The evidence in the fraud trial against Canover Watson and Bruce Blake ended this week with defence lawyers claiming in their final remarks that the Crown had totally misunderstood its own case against Watson and that Blake may have erred in judgment but had trusted his fellow Cayman Islands Football Association executive.
In the case, Watson is charged with a fraud that involved sending false invoices for US$1.54 million to football confederation CONCACAF for equipment that was never delivered, as well as with money laundering.
Blake is charged with money laundering-related charges for helping Watson move the allegedly stolen money by issuing false invoices and documents to his bank.
Both men are accused of misleading auditors and producing false loan agreements presented in the audit of CIFA to disguise a payment to the association made from the proceeds of the invoices.
Both deny the respective charges against them.
Alleged fake invoices
Crown Counsel Eloise Marshall reiterated that the three invoices had been fake, that none of the goods itemised in them were ever produced or shipped and that Watson’s Panama company, Forward Sports International Management Inc, had never paid for the goods to be manufactured.
A single US$300,000 payment from the company to Forward Sports in Pakistan was for different goods to keep the scheme going.
She said Watson did not have the right to issue invoices as an agent under the Forward name and had consistently used wrong company names, random invoice numbers and changed the price and number of units in a genuine invoice.
Even according to Watson’s own version of events, she said, his profits would have been so outrageously high that no reasonable organisation would have ordered the goods through his company, if it could have simply bought directly from the manufacturer at a fraction of the cost.
CONCACAF witnesses had confirmed that the goods in the three invoices were paid for but never received, even after ongoing attempts to track them down.
Shakeel Khawaja, a sales manager for Forward Sports, testified that he had no knowledge of the invoices or related payments and that they were not part of the goods contained in genuine orders produced by the manufacturer for CONCACAF.
One invoice for 30,000 ushers’ vests, purportedly for the 2013 Gold Cup football tournament, was presented as the most egregious example.
There was no email, documentary or witness evidence that would indicate the goods were ever ordered, manufactured, shipped, received or used, other than Watson’s statement they had been delivered by DHL to CONCACAF’s general secretary Enrique Sanz.
‘Crown got it all wrong’
The defence’s case is simple. The Crown had totally misunderstood the narrow evidence it presented in the case. Watson was a successful businessman and his Panama companies and the three invoices were entirely legitimate. If all email communication and documents were considered, it would be clear that efforts had been made to deliver the paid football equipment. But the investigation had been biased against Watson because it was carried out by the same Anti-Corruption Commission investigator whose evidence led to his conviction in the CarePay case, for which he blames his former lawyers.
Key witnesses in the case, whose testimony contradicted Watson’s, were either lying, had been stealing or unintentionally given false evidence, because they did not know the full facts, the defence said. Rather than a criminal, whose actions had damaged the football organisations he was involved with, Watson had been a benefactor of CIFA.
Dapinder Singh, the defence attorney for Watson, encouraged the jury to consider all the evidence heard in the trial, not just what had been presented by the Crown.
Singh said the prosecution had maintained its “totally unfounded” position even after Watson’s account had been “supported by document after document” as well as the times and dates as to what had happened.
He encouraged the jurors to look at the inconsistencies in the Crown’s arguments, stating “Standing in court and calling [the defendant] a liar does not make them a liar.”
Singh took the jury, once again, through reams of email chains and invoices to demonstrate the legitimacy of the allegedly false orders.
“Is this really the chronology of a fraud?” Singh asked the jury. “These are legitimate orders with legitimate business being done, with people trying to fulfil these orders.”
Yes, things went wrong later on, but there were reasons for that, he said.
The defence claimed that delays and non-deliveries were due to quality issues and shipping problems at the manufacturer or the result of Khawaja withholding payments to Pakistan.
Singh claimed the prosecution had totally misunderstood its own case and confused shipping invoices and customs clearance documents with genuine invoices and prepaid pro forma invoices that were subject to change later.
He pointed to emails discussing the shipments of goods as indications that Watson’s company was engaged in legitimate business trying to fulfil the orders related to the invoices.
The prosecution argues that, by the time most of these emails were sent, all the money received from the invoices had already been spent – without ever paying the manufacturer.
Singh said Watson had legitimately set up the Panama business with the knowledge of Forward Sports’ sales manager Khawaja, replicating the business arrangement Khawaja previously had in a Swiss company with another investor.
Key witnesses in the case, such as CONCACAF’s executives, did not have the complete picture of orders being changed by senior management and efforts being made to ship certain goods.
Others, such as Watson’s business partner Khawaja, had given false evidence by claiming that he had not known about Cayman and Panama businesses set up by Watson, because everybody wanted to distance themselves from CIFA and CONCACAF president Jeffrey Webb, following his arrest in 2015.
Singh suggested to the jury that the bigger picture was different than the Crown’s case: “You were on island. You know that this case cannot be looked at in a vacuum.”
The prosecution said the bigger picture was that Watson used his position at CONCACAF and his relationship with Webb and Sanz to send false invoices and syphon money out of the organisation.
Alleged money-laundering and loans
In relation to the money-laundering charges, Singh said there had been no money-laundering; there was no “bad money” and no proceeds of crime because there was no crime at all.
In the same vein, the two $600,000 loans to CIFA made by Forward Sports International Management Inc and Cartan International Management Inc was Watson’s own personal money that he could use as he saw fit.
Watson’s lawyer claimed the prosecution did not want the jury to know about $1.1 million that Watson’s Forward Sports International Management Inc had received from Traffic Sports, which showed that not all the money in the company’s Panama account had come from the three invoices.
The prosecution had also not known about a joint venture between Watson and travel and event company Cartan in Panama, which earned Watson $400,000 in 2013 alone.
Yet evidence in the case showed Watson kept his ownership in the partnership anonymous through a foundation and Cartan denied it even existed, when contacted by CIFA auditors about its Panama entity.
Watson had given a lot to CIFA, Singh claimed. “He is the only person on trial for giving money rather than taking it.”
Singh said Watson had helped CIFA to pay down a loan to not be in breach of FIFA regulations. It was just sensible to have a loan agreement to get the money back later on, he argued. Watson had helped solve the problem and then arranged for the paperwork.
“If any constitution was not followed, or something was not done, which was good practice, it does not make this illegal,” he said.
Trusting not lying
The Crown claims Blake should have known, or suspected, that $500,000 Watson attempted to send to Blake’s company M-Management in Cayman in two wire transfers was stolen money and criminal proceeds. He allegedly tried to mislead his bank in an email in which he claimed that he had a partnership with Forward Sports and was helping the company sell sports equipment.
Blake forwarded an unrelated Forward Sports invoice from Watson to have the funds released and submitted false invoices for services he did not provide, the Crown asserts.
The fact that Blake never questioned why Watson would not just send the money to his own companies’ bank accounts in Cayman, if the intention was to pass it on for equipment orders, showed that Blake and Watson were in a joint enterprise to deceive, according to the prosecution.
During the trial, Blake was upset when he remembered Webb’s arrest in 2015 in Zurich.
Referencing his testimony, the Crown said, “Jeffrey Webb’s arrest was not a bad time for football. It was a bad time for Jeffrey Webb.”
Instead, Blake had completely ignored that the worst day for CIFA had been when the association received $1.2 million in sponsorship to pay down its Fidelity loan, and then Blake “without doing any due diligence, apparently without even checking, signed documents” which allowed it to be turned it into a loan.
Blake’s defence lawyer, Cairns Nelson, said his client had done much for football in the Cayman Islands and spent much more of his personal money on CIFA than he is accused of enriching himself with in the case.
He argued the jury had to decide between the L-word – liar – which the prosecution had “machine-gunned” at the defendants, or the T-word, in that he trusted Watson.
Blake had made errors of judgement, but the question was not whether he should have trusted Watson but whether he did, Nelson suggested to the jury.
He said Blake had known nothing of the invoices sent by Watson to CONCACAF and knew nothing about Watson’s company structures or any alleged crime.
Nelson claimed, Blake had provided 22 months of legal advice to Watson and had received a net $90,000 from his invoices totalling $140,000. That would have equated to four hours a week at half the rate he charged CONCACAF for legal services. He cited sponsorship agreements and shareholder agreements Blake drafted and incorporation services he provided for Watson.
In relation to the two alleged fake loan agreements that Blake signed, and Watson submitted to CIFA’s auditors, Blake’s defence argued it was all Watson’s doing and Blake played no part in negotiating the loans, drafting the loan agreements or allowing Watson to place Blake’s digital signature on them.
The jury will deliberate the submissions in the case next week.
Related Videos
