Convicted fraudster Canover Watson, 45, began serving his seven-year prison sentence Friday on charges of conspiracy to defraud, fraud on the government, breach of trust and conflict of interest following a Grand Court verdict in the CarePay trial.
In pronouncing his sentence, Grand Court Judge Michael Mettyear, while acknowledging that Watson was not the only person involved in the conspiracy to defraud the government, said that Watson had played his part to the full extent.
Justice Mettyear even accepted that Watson’s business partner Jeffrey Webb may have been the leader of the conspiracy to skim profits from the public health system swipe-card contract, known as the CarePay contract, but he said that did not excuse Watson’s key role in the scheme.
“I’m satisfied, of the two, you are the cleverer,” the judge said, referring to Watson.
Mr. Mettyear spoke directly to Watson while pronouncing his sentence: “The evidence against you was overwhelming. You conspired with Jeff Webb to steal money from the Cayman Islands government. You were able to succeed because of your position of power and trust as chairman of the Health Services Authority.
“You are a certified accountant. Yet you behaved shamelessly,” Justice Mettyear said, stating that Watson had falsified presentations, letters, emails, contracts and signatures during the course of the fraud scheme.
“You fooled a number of senior civil servants and possibly a minister,” the judge said to Watson. “You tried to fool the jury, although you failed.
“You were already a wealthy man when this started. It was sheer greed and contempt for your fellow Caymanians that caused you to act as you did.”
Justice Mettyear noted that during the approximate mid-point of the trial, new evidence was discovered on computer flash drives [also called jump drives or memory sticks] that were initially thought to have been lost from Watson’s office at his former company, Admiral Administration. Information recovered from those drives showed Watson creating spreadsheets that calculated how much profit he expected to receive from the CarePay contract.
“It is a great shame that you didn’t have the courage to admit what you’d done and plead guilty. That is particularly so following the discovery of the missing flash drives after Christmas,” the judge said. “Instead you twisted and turned … and came up with a complicated web of lies.”
The judge did not deny that Watson had performed a number of good works in the community during the past 10 years, for which he had received the Young Caymanian Leadership Award in 2007. However, in some ways, Justice Mettyear said, that made the offenses of which Watson was convicted worse.
“You had been an inspiration to many young Caymanians,” Mr. Mettyear said. “What on Earth must they think now?”
Watson was sentenced to a concurrent seven years on each of the first two counts of the indictment, which alleged conspiracy to defraud. The additional three charges carried another three-year sentence, but all of the terms were ordered to run concurrently, which means Watson will spend a maximum of seven years in prison based on the court’s ruling.
Certain aspects of Watson’s case look to remain in the courts for a number of months following the guilty verdict against him last week on five of six corruption-related charges.
Even after he is released from prison, the criminal conviction will follow the defendant, his attorneys said.
“He is ruined,” Watson’s attorney, Trevor Burke, QC said Friday during the sentencing hearing. “[The conviction] will leave him penniless.”
Defense counsel did not say Friday whether they intended to appeal either the guilty verdict on the five counts or the length of the sentence. Watson was found not guilty on the sixth charge, which alleged he transferred criminal property [money laundering].
Deputy Director of Public Prosecutions Patrick Moran said Friday that the Crown would seek to request that the court inform the Cayman Islands Monetary Authority that Watson is not a “fit and proper person” to register companies in the islands. This would essentially mean that Watson would no longer be able to set up a business in Cayman, even after his release.
Mr. Moran also discussed a timetable for the Crown to initiate civil forfeiture proceedings against Watson’s estate in Cayman. This involves seeking restitution of the cash he is alleged to have bilked from the CarePay swipe-card contract with the public hospital system between 2010 and 2013.
During his two-month trial, Watson was accused of conspiring with his friend and business partner Webb in a scheme to skim hundreds of thousands of dollars in profits from the CarePay contract. It was a scheme prosecutors accused Watson of directing as HSA chairman.
The Crown calculated the total “intended” loss to the government as a result of the CarePay fraud scheme at nearly US$5.7 million, if all of Watson and Webb’s plans in the criminal conspiracy had succeeded.
Mr. Moran said that is not what the Crown would ultimately seek to recover in asset forfeiture proceedings. During the trial prosecutors said Watson appeared to have personally benefited from the scheme by receiving US$417,000 in various clandestine payments.
Webb, it was suggested, earned some US$1.7 million from the CarePay contract via a local front company called AIS [Advanced Integrated Systems] Cayman Ltd. Mr. Moran said he expected civil forfeiture proceeds to last until at least August.
Finally, on Friday, Watson acknowledged to the court that he would lose his professional certification as an accountant as a result of the guilty verdicts.
“His prospects of employment once he’s released from custody … [will be] very difficult,” Mr. Burke said.