Photo: Hugo Patt – Former Minister of Natural Resources

GOB slaps $6 million suit on Hugo Patt, Wilbert Vallejos and Roosevelt Blades companies

BELIZE CITY, Tues. Sept. 19, 2023

The Government of Belize has served a claim for BZ $6,441,846 plus interest on former Minister of Natural Resources, Hugo Patt; former Lands Commissioner, Wilbert Vallejos; former CEO in the Ministry, Kerry Belisle; and three companies linked to former United Democratic Party senator and campaign manager for Patrick Faber, Roosevelt Blades. The companies are VRK2 Construction Limited, CA Technologies Limited and Blades Construction Limited. All three were incorporated by Blades on November 3 and 4, 2020, just days before the General Elections held on November 11, 2020. Blades is listed as director of the companies, having one share in each. The address for the three private companies is listed as 15 7th Avenue, Corozal Town.

The primary thrust of the claim is that the cited officials in the Ministry of Natural Resources at the time abused their public office and violated the Finance and Audit Reform Act (FARA). The background to this case was first exposed by current Minister of Natural Resources, Cordel Hyde in the House of Representatives in January 2021. He indicated that the then United Democratic Party Government purchased around 30 acres of land in Belama Phase IV on September 25, 2020 from Myrna Weir Harris (including 3.998 acres that she owned jointly with Edward Perkins Harris). The compensation payment the Government agreed with the Harrises was for BZ$6,501,000. This was set out in two compensation agreements which indicated that the land was being acquired for a public purpose for Belize City expansion. Despite the grand intention to subdivide the land into 130 house lots, with elections fast approaching, the land was sold to the aforementioned private companies which were incorporated just one day before the sale.

The compensation payment to the Harrises was to be made via two immediate deposits followed by monthly instalments and then interest on the balance. It is important to note here that the aforementioned acreage was not the totality of land contained in the parcels held by Myrna Harris, and so the Government agreed to return 13 acres to her from one parcel.

According to the claim form dated August 29, 2023, even after the National Assembly had already been dissolved on October 6, the acquired land was subdivided into 6 new parcels on October 28, 2020. On November 6th of that year, one of the new parcels totalling 13 acres was transferred back in Myrna Harris’ name.

Another part of the claim involves former CEO Belisle and then Minister Patt who are being held liable (jointly or individually) for a portion of the overall six plus million dollars. The figure the duo is being specifically cited for is BZ $3,223,666.67 plus interest or in the alternative, that they be made to pay to the Government BZ $3,164,333.42 plus accrued interest. According to the claim, CEO Belisle in 2019 requested from the Chief Valuer in the Ministry a Valuation Report for several of the parcels held by Myrna Harris. The figure submitted by the Chief Valuer for the land acquired by the Government was just over BZ $3 million. What was set out in the compensation agreements reached by the Harrises and the Government was over two times the figure from the internal valuation, that is, the $6.5 million. This is described in the lawsuit as a gross overpayment by Belisle which caused the Government loss and damage. As CEO and chief accounting officer in the Ministry, the claim is that Belisle “owed a fiduciary duty to the GoB to safeguard the expenditure and finances at the ministry, including the payment for lands acquired, to ensure that the GoB paid fair market value.” Authorities are arguing that, to their knowledge, no other valuation was done to have justified the overpayment by Belisle. The action by Belisle is described as unlawful, and Patt is drawn into the same characterization given the argument that he, too, ought to have known that an overpayment was being made and therefore, he should never have directed Belisle to enter into the compensation agreements with Myrna Harris and Edward Perkins Harris for the value cited.

But the matter did not end there. It is further claimed that after the acquisition of the private land, the Government turned around and sold the land to the three Blades-linked companies for a peppercorn purchase price, which is legal parlance for gross undervalue. The purchase price for the three companies listed in the claim is $59,154, but our reports are that that figure was not paid in full. The sale was processed on or about the 5th day of November, 2020. The claim form states that this sale was done “unlawfully and with intent to cause the GoB loss and/or to cause loss to the GoB by unlawful means in that 1st, 3rd, 4th, 5th, and 6th Defendants all conspired together to defraud the GoB by quickly disposing of the said parcels at gross undervalue before the holding of the general elections.” It is further alleged that the three companies “were simply corporate vehicles incorporated to mask the same person, to quickly dispose of the said lands, the aggregate value of which exceeded BZ$2 million, thereby creating the facade that the lands were being sold to separate persons, via six separate sale agreements. By doing so, that is, by dividing up the parcels and their value, the 1st, 3rd, 4th, 5th and 6th Defendants were unlawfully attempting to circumvent the requirements under the FARA. This disposal was done by the 1st and 3rd Defendants in concert with Mr. Blades, who incorporated the 4th, 5th, and 6th Defendants to defraud the GOB.”

In the end, the Government is still on the hook to pay the Harrises that BZ $6,501,000 sum minus the purchase price of $59,154. That leaves the BZ $6,441,846 total for which all six (6) defendants are being held jointly or severally liable. This means that, were the High Court judge to find the defendants liable, the liability or sum to be paid by each defendant would be apportioned based on their own individual responsibility, obligations in the case.

Apart from seeking damages, the Government is also asking the court for a declaration that the sale of the parcels to the three Blades-linked companies be declared unlawful, null and void.

Importantly, we note here that this claim by the Government was brought as a counter measure after the Blades companies sued the current administration in June this year for the enforcement of the 2020 purchase agreements. In their claim forms they request: a declaration that they are entitled to “specific performance of a written contract for the sale and purchase of the land,” an injunction restraining the Government from dealing with the land except in accordance with their rights, an order of mandamus directing the Commissioner of Lands to open the companies’ land accounts to allow for the payment of the balance owed for the lands, and an order of mandamus instructing the Registrar of Lands to immediately issue Certificate of Titles after the balance is paid.

Notably, the Government has already paid out over $3.5 million in compensation to the Harrises. Former Attorney General, Magali Marin-Young is representing the Government in this case.