If the Cayman Islands government is going to take any money from Canover Watson as a result of his conviction in the CarePay hospital swipe-card contract scam, it will have to settle that amount by Friday.
Grand Court Judge Marlene Carter said last week that any confiscation proceeding against a criminal defendant must be completed within two years of the date of that person’s conviction. Mr. Watson was convicted of two counts of fraud on the government and three corruption-related offenses on Feb. 4, 2016.
Friday, Feb. 2, will be the last business day available to the Crown and Mr. Watson’s attorneys to agree on a sum repayable to the government.
A hearing on the matter has been set for Feb. 1.
Last week, Justice Carter ruled that Mr. Watson, his alleged co-conspirator in the CarePay scheme, Jeffrey Webb, and unidentified “others” jointly benefited from the fraud by some US$6.8 million. How much of that benefit Mr. Watson will be able to repay is the subject of the hearing set for Thursday.
Mr. Webb was charged in connection with the CarePay scheme, but has not faced trial. He is currently in the U.S. awaiting sentencing in connection with the FIFA racketeering investigation, to which he pleaded guilty in 2015.
The US$6.8 million figure represents the Crown’s estimate of the full illicit “take” from the public hospital swipe-card contract, which was initially a five-year, US$13 million deal to provide ID cards for Cayman Islands National Insurance Company patients who use hospital and health clinics. Those cards were to be used as a real-time healthcare claims adjudication service, meaning customers who used public health services would be recorded and billed, if applicable, for those services at the time the cards were used.
The claims adjudication service was never fully implemented and proposals aimed at putting private sector insurance customers onto the CarePay system never came to fruition. The CarePay cards are still in use by CINICO-insured patients.
Prosecutors said during the first stage of Mr. Watson’s confiscation hearing that some US$4.8 million was “creamed” from the CarePay contract and put into a Fidelity Bank account that Mr. Watson set up through sham frontmen.
A further US$1.8 million was spent on the proposed expansion of the CarePay card system – “known as the national rollout” – to private sector insurers. However, subsequent government audits revealed this amount was paid for no legitimate purpose and ultimately went to Mr. Watson and Mr. Webb. A further $147,000 was spent on a proposed pharmacy contract linked to the CarePay card system that also never happened, prosecutors said.
With the Grand Court deciding Friday that Mr. Watson did receive a benefit from the CarePay fraud and ruling that benefit had been jointly obtained, at a value of US$6.8 million, the only matter remaining to be decided is how much Mr. Watson has to pay.
His attorney, Amelia Fosuhene, told the court that Mr. Watson has about US$1 million in available assets. It was not known if the Crown would dispute that figure.
Discussion of specific assets held by the defendant have not been discussed in open court.
According to publicly available records in the U.S., Mr. Watson remains the listed owner of a property at 2128 Adel Dr. in Loganville, Georgia, which was purchased for US$515,000 in July 2011, according to Rockdale County tax records. A neighboring vacant lot is also listed as being owned by Mr. Watson that was purchased in 2012 for US$75,000.
Based on trial testimony and Crown claims made in 2015-2016, at least some of the purchases made for the Loganville house were done with funds from the CarePay fraud.