Caribbean Real Estate Investment Fund (CAREIF), one of several alternative investment clubs on the blacklist of the Financial Services Commission (FSC), has crashed, depriving several investors of millions of dollars.

CAREIF's CEO Anthony Tharpe yesterday issued a three-page memo to his seven-member staff in Kingston advising them that, among other things, the company had no money and that they should seek employment elsewhere. An insider told the Observer the plan was to retain a few "core people" and have them operate out of the company's Miami office.

"The fact that the sales and marketing team abandoned their jobs... now makes it necessary for CAREIF to close its offices while we reorganise. CAREIF Ltd as you know it today must close down it operations with immediate effect," Tharpe said in the memo.

"Specific members of staff will be asked to remain in order to have an orderly reorganising of the office. It would be unreasonable to ask [that of] the other staff members who, unfortunately, we must ask to consider this your two weeks' notice of termination and to use this two-week period to seek employment elsewhere."

He said the salaries owed wouldn't be paid before May 25 but there was no indication of whether investors would be reimbursed.

The Business Observer understands that CAREIF's Mandeville branch closed down in similar fashion just over a month ago, laying off six persons.

It was not immediately clear yesterday whether the folding was a direct consequence of the FSC's investigations into the business but along with low productivity among marketing staff, Tharpe also pointed fingers at the regulatory agency for the failure of his business.

Acting executive director of the FSC, George Roper, told the Business Observer that "CAREIF cannot lawfully conduct securities business in Jamaica or offer its securities to the public".

Two former employees of CAREIF told the Business Observer that the company has been having cash flow problems for the past several months.

"I have not yet received last month's pay and the month before that I only got a half," said a Kingston-based female. "And there are persons whom he fired but whom he still owes," she added.

A man from Mandeville who resigned from CAREIF late last year said he has still not been paid for his last month of work.
"Here's a company that's promising to do a six-city tour but it can't pay employees. Here's a company that's promising $6.7 million houses to members of the real estate investment club but it can't pay staff."

In another case, CAREIF is before the courts for not paying over the sum agreed for the acquisition of a Mandeville-based internet company.

And Tharpe has confirmed the stories. "As you are all aware, CAREIF Ltd has failed for the last 12 months to generate enough income to meet its obligations to both staff and creditors. A business must have income to cover its operations. This is a message I have stressed several times in meetings over the last 12 months," he wrote in yesterday's memo.

The company, which began in 2005, offered a number of investment options to the public and promised returns of between 100 and 1,000 per cent within a three-year period. It had two planned real estate development projects, Phinion Preserves and Phinion on the Ridge.

The former, according to an employee who was notified of the company's true state yesterday, had more than 60 investors, each of whom had put in a minimum of $200,000. The latter, said the source, had at least two investors, each of whom had committed US$250,000.

CAREIF also offered a debt-funding option which accepted a minimun of US$10,000 and promised 100 per cent in one year. In addition, it had a real estate investment club, the name of which was changed to Real Estate Investment Fund after the FSC started to apply pressure. That had about 70 members who paid a membership fee of US$1,200 each.
According to our source, that investment would yield US$5,400 as well as scholarships and prize giveaways after three years.

"But none of the projects have started so where is the money going?" she questioned.

The three-year-old company also had a radio programme called Inside Real Estate which offered advice on the real estate market to the public.

In his letter, Tharpe bashed his former employees who resigned and suggested that he would not pay them the salaries owed.

"I am not mandated by law to continue paying anyone out of my pocket from resources not at all connected to the business. So if that's their intention, though I've been doing that for several months now, it's not something I will do in terms of these particular individuals.

"As we have done in the past, you will receive all funds outstanding. Please also remember that while this is an inconvenience, CAREIF Ltd has not earned any money for several months. However, we are confident that we will meet all our obligations on or before dates mentioned or indicated.
For those of you who would like to take an independent contractors position and earn commissions on sale of the products and services or selling ads for our site and programmes, we will certainly accommodate. I suggest that rather than sitting at home, while you seek out employment you could still utilise this option."

Camar aka Flavr Unit signs with Slip N Slide Records

Delano's Tempted to kick off the RTI Weekend on July 31

Free concerts in the park to Build Jamaica With Music