New evidence revealed Wednesday in the CarePay contract corruption investigation indicated that police obtained statements implicating other people besides the two individuals currently charged in the case, the Cayman Islands Grand Court heard.
In addition, Crown prosecutors made statements claiming defendant Canover Watson directed someone at his former company, Admiral Administration, to “permanently delete” emails which have now been seized as evidence by the Royal Cayman Islands Police Anti-Corruption Unit.
The statements were made Wednesday morning by Deputy Director of Public Prosecutions Patrick Moran during an application to have a trial date of May 25 vacated and replaced with a date in November. Watson and his former personal assistant Miriam Rebecca Rodriguez are due to face trial together in what Crown prosecutors allege was a fraud and money laundering scheme, surrounding the award and implementation of the Cayman Islands Hospital’s CarePay patient swipe-card system to a company known as Advanced Integrated Systems (Cayman) Ltd. Mr. Moran said there was simply not enough time, given the volume of evidence police obtained just last week, to hold the trial in late May.
Attorneys for Watson and Rodriguez argued that the trial date should not be moved, partly because of the financial strain such a delay would place on their clients whom, they said, are now effectively “unemployable.” Grand Court Justice Ingrid Mangatal agreed to provisionally reset the trial to Nov. 2, pending further discussions between the parties involved.
Watson previously denied allegations of corruption made against him, but declined to make any public statements Wednesday. Rodriguez has never made any public statements concerning the investigation.
It was alleged Wednesday that Watson used his former position as chairman of the Cayman Islands Health Services Authority to obtain the CarePay contract for AIS (Cayman) Ltd., as well as another government contract awarded to AIS in 2011 for a computer tracking system for pharmaceuticals. It was alleged that Watson benefited or appeared to directly benefit from the award of those contracts – worth millions of dollars – by receiving “numerous payments” from AIS.
The payments, it was alleged, went to a bank account that Watson was “involved” in setting up and it was further alleged that the registration of AIS (Cayman), Ltd. in the islands was done “at the direction of Mr. Watson himself.”
In addition, for the first time, prosecutors publicly acknowledged that the activities of other individuals in creating the AIS (Cayman)-CarePay arrangement were being investigated. No one else had been charged in connection with the investigation as of press time Wednesday.
Mr. Moran said, “Mr. Watson was giving specific instruction to individuals who might be described as ‘the public face of AIS (Cayman)’ as to what should be said to members of the Health Services Authority in order to win more business.”
Later on, after being questioned on the topic further by Justice Mangatal, Mr. Moran said that Watson made a number of assertions while responding to questions given to him by the RCIPS “that others may have been responsible for any wrongdoing that might have occurred in this case.”
Watson, who is a former recipient of the Young Caymanian Leadership Award, faces 10 charges, including six for alleged money laundering. The money laundering charges, relating to a total of US$169,000 covering the period from Dec. 30, 2010 to June 2012, are brought under the Proceeds of Crime Law. He is also charged with failing to disclose a pecuniary interest, breach of trust, fraud on the government, and conflict of interest.
Rodriguez faces one fraud-related charge in the investigation under section 11 of the Cayman Islands Anti-Corruption Law and two charges of money laundering. The money laundering allegations relate to separate amounts, totaling US$30,000 and US$25,000, that Rodriguez is accused of handling on behalf of Watson, who was managing director at Admiral Administration.
In asking for the trial date postponement, prosecutors also revealed that new evidence – in the form of various communications saved to a compact disc – was just presented to police on March 26 that included emails from Mr. Watson’s work account during the investigation.
Mr. Moran said a witness statement had been obtained to the effect that “Mr. Watson had directed these emails to be permanently deleted.” The person to whom those directions had been given at Admiral Administration did not comply, Mr. Moran said.
The disc “will clearly contain a vast amount of evidence” that prosecutors could not vet for legal advice privilege and for disclosure purposes in the roughly 50 calendar days prior to the May trial date, Mr. Moran said.
The examination of other computerized evidence obtained during police searches at Admiral Administration and at Mr. Watson’s Prospect-area home after his Aug. 28, 2014 arrest on suspicion of corruption and money laundering activities was temporarily halted following various claims made by Mr. Watson’s attorneys. The attorneys noted that some of the records obtained during the police searches may have been subject to claims of legal professional privilege and other materials may have been considered “excluded” – meaning they were not relevant to the criminal case.
Legal wrangling surrounding these records led to a five month “hiatus” in the case, according to Mr. Moran, and was also part of the reason the Crown was asking for a trial date postponement. Mr. Moran said he did not intend to criticize defense lawyers for making such a motion as some of the earlier records seized may well have fallen into one of the two excluded categories.
Trevor Burke QC, appearing on behalf of Mr. Watson, noted his previous appearance in the Eurobank trial held more than a decade ago in Cayman, and indicated that the evidence that had to be examined in this case was “about 5 percent” of what lawyers in that trial were faced with. Mr. Burke argued that, given “a little cooperation” from prosecutors in turning over disclosure records promptly, there was no reason the trial could not be commenced in May.
“It is a very simple and straightforward allegation,” Mr. Burke said. “Bear in mind, the electronic devices [described in court proceedings] here belonged to [Mr. Watson]. They’re his computers. The Crown [is] playing catch-up with us. The only question is what [evidence] the Crown chooses to deploy.”
Mr. Moran dissented. “I disagree with the submission that this case is simplicity itself,” he said, noting there were two defendants in the case, including Rodriguez whose involvement may have been limited and who may not have seen everything her former boss, Watson, had been privy to.
Mr. Moran also pointed out that some of the material seized by police belonged to AIS (Cayman) Ltd., “an entity in which [Watson] claims to have no involvement.”
“We cannot just [serve] this on the defense [without reviewing it],” he said.
It was also stated in court that Watson’s legal expenses through June, at least, had been funded through an unnamed third party.
Mr. Burke was asked following the court hearing Wednesday if he could identify that “third party.”
He declined to make any statements regarding the matter.