Anatomy of a fraud scheme

Fraudulent contracts, crooked invoicing and underhand cheque cashing were at the heart of a two-year multimillion-dollar raid of public funds by former National Energy Solutions Limited (NESoL) official Lawrence Pommels.

Pommels used the fraudulent scheme to funnel more than $150 million out of the now-shuttered government firm, authorities have confirmed.

Over the two-year period ending in 2018, Pommels and his associates fleeced NESoL of approximately $170.8 million through their “criminal schemes”, the Financial Investigations Division (FID) disclosed, citing a forensic investigation of contracts, invoices and cheques that were cashed.

The money was paid out to several contractors for non-existent bushing, electrical and solar panel installation works which Pommels, the company’s under-qualified acting chief engineer at NESoL, ‘approved’ as being ‘satisfactorily’ completed.

“This was a complete breakdown of the internal controls at NESoL as he was the person who issued the so-called contracts, signed that the works were satisfactorily done and also signed cheques for payments,” Keith Darien, principal director of investigations at FID, told The Sunday Gleaner.

Court records show that one legitimate NESoL contractor identified for investigators 10 cheques, with a total value of $5 million, which were drawn in his name as payment for works he acknowledged were never done.

The cheques were issued and cashed between February 2, 2017 and February 22 the following year.

“I would contact Mr Lawrence Pommels on changing the cheques and inform him that I had the money in my possession and (sic) that we would meet somewhere neutral to hand over the money to him,” he said, explaining his role in the fraud scheme.

The contractor said he was paid between $50,000 and $30,000 for each cheque encashed.

Admitted signing

some invoices

He also admitted signing some invoices to facilitate payments for contracts that “Mr Lawrence Pommels asked me to assist with”.

One cheque, dated November 10, 2017, in the amount of $935,900, was purportedly issued by NESoL as payment for solar installation work in Guys Hill, St Catherine. The contractor admitted that the signature on the cheque was his, but said the signature on the supporting invoice was not his.

“I changed the cheque and handed the money to Mr Lawrence Pommels. The contract stated that I did solar installation in Guys Hill, St Catherine. I didn’t do this contract,” he said in his witness statement.

It was a similar story for a $766,360 cheque issued on January 26, 2018 by NESoL in his name as payment for an ‘electrical upgrade’ of the Community Access Point project at Albion New Testament Church of God, in St Thomas.

“I didn’t do this contract,” he acknowledged.

In two cases, the contractor said he did not recognise the signatures on the cheques issued in his name and the supporting invoices for ‘bushing’ works in Savage Pen, in Gordon Town, St Andrew, and Kensington, in Portland.

The cheques, which were dated April 27 and May 11 in 2017, were for $389,060 and $380,240, respectively, the court records show.

“I didn’t change the cheque or submit the invoice. I didn’t do this contract,” he said, making reference to both ‘projects’.

A second witness, who said he has never done any work for NESoL, indicated in his statement that a business associate he had known for nearly 30 years asked his permission to put his name on a cheque and he agreed.

“I did this because I have a business relation with him and I trusted him. I did not suspect that it was anything illegal that he was doing,” said the witness, who admitted that he also cashed the $546,840 cheque.

Following his arrest, he said he was shown an invoice, done in his name, requesting payment from NESoL in the amount of $546,840 for the “installation of a solar PV system in St Mary”.

“I do not recognise the document because I did not write the invoice, the signature on the invoice is not mine and I did not submit the invoice to anyone because I did no work in relation to any solar installation in St Mary or anywhere in Jamaica,” he admitted.

Pommels ended his criminal trial in the St Catherine Parish Court last Monday by pleading guilty to six counts of possession of criminal property and two breaches of the Corruption Prevention Act.

He was sentenced to nine months in prison under a plea deal which also stipulates that he should forfeit “over 80 per cent” of the total value of six vehicles – including three high-end brands – and $30 million in cash that were seized by authorities during his 2018 arrest and frozen by court order.

The vehicles include a BMW X6, an Audi Q7, a Mercedes-Benz motor car and a Honda Accord motor car. Investigators also seized six counterfeit Rolex watches, each valued approximately $350,000.

A forfeiture hearing is scheduled for June 20 in the St Catherine Circuit Court.

His co-accused, Rayon Hamilton, Ricardo Harris, Horace Stewart and Kimberly Nelson, were freed after prosecutors offered no evidence against them.

Pommels was employed to the Rural Electrification Programme in 2013 and served in several roles until 2015 when NESoL was established to take over its functions, records revealed.

Only a diploma in engineering

With only a diploma in engineering, he was appointed to the newly created post of operations engineer at NESoL in January 2017 and promoted, later that year, to acting chief engineer after the incumbent Anthony Brown was sent on leave, company executives told Parliament’s Public Administration and Appropriations Committee in 2018.

He was also elevated to a signing officer over three other engineers with degrees and continued to sign cheques drawn on the company’s accounts up to seven months after Brown resumed duties, members of the PAAC were told.

NESoL was shuttered by the Andrew Holness-led administration in late 2019 and its functions subsumed under the energy ministry amid allegations of financial impropriety.

Around the time of his promotion, an anonymous tipster alerted the FID that Pommels may be involved in criminal activities as he was living way beyond his known source of income, flaunting wads of cash and luxury brand watches while driving different high-end vehicles

The FID said surveillance and other tactics confirmed the accusations and investigators hit pay dirt during a surprise search operation at his home in New Harbour, St Catherine.

Plastic bags containing almost $2 million

Inside the home investigators found six plastic bags at the base of a baby play pen each containing almost $2 million in cash or a total of $10.6 million along with US$4,851 and J$299,000 taken from a chest of drawers.

Two duffle bags containing a total of $18 million and another $2.1 million were seized in a car during a secondary operation, FID said.

The cash was to pay the $20-million bribe Pommels offered a police investigator, which was secretly recorded.

Investigations further revealed that projects, including the installation of solar panels and light posts in schools and rural communities, were never commenced, despite documentation submitted to NESoL claiming that the works were completed.

Payments were made for work falsely listed as “satisfactorily completed” without any site visits as was mandated by NESoL’s internal processes, investigators concluded.

Darien, the principal director of investigations at FID, cautioned accountable officers in the public sector to ensure that there is proper segregation of duties in all areas of their operations.

“This will serve to minimise fraud and corruption,” he said, praising the close collaboration between the agency and the Office of the Director of Public Prosecutions as integral to the outcome of the case.

livern.barrett@gleanerjm.com