in Bermuda to dupe overseas investors into parting with their money.

The International Exchange Bank has a Bermuda-based telephone number and is run by Lewis Talbert according to Offshore Alert, a newsletter based in Miami, Florida. The newsletter is run by former Royal Gazette reporter David Marchant.

The bank's local number, 292-4884, is picked up by an answering machine informing clients that the International Exchange is open from 9 a.m. to 5 p.m. during the weekdays.

Callers are invited to leave a message and are told they can open up accounts, request information about existing accounts, and perform other banking tasks.

The Royal Gazette left a message on the answering machine but no one called back by deadline last night.

The International Exchange Bank at one time was also a customer of Mailboxes Unlimited, using the company's fax number to receive client enquiries.

Owner Steve Thompson said Mr. Talbert had been a client several months ago but was no longer using Mailboxes Unlimited. He said Mailboxes Unlimited attempted to screen out customers who might be using the services to conduct fraudulent business.

"We require a physical address, a phone number, a work number and a fax number before we will deal with an international client,'' he said. "That usually turns them away if they are shady.'' Bermuda Monetary Authority general manager Malcolm Williams said the regulator was aware of the bank's existence.

"We are aware of these allegations,'' he said yesterday. "It would be irresponsible not to look into these allegations.'' Assistant financial secretary Peter Sousa said the Finance Ministry was aware of the company and was looking into whether or not the Companies Act was being contravened.

In his article Mr. Marchant stated that International Exchange Bank also operates out of Texas and accuses it of being involved in fraudulent business with the World Investors Stock Exchange in Grenada, the International Deposit Insurance Corp. in Nevis, and the First International Bank of Grenada.

"The main part of the fraud involves International Exchange Bank, First International Bank of Grenada and Fidelity International Bank attracting deposits by offering high rates of return and telling investors their funds are fully insured by the International Deposit Insurance Corporation, which is passed off to the public as one of the world's biggest insurance companies,'' he stated.

Nevis regulators closed down the International Deposit Insurance Corp. on January 27 as it was not licensed to conduct business, after he contacted them Mr. Marchant said.

In another story Mr. Marchant links Lines Overseas Management (LOM) Cayman-based salesman Scott Oliver with the scheme.

Mr. Oliver five months ago claimed at the bottom of his e-mail postings that he was an advisor to the International Exchange Bank of Bermuda. The bank also listed Mr. Oliver as a director of the bank.

LOM managing director Scott Lines said Mr. Oliver had been reprimanded for making the statement, but the company was satisfied he had made a mistake and had not intended to mislead clients about his involvement.

All clients had been contacted and a retraction had been made. Mr. Oliver had met Mr. Talbert in 1997, who had engaged in a discussion about possibly setting up an offshore bank.

LOM has since had no involvement with the principals involved with the company, Mr. Lines said. Mr. Oliver also did not know he had been named as a director to the bank.

LOM's Cayman lawyers have since contacted Mr. Talbert and asked for a removal of the reference.

Mr. Talbert subsequently sent an e-mail back responding to the letter addressed to ETU Corp.

"You are absolutely correct,'' he stated. "Mr. Oliver's name should have never been used in any advertising. In fact, the entire site should not be posted on the Internet at all. We are in the process of listing this company on the stock exchange and meeting with potential directors.'' Mr. Lines said LOM has since sent out a letter to clients informing them the allegations in Mr. Marchant's letter were incorrect.

"There are no business links between us and this bank,'' he said. "We are standing by Mr. Oliver. He markets LOM and made a mistake. We took the mistake seriously but it does not warrant dismissal. There was no intent to mislead.'' Mr. Lines said other allegations contained in the newsletter of LOM's business links to The Harris Organisation were false.

In a story Mr. Marchant alleges LOM president Brian Lines is a witness in a suit filed in US Federal Court by Marc Harris against Offshore Business News & Research.

Mr. Marchant said the action was brought by The Harris Organisation of Panama, which he claimed is a fraud. The suit which claims $30 million in libel damages is due to go to court in May.

Mr. Scott Lines said neither Mr. Brian Lines nor any one at LOM had ever met Mr. Harris or had any business dealings with him. Brian Lines has no information he is named as a witness.

Mr. Lines said the allegations by Mr. Marchant had hurt the firm's business in the Cayman Islands. Customers had telephoned to enquire about the claims, he said.