Thu | Apr 27, 2017

Olint aftershocks

Published:Monday | August 11, 2014 | 8:00 AM
Sherry Ann McGregor

When Overseas Locket Internal Corporation (Olint) was confirmed to be a Ponzi scheme and suffered its demise, it left many hapless victims in its wake.

Initially, many of the investors scurried to obtain advice as to what legal remedies may be open to them. Some cases commenced and discontinued and many others never got started due to the perceived futility of such a course.

The claims differed according to whether the complainant was a direct investor or member of Olint or someone who invested money through a member ("the indirect investor"). The growth of the latter group mushroomed during 2007 after the stop order was issued by the Financial Services Commission and Olint was closed to new members. This left would-be members or investors to 'piggy-back' on the status of existing members to enjoy the prospect of the incredible investment returns.

To that indirect investor, who had no contract with Olint or standing to make a claim against it, the situation was perhaps more desperate when Olint's true character was revealed. Unlike the direct investor, the secondary investor had relied on the benevolence of friends, relatives and even strangers to place funds in Olint on their behalf. One such investor pursued her claim through the Supreme Court all the way to trial and judgement on June 3, 2014 - Mitchell v Stewart [2014] JMSC Civ. 92.

In that case, the claimant delivered a cheque dated October 31, 2007 and payable to Olint in the amount of US$9,000 to the defendant. The defendant, then a member of Olint, duly deposited the cheque into her Olint account on the claimant's behalf. By late November 2007, all of Olint's accounts were frozen, and the defendant was no longer able to access the funds in her Olint account.

Almost four years after Olint's collapse in 2008, the claimant sued her erstwhile friend and fellow investor, the defendant, in an attempt to recover the money invested in Olint. She raised several allegations of fraud, and in response, the defendant contended that she merely acted on the instructions of the claimant in making the investment and was not liable to repay the funds.

The learned judge held that the claim had failed because the facts needed to prove fraud or deceit were absent in that there was no evidence that the defendant knowingly made any representation of fact made by words or conduct with the intention that it should be acted upon by the claimant in a manner which resulted in damage to her. Further, there was no proof that the claimant acted upon the false statement or suffered damage by so doing.

Sealing claimant's fate

The following comments by the judge sealed the fate of the claimant's claim:

"... the impetus behind the Claimant's thrust to become a member of the Olint enterprise was opportune enrichment. She knew the risks associated with such a venture. Notwithstanding, she was not even daunted by the said risks or the fact that she could not on her own have attached membership to that dubious entity. Thus prepossessed, the Claimant was content to rely on the membership of the Defendant to that entity so as to be able to participate in the spoils of the venture. For the Claimant, her passion to gain entry into the venture, made even haste seem slow."

For the many persons who were secondary investors in Olint or any similar Ponzi scheme, the outcome of this claim may either cause latent feelings of anger or disappointment to resurface, or finally bury any residual hope they harboured of making a successful claim for the return of their money.

Sherry Ann McGregor is a partner and mediator in the firm of Nunes, Scholefield, DeLeon & Co. Please send questions and comments to lawsofeve@yahoo.com or lifestyl@gleanerjm.com.