Smith-Olint intrigue tainted with mischief
Christopher Pryce, Contributor
While the David Smith conviction was fading as yesterday's news, there seems to be a resurgent interest not only in him, but in the activities of Olint. The confiscation order from the authorities in the Turks and Caicos Islands has revealed a list of Jamaican persons and entities that purportedly received funds from Smith/Olint, and this has set the cat among the pigeons.
A recent Gleaner headline screamed 'No moral obligation to refund Olint money', with the article indicating that the PNP received US$1 million in August 2007. While the public and online social media are entitled to spend time focusing on the tawdry details and intrigue of our recent infatuations with Ponzi schemes, it may be instructive to comment on some of the legal and regulatory aspects that this case has exposed, from a Jamaican perspective.
To the extent that the activities took place after May 2007, from a local standpoint, the Proceeds of Crime Act (POCA) is one of the key and relevant statutes to be aware of, were one to consider possible criminal, as opposed to civil, violations.
Under POCA, criminal conduct refers to activities which are offences in Jamaica. The criminal conduct also extends to activities occurring outside Jamaica that would be an offence were they to have been conducted in Jamaica. Hence, if Olint's activities in the TCI would have been criminal were they to have taken place in Jamaica, then these activities would be within the scope of POCA.
It, therefore, remains to be tested if the criminal activities admitted to by Smith, albeit occurring outside Jamaica, will be seen to be criminal conduct in Jamaica under POCA. By extension, if the conduct is seen to be criminal in Jamaica, the wilful blindness defence being asserted by some may be of no avail.
Continuing with the scenario, if Smith were standing as a defendant in Jamaica, based on public statements, it is clear that the political parties and certain named persons would, in fact, be recipients of a tainted gift. According to POCA, the recipient of a tainted gift is a person or entity to whom the defendant has made the gift.
The tainted-gift designation would be further buttressed were the court to determine that the defendant had a criminal lifestyle. Smith has confessed and has been convicted of crimes, be it in the TCI or the United States.
But since he has not been convicted in a local court, it appears that any reference in Jamaica to the gift as being tainted could be seen to be mere mischief, as there has neither been a conviction nor a declaration by a local court on the matter.
Whereas POCA allows the DPP to apply for forfeiture orders, the local court has to be satisfied that the defendant is convicted of offences before the court. So it does appear that until there is a conviction in a Jamaican court, any meaningful local legal action will be stymied.
Court penalties on whom?
Were the courts to issue forfeiture or pecuniary penalty orders, the subject would be Olint, and not third parties. However, the court will have regard to the rights and interests of third parties in the property or monies. As some have asserted their innocence or naïveté, it could be their defence that at the time when the gifts were received, notwithstanding well-publicised negative news and regulatory warnings to the contrary, the existence of Olint and its ability to give gifts was not illegal.
Perhaps it is this logic that has resonated with the third-party recipient and has prompted such recipient to declare that it does not feel compelled to pay back sums.
In terms of public policy, state authorities have an interest in deterring crime and punishing criminals. In matters such as fraudulent crime, the goal is to ensure the prosecution of the principals and as many others that are material to the crime.
The dilemma is whether to pursue, as criminals, the persons who are incidental to the crime such as the masses who participated by 'investing' or taking part in an act subsequently declared by a court to be illegal but who had no intention of knowingly participating in criminal activity.
Unless there is an interest to be served by causing public mischief and sullying the reputations of the high and mighty, and considering that no action is likely in the local courts, perhaps it is time for us all to extract the lessons to be learnt, and let this saga die a natural death.