders in The Classic Car Fund (“TCCF”) commissioned Intel Suisse in mid-2022 to investigate potential financial fraud in TCCF, which collapsed in 2021 resulting in catastrophic losses to all investors. Investors suffered severe losses in sister fund Classic Investment Fund (“CIF”), also registered/regulated in St Vincent & Grenadines. Both funds were placed into liquidation in early 2021 by controlling shareholder and director Filippo Pignatti-Morano, with not 1 cent revcovered to date.
The investigation uncovered many inconsistencies and misrepresentations, with investment losses concealed for several years while Pignatti heavily marketed TCCF to unsuspecting new investors, with the aid of a complicit fund administrator issuing shares at over-inflated share prices.
As an example, a TCCF loan was made in March 2017, where all of TCCF’s cash was lent out at low interest rates, and which then defaulted within 12 months (unrelated to any investing in classic cars) – says Clive Evans, representing 9 investors.
“It’s unbelievable that Filippo Pignatti could sit in my Antibes office in September 2018, marketing his fund to me and my clients, knowing perfectly well that this loan it was already in default. This was then compounded by him selling cars at silly prices – only seven months later- at a time when most car people knew it was a time to hold. Did he sell them to himself? Pignatti and his associates need to pay the price of their actions- as well as returning client monies” Clive Evans told the St Vincent Times.
A few months after the Evan’s last investor sent money in April 2019, Pignatti sold 7 classic cars at a firesale auction in Zurich, Switzerland, recovering less than 50% of TCCF’s valuation of these cars.
Further alarms are ringing in SVG however – Scarabaeus Waelth Management AG, the Liechtenstein-based fund administrator to TCCF in 2012, changed into Fortuna Administration (no office or people in SVG), and/or administered the fund from Liechtenstein (never registered in Liechtenstein), with former directors of TCCF, CIF and Scarabaeus Michael Zuther and Patrick Demi intimately involved in every company. An unnamed company, Hawk Fund Management in Bulgaria, with Demi and Zuther as directors, appeared to be behind the shareholder administration for TCCF.
On www.fortuna.vc one observes that “Fortuna” is also administering 6 Scarabaeus’ funds with well over US$ 100 million of assets. So who is actually calculating the share price, doing the accounting, and is this process independent? The concerns for international investors have led Intel Suisse to file a report with the Director of Public Prosecutions and the Financial Services Authority, citing its findings after 7 months of investigation. It appears that Pignatti-Morano and Scarabaeus might be taking SVG’s reputation as financial center for a ride.
Ernesto is a senior journalist with the St. Vincent Times. Having worked in the media for 16 years, he focuses on local and international issues. He has written for the New York Times and reported for the BBC during the La Soufriere eruptions of 2021.
For the integrity of St Vincent as a financial center the FSA has to be pro-active in stopping such investor abuses.