Top Story of 2014: CarePay criminal probe rattles gov't

The Health Services Authority’s patient swipe-card system became the focal point of a criminal investigation that, by the end of 2014, had swept up one of the Cayman Islands more prominent local businessmen.

The controversy began in June during an evening hearing of the Legislative Assembly’s Finance Committee, with Finance Minister Marco Archer demanding answers about the CarePay card contract: “I want to find out who the ultimate beneficial owner of this company is. There’s a lot of money being paid for this company and we don’t know who it’s going to,” Mr. Archer said during the hearing.

The contract 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, a copy of which was obtained by the Cayman Compass, 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 CINICO and the health authority 4 percent of the value of every swipe card transaction approved for payment.

The 4 percent charge on the value of each claim was split between CINICO, which was responsible for paying 1.5 percent of it, and the Health Services Authority, which would pay 2.5 percent, according to the contract.

Bid documents for the project obtained by the Compass indicated the total cost over the five-year agreement was estimated at US$13.6 million (CI$11.15 million), including the US$1.37 million for the set-up expenses.

By late August, a criminal probe into the contract led to the arrest of Canover Watson, 43, on charges related to corrupt activities and money laundering. He was charged later in the year in connection with the case.

After Watson’s arrest, his lawyer, Ben Tonner, issued a brief statement on his client’s behalf: “The allegations are denied. In due course, at the proper time and in the appropriate forum, I look forward to setting out my position in greater detail. For present purposes since the police investigation is ongoing, I have been advised by my attorneys that it would be inappropriate for me to make further comment.”

The money laundering charges, relating to a total of US$169,000 and covering the period from Dec. 30, 2010, to June 2012, are brought under the Proceeds of Crime Law. Watson is also charged with failing to disclose a pecuniary interest, breach of trust, fraud on the government, and conflict of interest.

Details of the charge of failing to disclose a pecuniary interest, contrary to the Health Services Authority Law, are that on or about June 9, 2011, as a director of the Health Services board, Watson failed to discharge the disclosure obligation at a Finance Subcommittee meeting that he had a pecuniary interest in Advanced Integrated Systems (Cayman) Ltd.

The next three charges were brought under the Anti-Corruption Law.

The first alleges breach of trust. Watson is charged with, on or about Dec. 21, 2010, as chairman of the HSA and chairman of the Technical Evaluation Subcommittee, with a view to private pecuniary gain, he failed to disclose his personal interest in Advanced Integrated Systems (Cayman) Ltd. As a public officer, he failed to recuse himself from deliberations, in a manner that breached the standard of responsibility and conduct demanded of him by the nature of the office and duty imposed upon him.

A charge of fraud on the government contains the following details: that on or about Dec. 29, 2010, Watson accepted from Advanced Integrated Systems (Cayman) Ltd. a reward of US$50,000 in that, as a member of a public office, he undertook for consideration to act on behalf of the company in conducting business with the Cayman Islands government.

A charge of conflict of interest alleges that on or about Dec. 21, 2010, with a view to private pecuniary gain, he failed to disclose personal interest in Advanced Integrated Systems (Cayman) Ltd. in that he provided assistance in incorporating the company and advised it during the bidding process. As a public officer, he failed to disclose the personal interest in any decisions taken by the Health Services Authority.

Initially, one charge of money laundering was presented to the court, alleging that on or about Dec. 30, 2010, Watson acquired criminal property in whole or in part that represented, directly or indirectly, benefit from criminal conduct in the amount of US$50,000. Five more charges of money laundering, with similar wording as the charge above, have also been brought against Mr. Watson.

These charges related to US$50,000 in January 2011; US$15,000 in April 2011; US$4,000 in June 2011; US$25,000 in June 2012; and another US$25,000, also in June 2012.

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