The Bank of Cyprus is sued by the trustees of bankrupt Nasdaq-listed AremiSoft Corporation in the USA for laundering the financier’s ill-gotten gains under investigation for stock fraud.
Till bankruptcy, AremiSoft Corporation was a computer software enterprise traded on NASDAQ under the ticker AREM.
The lawsuit wants from the bank the money defrauded from AremiSoft investors in a major stock market scam. So, it seeks damages of at least USD 40 million.
Lycourgos Kyprianou, former chairman and CEO of AremiSoft is alleged to have bribed auditors either directly or through associates in order to conduct false audits regarding company acquisitions. Among other things, Kyprianou has been charged by US authorities with securities fraud and money laundering. After his refusing to return and face the charges, Kyprianou, who currently lives in Cyprus, is treated as a fugitive.
While AremiSoft Corporation was reporting artificially inflated revenues, Kyprianou and joint CEO Roys Poyiadjis purpotedly made over USD 300 million in secret sales of Aremis stock.
As part of a settlement deal, Poyadjis has returned USD 200 million to the Liquidating Trust. In accordance with the US Securities & Exchange Commission (SEC) that carries the investigation, Kyprianou as well as other officials intentionally misrepresented the company’s true financial and business conditions.
Local authorities detained Kyprianou in October 2002 suspecting him of conspiracy in defraud and exporting currency under false pretences. He was detained for a week, but released without ever being charged. AremiSoft is also accused of reporting false revenues.
As a result, US-based investors are accusing the Bank of Cyprus, with which Kyprianou had several deposit accounts. Bank of Cyprus let him engage in transactions processing tens of millions of USD from AremiSoft to his own accounts and then let him launder proceeds obtained by him in further breach of his fiduciary duties to AremiSoft. One of account was opened with the bank on the name of an offshore company incorporated in the British Virgin Islands – Southwood.
The Bank of Cyprus rejects the claims made made in the lawsuit.