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Tuesday, 11 June, 2002, 10:18 GMT 11:18 UK
Tonga sues over jester's huge losses
Tonga's royal government is taking legal action in the United States to recover $24m lost through investments promoted by the king's court jester.

The money - which represents 40% of the government's annual revenue - was managed by an American businessman, Jesse Bogdonoff.

King Taufaahau Tupou IV
King Taufaahau Tupou: Declared Bogdonoff official jester
He had impressed Tonga's King Taufaahau Tupou IV so much that he had been decreed court jester.

The South Pacific territory - one of the world's poorest nations - had made the money back in the 1980s in a controversial scheme selling Tongan citizenship to Asians.

The beneficiaries included Hong Kong Chinese and the exiled former Filipino president Ferdinand Marcos and his wife Imelda.

Bad investments

Initially the funds were kept in an ordinary Bank of America cheque account.

But Mr Bogdonoff, a bank employee, persuaded the king to transfer the money to the Nevada investment firm Millennium Asset Management and two other companies - Trinity Flywheel Power, which Mr Bogdonoff owned, and a small dot.com.


I had no intention to defraud

Jesse Bogdonoff
Court jester

The Tongan Government statement said audit investigations in the United States had confirmed that the money had been lost.

"Legal action has been commenced in the US against three persons and six companies," it said.

The allegations in the lawsuit include defaulting on payments, fraud, conspiracy, aiding and abetting fraud and negligent misrepresentation.

Two of Tonga's cabinet ministers, including the deputy prime minister, were forced to quit over the scandal.

Jester's 'mistake'

Mr Bogdonoff has voiced regret over his choice of investment, but has denied any deliberate malpractice.

"The fact is I had no intention to defraud or conspire with anybody to defraud anyone," he told the San Francisco newspaper Mercury News.

"I chose the wrong company but learned that after the fact. I gave the best advice I had, but in hindsight, which is always 20-20, I regret picking the company I did."

Tonga's Attorney General and Justice Minister 'Aisea Taumoepeau will go to the United States to liaise with the law firm handling the case in San Francisco.

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 ON THIS STORY
Trong Phuoc Khanh, San Francisco Mercury
"The $20m which was invested is gone."
See also:

08 Mar 02 | Country profiles
06 Oct 01 | Asia-Pacific
02 Nov 01 | Asia-Pacific
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