Cayman Islands businessman Canover Watson was charged Thursday with five separate corruption, fraud and money laundering offenses, according to officers with the Royal Cayman Islands Police Anti-Corruption Unit.
The charges stem from an ongoing investigation into the 2010 award of a public hospital contract for a swipe card payment system, known as CarePay, for Cayman Islands National Insurance Company customers. Mr. Watson, a former recipient of the Young Caymanian Leadership Award, was chairman of the Health Services Authority board of directors at the time the contract was awarded.
Mr. Watson was arrested during the investigation on Aug. 28. He has been reporting to the police periodically on bail since then.
A statement from Anti-Corruption Commissioner David Baines did not name Mr. Watson as the person who had been charged, but Mr. Watson has previously stated that he is the target of the police probe. He has denied any and all allegations of corruption in connection with the case. Mr. Watson’s attorney did not respond to queries Thursday, or at any time previously when the Cayman Compass has tried to contact him on this matter.
Mr. Watson is due in court on Nov. 25 to answer the charges.
According to Mr. Baines, the charges include conflict of interest, breach of trust, fraud on government, failure to disclose a pecuniary interest and money laundering.
Breakdown of charges
Conflict of interest contrary to the Cayman Islands Anti-Corruption Law  refers to decisions taken by public officers in which they have a “personal interest” where those decisions are not disclosed and/or where the public officer “votes or otherwise takes part in proceedings of the government entity related to such [personal] interest.” To do so is an offense under the Anti-Corruption Law, carrying a prison term of up to five years.
The section of the Anti-Corruption Law under which the breach of trust charge arises refers to a “fraud or breach of trust” committed in connection with the official duties of a public officer or member of the Legislative Assembly. The section carries a maximum five-year prison term upon conviction.
Section 11 of the Anti-Corruption Law, under which the charge of fraud on government is brought, deals with anyone who directly or indirectly agrees to give or offers a public officer reward, advantage or other benefit in return for cooperation or influence in the transaction of business with government. The charge also makes it an offense for a public officer or Legislative Assembly member to ask for or accept such a consideration.
Under section 10(1) of the Health Services Authority Law (2005), failing to disclose a pecuniary interest is an offense. This section refers to requirements to disclose pecuniary interests prior to meetings of the Health Services Authority board during which government contracts or proposed contracts are discussed. Failure to do so, and failure to leave the meetings during which those contracts are discussed, can result in a three year sentence upon conviction on indictment.
Mr. Watson has also been charged with money laundering contrary to section 135(1) of the Proceeds of Crime Law . The allegation against Mr. Watson here is that he acquired criminal property “in the amount of U.S. $50,000.”
“It is anticipated that further charges will follow,” Mr. Baines’s statement said.
Mr. Watson, 43, is on an undefined leave of absence from the Cayman Islands offices of the financial services company he managed. He has also been suspended from his position as a member of FIFA’s financial monitoring panel, called the audit and compliance committee, for the North and Central American and Caribbean region of world football’s governing body.
FIFA Vice President Jeff Webb, who is also a Cayman Islands resident, was contacted for comment Thursday but was out of the country and did not return calls immediately.
In September, the head of FIFA’s Audit and Compliance Committee, Domenico Scala, said Mr. Watson had been relieved of his duties while the investigation continues.
“The chairman has decided to temporarily relieve, until further notice, Canover Watson, to whom the presumption of innocence applies, of his duties on the FIFA Audit and Compliance Committee,” a FIFA statement on the matter read. “This should not be regarded as routine procedure because cases like this or of this nature must always be assessed on their individual merits.
“After a preliminary clarification of the facts of the case and the allegations of the Cayman Island[s] investigating authorities against Canover Watson, no connection with football and/or his role at association level has been established at this stage.”
The CarePay contract
For some months, the Anti-Corruption Commission has been looking into certain aspects of the award and implementation of a 2010 contract the public hospital system signed with the local arm of a Caribbean company for the patient swipe card system.
The probe began following an audit of the contract process, the Cayman Compass learned from separate sources familiar with the matter. The newspaper has confirmed that the Cayman Islands Auditor General’s Office started looking into the CarePay contract more than two years ago and that the office has since completed a review of the agreement. That review was passed on to the Anti-Corruption Commission. It has not been made public. The contract for the swipe card system was awarded on Dec. 21, 2010, to AIS Cayman Ltd., an agent of St. Lucia-based Health Adjudication Systems, for a five-year period. According to the contract, AIS Cayman Ltd. was to receive US$1.37 million for initiating and implementing the computerized card swipe system. In addition, it would receive from the Cayman Islands National Insurance Company and the government Health Services Authority 4 percent of the value of every swipe card transaction approved for payment. Effective Oct. 1, the Cayman Islands National Insurance Company switched providers involved in the processing of about 90 percent of the healthcare services claims from its contract with Advanced Information Systems Cayman Ltd. and St. Lucia-based Health Adjudication Systems, to a Detroit-based company, Automated Benefit Services.
The change led to allegations by the current healthcare claims system provider that the government had breached its contract with the company.