Money laundering trial starts

The trial of Raymond Frank Creed, charged with money laundering, began on Monday with the selection of a 12-member jury.

The defendant has pleaded not guilty to four charges brought under the Proceeds of Criminal Conduct Law.

The charges relate to periods between August 1998 and April 1999.

The criminal conduct alleged is that of Kenneth Taves, who is currently incarcerated in the US for credit card fraud.

Solicitor General Cheryll Richards opened the case for the Prosecution on Tuesday.

She explained that Taves was a resident of California but resided in Cayman part-time. Raymond Creed, who is retired, was a neighbour of his in North Side.

In the US, Taves had operated an Internet adult website for which customers were billed $19.95 a month. That was a legitimate business.

But then Taves purchased a list of credit card numbers and simply billed those numbers for $19.95 per month. Most of the customers did not complain, Ms Richards said. The amount was small and they thought it related to something else.

It was estimated that Taves grossed some $47 million in 1998 and transferred about $25 million to accounts in the Cayman Islands through companies he owned and controlled in the US and other companies in Cayman.

The Cayman companies had accounts at Euro Bank Corporation. Media Buying Services was a company owned and controlled by Ken Taves. For the company Phaeton, the signatory on the bank account was Ken Taves’ father.

Ms Richards said funds from the US would be transferred into that account and then most of the funds would be retransferred to other accounts in Cayman.

On 9 August 1998 an account was set up at Euro Bank under the client signature of Raymond F. Creed for a company called Chamonix. It was established as an ordinary non-resident company. Two Euro Bank entities acted as nominee shareholders. The beneficial owner was Raymond Creed.

However, Euro Bank records show that Ken Taves controlled this account and it was used to receive and transfer funds that were the proceeds of his criminal conduct. The Crown’s case is that Raymond Creed established this account on behalf of Ken Taves, suspecting at the very least that it was going to be used for criminal purposes.

In January 1999 a US court ordered a freeze of Taves’ assets after receiving a report from the US Federal Trade Commission. The FTC had begun investigating complaints from people who had been billed $19.95 by Taves for the website service, but who had not ordered it. In fact, some of them didn’t even have computers.

Taves was charged with credit card fraud in January 2001 and entered a plea agreement. He was sentenced in May 2004 to 135 months imprisonment. He was also to make restitution of $37 million.

In order to prove charges of money laundering against Raymond Creed, the Crown needs to bring evidence so that jurors are sure of four things, Ms Richards summarised.

The first three are: that Ken Taves was engaged in criminal conduct; that the criminal conduct generated proceeds; that Raymond Creed did some act regarding those proceeds that facilitated Taves’ control or retention of them, or allowed him to conceal, disguise or transfer any of those proceeds.

The fourth thing the Crown must prove is that, when Raymond Creed did that act, he had the requisite mental element – that is, knowledge or suspicion that Ken Taves is or was a person who had engaged in criminal conduct or benefited from criminal conduct.

Two charges allege that Creed entered into or was otherwise concerned in an arrangement that facilitated Taves’ control of the proceeds of his criminal conduct. One amount is US$3,481,394. The other is US$2 million.

Two other charges allege the concealing or transferring of Taves’ proceeds of criminal conduct with intent to assist Taves to avoid prosecution for an offence or to avoid the making or enforcement of a confiscation order. One amount is US$2,399,982. The other is approximately US$3.8 million.

Chief Justice Anthony Smellie, as presiding judge, earlier told the jurors that Ms Richards’ opening statement was not evidence on which they could decide anything. But it would assist them to understand the issues.

He reminded them that there is no burden of the Defence to prove anything. The Crown had to prove its case so that they felt sure before they might convict.

The Chief Justice further cautioned jurors that the trial was expected to run three to four weeks and they must avoid forming impressions too soon. He also warned them not to be influenced by anything they might hear or see outside the courtroom.

The trial is being held in Court 5, where there are computer monitors for the display of documents in the case.

Ms Richards is being assisted by Senior Crown Counsel Adam Roberts.

The defendant is represented by Attorney A. Steve McField with Attorney Delroy Murray.