Mon | Sep 25, 2017

Cash Plus depositors may have breached the law – DPP

Published:Wednesday | June 7, 2017 | 6:38 PM
Former Cash Plus boss Carlos Hill is interviewed by reporters as he left court, on May 24.

The Office of the Director of Public Prosecutions (DPP) has disclosed that investors in the failed ponzi scheme Cash Plus may have breached the law when they signed up with the company.

This afternoon, the DPP, Paula Lewellyn, released a 30 page document defending her office’s handling of the case against the company’s principal, Carlos Hill, which culminated with him being freed last month.

The office of the DPP has faced criticism, with some commentators saying Hill was not charged with the appropriate offence.

However, Llewellyn says Hill’s ingenuity made prosecution difficult.

She notes that Hill structured the mechanism for collecting money from investors as a ‘loan agreement’.  

She says under the carefully worded agreement, depositors made a loan to Cash Plus, which would be repaid with interest.

She says based on the rates of interest offered, depositors might have actually been in breach of the Moneylending Act of Jamaica, which prohibits entities from lending money to others in excess of a particular rate of interest.

She reiterates that based on the structure of Cash Plus, Hill was never, under the terms of Jamaican law, dealing in securities, which would have made him vulnerable to a prosecution under the Securities Act.

Turning to legal commentary and comments from the FSC suggesting Hill should have been prosecuted under the Securities Act, Llwelleyn notes that the FSC also did not charge Hill under the act, even though it had the power to do so.

According to her, it can fairly be described as tragic that the operations of Cash Plus remained largely unchecked to the point where some 40,000 investors collectively lost billions of dollars.

Lewellyn has recommended that the Parliament review the Larceny Act, which she says is antiquated.

She says a review to bring the law into the 21st century would perhaps act as a deterrent to prevent ponzi schemes flourishing to the detriment of citizens.