http://nytsyn.com/live/Latest/218_080697_110027_578.html Fraud Feared as Antigua Net Bank Fails By EMILE VALERE c.1997 Bloomberg News T. JOHN'S, Antigua - The Antigua and Barbuda government issued a fraud alert Tuesday after the collapse of European Union Bank and the disappearance of its cofounders. The locally-chartered bank, which fired all its employees last Thursday, had marketed itself as the first off-shore bank on the Internet. The Antiguan government hired the accounting firm Coopers and Lybrand LLP to examine the records of the three-year-old company. Callers to the bank heard a recorded message that gave only a hint that something was amiss. ``Welcome. You have reached the European Union Bank,`` said a reassuring-sounding male voice. ``Due to technical reasons, some of our services involving the security mode are temporarily unavailable.'' The bank's Internet site, http://www.eubank.ag , was also unavailable. Meanwhile, the government is on the look-out for the bank's founders, Serbveo Ushakov, allegedly of Bronxville, New York, and Vietalui Papsouev of Richmond Hill, Ontario, according to the Caribbean News Agency. The government says the two are Russian nationals. The Idaho Department of Finance on May 30 ordered European Union to stop soliciting deposits from Idaho residents over the Internet. ``I can't say I'm surprised'' at the news of the bank's collapse, said Gavin Gee, director of the department. Idaho alleged the bank, without a state or federal charter, was operating illegally. Gee said he hopes other U.S. regulators will take similar actions against off-shore banks soliciting over the Internet. ``If nobody's going to take action against fraud on the Internet, we've got a serious problem,'' said Gee. Antigua has more than 50 off-shore banks. Prime Minister Lester Bird last February targeted three of them to be shut down because of their alleged involvement with Russian crime rings. The Associated Press reported last week that the Bank of England warned investors last fall about depositing funds in European Union Bank. (The Bloomberg web site is at http://www.bloomberg.com )< (Disbributed by The N.Y. Times News Service)< NYT-08-06-97 1054EDT<