Cayman Islands and the United States’ top officials had cause for much mutual admiration Thursday in Washington, DC, when both countries were on the receiving end of cooperative efforts.
The event once again underscored the resolve that respective banking systems offer no refuge to those attempting to subvert justice.
The Cayman Islands Mutual Legal Assistance Central Authority Chief Justice Anthony Smellie and Attorney General Samuel Bulgin (accompanied by the director of GIS Patricia Ebanks and Crown Counsel Susanne Look Loy) met with the Attorney General of the United States Alberto R. Gonzales and other officials from the US Department of Justice to exchange funds under the asset-sharing agreement between the two countries.
The Cayman delegation received on behalf of the Government just over US$1.7 million, the proceeds of the successful prosecution of two cases. In turn, they presented to Mr Gonzales a cheque in the amount of US$675,000, to be restored to the victims of another fraud, which has been successfully prosecuted and the proceeds confiscated because of the co-operative efforts.
Show of cooperation
The exchange is an example of the outcome of a now well-established regime of cooperation that evolved from the implementation of the Mutual Legal Assistance Treaty with the United States in 1990.
The MLAT encourages use of shared funds for local drug rehabilitation, law enforcement and justice administration programmes.
Accepting the funds from the US Attorney General, Chief Justice Smellie expressed Cayman’s appreciation to several members of the Office of International Affairs and commended the strong working relationship that has developed between the two governments.
‘Our relationship with the U.S. and our moral obligations as a member of the global community to assist in the efforts to combat the scourge of organised crime and money laundering are of the highest importance to the Cayman Islands,’ said Mr Smellie.
Attorney General Bulgin remarked: ‘The occasion here today is indeed a reaffirmation of the long history of cooperation between the U.S. and the Cayman Islands – with able guidance from the U.K. – in the fight against criminal activities. It is an unequivocal pledge of the Cayman Islands to continue to cooperate with other countries, including the U.S., in not only prosecuting the perpetrators, but in confiscating their proceeds of crime.’
Attorney General Gonzales noted that the US was a big country but it could not succeed in the fight against crime without the cooperation of other countries.
Good evidence
He said the funds forfeited and the exchange of cheques were very good evidence of global cooperation.
Since the MLAT’s introduction, in excess of US$10 million, arising from some 230 cases in which the two governments have co-operated, has been shared with the Cayman Government. Several million dollars have also been returned to the United States for the restitution of victims of fraud in other cases and as asset sharing with the United States.
The Cayman Islands was the first regionally, and among the first worldwide, to criminalise the laundering of the proceeds of all serious crimes, extending such legislation beyond the ambit of drug-money laundering. The legislation gives the courts of the Cayman Islands power to restrain and ultimately to forfeit the proceeds of drug trafficking and all other serious crime, including fraud and official corruption.
The Cayman Islands passed a comprehensive anti-terrorism law in 2003, in addition to adopting as part of our domestic law UN Security Council resolutions dealing with the financing of terrorism.
The funds handed over to Cayman today were in the form of two cheques, one for US$1,566,890.49, proceeds from the case of Chantal and William J. McCorkle, the other for $US$141,027.30 from the case of US v. All Funds.
The history
The cooperative effort in the textbook McCorkle case began some seven years ago when William J. and Chantal McCorkle became the subjects of investigations into their fraudulent telemarketing operation. At one stage, the McCorkles seemed to be winning the case because of technicalities in local law (which have since been adjusted). Three years later, however, the Cayman Islands Court of Appeals ruled substantially in favour of the prosecution in upholding the application of the Cayman Central Authority.
‘We will help – and if at first we don’t succeed, we will try again – but we won’t give up,’ says Acting Solicitor General Cheryl Richards describing the persistence with which this case was tackled.
Ms Richards is one of the Crown attorneys advising Cayman’s Central Authority in the administration of the MLAT.
Chief Justice Smellie paid tribute to the attorneys general, solicitors general and crown counsel who handled this and the many other cases over years since the MLAT was implemented.
‘This case, both in terms of our legislature’s response to it in amending the Law and how it was dealt with in the courts, presents a paradigm on how these matters should be handled,’ said the Chief Justice, who referenced this litigation as the basis of a hypothetical case discussed at the 11th United Nations World Congress in Bangkok, Thailand, last month.
‘Many lessons were learnt from it, not least the importance of ensuring that international requests for assistance by way of the restraint and forfeiture of the proceeds of crime are properly grounded – and this was both in terms of the law of the requesting state, as well as that of the requested state,’ Chief Justice Smellie told the Congress last month.
The background
Explaining the background to the case, the Chief Justice said that that the McCorkles promised customers that they would partner with them in real estate transactions by providing the capital necessary to purchase properties. They offered a 30-day money-back guarantee in relation to introductory video tapes that cost USD$69. The couple sold tens of thousands of these tapes.
But the McCorkles failed to provide the capital for the real estate ventures and frequently failed to honour the 30-day money-back guarantee. ‘When complaints were made, the introductory video tape turned out to be nothing but a fraudulent misrepresentation by which the McCorkles enticed people to part with their money,’ said Chief Justice Smellie. Investigations in the United States showed that the McCorkles had wire transferred millions of dollars of the proceeds of their fraudulent telemarketing activities to the Cayman Islands.
By use of information provided by the Cayman authorities pursuant to a request under the MLAT, these monies were restrained and the funds were transferred to the US authorities for restitution of victims.
However, the US discovered that the administrative process of restoration of small individual amounts of funds to the many victims would have exceeded the money returned, said Chief Justice Smellie. As a result, the US made the decision, in accordance with the agreement, to share the funds with the Cayman Islands.
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