Lex Life, another fraud by Landsbanki

Customers of Iceland’s Landsbanki in Lux to Sue

Dozens of customers of the Luxembourg subsidiary of Iceland’s Landsbanki claim that they were victims of fraud, that their deposits were used to invest in debentures in the Icelandic banks, and have taken their case to a lawyer in Luxembourg.

Hundreds of people took unorthodox loans at the subsidiary, Lex Life, designed for wealthy pensioners in Europe. The customers provided collateral in real estate, had one quarter of the amount paid out and the rest was deposited into a fund controlled by a service representative of the bank, Morgunbladid reports.

Then the service representative invested in currency, debentures and stocks; the goal was for the investments to pay off the loan. The resolution committee of Landsbanki in Luxembourg now demands that the loan is settled; otherwise the collateral will be called for.

The Barlows, a couple living in southern France, have been asked to pay back EUR 2.5 million (USD 3.2 million) to Landsbanki in Luxembourg. Originally they received EUR 750,000 and deposited EUR 500,000 to the bank.

That money was lost and now the Barlows only have the right to reclaim EUR 20,887 (USD 26,604) in minimum deposit insurance. They wanted to withdraw their money before the bank went under, but their request was denied with a court order.

The Barlows believe they were victims of fraud. Their main argument is that their fund primarily invested in debentures in the Icelandic banks, Landsbanki and Kaupthing, right up until their collapse.

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