No answer to lack of prosecutions from FRA

| 01/02/2019 | 68 Comments
Cayman News Service

Robert James Berry

(CNS): The director of the Cayman Islands Financial Reporting Authority, Robert James Berry, has agreed with Public Accounts Committee Chairman Ezzard Miller that there is a perception by international agencies that, despite having an impressive amount of agreements and reporting mechanisms in place, Cayman is failing to prosecute financial criminals. When asked why more bankers or other financial players who were involved in wrongdoing in the offshore sector were not ending up in court, Berry told Miller that it was something they “need to look at”, as he suggested some agencies had to take an “honest look in the mirror and check if they are discharging their functions”.

Berry appeared before PAC on Thursday to answer questions relating to the auditor general’s latest report on the fight against corruption.

The FRA, which forms part on the Portfolio of Legal Affairs, is an administrative agency rather than an investigative one. It analyses suspicious activity reports that it receives from the financial sector and determines if there is potential criminality, including fraud and corruption. It then passes on the ones that appear to be possible wrongdoing and not just unusual transactions to the relevant law enforcement agencies, whether that is here or abroad.

But Berry explained that his team does not actually pursue any investigations or prepare any cases for prosecution, though they work closely with local law enforcement agencies. And after the FRA has referred a suspicious report to the police, CIMA, the Anti-Corruption Commission or any other relevant investigative agency, it has been trying to follow up to see if the information was useful, how it was used, or if the FRA could have supplied more or better information, he said.

However, asked about the perception that Cayman did not seem to be following through, given the lack of prosecutions of offshore players in the local environment, he confirmed that it was an accurate representation.

“It is something that I think jurisdictionally we do need to look at further. From an FRA perspective, we are an administrative unit,” he said. “We don’t have investigative powers, our role is to receive, analyse, disseminate. We work closely with law enforcement agents, and one of things we strive for is to get feedback.”

Pressed about what could be done to improve prosecution rates and change the image internationally, he said he did not have a personal view, but thought that “each agency has to look at its role and take an honest look in the mirror as to whether it’s discharging its functions”, adding that there was “a certain diligence that’s required to keep fighting the fight”.

He said there were concerns about this perception in the international community, as people are raising the issue of what happens after a report is made to the FRA. But he had no answers as to why there are so few prosecutions, given the growing number of suspicious activity reports his agency is passing on.

However, he did not feel that switching the Financial Reporting Authority into an investigative unit or going as far as making it a prosecuting body was necessarily the answer.

Berry also revealed that, given the jump in reporting, he was currently preparing a paper for the attorney general about increasing the size of his team. He explained that they were working on a growing backlog at the same time as analysing new live reports.

He said that by the end of 2018 the unit had dealt with 938 suspicious reports, which was almost double the long-time annual average and he expected it to grow for a number of reasons, such as the requirement for reporting officers in financial institutions and the increase in stricter legislation.

The committee also heard that local legislation had limited the government’s ability to fine HSBC after that bank, formally domiciled here, was embroiled in an international financial scandal.

PAC member Chris Saunders, a former employee of the bank, implied there were some complex issues surrounding that situation and the failure of any sanctions. He told the committee that efforts had been made but they had failed.

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Category: Business, Financial Services

Comments (68)

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  1. Anonymous says:

    HSBC and well connected staff were allowed to get away with $$$ BILLIONS money laundering.

  2. Anonymous says:

    Riddle me this: why must National Archives Office mandate, in the year 2019, that all CIG department records be destroyed after 5 years, and all phone records after just 12 months? A 3TB hard-drive can be acquired for under $80…the redacting of civil service accountability goes well beyond failure to enact of SIPL law…destruction of evidence is standard operating procedure, even if the FRA were willing to be on the ball (which they clearly aren’t). In the digital age, CIG “work” should “live” for 25 years at least.

  3. Anonymous says:

    Fronts? Like jewelry stores in town with prime real estate leases, are foreign staffed and have no customers but somehow remain open?

    • Anonymous says:

      And restaurants! Look at the ridiculously opulent lifestyles of some restaurant owners here and then at how empty their establishments are. There’s definitely something fishy going on there.

  4. Wait a minute. What?? says:

    Has the Public Accounts Committee considered that maybe there just aren’t any matters to prosecute?? Cayman has more anti-money laundering and anti-terrorist financing rules and regulations than the US, UK and EU. It is far more difficult to launder the proceeds of crime here in Cayman than it is in many other jurisdictions. Shouldn’t the perception be that the Cayman anti-money laundering and anti-terrorist financing regime is robust and actually working?? Why take the perspective that, although we have a robust anti-money laundering and anti-terrorist financing regime, we’re not prosecuting criminals? This perspective is just idiotic.

    • Anonymous says:

      I know of many reasons to prosecute for fronting. It seems a conscious decision has been made by someone, somewhere, not to. It makes the whole system a farce.

    • Anonymous says:

      Exactly!! It boggles my mind that anyone with even a 2nd grade understanding would have read RJs comments and still think it is his job to investigate and prosecute. RJ is qualified, experienced and diligent in his work. In this culture that the EU, OECD, FATCA Etc. etc everyone is now deemed guilty and has to be proven innocent instead of deemed innocent and proven guilty. If a transaction has even one marker that could be construed as being suspicious, and even if the reporting officer can see the likelihood of it being suspicious is almost nil they will err on the side of caution because if it turns out to be suspicions he/ she will be in court. Having said that I also agree that if the investigative officers hands over a suspicious report and ,it merits a charge and trial the DPP should bring the case forward and they probably do. i Not because some of you do not know who he is has no bearing on his ability to work efficiently. As a matter of fact in his line of work anonymity is a plus. One never knows what can be picked up while at lunch from the tables next to yours.

    • Anonymous says:

      Yes, and is it also possible that the criminals (if any) do not reside here? Could it be that the information provide by the FRA may be used to prosecute such individuals where ever in the world they may reside?

      • Anonymous says:

        The reporting has to be done here and if it isn’t the bank/financial institute is culpable.The level of knowledge only has to be at an objective level for the bank to commit an offence. Cayman cannot hide in this, but it is trying to. There is no doubt. The island is in the top fifteen for volume of financial business here. Yet no person has ever been prosecuted. It is either rank incompetency or cover up. And by cover up I set the standard as being ethical when no-one is looking not when they are.
        Anyone that thinks no prosecutions is normal is deluded.

      • Anonymous says:

        But they do reside here – in abnormal frequency – and many specifically because of Cayman’s Hollywood-fueled reputation for turning a blind eye – and still they prosper!

  5. Anonymous says:

    RJ was previously the head of Compliance at CIMA.

    • Anonymous says:

      Clearly didn’t look in the mirror when head of compliance at CIMA.
      You need to be careful what you say when trying to pass the buck.

  6. Corruption says:

    @ 02/02/2019 12:35 p.m.

    Agreed. Remember that teacher they went after about 10 years ago or so for that half smoked ganja spliff. Prime example. He tested negative for ganja and his DNA wasn’t on it, yet they spent like 40 court appearances on it. Would you think that if he was a ganja smoker and the spliff was half smoked, that it would most likely have been in his system? These people are a bunch of absolute idiots and morons. If I remember, it went from the Summary Court to the Grand Court and then all the way to the Cayman Islands Court of Appeals, only for the DPP to embarrassingly lose…as always. Over a half smoked spliff. Steal ten million, you’re all good. Get found with a half spliff which isn’t yours, end up spending your life savings defending it. All those involved in that case were later promoted. Pathetic. No wonder our system cannot be trusted. Corrupt to the bone.

    • Imbeciles says:

      Imbeciles more like it. And proud of it, to boot.

      • Anonymous says:

        The question as to why there are few prosecutions should be directed to the DPP not to the FRA. It is the ODPP which is mandated by the Constitution to prosecute. Why would the PAC not know this?

        • Anonymous says:

          Bumbling DPP can’t even handle what’s on their plate now let alone take on a chunk of this. However why does another Authority want to get into the ring when the grey waters are becoming more cloudy. Let the finger pointing and excuses continue. It’s a white collar crook’s playground out their.

    • Anonymous says:

      Corruption Say #03/02/2019 12.39 pm, I hear what you say but you can bet that if someone steals ten million it will not show up in a Suspicious transaction. Unfortunately most of these suspicious transactions are nothing more than a transaction not understood by the people making the report.

      • Anonymous says:

        Agreed. I think most persons do not know why the transaction is suspect. They do not understand it and hope the report to the FRA tells them what to do.

  7. Anonymous says:

    These agreements were put in place to tick boxes not with any intent of deterring tax reduction strategies or other immoral behaviour.

  8. Anonymous says:

    While we are at it, can anyone tell me where the hell is Ruth Bader Ginsberg? Is she dead?

  9. Anonymous says:

    Legge was right and the elected Government tried to destroy him for telling the truth and doing what any reputable journalist should do – shine light in dark corners. It is a critical part of democracy, and is what CNS does so well at maintaining including through allowing comments in the way it does.

    Does any thinking person believe Legge was wrong to suggest corruption appears to pervade many aspects of our society? Does any thinking person believe our politicians (who shot the messenger) can have any credibility on this issue?

    • Anonymous says:

      Legge my Eggo and keep quiet you bot!

    • Anonymous says:

      Legge has no pioneering or whistle-blowing thoughts on the levels of ambient corruption we all encounter. His paper, and their editorials, never miss an opportunity to applaud corrupt politicians and developers, spinning the erosion of due process, and responsibility as some kind of progress we should blindly embrace.

    • Anonymous says:

      Legge said YOU, personally, were corrupt. (Assuming you are a Caymanian.)

  10. Anonymous says:

    They only prosecute little people who don’t have money to get a decent lawyer. The courts are overflowing with BS cases sent over by the DPP’s office which frankly should be labeled as abuse of power. Yet big players wine and dine without loss of sleep or reputation it’s disgusting actually and it’s the prosecution and the attorney general to blame and should have been fired years ago. Instead they make them judges and trusted confidants. They could not fly in most civillized countries.

  11. Anonymous says:

    Also, money laundering through many “front” restaurants is very prevalent. There is one restaurant XXXX which is open every day but no patrons, even for Sunday brunch – staged rental cars in the lot from an agency which has related “parentage”, but I’m sure deposits a healthy amount into the bank each week! There are quite a few like that!

    • Anonymous says:

      Perhaps the anti-corruption commission could ask the business licensing authorities why there has never been a prosecution for fronting?

    • Anonymous says:

      Why don’t you report your suspicions ?

      • Anonymous says:

        You do understand that many hundreds of suspicions, sometimes with overwhelming evidence, have been provided to the FRA and other relevant authotities for more than a decade?

        You do understand that the many decent persons in our financial services industry have spent tens of thousands of hours of unremunerated time compiling and presenting suspiscions?

        You do understand that the authorities appear to do nothing, EVER?

        You do understand that the failure to do anything despite the hundreds of reports is what this article is about?

      • Anonymous says:

        To who, the FRA?

      • Anonymous says:

        Maybe because this type of ‘business’ is a pillar of the cayman economy and it would never be prosecuted.

        • Anonymous says:

          So this is so prevalent you describe it as a pillar of the economy, and yet it is both a crime and money-laundering. Thank you for emphasizing the point.

      • Anonymous says:

        And when they are reported, what happens?

      • Anonymous says:

        At least one pops to mind already connected by cross-ownership to Care Pay and FIFA/CIFA scandals. Yet no investigation triggered from FRA…

        • Hancock says:

          Agreed. It is almost four years since Webb was arrested and we have ZILCH. It is now much worse because CIFA is not holding an annual meeting and no one knows what on earth is going on. The football playing public to to know. Fire the board and start again. It is one big black eye for Cayman.

          Where were the auditors when you wanted them and where are the RCIP and the ACC.

          With 700 lawyers and 1300 accountants on the island you would have thought something could be done. Jeff was no Bernie Madoff.

    • Anonymous says:

      Money Laundering. An attraction to the Country. No one checks, befriending is prevalent.

    • Just wondering says:

      One restaurant?
      There is a group which owns several restaurants ok a dozen. Plus rumoured they just purchased a large commercial building XXXXX.
      The group have opened at least 5 of these in the last couple of years. Hmmm, anything fishie? Of course not.

      • Anonymous says:

        At least those restaurants have patrons eating there. So, successful ‘fronts’… Employs many people as well. Busy ‘front’ restaurants.

        • Real Caymanian... says:

          Is that so?? I eat at a few of those restaurants all the time and I actually love them because they are always empty.. How are they able to pay that expensive rent??? I’m sure they’ll say that 1 or 2 of the restaurants helps to support all the others but come on man this is Cayman sh*t aint cheap out here! 🙂

  12. Anonymous says:

    just another glorious day for the civil service…

  13. Anonymous says:

    Prosecution and going to prison is largely for a specific segment of society.

  14. Anonymous says:

    Typical government behavior. Everything is some other Department/Agency/Ministry’s responsibility. The buck stops with you Attorney General. A clear public explanation is long overdue.

    • Say it like it is says:

      8.25pm Exactly – they always pass the buck. Who is this Robert Berry and what are his qualifications and experience to qualify him as director of the FRA – his response to the serious problem identified, that it is “something they need to look at” speaks for itself.

      • Anonymous says:

        You have no idea who RJ Berry is. Maybe you should ask him, I’m sure he would gladly enlighten you and others.

        • anonymous says:

          1.35pm, you are stating the obvious, please enlighten us.Whatever his background Mr Berry clearly has problems doing his job.

        • Anonymous says:

          He is a appointed specialist by the special interests!
          Don’t worry once they increase there staff they will still be doing nothing. If you think that any high roller will ever be charged on this island than you are really delusional.

    • Anonymous says:

      All part and parcel of our world class civil service.

  15. Anonymous says:

    Reuter’s reported earlier this week on Deripaska / RUSAL and a Jersey based headquartered law firm with an office in Cayman. There is also a reference to Deripaska and Cayman in the story. Interesting how nobody in Cayman has picked this up. When the Mueller Report comes out there is going to be a number of international eyes looking at Cayman. Get ready FRA.

    • Anonymous says:

      Now that Senator Mark Warner, the top Democratic Senator on the Senate’s Intelligence Committee, is asking questions about Ogier’s dealings with Deripaska’s companies the spotlight will soon shine on Cayman. Hope FRA is ready to defend Cayman.

      • Anonymous says:

        AS long as they can increase the staff they will be!

        • Anonymous says:

          8:31, So what do all those people at FRA do all day? Certainly not investigating and carrying out prosecutions.

      • Anonymous says:

        Lawyers from all major offshore law firms should be required to read the Panama Papers and the Paradise Papers. Although big Russian money, from Russian oligarchs, is attractive, there will be a big price to pay for those who dance with the devil.

  16. Anonymous says:

    If they take this any further then there goes our financial services sector!

  17. Anonymous says:

    We cannot even attempt to stop (let alone prosecute) something as simple as fronting, an offense so prevalent that you actually have to try hard to avoid finding it. These same agencies are expected to deal with sophisticated international financial crimes? Incompetence or corruption. Which is it? Which agencies should look in the mirror? Does the Department of Mirrors even have any mirrors to hold up?

    • Anonymous says:

      No, they have no mirrors. Because of this it is not their fault that they cannot look in them. Because they cannot look in them they cannot see their own guilt. Because they cannot see their own guilt they are not compelled to do anything, including obtaining mirrors. A perfect system. Congratulations all. The combined intellect of the entire Monty Python troop could not have conceived it. Brilliant!

    • Anonymous says:

      There is an optical shoppe on SMB that is a front and funny how no one cares.

  18. Anonymous says:

    There are many rogue pump and dump SIBLs still running normal bandit operations to the future peril of our reputation.

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