The following is an outline of the monetization and distribution process of the value for all e-metal accounts held in EGL accounts (“Value Access Plan” or “VAP”) as agreed to between the Government, e-gold Ltd (“EGL”) and Gold & Silver Reserve, Inc. (“GSR”) . The agreement identifies three distinct groups of value: Criminal Proceeds Value (“CPV”), VAP Value, and Residual Value and sets forth the process by which each of these values will be monetized and distributed.
Criminal Proceeds Value Accounts
EGL and GSR have advised the Government that they believe EGL has in its possession evidence establishing that certain accounts contain value that is traceable to criminal activity in which third-party e-gold account holders engaged. Such accounts with a balance of one (1) ounce or more of e-gold are defined as CPV accounts.
Under the terms of the agreement, EGL will provide to the Government a list of names and contact information of the CPV account holders in order to provide those account holders with the requisite notice. The government must provide notice for at least 30 days as well as direct notice to any person who reasonably appears to be known as a potential claimant for the CPV.
The deadline for filing a claim by a CPV claimant is at least 35 days after notice is sent (actual notice situation) or no later than 60 days after 1st day of 30 days of publication. Upon judicial resolution of any CPV claims, the Government will request the court to issue an order forfeiting the CPV to the United States.
The value in these accounts will be monetized as required by the arrest warrant in rem, pursuant to the terms and conditions of the agreement with the proceeds being delivered to the Claims Administrator.
Value Access Plan and Set Aside Value
All remaining value in the system will be monetized as required by the arrest warrant in rem, pursuant to the terms and conditions described in the agreement. The value of this monetization will be the “VAP Set-Aside Value”. The Claims Administrator will deposit the VAP Set-Aside Value into an interest bearing escrow account.
The Value Access Plan will be available to all account holders other than those whose accounts contain criminal proceeds. VAP participants will be able to access the monetized value of their accounts upon satisfactory completion of EGL’s customer due diligence process subject to disqualification by the Government or the Claims Administrator. The first step for an account holder will be to complete the Customer Identification Program (“CIP”) via the EGL website. According to the CIP, account holders are required to provide certain identifying information that is required by U.S. anti-money laundering laws to be verified.
The agreement states that EGL will provide notice to account holders of the launch of the VAP and this notice will advise account holders that:
- all claims must be submitted within 120 days;
- distributions from the VAP Set-Aside Value attributable to VAP-Qualified accounts will be made to VAP-Qualified Claimants;
- by agreement with relevant government authorities, all other value of e-metal accounts is subject to forfeiture action pending in the District of Maryland;
- VAP-Qualified Claimants will be paid a sum of money representing each VAP-Qualified Account’s proportionate share of the monetized value of each applicable e-metal in the system as calculated by EGL;
- the distribution of that money will be pursuant to court order; and
- that such distribution will be in full and final settlement of all amounts due in respect of each VAP-Qualified Account.
As noted above, account holders will have 120 days from launch of VAP to file a claim. Such claim will require, among other things, providing owner and user identification information. EGL will collect and verify all identifying information provided by any VAP-eligible account holder and will send to the Claims Administrator on a monthly basis a list:
- identifying VAP-eligible account holders who have submitted the requisite information as verified by EGL;
- showing the account number(s) from which each such claimant seeks value; and
- specifying the value in U.S. dollars of each corresponding account based on its proportionate share of the monetized value.
Both the Government and the Claims Administrator will review the list of VAP-eligible, CIP compliant account holders supplied by EGL. Either the Claims Administrator or the Government may disqualify such claimant on the following grounds:
- known engagement in criminal activity;
- activity related to terrorism; or
- residence in a country (other than Iran) subject to OFAC sanctions that would prohibit the Claims Administrator from paying the claimant.
The Government and Claims Administrator will have 10 business days to notify VAP-eligible claimant of disqualification. In the absence of such disqualifications, the Government will submit a motion to the court to release funds for distribution to the VAP Qualified Claimants. The Government will send a copy of these papers (or notice of disqualification) to the claimants and EGL. The claimants will have 15 days to object to the amount of distribution and, in the case of a disqualified account holder, to such disqualification.
The agreement calls for distributions to VAP-Qualified Claimants in two tranches. First, each VAP-Qualified Claimant will receive funds equal to 85% of their approved claim. After objections of other VAP-eligible claimants have been resolved, within 15 days of resolving the claims, the Government will move the court to order the release of so much of the VAP Set-Aside Value as necessary to pay all successful VAP claimants their final proportionate share of the monetized value of their account(s).
While this approach will delay full payment to successful account holders, paying in two tranches will enable successful claimants to receive 85% of their claim immediately while ensuring that all successful claimants receive a properly calculated proportionate share of the VAP Set-Aside Value.
Distribution of Residual Value
If there is Residual Value remaining after forfeiture of the CPV, distribution of the VAP Value and, resolution of any disputed claims, the Government will provide notice to all potential claimants to the Residual Value following the same notice and claims process used for CPV accounts. The Government will provide notice for at least 30 days by publication as well as the required actual notice to any person who reasonably appears to be a known potential claimant. Deadline for filing a claim by Residual Value claimant:
- at least 35 days after notice is sent (actual notice situation); or
- no later than 60 days after 1st day of 30 days of publication.
Residual Value claimants will have up to 60 days from first date publication of notice by the DOJ to file their notice of claim. Upon judicial resolution of any residual value claims and the merits of the forfeiture action against the Residual Value the Government will seek the forfeiture of the Residual Value.
All of these conditions are intended to ensure that qualified claimants, account holders receive the value from their account at the prevailing exchange rates at the time of monetization less reasonable exchange fees.