Cayman Islands businessman Canover Watson and others “jointly benefited” from the CarePay public hospital fraud scheme to the tune of US$6.79 million, a Grand Court judge found Thursday.
Grand Court Justice Marlene Carter has been hearing arguments since Jan. 19 from prosecutors and Mr. Watson’s attorney regarding how much money should be confiscated from Mr. Watson over his role in the CarePay fraud.
On Thursday, Judge Carter noted that the court had decided, on balance of probabilities, that Mr. Watson “has received a benefit of the result” of his criminal conduct.
The ruling indicated that Mr. Watson jointly benefited, along with his business partner Jeffrey Webb and unnamed “others” in the scheme, and that the “value of the benefit must be the full figure for the monies paid as a result.”
“I therefore set that figure at … US$6,789,864,” the judge said.
The joint benefit figure does not represent what Mr. Watson must pay back. The exact figure will be somewhat lower, according to Deputy Director of Public Prosecutions Patrick Moran, and is based in large part upon what assets the defendant has left.
Mr. Watson’s attorney Amelia Fosuhene said earlier in the court proceedings that her client has about US$1 million in available assets. However, a further court hearing was set on Feb. 1 to determine exactly what Mr. Watson can repay.
Mr. Watson, the former chairman of the Cayman Islands Health Services Authority, was convicted in February 2016 of conspiring to defraud the government and various corruption-related offenses in connection with the award of the CarePay public hospital patient swipe-card contract to a company prosecutors said he ran through “sham” frontmen.
Mr. Watson’s alleged co-conspirator, Cayman Islands businessman Jeffrey Webb, has also been charged in the case but is currently in the U.S. awaiting sentencing in connection with the FIFA racketeering investigation – to which he pleaded guilty in November 2015.
Mr. Moran argued during the course of the two-day hearing that the Crown would seek to recover nearly US$6.8 million from Mr. Watson and others involved – what prosecutors believed was the full extent of the “take” from the CarePay scheme. Mr. Moran said the US$6.8 million amount was what appeared to have been paid into the bank account of the front company Mr. Watson and Mr. Webb had set up – known as Advanced Integrated Systems (AIS) Cayman Ltd.– to skim profits from the CarePay contract.
“This was a 50/50 company,” Mr. Moran said. “The evidence was abundantly clear in this case … that Mr. Watson was fundamental in setting up AIS Cayman Ltd. He had the checkbook. He had the ability to negotiate on behalf of the company and make agreements with others, and it was he that was responsible for making sure that money went into that account.”
Ms. Fosuhene argued that prosecutors were attempting to make the entire CarePay card-swipe system appear to be a fraud when, in reality, a significant portion of the payments went to legitimate purposes.
Ms. Fosuhene noted that prosecutors only charged Mr. Watson with taking US$348,000 as a personal benefit as a result of the scheme.
“We have a legitimate company [that] has entered into a contract with the government and, as part of that contract, persons within that company have skimmed off the top of that contract,” Ms. Fosuhene said.
Mr. Moran said the US$348,000 cited in the charge as Mr. Watson’s personal benefit from the scheme was understood by trial jurors at the time to be an “at least” approximation.
“There were a huge number of cash withdrawals made from the [AIS] account … either by Webb or with his blessing,” Mr. Moran said. “The Crown simply can’t say whose pockets it went into.”
Ms. Fosuhene said the US$348,000 figure suggested that Mr. Watson “was a paid assistant in the conspiracy, as opposed to Mr. Webb who is the lead in the conspiracy.”