A fraud alert was issued in Antigua last week after the collapse of the European Union Bank - claimed to be the first off shore bank on the Internet. The company fired its 31 staff on 31 July, the same day the company's founders and investors money vanished.
According to reports, the Antigua and Barbuda government issued the alert after several complaints were made about lost deposits. A national search is also under way for the company's founders Serbveo Ushakov and Vietalui Papsouev, both of whom are thought to be Russian nationals. It is also understood that Coopers & Lybrand has been hired to examine the company's records.
According to the Washington Post, evidence that the bank was involved in money laundering was made available to investigators last October.
The Bank of England warned investors to treat the European Union Bank with caution following several reports in international newspapers.
A spokeswoman from the Bank of England confirmed that the European Union Bank was seeking deposits via ads on its Internet site (http://www.eubank.ag) which were accessible in the UK, but was not allowed to bank in England.
Asked if she thought the collapse would further hamper the Internet's foray into the financial world, she said: "Whether you are banking on the Internet or not, you must be very careful what you do with your investments."
But Saj Arshad, head of electronic commerce at VISA Europe, believed the collapse will further damage the Internet's reputation as a safe environment for commerce. He said: "The problem with using the Internet for commerce is trust. You can't see who you're dealing with. This is a major obstacle and this (collapse) doesn't help."
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