Bahamian officials have informed the State Department that a Nassau banker, sought by the U.S. in an international fraud and tax investigation called Project Haven, will be forced to leave that island later this month.
Justice Department officials are deciding what attempts can be made to bring H. Micheal Wolstencroft, managing director of Castle Bank and Trust in Nassau until it closed earlier this year, to American soil to face charges and questioning.
He has been indicted in two separate federal fraud cases, and authorities believe he has intimate knowledge of a tax evasion scheme that involves as much as $500 million and hundreds of wealthy and prominent Americans from the entertainment business and professional worlds.
Wolstencroft also was the target of the controversial "brief caper," in January 1973. In that incident he was taken to a Key Biscayne restaurant by a female IRS informant while another entered the woman's apartment and broke into Wolstencroft's briefcase. The banker was enroute to Chicago from Nassau with bank records.
The second informant took the contents of the briefcase to waiting IRS intelligence agents, who found what they had been looking for - the names of 308 Americans with accounts at Castle.
After they were photographed, the contents were returned to the briefcase without Wolstencroft ever learning they has been taken. In a separate incident, the same informant visited Wolstencroft at his Nassau office and quietly removed a rolodex containing the names of the same, and more, account holders.
The probe touched sensitive nerves in the Nixon administration when it was widely reported that Richard Nixon's name had appeared on a computer printout seen by an IRS informant in the bank. It was never learned just what Nixon's name was doing at the bank, and IRS probers never came up with any further leads.
Ane then-Internal Revenue Commissioner Donald Alexander, a Nixon appointee, was involved in a bitter struggle with the IRS' elite intelligence division over the investigation which he claimed all along "had major problems."
Alexander came under suspicion himself when it was learned by IRS agents that his old law firm's name was on the Rolodex. Again, nothing further could be developed.
Alexander claimed, and a federal judge later agreed, that the "briefcase caper" was an illegal entry. When a federal judge in Cleveland, ruling on the case against one Castle Bank account holder, chastised the IRS for its activities in the probe, several related cases were halted while the government appealed his ruling. The appeal is pending.
After Wolstencroft was indicted as a conspirator in the Cleveland case last year, the Justice Department made attempts to get him extradicted from Nassau. But since he is a British subject and since the Bahamas takes its banking secrecy seriously - it is the Island's largest form of income after tourism - the attempts failed.
The banker was also indicted in Dallas, for his connection with an elaborate mining fraud. It seems Castle Bank was the base of operations and financial backings for C. W. Deaton, who was selling shares in a mining process that promised to extract gold and silver from dirt.
Again, the Justice Department failed in its attempts to get Wolstencroft back to the U.S. But this time the other six men indicted, including Deaton after he was extradicted from Germany, were convicted, and received the longest jail sentences for any white collar crimes in history. The sentences ranged from 15 to 50 years for Deaton.
Meanwhile, Project Haven was all but collapsing because the briefcase evidence, which provided the leads for most of the cases that later developed into indicments, was considered "tainted" and further court action seemed doomed.
Castle Bank and Trust, under pressure because of news stories linking it to the IRS probe, closed its doors earlier this year moving its remaining business to its parent firm in Panama. There is still another Castle Bank in Curacao another popular tax haven island.
After Castle Bank closed its doors in Nassau, the Bahamian government took the opportunity to inform Wolstencroft that his work permit, which expires November 25, would not be renewed.
According to Peter Drudge, the number two man at the Bahamian embasssy here, "He will be leaving shortly thereafter."
Drudge said Wolstencroft could apply for a residency permit to remain in the Bahamas, " but I rather doubt that it would be granted, and there are no indications that he has applied."
Otherwise, Drudge said, he has visiting privileges, but only for limited amount of time. "The maximum we let anyone stay for a visit is eight months, but usually that is for someone like the daughter of a Shah."
Justice Department sources have told The Post the Wolstencroft, who is 47, may have made plans to go to
Sources in Bahamas say the banker has put his house and car up for sale.
Wherever he goes, Wolsencroft is sure to attract the scrutiny of the Justice Department. "Sure we want him," a Dpeartment official said this week, "he knows it all - how the money came in and how it went out. He's one man with all the answers."