Features — 27 February 2015
FIU case against Bahamians fizzles with no-case submission

BELIZE CITY, Wed. Feb. 25, 2015–This morning, Senior Magistrate Sharon Frazer ruled to uphold a no-case-to-answer submission made by attorney Godfrey Smith, S.C. in the Financial Intelligence Unit’s (FIU) case of “failure to declare funds” against two Bahamian nationals Rhon Knowles and Kelvin Leach, securities brokers who worked in the offshore banking sector in Belize and who are also the subjects of a United States extradition request to the Government of Belize.

Frazer’s ruling brought an abrupt end to the FIU case against the two men who she said “are freed from the charge.”

In September 2014, the Financial Intelligence Unit (FIU) presided over an operation to dismantle some offshore banking entities in Belize: IPC Management Services, LLC; IPC Corporate Services Inc.; IPC Corporate Services LLC; Titan International Securities, Inc.; Legacy Global Markets S.A.; and Unicorn International Securities LLC.

The companies operated out of the Matalon Building on Coney Drive, and the operations against them and their directors began after they were named in a United States federal indictment which was unsealed in Brooklyn, New York, alleging “conspiracy to commit securities fraud, tax fraud, and money laundering that has deprived the US Government of $500 million.”

The FIU moved swiftly, securing a court order to freeze the bank accounts of the individuals and their companies. When they were challenged in the Supreme Court, however, Chief Justice Kenneth Benjamin, who heard the case in chambers, ruled against the FIU.

Bahamians Ron Knowles, 29, and Kelvin Leach, 34, were arrested and hauled before the court on a charge of failure to declare funds above the FIU prescribed limit of $10,000, under the Money Laundering and Terrorism Act, when they were intercepted on September 12, 2014, at the Philip Goldson International Airport by police officers attached to the FIU, who testified in court that they were acting on “intelligence” about the individuals.

Leach and Knowles even found themselves at the Belize Central Prison—without a court ordering their incarceration. On October 1, 2014, Leach and Knowles were released on Supreme Court bail of $100,000. The bail also covered the eventual US extradition request, which has since officially been made to the Belize Ministry of Foreign Affairs.

Their Supreme Court bail, however, has made the two Bahamians the only persons for whom the US has made an extradition request, and they do not have to sit and wait out the extradition case, which can take years, behind bars.

In the case, 12 witnesses testified on behalf of the FIU. The FIU case, however, hit a major hurdle when the actual cash that the men were carrying was not admitted into the evidence against them, because when one of the envelopes was opened in court, $11 BZ that was listed as being in the envelope was not inside it.

The FIU detective-constable who had handled the money taken from the men had mislabeled the envelopes and thus when one of the envelopes was opened in court, it did not contain the amount that was listed as being in it. This led to the money not being accepted into the FIU’s evidence against the men—signaling the doom of the prosecution’s case.

Magistrate Frazer, in accepting the no-case-to-answer submission, remarked, “The element of the offense that was to be proven was that you were leaving Belize, and that you had more than $10,000. You had failed to declare the funds; none of you had made any declaration. No money came to this court. So at which point the offense was deemed to have been committed?”

“I heard the evidence and at the end, I am of the considered view that the offense of failure to declare is committed when the person has cleared all official channels. I am of the firm view that Corporal Lopez [the FIU’s Lillian Lopez] acted prematurely. I am upholding the no case submission,” Frazer declared.

Prosecution of the FIU’s case against Leach and Knowles began with two of the agency’s in-house attorneys, Leni Ysaguirre and Sheena Pitts, but as the case progressed, the FIU hired the law firm of Fred Lumor and Company, and attorney Christelle Wilson from that firm became the lead FIU prosecutor, who was assisted by Ysaguirre and Pitts.

So far, the FIU has not successfully prosecuted any case in court with its own attorneys, and has not won any of the cases it brought to court, with the exception of a case against two foreigners who pleaded guilty when they entered the jurisdiction with excess cash.

“In truth, it wasn’t a complex decision nor a complex case, although it was a drawn-out case with over 12 witnesses,” Attorney Smith told reporters upon exiting the courtroom.

Smith said at the end of the day that the whole case hinged on whether or not the men were guilty of failing to declare sums in excess of $10,000. The prosecution’s own witnesses said that a person is deemed to have committed the offense only after he or she has cleared all the official checkpoints, Customs and Immigration.

“So as the judge rightly pointed out, it was entirely premature,” Smith said.

When asked about the US extradition request for his clients, Smith replied, “This case was a foregone conclusion. The real story here is that the state has acted in an extremely oppressive manner in relation to these people.”

“You will recall that around September 9, last year, police swooped down on these gentlemen’s office, seized all their computers and documents, froze all their accounts and eventually detained them in prison. What has happened since, the court has found that their detention was completely without authority. They had been unlawfully remanded and detained at Hattieville prison,” Smith remarked.

“Secondly, the court found that their monies were unconstitutionally and unlawfully frozen. Thirdly, all the documents and the documents for their clients were unlawfully seized and had to be returned,” Smith further explained.

Smith added, “I say that to say this: Damages loom very large in this case; because of this, these gentlemen’s business has been shut down completely, and the court has found, unlawfully so. The extradition request has been made and is pending before the court, but this is what I have to say. That extradition request is based on information put together, unlawfully, illegally, after they had seized documents and all the computers and used that information to create the basis for an extradition request.”

“That might be permissible in the United States, from which this entire operation is being directed; it is not permissible under the common law system. You cannot use unlawfully, illegally obtained evidence to form the basis of charges you are going to bring against anybody for extradition. So we intend to attack this at the very root at the very first opportunity,” Smith said.

Smith said that the Belizean authorities were following the directions of agents of the United States Government, adding that when the courts find that illegalities were committed, it is not the United States Government that will have to pay for it; it is Belizean taxpayers’ dollars that will be covering the costs.

Robert Bandfield is also included in the US indictment against Knowles and Leach. Bandfield is a US citizen who was arrested in the US on the day the federal grand jury indictment was unsealed. Belizean Andrew Godfrey and Canadians Brian De Wit and Cem Can were also named in the indictment.

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