Possible Bahamas Link To Tax Fraud Under Probe

They are investigating whether a scheme known as the Banyan Tree Foundation was used fraudulently.

Banyan Tree is a gifting programme devised and based in Canada.

On the civil side, a class action lawsuit in Canada alleges that Promittere Capital Group Inc., Promittere Asset Management Ltd. and Banyan Tree Foundation with the assistance of Rochester Financial Limited, developed, promoted, sold and administered a gift programme under which participants borrowed money to make charitable donations in order to receive charitable donation receipts and concomitant tax credits. The Plaintiffs are seeking C$50,000,000--, plus C$5,000,000—in punitive damages.

The suit alleges that participants borrowed substantially all of the funds donated and actually paid in cash only a small portion of the total donation amounts.

It is alleged that the scheme allowed wealthy Canadian companies and individuals to secure fraudulent tax deductions.

Investigators’ findings would determine whether the beneficiaries in Canada face any penalties for having participated, and whether the promoters would face criminal and civil penalties. The value of the transaction under review totals C$197,700,000--.

The Bahama Journal also learnt that investigators flew to The Bahamas and spent three days interviewing former MP Lester Turnquest, who was once associated with the Hampton/Britannia group locally.

Hampton/Britannia was reportedly involved at one point in facilitating the Banyan Tree Foundation operation.

When contacted for a comment Mr. Turnquest confirmed the meeting.

"They knew things about the transactions, and about my former associates that I did not even know," he said. "This was a learning experience for me as well."

After Mr. Turnquest broke away from the group last year, he became embroiled in a legal dispute with his former associate, Hywel Jones, a UK citizen who is a Bahamas permanent resident.

Mr. Turnquest and the Financial Comptroller of Hampton/Britannia had notified regulators about a number of concerns which included, but were not limited to the Banyan Tree scheme.

Investigators believe that Mr. Turnquest could provide crucial information that may establish a link between the fraudulent tax scheme and Bahamas-based entities or individuals.

After Messrs Turnquest and Jones parted ways, Mr. Jones became affiliated with the Costwold Group, which is based in the Goodman’s Bay Corporate Centre, the Bahama Journal understands.

Hampton/Britannia was merged into the Costwold Group, according to documents received by the Bahama Journal.

While the Journal was reliably informed that the new arrangement has been unilaterally terminated, and Messrs. Jones, Heney, and Dickson have been asked to vacate the offices immediately. Mr. Jones has said that Costwold has gross assets under administration in excess of $6 billion.

Mr. Jones is reportedly an associate of Robert Thiessen, who owns the Promittere Capital Group, which is a defendant in the Canadian class action lawsuit.

The Canada Revenue Agency believes that a substantial amount of the funds donated to Banyan by its donors was transferred by Banyan to Bahamas-based Hampton Insurance Company Limited (which is owned by Mr. Jones) via the purchase of term annuity policies from Hampton.

The Agency believes that these term annuity policies have been assigned to recipient Canadian charities.

The investigators have sought locally all correspondence between Banyan, Promittere Capital Group, Mr. Thiessen, and/or any other representative of Banyan, and Hampton, in regards to transactions entered into by Banyan and Hampton.

They want to know whether Hampton provided any funds or loans to Banyan or any party to the donation arrangement.

The investigators asked Mr. Turnquest if he was able to recall or provide evidence of the source of the funds used to make annuity payments to the Canadian Charity annuitants. Mr. Turnquest was also questioned about a company called West Point Ventures, whose shares were held by Mr. Turnquest on behalf of Mr. Jones. This company was involved in a transaction totaling C$77,700,000--.

One of the purported beneficiaries of the Canadian donors was the University of the West Indies, Mona Campus. Canadian investigators are seeking to determine why UWI was chosen to benefit from Banyan’s "generosity."

Canadian investigators have been informed that Mr. Jones lived in Jamaica where he worked as a lecturer for the Institute of Bankers and reportedly forged links with UWI.

The Canada Revenue Agency is also currently conducting a review of the donation of $5 million by Canadian company "6191088 Canada Inc." to the Banyan Tree Foundation and the subsequent sale of that company to SOX Marketing Inc.

Investigators have said that Mr. Jones, through a corporation by the name of Regency Holdings Inc., injected $5 million into "6181864 Canada Inc." which then used the money to invest in "6191088 Canada Inc."

Investigators want to know how Mr. Turnquest became a director of these two companies and why. They also want to know who directed "6191088" to donate $5 million to Banyan, and why that company directed Banyan to donate $4,975,000 to the UWI.

While West Point and Regency remain with the Hampton/ Britannia Group.The Journal understands that Mr. Turnquest served as director on every company handled by Hampton/Britannia when he was affiliated with the group, which is why investigators were seeking his assistance in gathering information on those companies and their role in the Banyan scheme. He also signed policies issued by the Group’s agents and account officers.

Canadian investigators have asked Mr. Turnquest to explain his relationship with Mr. Jones, a Mr. Bradley Heney, and Stephen Dickson, the Britannia Group of Companies and the Hampton Insurance Company Limited.

It is understood that he has informed investigators that he currently has no relationship with the men.

Some observers fear that UWI’s tax status could be affected as a result of what investigators believe may be questionable donations made to it.

They also fear that any connection Bahamas-based entities or individuals may have to any fraudulent tax scheme abroad could give The Bahamas financial services jurisdiction a bad name at a time when the memory of the 2000 blacklisting by industrialized nations has not been completely washed away.

The investigators are also seeking any local correspondence to and from Mr. Jones in relation to Banyan’s dealings.

Investigators are also seeking correspondence to and from Stephen Dickson, who works in the local financial services on a work permit.

After his work permit had initially been denied on several occasions, Mr. Dickson was granted a work permit by the Department of Immigration despite the objection raised by a number of persons including Mr. Turnquest, according to documents obtained by the Bahama Journal.