Buyers shun confiscated criminal properties

The Government is having difficulty selling millions of dollars’ worth of real estate forfeited under the Proceeds of Crime Act (POCA) as buyers shy away from purchasing a former gangster’s paradise.

“We have well over a billion dollars’ worth of real estate,” Minister of National Security Dr Horace Chang disclosed during an interview with The Sunday Gleaner last week, speaking to properties previously owned by criminals.

“The effectiveness in the last two years, in particular using POCA, has improved, so we have acquired property recently and the process of selling them would only be starting for some of them, so it will take a little while,” he added.

Information from the Financial Investigations Division (FID) revealed that between July 2020 and March 2021, it was pursuing the forfeiture of just over J$567 million and US$1.53 million in cash and assets held by persons charged under POCA. This, after successfully completing investigations and bringing before the courts 15 asset-recovery cases, including 12 criminal forfeiture cases and three civil recovery cases.

The FID also noted that during the same period, there were six narcotics-related cases, where the value of the criminal benefit was assessed to be over J$95 million and US$9,000. There were also two cases of fraud involving over J$13 million and US$1,800; and two cases of money laundering in which the criminal benefit exceeded J$300 million and US$24,000.

There was also a case of lottery scamming in which the criminal benefit was approximately J$29 million and US$27,000; as well as a case involving unlicensed securities operation and fraud, where the assessed criminal benefit was over J$52 million and US$1.1 million.

As it relates to civil recovery, the FID noted that there were two cases of lottery scamming involving properties valued at over US$83,000 and one case of credit card fraud with properties valued at approximately J$66 million and US$250,900.

Last week, the FID promised to provide The Sunday Gleaner with the data on the current status of the forfeited properties.

“The problem we face with these properties is that if a person knows that a gangster used to own the property, they don’t want to buy it. But with the emergence of Airbnb and so forth, I think you’ll find this could change because people are buying real estate and using them in this element of business. It can be a challenge with property, but there is cash and other assets which are saleable,” said Chang.

HIGH-PROFILE CASES

The national security minister lauded the efforts of the FID, a division of the Ministry of Finance and the Public Service.

“They’ve just concluded a case that might have forfeited about over a billion dollars involving a huge banker that had high-quality real estate which is now in the possession of the Government, so they’ve had some good successes,” said Chang.

There have been several high-profile criminal cases over the years, leading to the seizure of assets.

In 2018, the Supreme Court ordered that nearly $200 million in assets and properties linked to drug kingpin Norris ‘Deedo’ Nembhard should be forfeited after a legal fight. A “great house” located in St Ann was among five developed and undeveloped properties that were to be turned over to the State. The other assets included a Mercedes-Benz and 10 other motor vehicles.

Nembhard was one of several Jamaicans designated as drug kingpins by then US President George Bush in 2004.

He pleaded guilty to narcotics charges, along with cronies Robroy Williams, Glenford Williams, Herbert Henry, and Vivian Daley.

Nembhard was sentenced to 13 years and released in 2015.

Court documents, including the plea agreements signed by the five Jamaicans and their Colombian co-accused Luis Miguel Avila Arias, indicated that the group used Jamaican waters as a trans-shipment point for cocaine moving from Colombia to the US.

In another case in 2018, the Asset Recovery Agency (ARA), a division of the FID, sought the forfeiture of over $203 million, which it alleged that businesswoman Lan Yan had obtained by illegal means.

The agency filed a pecuniary penalty order against her pursuant to Section 5 of the POCA in the Home Circuit Court.

The Kingston and St Andrew Parish Court had previously granted an order for the forfeiture of $2.1 million, which the police seized at the businesswoman’s home in April 2015. The cash was found in four different locations of an upstairs bedroom, hidden in black plastic bags.

The judge held that the businesswoman failed to effectively challenge the evidence and found that there was sufficient evidence upon which to conclude that the cash had been derived from unlawful conduct.

Her attorney had then indicated the defendant’s intention to file an appeal.

The search of the home arose out of an earlier operation by the police’s Counter-Terrorism and Organised Crime Investigations Branch and the Jamaica Custom’s Enforcement Unit on March 17, 2015.

On that day, the officers raided Kay’s Superstore Limited, a downtown Kingston business owned and operated by Yan. More than 34,000 pairs of counterfeit footwear were seized and the businesswoman arrested and charged for multiple counts of unlawful use of trademark.

On April 6, 2016, she pleaded guilty to the offences.

MAKE POCA MORE EFFECTIVE

Despite the challenges, Chang said that the State will continue efforts to sell the confiscated properties.

“The law (POCA) itself is just beginning to be exercised with the kind of efficiency and energy we would like, so I’m not unduly worried. In fact, I’d want to see more of it done because money underpins the acquisition of huge amounts of resources and underpins the problem we’re facing with crime. They buy guns give people to protect their property and they kill people. If we can disrupt that flow, people will hold off,” Chang explained.

Noting that law enforcement officials have been observing “creative ways” in which money is being laundered, Chang said further amendments are coming to make POCA more effective.

“There are a number of other institutions and activities which we have to bring under POCA,” said Chang.

tyrone.reid@gleanerjm.com