MORE details of questionable dealings by the Bermuda-domiciled fund that has been subject to money-laundering investigations have surfaced in a Caribbean court.

Documents on the $1-billion IPOC International Growth Fund Ltd., revealed in a British Virgin Islands (BVI) court case, showed that millions of dollars were paid into the Fund in bogus transactions.

One company was claimed by the Fund to have paid more than $2 million to an IPOC group company for services relating to the merger of two banks. The company in question was found to be a Budapest high street retail outlet that knew nothing of the alleged transaction.

That was just one of a string of remarkable revelations in the case. They arose in response to a report by accountancy firm Ernst & Young that was presented to the court, apparently to illustrate the legitimacy of funding coming into the IPOC group.

The documents, obtained by the Mid-Ocean News, include several written responses of companies denying claims by IPOC that they had paid hundreds of thousands of dollars to the group. IPOC became a source of international embarrassment to Bermuda, when the Wall Street Journal revealed in December last year that the Fund had been set up by a convicted fraudster, Vidya Sharma.

The Journal alleged that the Fund was effectively a holding company for around $1 billion in telecommunications assets transferred through a network of shell companies. And the newspaper claimed that the true beneficiary of the Fund is Russian IT and Communications Minister Leonid Reiman.

IPOC has long claimed that Jeffrey Galmond, a Dane and once Mr. Reiman's lawyer, is the sole owner of the Fund. But earlier this year, David Hauenstein, a director of the fund, admitted in a sworn affidavit that the board had decided that "the point has come when it can no longer maintain that position".

Mr. Hauenstein also said he could not be sure whether Mr. Reiman owned the Fund.

The emergence of the papers from the Court of Appeal of the Eastern Caribbean Supreme Court in the BVI sheds more light on the Fund's dealings.

For example, the Ernst & Young report shows IPOC claimed its company Lapal Ltd. had been loaned $550,000 by a Connecticut-based company called Castle Ventures Ltd. But in its submission, the alleged lender claimed to know nothing about it.

A letter from Castle Ventures' attorneys stated: ". . . there have been no business dealings between Castle Ventures or (company owners) the Hedges and Lapal Limited. There are no records of any loan transactions between Castle Ventures and Lapal Limited. Further, Castle Ventures is not in the business of providing loans."

Another IPOC group company, Albany Invest Ltd., claimed it had been paid $803,901 in two separate payments by UK company Advanta Corporation Ltd. But court papers showed that Advanta had never even traded at the time of the alleged transaction.

Yet another anomaly is the $250,000 that the accountants' report said was paid to IPOC company Lapal Ltd. by Netmax for consultancy services.

Netmax proved not to be a company at all, but instead a brand for a completely different firm, Cybernet Systems Corporation.

Cybernet's written response to the alleged transaction included: "Netmax is a product line owned by Cybernet Systems Corporation.

"As such, we are in a position to confirm that Netmax did not enter into any such agreement with Lapal Limited, nor did it pay any monies to Lapal, whether the sum of $250,000 or any other amount. In fact, Netmax has had no dealings with Lapal or IPOC International Growth Fund Limited."

Odder still, Lapal claimed it had been paid $2.04 million by Lemex Company for "consulting services: structuring a transaction involving a merger of two banks".

The courts documents show evidence that Lemex is a Hungarian kitchen outfitter. Also included were printed-off web pages from the web site of the Lemex Industrial Group, which is a US supplier of lathes designed for the aeronautics industry.

The case was a civil appeal brought to court by IPOC against 16 companies. It was thrown out by the BVI court and the Fund then took their case to the Privy Council in London, which also dismissed it.

It has also emerged that Roland Bopp left his job as one of three directors of the Fund earlier this month. Russia's leading business daily, Vedomosti, reported that "experts suspect that the director is trying to escape responsibility for providing false information about the Fund's owners".

IPOC has stated that Mr. Bopp is a telecommunications expert and the Fund now needs financial specialists. Mats Bremer has replaced him as a director.

KPMG Advisory Services has been commissioned by the Ministry of Finance to investigate IPOC. Finance Secretary Donald Scott said three weeks ago that the probe was at the stage where those criticised in the report were given an opportunity to submit their comments. The Ministry has not said whether the report will be made public.

The Bermuda Police Service's fraud unit has also carried out some investigations into IPOC.