FINANCE Minister Dr Nigel Clarke says the British Government has pumped just under $10 million into the investigation of activities at fraud-hit Stocks and Securities Limited.
Dr Clarke made the revelation on Saturday to the Jamaica Observer after questions were raised about the cost of the probe to the country.
“The Government of the United Kingdom, through the British High Commission in Jamaica, has provided grant support to the Financial Investigations Division (FID) in the amount of £50,000 (just under $10 million), to assist in the investigation into the alleged fraud at Stocks and Securities Limited,” Dr Clarke said in an e-mail response.
His revelation came two days after Opposition spokesman on finance Julian Robinson asked him to state specifically:
1) the cost to the Government for engaging the UK forensic auditing firm Kroll Associates
2) the cost to the Government for engaging the receiver/manager
3) any other expenditures being paid for by the Government in pursuit of the investigations.
“Full transparency,” Robinson argued, “requires the disclosure of expenditures not just by the Ministry of Finance, but by both the Financial Services Commission and the Financial Investigations Division, who are funded by the public purse.”
He said that each day more information emerges on the extent of the role being played by the Government and its agencies in footing the bill for the investigations. As such, “the Government needs to be completely transparent and come clean with the public about these expenditures”, Robinson said.
In January this year when the fraud was uncovered, Clarke had announced the Government’s intention to engage international forensic auditors as well as the United States Federal Bureau of Investigation to help unravel the fraud which spanned more than a decade.
Jamaican sprint icon Usain Bolt is among 40 of SSL’s clients whose accounts have been raided in the fraud.
In March this year Clarke signed an agreement with Kroll Associates UK under which the company will assist local law enforcement agencies with their probe of the more than $3-billion fraud at SSL.
“Kroll will bring to the table technology and expertise that will enable the investigators to unravel every aspect of this fraud,” Dr Clarke said in a short ceremony at his office in Kingston.
He pointed out that Kroll Associates is “a subsidiary of Kroll International, a firm known for their forensic auditing experience and expertise”.
A former wealth advisor at the firm, Jean-Ann Panton, has confessed to stealing from the clients and has been charged with three counts of larceny as a servant, five counts of forgery, five counts of uttering forged documents, three counts of engaging in transactions involving criminal property, and three counts of breaching the Cybercrimes Act.
Two weeks ago the FID said it expects to make more arrests in relation to the fraud probe as the skulduggery at the securities dealer is much bigger than previously thought and has affected almost twice as many people as stated earlier.
Selvin Hay, director general of the FID, said the investigation is progressing with the application of the highest professional standards.
“It has taken on new dimensions which are wider than first expected,” Hay was quoted as saying in the release. “What is being uncovered is that there are approximately 70 affected accounts — this is significantly more than the just-over 40 affected accounts at the initial phase. The investigation has also identified other fraudulent schemes at SSL which has resulted in the misappropriation and/or loss of numerous investors’ funds amounting to over US$10 million ($1.5 billion).”
On Saturday, Clarke expressed gratitude to the British Government for its support.
“The Ministry of Finance and the Public Service is grateful to the British High Commission for this meaningful support, which ultimately comes from British taxpayers,” he said.
“It is instructive that British taxpayers are willing to assist in building Jamaica’s financial crime investigative capacity and in supporting Jamaican authorities in their financial crime investigations. It also demonstrates the confidence of the UK in Jamaica’s FID,” Clarke added.
Pointing out that Jamaica is the ultimate beneficiary of successful investigations into alleged financial crime here, Clarke said, “Successful investigations increase public trust, strengthen our financial system, and serve as a deterrent to other potential wrongdoers. However, these kinds of investigations are expensive, especially for fraud of the magnitude and duration of what allegedly occurred at SSL.”
Added Clarke: “Highly specialised resources have to be retained and international collaboration has to be sustained. Though we are not using tax revenues to fund the extraordinary costs of the SSL investigation, as a country we will need to be prepared to make the necessary fiscal allocations for investigations of this kind if we are interested in achieving a Jamaica governed by the rule of law.
“Much of the cynicism may stem from the relative impunity that has existed in Jamaica in relation to alleged financial sector shenanigans over several decades. Many people just don’t believe, therefore, that anything will come of this SSL saga, and so the view is held that money spent is money wasted. If so, this would be an unhealthy disposition in our society that must be addressed through results.”
He said the policy he had articulated in January to leave no stone unturned, follow the evidence where it leads, and seek international help is clear.
“That is what investigators have operationalised. This is the approach that is required if we indeed want this time to be different,” the finance minister said.