We are now prepared to report the details of extraordinary, coordinated, and fraudulent schemes orchestrated by the leadership of Bank of Asia to mask its true equity position; these while its disgraced and bankrupt founder, Mr Carson Wen, attempted to sell the bank for around $400 million and extract cash for himself and others despite a worldwide freezing order being in place.
None other than Lorna Smith OBE, now Junior Minister Smith, was at the helm of Bank of Asia at all material times while it was cooking its books. She is at the core of this story and what is to follow hereafter.
We have now uncovered detailed documents that verify what we now expose regarding corporate fraud. In the interest of transparency, we will be sharing the documents with the rest of the media community in due course so that they can confirm the veracity of our reporting. Whether they choose to remain quiet or speak out as we have is an urgent choice that they will need to make.
This article is only Part 1 of a terribly disturbing story of cronyism, nepotism, and outright fraud.
The Top-Desk Drawer Invoice Fraud Scheme, and the Intimate Involvement of Lorna Smith OBE
By way of a recent press release, Junior Minister Smith has publicly confirmed that she joined the board of Bank of Asia in or around 2019. On 19 June 2025 at the RISA and South Square Conference on Peter Island she also stated that “[o]ur determination to succeed will never change, nor will our commitment to good governance, robust financial regulation and positive partnerships”. On the evidence, nothing could be further from the truth.
In 2019, just after now Junior Minister Smith’s arrival to Bank of Asia’s board of directors, a Hong Kong affiliate company named BOA Financial Group Limited (“BOA Financial”), which was providing extensive management services to Bank of Asia, began withholding its invoicing for services rendered.
As the now bankrupt Mr Carson Wen described the accounting fraud scheme: “[BOA] Financial Group has withheld billing Bank of Asia (BVI) Limited management fees in order to ensure all of Bank of Asia’s resources are devoted to growing the bank.”
Rather than record an obvious expense and a related liability to the affiliate, the bank decided it could hide the matter as if the debt did not exist. But it did. The effect of this was simple: overstated income and overstated capital and capital ratios. This is what was presented to the FSC. It should be noted upfront that by year end 2023 common equity capital BEFORE properly recording the expense and liability was near zero.
As we will detail below, the size of this corporate accounting fraud scheme is staggering. Whether it is one of the largest uncovered in our history is unknown. The length of time it went on is equally troubling. Unwitting depositors had no idea of Bank of Asia’s debts and its true equity position, and it all happened right under the nose of the FSC. The epitome of gambling with depositors’ money.
No doubt the envisaged end-game to this paradigm example of corporate fraud and accounting shenanigans was a major capital injection combined with a sale of the bank, with all of this swept under the rug and no one the wiser. But so too goes the means-to-an-end story of many similar corporate schemes. Showing false investment returns, inflating revenues, and/or hiding expenses (as here) all have the same effect – fraudulently duping customers, suppliers, creditors, regulators, and shareholders to name a few.
We have all seen this story play out in the global press time and time again. Witness Bernie Madoff – falsely inflating investor returns; Allen Stanford and Stanford International Bank in Antigua – inflating depositor returns and the misappropriation of assets for personal gain; Enron – concealing large losses; WorldCom – fraudulent accounting in an attempt to increase its share value. The list goes on.
The Expenses Recorded – No One Competent Could Have Missed this
To put the scale of the corporate fraud in perspective so as to show that no sane board member could have missed that accounting games were afoot, we evidence from documents the following:
In 2018, as it was building its business platform, Bank of Asia recorded a loss of just less than $15 million. This is unsurprising for a high potential growth business beginning its journey. Its ‘other operating expenses’ – the management fees – were then $13 million. A similar trend continued in 2019, though the evidence shows that in October 2019 the makings of the fraud began.
The trend continued in 2020 before wild ‘other operating expenses’ figures appeared in 2021, 2022, and 2023 – only $2 million was recorded each year, or about $10 million (or 85%) less each year than previously reported. Now you might say, ‘well maybe operations were just curtailed dramatically and nothing wrong actually occurred’. You would be dead wrong…
Management Services Invoices In the Top Desk Drawer
The last quarter of 2019, $1.5 million of ‘management services’ to Bank of Asia were left unbilled by BOA Financial. Even in 2020, when $10 million in capital was raised, a further nearly $750,000 went unbilled.
Then, in 2021, the fraud really took hold: nearly $5 million stayed in the top desk drawer alongside the other invoices. Not going to stop there, in 2022 a further approximate $4 million went unbilled, followed by some $2 million in just the first half of 2023 alone (or the same $4 million when viewed on a full year basis).
Adding this up, by June 2023 Bank of Asia owed the Hong Kong affiliate nearly $13 million. Taking these figures to today, a sensible current estimate would approach an astonishing roughly $17 MILLION; none of which Bank of Asia recorded on its books.
Through mid-2023, this ‘hide the invoices’ corporate fraud scheme all occurred under the watch of then Director Lorna Smith OBE. This is not a day-to-day management matter; it is precisely the type of ongoings initiated by and then scrutinised by a board of directors during board meetings. This undoubtedly puts Lorna Smith OBE in a position of being deeply complicit in a comprehensive, multi-year accounting fraud.
Reports have surfaced that the bank has not produced audited financials for years and no one has stepped forward to suggest otherwise. This accounting fraud scheme would be an incredibly good reason why no accounting firm would ever sign off on the numbers. But where was the FSC in all of this?
Worse more, before Lorna Smith OBE stepped down as Chairman of Bank of Asia upon election it certainly appears to have been trading while insolvent. This brings with it a WHOLE other set of adverse consequences for all involved.
Smith OBE Moves to Deputy Premier – An Elected Official Stays Quiet about the Corporate Fraud under her Watch
For Mrs Smith OBE, the problem took on a new gravity when she was elected and was handed the Financial Services and Banking portfolio. That includes oversight of the FSC. This is a position which has put her in grave conflict: she has known all along of, and been a direct participant in, the serious accounting fraud activities at a bank that she was just leaving the Chairmanship of. Would it not have been her sworn duty to bring this to the attention of the FSC at the first moment? For obvious personal reasons it does not seem that occurred.
By way of a press release dated 6 June 2025, Junior Minister Smith claimed that she has “never issued instructions to either regulator concerning the Bank of Asia or any other regulated entity” and that she did not engage in any “delayed action”. Plainly, she should have issued an instruction or at the very least fallen on the sword and told VIDIC and the FSC what she knows. She most certainly “delayed action”, contrary to what she now claims.
It is hardly clear what Junior Minister meant in stating on 6 June 2025 that she “remain committed to restoring confidence and promoting integrity in public life.” She has done the complete opposite, both as a private citizen and now as an elected official.
If It Could Not Get Worse…
While we cannot yet verify it, rumours are circling that at some point relatively recently, someone at Bank of Asia was instructed to pay the hidden invoices. We reported on this very real possibility on 21 June 2025 and the possibility that the losses to the Government may be far beyond the $5 million deposit. We stand behind that position.
https://www.gbmediahouse.com/Articles/Article/3784/Bank-of-Asia-–-Losses-to-the-Government-Much-Bigger-than-5-Million-Averting-Potential-Disaster-for-the-Territory
If Mr Wen and his cronies were aware of some imminent action by VIDIC and/or the FSC, and they must have had some clue given their stranglehold on the business up until VIDIC stepped in, they may well have rushed to take out the money and place it somewhere thought safe (wherever that might be) before it was frozen. Someone in the Territory would have had to hit the ‘SEND’ button no doubt. Was this the bankrupt Wen’s final act of thumbing his nose at the Territory before running off to hide? If so, and it is hardly a leap to believe this happened given Mr Wen’s and his friends’ past abhorrent behaviours, the bank would then have had to record a major loss upon payment and been short the estimated $17 million in cash. All of this depositor money would now be lost.
If in fact the large sum of cash left the bank at some point, did Junior Minister have any knowledge of this? Her nephew took her place on the board of the bank after she was elected and has been head of its operations at all material times. If the invoices were finally paid, would he have been the one to push the Send button?
To get to the bottom of this further piece of the jigsaw puzzle, a few very simple questions can be asked and answered:
First, is there a missing large sum of cash?
Second, if so, when did it leave the bank?
Third, if so, who gave the direction, directly or indirectly, and who pushed the Send button?
And lastly, if so, where did the money go and who is now benefiting at the expense of depositors?
Blocking Serious Investors From the Books
After the insolvencies and bankruptcies related to Mr Wen, which we have previously reported and are now well-publicised, serious and committed well-heeled investors went through the proper channels to reach the board of Bank of Asia to gather the most basic of information.
These investors had previously been well educated as to Bank of Asia’s current weak state. Their interest was in its untapped potential, which they viewed as unlocked once Junior Minister Smith’s long-time friend, Mr Wen, lost his influence. We are informed that the prices these credible investors were considering to pay, subject to seeing information from the bank, were not too dissimilar to the pricing of Mr Wen’s failed deals. But even if the price turned out to be much less, the positive end-result for the jurisdiction would have been the same.
However, the potential investors were rebuffed at every turn by the nephew of Junior Minister Lorna Smith, Deon Vanterpool. Did Mr Vanterpool unilaterally make the decision to grossly breach his fiduciary duties; or much more logical, was he encouraged by those in higher places to not engage? As we now know, before any investment and sale could take place, the music stopped when VIDIC stepped in at the end of May 2025. It should be made clear that the investor interest was relayed to Bank of Asia by officers of the court and not by some novice innocent bystanders on the street simply fishing around.
Do we now have the evidence for why these credible investors were blocked at the door? Did panic set in that disclosure to outsiders would uncover the multi-year accounting fraud? It sure sounds like as good of a reason as any to astonishingly put personal self-interest and the self-interests of close associates in front of the needs of the business and the BVI.
Stay tuned for Part 2…loaning money to corporate corpses and more under the Chairmanship of Lorna Smith OBE.