Which former executive implicated Sandals in TCI corruption?
AN attempt by a fraud accused to link the ATL pension trial to an old investigation implicating Sandals hotel chain in the Turks and Caicos Islands, has raised speculation about the identity of the unnamed former Sandals executive fingered by authorities.
Patrick Lynch, the former chairman of the pension fund, brought up the old TCI case in a statement to the Financial Services Commission (FSC), after he was arrested and charged for fraud. Last week, defence attorneys at the trial suggested that the TCI corruption case was behind Lynch's current woes.
But prosecutors in the trial rubbished the link between the local and TCI cases as a "red herring" to divert attention away from the alleged forgery of four letters to deceive that consent was given for the distribution of $1.7 billion in pension fund surplus.
Lynch, former chairman of the pension scheme and, according to the prosecution, the alleged mastermind behind the conspiracy; Jeffrey Pyne, former managing director of Gorstew, Gordon 'Butch' Stewart's holding company and Catherine Barber, former general manager of the pension fund, are jointly charged with fraud over the distribution from which they benefited.
The three former executives have been before the St Andrew Resident Magistrate's Court in Half-Way-Tree for just over a year. After suffering a third consecutive major blow when the presiding magistrate, Lorna Shelly-Williams, threw out their latest submission in the case, the defence reached for the TCI incident.
But the reference to the TCI case appears to have backfired by raising speculation about the identity of a former Sandals executive whose action implicated Sandals in the TCI, causing the company to pay US$12 million to settle the case.
Prosecutors wondered aloud why mention was not made by defence lawyers Frank Phipps, QC, representing Lynch, and Deborah Martin, representing Barber, that the old case was settled with Sandals principals being exonerated, after the errant executive undertook an illegal transaction in the TCI several years ago. Pyne is represented by KD Knight, QC and John Junor.
In the TCI case, Sandals was notified by the United States Department of Justice (DOJ) of certain payments which had been made to former premier, Michael Misick.
"We retained a leading international forensic firm, along with our US attorneys, to investigate the matter and it was revealed that a senior officer of the company at the time had made these unauthorised payments. No other officer of the Group was implicated," Sandals said in response to media queries.
The DOJ undertook a thorough investigation and concluded that Sandals' co-operation was "both unique and extraordinary and included the early and voluntary release of valuable evidence". Based on the outcome of the probe, the DOJ declined to prosecute Sandals, the company confirmed.
"However, we were advised by our attorneys that the actions of a senior officer bind the company, with the result that a settlement was made with the Special Investigations Prosecution Team (SIPT) in the Turks and Caicos Islands.
Speculation had been rife at the time as to which former Sandals executive was guilty of the illegal TCI transaction and whether any of the three former executives in the pension fraud trial was that individual.
Sandals was constrained not to call names by a privacy agreement as part of the settlement and the fact that the company "has instituted legal proceedings in The Bahamas to recover the unauthorised payments", thus rendering the matter sub judice.
It was not clear why Lynch would have mentioned the matter to the FSC, since he was apparently not the former executive implicated, unless he knew the identity of the former executive and wanted to help his case.
In the ATL pension case, Lynch is accused of masterminding the production of four letters, to show that consent was given for the distribution of funds, after Stewart questioned his decision. The letters were backdated, according to evidence at the trial, and signed by Pyne seven months after he had left the company. Barber took the letters to Stewart.
An American forensic document analyst, Erich Speckin found in scientific tests that the letters were signed one on top of the other, causing impressions from the 1998 letter to be on the 2002 letter which should not yet have been in existence. All the letters were artificially aged, the expert testified.
So far, the defence has rarely touched the four letters in their cross-examination, after 52 days of hearings covering a full year. The trial resumes on Monday, March 24 when dates will be set for the defence to make no-case submissions.