Nearly $2 billion traced to criminal activities in the last 18 months
Published:Sunday | June 19, 2022 | 12:11 AMLivern Barrett - Senior Staff Reporter
Over the last 18 months, Jamaican financial investigators have tracked down nearly $2 billion in assets they believe were acquired through illicit activities.
The assets – mainly real estate – are included in 27 asset forfeiture or money laundering investigations completed by the Financial Investigations Division (FID) since January last year, the agency confirmed to The Sunday Gleaner last week.
Forty per cent of the cases involve drugs trafficking, 30 per cent involve lottery scamming, 15 per cent involve money laundering, while fraud and cybercrimes account for eleven and four per cent, respectively.
The total value of “criminal benefits” derived by the defendants in these cases was J$1.69 billion and US$356,000 (approximately J$54.3 million), the FID said.
“It is clear that the ill-gotten gains being derived from criminal activities are quite significant and pose a real threat to the stability of the country, as the illicit funds are reinvested in organised crime and also has the potential to distort activities in the productive sector,” said principal director of the FID, Keith Darien.
Jamaica is among 23 countries that were placed on a ‘grey list’ by the Paris-based Financial Action Task Force (FATF) over concerns about weaknesses in existing money laundering regimes.
Further, the real estate industry has long been viewed as fertile ground for the criminal underworld to rinse the profits from their nefarious activities.
Real estate developers do not currently fall under the Proceeds of Crime Act (POCA) and, therefore, have no legal obligation to file suspicious transaction reports or apply anti-money laundering due diligence when dealing with their clients, experts noted.
CASES BEFORE THE COURT
Already, 20 case files from the asset forfeiture investigations have been completed and placed before the Supreme Court with applications for the assets to be forfeited to the State through POCA, the FID disclosed.
Sanja Elliott, the former public official who was sentenced to five years in prison for stealing $40 million from the Manchester Municipal Corporation; and Andrea Gordon, the former National Commercial Bank senior manager who was given a seven-year prison sentence for fleecing her employers of $34 million, are among the persons whose assets have been targeted by the FID.
The FID said over the 18-month period, it has obtained forfeiture orders in seven cases for assets valued at over $142.4 million.
There are ongoing out-of-court settlement talks between attorneys for the FID and defendants in four other cases, the agency said.
Forty-six post-conviction asset forfeiture investigations are still active, while the FID and its partners, the Constabulary Financial Unit and the Counter-Terrorism and Organised Crime division, are pursuing over 170 money laundering cases.
In one of the cases that ended last Monday, Manchester businesswoman Eva Mae Sterling, 61; her son, Nicholaus Chang; and sister, Marline Ledford, were ordered by a judge to surrender to the State five properties that were purchased between 2012 and 2014 for approximately $105 million.
During her first court appearance in 2017, the FID claimed that the properties were purchased from the proceeds of drug trafficking activities carried out by a close relative who was convicted in the United States in 2013.
Among the real estate forfeited by the trio is a 602-acre beachfront property in Parottee, St Elizabeth, registered in Ledford’s name, which was purchased in November 2012 for $74 million, a Sunday Gleaner investigation revealed.
The other properties are located in Smiths Run, Clarendon; Round Hill, St Elizabeth; Boscobel, St Mary; and Seville Meadows, St Catherine, records show.
The FID claimed, however, that based on its calculations “in keeping with the Proceeds of Crime Act”, the total financial benefits derived by Sterling, Chang and Ledford amounted to $288 million.
This includes “significant expenditure” on the acquisition of motor vehicles, farm supplies and the conversion of approximately US$370,000 in cash to Jamaican currency at a foreign exchange dealer, the agency charged.
Sources claimed, too, that a St Andrew apartment and several high-end motor vehicles registered to the trio were hastily disposed of after they got wind of the FID money laundering investigation.
Sterling was fined $300,000 or nine months imprisonment and 12 months in prison suspended for two years after she pleaded guilty to money laundering charges in the Corporate Area Criminal Court last month.
Similar charges were dismissed against Ledford and Chang following Sterling’s plea deal.
A restraint order has been placed on several properties and other assets traced to Elliott, barring him from disposing of them. His asset forfeiture hearing is on hold pending the outcome of the appeal against his conviction.
CONCERNS WITH REAL ESTATE DEVELOPERS
Real estate developers were flagged in a National Risk Assessment Report for Jamaica, which was published last August.
“From a review of STR [suspicious transaction report] data and criminal investigations that have been conducted, developers feature in a number of the investigations concerning money laundering,” said the report, which covers the 2016 to 2019 calendar years.
It noted, too, that concerns have been raised about the proof of financing provided by a small percentage of developers.
“The primary concern is that real estate developers may use their operations to legitimise ill-gotten gains, given the lack of supervision,” the report said.
“Taking all this into consideration, the ML/TF [money laundering/terrorism financing] threats and vulnerability posed by developers have been assessed as HIGH.”
But the Realtors Association of Jamaica defended its members, saying they adhere to the highest standards of professionalism.
“Our members practise within the ambit of the law and we have no knowledge of any member who is engaged in such activities or willingly and knowingly condones such activities,” said Pierre Shirley, president of the association, in emailed responses to The Sunday Gleaner.
Shirley said members are held accountable “to our code of ethics”.
“We are not a law enforcement agency and, as such, are not in a position to hold our members accountable to unsubstantiated allegations with respect to breaches of the law,” he said.
“If a member, however, has been found guilty of any breaches of the law and specifically with respect to the practice of real estate, then that may be grounds for disciplinary action up to and including termination.”
The FID said Jamaica has made significant progress in addressing the 13 strategic deficiencies identified by the FATF and is on track to exit the grey list next year.