ODPP pays $64k bill after failed seizure of legit cash
(CNS): The Office of the Director of Public Prosecutions was ordered to pay US$64,000 in compensation to a Brazilian businessman after the office tried unsuccessfully to freeze and seize his assets in the Cayman Islands even though he was able to show that the money was legitimately earned. The order followed a decision by the Grand Court in 2020 that the case for seizing the money was “frivolous” and that prosecutors had “failed to establish” the bare minimum of a “good arguable case”, which according to case law cited is one that is “barely capable of serious argument”.
In the first case of its kind in the Cayman Islands, the ODPP was given a punitive order over the bungled case. It began in November 2019 when prosecutors applied to the Grand Court for a restraint order targeting an investment fund managed in the Cayman Islands and held in the name of Massimo Andrea Giavina Bianchi, an Italian citizen and Brazilian businessman.
The initial investment had been US$1,375,000 but by May 2020, following a number of withdrawals, only US$453,000 remained on the account, indicating that this was the amount when the restraint order was imposed.
The RCIPS Financial Crimes Unit alleged that the initial investment funds were criminal proceeds from money laundering, corruption, tax evasion, bribery and other organised and financial crimes in Brazil. Police here claimed the money was connected to a “subway-railroad cartel” accused of manipulating the tendering process for lucrative government contracts in Brazil between 1998 and 2008. In June 2020, the ODPP followed up with an application for a property freezing order on all Bianchi’s Cayman Islands accounts.
But Bianchi, who was represented by Jonathon Hughes, a local attorney with Samson Law, vehemently denied the allegations and put forward evidence that the funds had been legitimately earned and declared to Brazilian tax authorities.
Chief Justice Margaret Ramsay-Hale, who heard the second application in the summer of 2020, found that the crown had “failed to establish a case which is ‘even barely more than capable of serious argument’ that the funds were obtained in the cartel scheme”. She was persuaded by Hughes’ arguments that the crown’s application was frivolous, defined as “being so unmeritorious that there was no realistic prospect of it succeeding after full argument”, and awarded costs to his client on an indemnity basis.
But given the circumstances of the case, Hughes invoked section 65 of the Proceeds of Crime Act on behalf of Bianchi, seeking to recoup not just legal fees but also compensation to reflect the
lost opportunity to invest and profit from the funds that had been frozen by the court pending the final outcome of his case.
In a ruling dated October 2022, Justice Cheryll Richards found that the police and prosecution were guilty of “serious failures” and that it would be just to order compensation and full legal costs to the businessman concerned. In January 2023, the matter was settled with a payment from the crown to Bianchi of US$63,886.51.
Speaking about the decision, Hughes said he understood the crown’s need to prosecute money laundering but raised concerns about the potential abuse of its powers.
“All too often we see the crown overreaching when it comes to the significant powers given to it under the Proceeds of Crime Act,” he said. “Whilst we understand the eagerness of the crown to prosecute suspected money laundering, it is equally important that cases are investigated and prepared thoroughly so that innocent individuals and companies do not erroneously fall under suspicion.” He said the firm was pleased their client had been “entirely vindicated”.
The case had emerged as a result of a report from a financial institution and the crown had relied “in good faith” on information from the Brazilian authorities that Bianchi’s company, Mottarone, which was the source of the investment funds, was not a legitimate business.
Court documents indicate that the authorities in Brazil are still investigating him in relation to another business he owns, TIRans, which had been involved in activities that had led to Bianchi’s indictment in Brazil in 2015, though most of the charges have since been dismissed. In addition, both TIRans and Bianchi had received an administrative fine for their role in the bidding cartel’s operations.
The ODPP had wanted to freeze the funds by claiming that the real source of money held in the Cayman Islands was from the alleged illegal activity of TIRans, and that Mottarone was a sham company and merely a funnel for the proceeds of crime.
But the court found that by the time the ODPP sought the freezing order, there was a mountain of evidence that the crown did not have a case in this instance and there were serious failings in the investigation. The court found that the investigative authorities had failed to undertake a full review of the documents they had received that had placed the case “on shaky ground”, and that a further detailed inquiry had been warranted but was not undertaken.
“I hold that there is a good arguable case that a certain kind of unlawful conduct had occurred. In my judgment, however, the Crown has not established any nexus between the unlawful conduct and the funds in the Cayman Islands,” Justice Ramsay-Hale wrote in her 2020 decision. “It is not enough to say that a defendant is guilty of unlawful conduct. The statute requires that some causal link between the conduct and the property be shown.”
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Sure, but even if something was uncovered the Chinese are not answering an extradition to Cayman.
FATF is harassing small countries like Cayman but are happy to turn a blind eye to real graft and corruption.
There is no accountability for these embarrassing failures that make Cayman a laughing stock and will keep us on the FATF grey list indefinitely.
Why do investigations from so called expert teams like the Anti-Corruption Team or Financial Crime Team take ten years to bring to court with little result?
Why do so many of their cases fail at court?
The spotlight needs to go on the managers of these departments and a full review of their competence to manage complex investigations.
Why do we never see their jobs being advertised ? There needs to be transparency in who these people are, what we are getting for our money and ensure their contracts are linked to performance as it would be in any other walk of life!
don’t worry The new Board at CIMA will sort these issues out.
Because we don’t have enough factors increasing our cost of living, lets keep running up the tab on people we have to settle cases with because the ODPP incompetence.
Take a close look at the players involved in the east/west road extension and the new port in Breakers. Excellent environment for money laundering and kick backs.
It’s been said before in other posts. There needs to be a root and branch review of the specialist units hired to investigate these matters.
There’s just to many examples of old aged expats taking a wage and not delivering.
We need fresh, current and qualified specialists not second rate investigators hired because they go drinking with the boss!
Bitcoin fixes state intrusion.
So will CIG and RCIPS be asking that the thousands they paid to so called consultants and experts retained to counter FATAF as well as the various senior management and heads of CIG authorities who insisted these alleged crimes be investigated and prosecuted now be held to account. This jurisdiction and the ODPP still has no idea how to deal with ML.
This is just one of many that the CIG will have to compensate for abuse of power by over zealous officers in its various Agencies, ie CBC, RCIPS etc.
A friend has received a money transfer from her brother in Canada, small sum. Her bank locked her account for 2 years.
CNS – Can you please clarify the wording in the article? It is mentioned that the order was a “punitive” order yet it goes on to say that the amount was “settled”. I am slightly confused as to whether this was part of a Costs Application, a punitive order, or if the ODPP was sued and settled. Thank you!
CNS: It was a punitive costs order, i.e. punishment costs someone has to pay because they behaved badly. “Settled” means they paid the bill.
Understood, thank you for clarifying.
CNS: No problem!
Stop trying to satisfy the crazy whims of FATA. We will never satisfy them so why even try.
Supervising the activity that takes place in our financial jurisdiction isn’t being done properly. That’s bad enough. What makes it worse is that our agencies don’t prosecute money laundering, terrorist financing, proceeds of crime, and/or corruption, even when it’s right there, or attempt it badly out of desperation, like in this case.
The FATF have the power to switch-off the financial services industry, the real estate sector, and tourism, by closing access to the international payments and settlements systems (including international credit cards) which are the lifeblood of the legitimate economy.
Without those, we are spinning thatch rope for crypto.
Alas, if the ODPP had any experience prosecuting serious money laundering cases, they might be better equipped to understand the limits of their authority. This is just more confirmation for the FATF that our apparatus have no brains to do this work, even in hindsight, even armed with the benefit of detailed published indictments elsewhere. They can’t put it together. The wrong people get under the lens while recidivist locals walk free.
https://caymannewsservice.com/2023/02/fatf-still-concerned-by-caymans-failings-on-action-plan/
“ there are problems in relation to prosecutions because the RCIPS and the Ani-Corruption Commission are short of the experts needed to conduct complex financial crime investigations. Criticisms have also been levelled over a tendency for law enforcement officials here to go after the “lower hanging fruit” rather than delving into more complex potential crimes.”
There is your answer!
There are hobbyist level/precautionary readers of Offshore Alert that have more of a clue than the so-called experts we pay. Many of them without securities and legal educations. Click on the hyperlink to the DOJ indictments. Not complex.
From what I understand it appears that being a social acquaintance of the manager affords certain individuals sufficient qualification and expertise to tackle complex investigations.
A set of golf clubs help.
Oh dear. Well that one wont count for the FATF, will it?
On the other hand maybe FATF will need to grind their axe some place else. Trying to satisfy FATF is like looking for a needle in a haystack. Just another part of their agenda that comes up empty every time. If these investors have to fill out as many forms as the “just above the poverty line” rest of us have to they should realise by now that there is nothing to find.
Only there’s plenty that won’t be found when nobody is looking properly. Have you even seen the headlines from our SIBL and SEZ participants in the last 5 years?
Trying to get off the FATF bull$#@% grey list at any cost, and following any whim and the UK ‘s old colonial adage that Might is Right. Our government believes everybody are like Caymanians who will lie down and comply with their tyranny because they can be bullied and labeled criminal or corrupt to achieve outcomes they would like to see happen without any proof and the belief that they can get away with it here .The arrogance and self righteousness of Cayman’s only Mafia the Government and its colonial consigliere’s. Saddest part now is only if you have means can you obtain Justice in Cayman !
FATF needs to disband themselves and find something else to do.
The problem here was that local lawyers argued the case for the government. It’s what happens when you force entities to hire based on Caymanian status. It’s now reached the point where these forced hiring practices are making the government itself look dumb. Still want to stand by that policy?
7:53 am: While your comment is hardly worth the dignity of a response, I am not sure what you mean by “local”. You should know that the Director of Public Prosecutions and most predecessors are expatriate. Several staff as well.
Errors on the job—even incompetence—are no respecter of nationalities.
10:54 – Despite your comment not being worthy of my response, I’ll waste a minute of my time. You know what was meant with “local”. Stop playing dumb. On another note, I couldn’t help but to notice the time of day of your post… a good indicator of how you spend your time during a workday. You’re probably a local.
7:47 pm: again, not worthy of dignity of a response, except to say I am a retired Caymanian. Your prejudices may be blocking your capacity to argue logically.
Are Jamaicans also classed as ex-patriots ?
9:28 am: to answer your question, yes, Jamaicans are definitionally expatriates, although in Cayman we tend to think of persons of British origin as Expatriates.
Here is a definition from web:
‘ “Expatriate” originates from the Latin words ‘ex’ (‘outside of’) and ‘patria’ (one’s country). It was initially defined as anyone who left their country or was exiled from it. During the European colonial period, ‘expatriates’ referred to colonial officers who travelled to overseas colonies.’
I have never seen a single Caymanian prosecutor… There might be some, but I haven’t seen one. They’re usually Jamaican or British…
You have done a good job at exposing your bigoted racism though, bravo.
Or Jamaican, Bajan, or Trini. Not Caymanian, though.
2:01 pm: while a small minority, over the years there have been Caymanian Crown Counsel.
It has usually been the first stop for qualifying Caymanians to cut their teeth, and they have usually moved on for one reason or other. I can think of four but there have likely been others.
The backbone of the DPP have been expatriate over the years to today.
The Caymanian Crown Counsels we have had over the years have been utterly useless. Even worse than some of those from Jamaica and the eastern Caribbean.
7.53 your factual observation will unfortunately be considered racist…which is the usual response to an uncomfortable truth.
Everyone knows todays Cayman Islands is the worse place to try and Launder money.
Delaware, London, UAE is much more attractive for that kind of activity.
Laundered money from China with CPC links is still coming here through sophisticated means.
How many prosecutions have there been the last 5 years related to laundered money?
So far, it’s unclear if our agencies understand what money laundering is. The ODPP can’t seem to read the published indictments on the DOJ and District Court websites involving the misdeeds of our residents, businesses, and enablers. Offshore Alert publishes them, in case they missed it. It’s like they are deliberately trying to look busy while doing anything else – with eyes only for those without connection to the islands. Cayman has no start date on competence.
The incompetent use and/or abuse of the legal powers by government’s legal departments is becoming a recurring theme.
Clearly both the investigative authorities and the ODPP are in need of a top to bottom review of competence by an independent outside expert that will hopefully lead to remediation/removal of incompetents.
Auditor General’s Department – Would you please do a value for money audit of the waste of government funds by both the ODPP and the Attorney General’s portfolio in this and similar cases. In this case it would appear yet again from the judge’s comments that either there was incompetence in not recognising the hopelessness of the case or utter disregard for propriety in taking forward a hopeless case.
What can you do? If a director asks locals to work he’s accused of racism. 😂
another glorious day for the civil service!
any comment mr governor or franzie?
just another day in wonderland…