Finance ministry mum on possible forfeiture action against Reid clan

The Financial Investigations Division (FID) in the finance ministry has refused to answer Sunday Gleaner questions on whether it has commenced civil forfeiture proceedings against former Education Minister Ruel Reid and his co-accused in the multimillion-dollar Caribbean Maritime University (CMU) fraud case.

The FID also refused to comment on whether it was going after any assets owned by Reid, his wife Sharen, their daughter Sharelle, as well as CMU President Fritz Pinnock and Jamaica Labour Party Councillor Kim Brown Lawrence, who have been jointly charged in the matter.

The agency is empowered under and routinely uses the Proceeds of Crime Act (POCA) to apply to the Supreme Court for orders to restrain or temporarily seize assets believed to be derived through criminal conduct before seeking, after a conviction, to have them forfeited to the State.

A judge is empowered under Section 32 of POCA to, among other things, make a restraint order where there is reasonable cause to believe that an alleged offender has benefited from his conduct; a criminal investigation has commenced in Jamaica related to the offences; and where proceedings for a criminal trial has commenced locally and “have not been concluded”.

While investigators probed their alleged involvement in the fraud uncovered at the CMU, the Reids had jointly acquired Barbican, St Andrew, property for $45 million.

The April 11, 2019 acquisition came three weeks after Jamaica House said that Prime Minister Andrew Holness had requested and received Reid’s resignation as education minister during a meeting “regarding certain allegations in the public domain”.

A $35-million mortgage provided by a top local financial institution was registered with the Titles Office on May 30, 2019, almost seven weeks after the transfer, a move that raised eyebrows for some experts.

Other experts opined that it was not unusually surprising.

“Was it a cash purchase and then the mortgage was taken out as a cover or was the financial institution using the time to conduct its due diligence to make sure the title was clean? Those are important questions to ask,” said one attorney

Six months after the transfer was registered, the Reids, Pinnock and Brown Lawrence were arrested during a series of predawn operations for allegedly defrauding the CMU of nearly $50 million through several schemes.

The Major Organised Crime and Anti-Corruption Agency confirmed at the time that they were charged for various offences, including breaches of the Corruption Prevention Act, conspiracy to defraud, misconduct in a public office at common law and breaches of POCA.

The offences are among those listed in the proceeds of crime legislation that give the FID the green light to commence forfeiture proceedings.

The Sunday Gleaner, through a request under the Access to Information (ATI) Act, submitted four questions to the finance ministry enquiring whether those proceedings have commenced against the five; whether the FID has applied for court orders to restrain any assets they own and, if so, to disclose those assets.

Question four asked the ministry to explain why the proceeds of crime law was not engaged in the two years since the charges were laid, if that was the case.

EXEMPTED FROM DISCLOSURE

But the ministry, in refusing to answer the questions, said the “documents” requested are exempted from disclosure under sections 16 and 19 of the ATI Act.

Further, an October 26 letter signed by Carlene Smith on behalf of Financial Secretary Darlene Morrison said “this matter is considered to be sub judice and therefore prohibited from public disclosure”.

“Your application has been regrettably denied,” the letter said.

Attorney Hugh Wildman told The Sunday Gleaner that he represents Ruel Reid and Pinnock in the constitutional challenges they have filed to have the criminal charges tossed before ending the telephone call.

Calls by our news team to Carolyn Chuck, the last known criminal defence attorney for Reid, went unanswered.

The stance by the finance ministry and the FID exposes a double standard, charged one top attorney who has represented clients in civil forfeiture cases.

A week ago, FID Principal Director Keith Darien revealed at a press conference that between January and October this year, the FID concluded investigations into 17 asset-recovery cases involving criminal benefits or assets, with accumulated values of J$1.185 billion and just over US$182,000. This compares with 13 cases completed in 2020 with criminal assets or benefits of amounting to J$300 billion and US$1.54 million.

On an annualised basis, this year’s figures represent an increase of 50 per cent in the number of investigations conducted into asset recovery and a 130 per cent increase in the value of criminal assets or benefits identified, which are subject to confiscation or forfeiture order.

In addition, the FID has also identified assets, including real estate holdings, motor vehicles and bank accounts valued at over J$300 million and about US$54,000, which it will pursue to satisfy the formal orders as they are obtained from the Supreme Court. Five formal orders were granted by the court in 2021 amounting to over J$33 million.

Darien further disclosed that since the beginning of the year, the division has restrained assets in excess of J$334 million in furtherance of money-laundering and asset-recovery investigations, which include five houses, six motor vehicles and five bank accounts.

The division has also forfeited assets being managed with a value of J$1.273 billion. Among them are some 44 real estate (holdings) valued at over J$1 billion, 19 motor vehicles valued at approximately $10 million, 19 bank accounts containing J$245.7 million, and other assets like jewellery, brand-name bags and so on, valued at $2 million.

“We are about to place some of these assets – the real estate, in particular – on the market, so that we can dispose of them,” Darien disclosed.

RESTRAINED ASSETS

Through an ATI request granted in September, the FID had disclosed to The Sunday Gleaner that over a 13-month period that ended in May this year, it had used the proceeds of crime legislation to obtain court-ordered restraint on assets valued at nearly $250 million that were linked 17 people, the majority of whom are still before the courts awaiting trial for criminal offences that also fall under POCA. The list of restrained assets included six houses – one valued at $70 million – three apartments, 29 cars and cash lodged at several financial institutions.

“I can’t see why or what would be a bar to them proceeding,” said one attorney, referring to the reluctance by the finance ministry to disclose whether forfeiture proceedings have commenced against the Reids, Pinnock and Brown Lawrence.

“So, we must ask the questions: Is he being protected? Who is protecting him? Why are they protecting him and are they preventing the press from digging further?” said the attorney, referring to the former education minister and government senator.

The attorney noted, too, that through the proceeds of crime legislation, citizens have had their assets forfeited to the State without being convicted of any crime.

“All it has to be is a transaction that is suspicious.”

Sections 16 and 19 of the ATI legislation outline the basis on which official documents should be exempted from public disclosure.

Section 16 refers to documents generated by law enforcement agencies which are exempt from disclosure if they could reasonably endanger any person’s life or prejudice the conduct of an investigation or possible breach of the law or the impartial adjudication of a particular case.

Section 19 refers to Cabinet and related documents with sensitive opinions, advice and recommendation.

National Integrity Action (NIA), the Jamaican chapter of the global watchdog group Transparency International, said the questions posed in The Sunday Gleaner’s ATI request can be answered without the “documents” for which the finance ministry is claiming exemption.

The first two questions, said Professor Trevor Munroe, principal director of NIA, relate to matters of fact.

“Each may be answered without providing documents,” Munroe said.

Similarly, Munroe believes question four may be answered if the answers to the first two questions are in the negative.

He suggested that The Sunday Gleaner appeal the ministry’s decision.

“As the ATI Act itself states, transparency and access to information is a fundamental principle of Jamaica’s constitutional democracy,” Munroe noted.

Investigators have alleged that millions of public funds were diverted to the personal use of Ruel Reid and Pinnock through a number of schemes, including one that mirrors the Career Advancement Programme-Youth Employment Solutions (CAP-YES) operated by the Reid-led education ministry.

The parallel ‘CAP-YES programme’ operated out of CMU was used to pay ‘vendors’, including Brown Lawrence, for services they did not provide, investigators allege.

Further, it is alleged that Reid was the architect of another scheme in which bogus catering contracts were created in the names of his former helper and driver.

The CMU has acknowledged that thousands of dollars were paid out to both persons, who have since insisted publicly that they were not associated with CMU.

livern.barrett@gleanerjm.com