Scammed in Dubai

Dennie Quill, Contributor

SCORES OF Cash Plus investors were broadly optimistic about the prospects of getting a payout last Christmas based on pronounce-ments by the trustee in bankruptcy. In fact, following Hugh Wildman's press conference, many started to think about getting their ruined finances back into shape during the most joyous season of the year.

Amid the euphoria that greeted the announcement, there were many sceptics, like myself, who did not for a second believe that there was any money to be had from Dubai.

However, hundreds of people believed Mr Wildman was on solid ground when he announced that some US$25 million that had been stashed away in a Dubai bank by Cash Plus principals had been found. Now, less than four months later, there are all sorts of reasons to be puzzled by the action of the trustee.

Irresponsible actions

Who could have thought that the learned trustee acted on the basis of an unsolicited email when he began his expedition into Dubai? Who could have imagined that Mr Wildman paid the informant's airfare from Canada to Dubai without even ascertaining his bona fides? As it turns out, the man was never employed to the financial institution, as he claimed. This was no model of collaboration, as we are now learning. The trustee was scammed because the informant disappeared after he arrived in Dubai. This raises the question about the timing of Mr Wildman's press conference in October 2009. Was it called after receiving the unsolicited email? If that was the case, it would have been premature. Was it called after the man failed to show for the planned rendezvous in Dubai? Then one would have to call the trustee's actions irresponsible.

A London court was scathing in its criticism of the manner in which the trustee went about his business. It appears - from the findings of Justice Colman, himself a highly regarded commercial lawyer - that he did not think the trustee exercised enough prudence and sound judgement in carrying out his job. First, he thought if a modicum of due diligence had been done it would have led to the discovery that the well-respected Julius Baer merchant bank is not permitted to take deposits. Second, a well-placed telephone call to Julius Baer would have helped to determine whether, in fact, Ali Saed was ever employed there. This explains why the judge ordered the trustee to pay the merchant bank's fee on an indemnity basis, that is to say 100 per cent of the legal fees incurred by Julius Baer. This was tantamount to a punitive order designed to send a message to the trustee in bankruptcy.

Who will pay the fees?

So, in addition to the informant's airfare and the trustee's legal fees, one must now pile all legal fees incurred by Julius Baer. Who will pay these fees? Another disturbing cost to the taxpayers of Jamaica? Mr Wildman? Cash Plus? This is not small potatoes. I submit that all of this could have been avoided with careful due diligence. While I appreciate Mr Wildman's exuberance and energy in pursuing his task, one expects, as the name trustee suggests, he would do his job with prudence, diligently carrying out his objective of protecting the interest of creditors away from the glare of publicity. In the scheme of things, a high-powered prosecutor with a penchant for public announce-ments is not really what this job demands.

By their very nature, pyramid schemes are built on the principle of taking from Peter to pay Paul. Cash Plus appeared to have operated on that basis. These schemes are unsustainable. Additionally, Cash Plus was investing in everything from hardware to media. So is there really any money stashed outside Jamaica? By now, the accountants working in tandem with the trustee should be able to tell the country just how much money has been spirited away and exactly what are the assets of Cash Plus. Is there evidence of missing money?

Scores of small investors who got sucked into the Cash Plus scheme are eager to get back their money and one expects that the trustee in bankruptcy would pursue all available channels to ensure that funds are found and assets are liquidated, but his approach must be tempered and balanced.

Dennie Quill is a veteran journalist. Send feedback to columns@gleanerjm.com.