Vall Banc SAU strips assets and shares, seized and frozen by Ponzi scheme victim!

A recent legal action against Dutch businessman Pieter Henderikus Langelaan, serial fraudster and resident of Andorra, which was marred by his sudden death, now involves Andorran bank, Vall Banc SAU, for stripping assets and shares, seized and frozen by an investor in one of the Ponzi schemes run by the deceased.

With no central bank in Andorra to provide banking safety, by overseeing the supply of money, the setting of interest rates, as well as regulating the banking industry, it is evident that all is not well in the Principality.

In 2015 the ‘glass stopper scam’ start-up company ‘International Quiding Sarl’ (IQ), run by Mr Langelaan, now deceased, and his company Rihold, secured €16 million from a consortium of duped investors from Andorra, for a wine and drinks glass stopper system, that never made a single product!

When assets and shares were frozen by one aggrieved investor owed €5M by Rihold, and Mr Langelaan, Vall Banc SAU in Andorra, advanced a €4 million loan on those frozen assets, which included 7,000 shares in a company that is now bankrupt? clearly with no financials, bringing the entire Andorran banking system into question!! The record of the transfer of the frozen shares and assets were recorded in the Commercial Register of Companies of Luxembourg, where Rihold and International Quidding were registered. So why did the due-diligence by Vall Banc SAU not bring this to light? Did Vall Banc SAU know that it was helping Mr Langelaan to commit serious fraud, which, before his untimely death, was being investigated in court? Perhaps now Andorra needs a central bank considering this recent behaviour by one of its institutions.

The aggrieved investor who was in the process of filing a successful criminal action against Mr Langelaan, has now filed a complaint against Vall Banc SAU (owned by JC Flowers) in the framework of the same action.

The complainant considers that Vall Banc SAU should have been aware of the financial situation regarding Langelaan and the Luxembourg companies Rihold and International Quiding. The fact Vall Banc SAU advanced a sizeable loan secured against frozen shares and assets that were seized in a court in Luxembourg, in favour of the complainant, surely this demonstrates dreadful ‘due diligence’ by one of the principal banking institutions in the Principality of Andorra.

Also, because Vall Banc SAU was already a shareholder in International Quiding, the financial consultant and intermediary in many of the operations carried out by Langelaan was and continues to be on the board of directors of the bank.

This Andorran consultant had previously signed, long before even the creation of Vall Banc SAU, a contract with Langelaan by which he undertook to “mobilize all his knowledge and experience to contribute funds to the ‘glass top’ start-up.

With Vall Banc SAU being rumoured to be ‘up for sale’ by owners, JC Flowers, will prospective buyers see the €4 million hole in the balance sheet from the loan to Mr Langelaan, which is unlikely to be recovered. And should Vall Banc SAU provide for that loss on the one hand and an economical compensation of €4 million for the loan made against frozen assets, totalling €8 million in all.

In February 2020, Andorra filed an application to become a full member of the IMF (International Monetary Fund). It is clear for this to be granted, the need for stricter due diligence in the Principality is paramount. Regulator, AFA, must clean up their act and put pressure on banks to be more diligent in their lending, otherwise, future investors will not come to Andorra, whilst now it seems that only fraudsters seem comfortable to exist in the Principality! Is the time now right for a Central Bank in Andorra?

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Will Strong Customer Authentication pave the way for a widely adopted digital ID scheme in the UK?

Strong Customer Authentication (SCA) lies at the heart of the revised Payment Services Directive (PSD2) and is likely to impact significantly on banks and financial organisations. Banks are required to provide a more robust framework for their online banking and electronic payment services to ensure added security for customers, and to comply with the Fifth Anti-Money Laundering Directive.

More consumers are now using online banking facilities on a daily basis, making it essential to keep up to speed with the customer and repeatedly verify their identity in a fast-paced digital world.

PSD2 will help deliver a better customer environment for banks by strengthening the requirements on authentication processes when making these payments, which will help reduce account takeover and other malicious activity.

Inevitably additional authentication will create extra friction during the customer journey and banks need to overcome some of the barriers and risks that currently hinder their verification processes.

For example, many banks rely on authentication systems such as text messages which are open to interception and are vulnerable to security attacks. These systems were not designed to be used as a part of secure customer authentication and instead have been retro-fitted to form a part of the customer journey.

When banking methods and technology aren’t aligned it creates pockets of risk that SCA is designed to mitigate. This risks banks having to overhaul their IT infrastructure completely to replace legacy systems and bring them in-line with the digital age.

The essential component to improving the customer journey and mitigating risk at the same time is the source of trusted identity that customers use for all their banking activities. This once again brings the debate for a national Digital ID scheme to the fore.

A Digital ID scheme has significant potential to deliver in two key areas – security and simplicity. It would help to deliver a more seamless journey for customers without compromising on security.

Combining a public (credit, ID&V etc.) and private (biometrics, device etc.) profile would create one unique Digital ID for an individual which can be presented to financial organisations either in person – by showing the mobile device – or by sharing select parts of a digital profile through a secure transfer mechanism.

New to market challenger banks are embracing the digital age and digital identity and as the market matures, other banks could be in danger of being left behind if they don’t keep pace with a new wave of authentication and user experience.
It seems clear that digital identity helps mitigate some of the risks posed by using legacy authentication methods to satisfy PSD2 requirements. The question remains as to whether a central digital identity scheme would be driven by either the public or private sector. Verify has represented the UK Government’s attempt to build a digital identity and has been deployed with mixed results.

Whilst the scheme is robust in authentication it has experienced significant delays, spiralling budgets and a challenging user experience when signing up. Furthermore, funding was ceased last year by central government.

Over and above Verify, consumer trust and confidence in our current government has been heavily eroded. In the 2019 Audit of Political Engagement, opinions of the system were at their lowest point in a 15-year audit series, with 72% saying the system needs ‘quite a lot’ or ‘a great deal’ of improvement. (1)

For a Digital ID scheme to work it needs to be easy to authenticate and trusted by consumers. We are currently living in a world where consumers are more inclined to trust financial institutions with their data than the government itself. A recent survey by nCipher Security suggested consumers trust banks more than any other organisation when it comes to data privacy and security. (2)

If a Digital ID scheme is to be implemented, it needs to be driven by the private sector, as opposed to the Government, to reflect consumer confidence and ensure adoption on a national scale.

PSD2 and SCA provides a great opportunity for the financial services sector to work together and begin to create a national digital identity.

It is inevitable that a Digital ID scheme will happen anyway and the data suggests that banks are best placed to create a scheme that provides positive customer experiences whilst ensuring data privacy and security standards are upheld.

The alternative is ominous. Customers are already using versions of Digital ID to verify their Apple and Facebook accounts and the transition to a Digital ID scheme to benefit the customer is already happening. The question remains – where are consumers going to place their trust?

This article was published in issue 10 of Connect Magazine from Synectics Solutions. To download the full copy visit:


1. reports/audit-of-political-engagement-16

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