Crown: Watson stole $1.54M in football invoice fraud

(CNS): Canover Watson, the former treasurer of the Cayman Island Football Association (CITA), stole US$1.54 million from CONCACAF, the regional football body, using false and massively overinflated invoices, prosecutors alleged as they opened the decade-long case against Watson and Bruce Blake on Friday. They accused Blake, the former VP of CIFA and at the time a lawyer with Maples, of helping Watson move the ill-gotten gains through the financial system.

At the time of the alleged crime, between 2013 and 2014, as well as holding CIFA’s purse strings, Watson and Blake were working at CONCACAF with their long-time friend, Jeff Webb, who was Watson’s business partner and also president of CONCACAF, which has around 41 teams across the Americas and the Caribbean.

As Eloise Marshall QC opened the prosecution’s case, she told the jury that Watson used his position in that football community to steal the money and then, with Blake’s help, set about hiding it through the creation of false deals and documents so they could spend it.

The crown said that after meeting Shakeel Khawaja, a sales agent from Forward Sports, a perfectly legitimate company that had hoped to supply sports equipment to CIFA, Watson set up a shell company called Forward Sports (Cayman). He then used that company to create false sponsorship deals to supply huge amounts of football equipment to be used across the region, including by young people in grassroot teams.

Both Watson and Blake have denied all of the allegations against them. They are charged with a number of offences, most of which relate to the conspiracy between them to hide, disguise and ultimately launder the stolen money. Watson is also charged with the actual theft of the cash at the heart of the case, Marshall told the court, as she began to set out the complexities of the crown’s case against the two men.

As Marshall explained the eight counts on the indictment, she set out the details of the main offence, which was how Watson allegedly stole the money. Using the shell version of Forward Sports, which Watson established in Panama, he sent out three fake invoices to CONCACAF for football kit that was manufactured in, and supplied from, Pakistan, where the real Forward Sports company was based.

Given CONCACAF’s poor internal processes and what appeared to be some blind eyes, Watson was able to get the massively inflated and unrealistic invoices approved for items such as tens of thousands of footballs, thousands of goals, sports bags, football strips, dribbling cones and even 15,000 usher vests for the Gold Cup, where there were likely no more than 150 ushers on duty throughout the whole tournament. None of these things were ever supplied.

In an agreement with Blake, the men used more shell companies, Blake’s own genuine consultancy company’s bank account here in Cayman and the local CIFA accounts to access and launder the cash, including a complex set of loan agreements for CIFA that they tried to disguise as money for its Centre of Excellence.

Marshall explained that the crimes came to light as a result of pressure from two directions. The first was from CONCACAF staff who noticed that their inventory of equipment was well short and began asking questions. This led to Watson having to make a real order from Forward Sports and pay for it. The second was during CIFA’s annual audit when the local audit firm began questioning the strange loan deals on the accounts.

The loans were initially shown as sponsorship deals and then converted to loans from shell companies. Watson eventually told the auditors in a private meeting that these loans were actually from him, as he was the beneficial owner of the various Panamanian companies involved, and that they would be converted to sponsorship deals.

While he never explained to the auditors what he was doing, the crown alleges that this was all part of efforts to disguise the original theft from CONCACAF. Marshall said the conspiracies were designed to confuse and deflect, and both Watson and Blake used false documents, forged signatures and numerous other fraudulent means to access the cash.

The crown also alleges that the motivation for the theft was in part to pay back a loan that CIFA had taken out from Fidelity Bank. By 2012 CIFA’s overdraft reached over half a million dollars, and both the bank and FIFA were pressuring the association to pay the loan back. Marshall said this was putting Webb’s potential promotion to become the president of CONCACAF and VP of FIFA in jeopardy.

Marshall will continue laying out the crown’s case on Monday. The trial is expected to last around ten weeks, with Justice Margaret Ramsay-Hale presiding.

Check back to CNS for regular coverage from the courtroom.