Lawyers consider options for Ponzi scheme victims
Published:Thursday | September 9, 2010 | 12:00 AM
Gary Spaulding, Senior Gleaner Writer
Contrasting views have coloured the debate over whether investors whose funds have disappeared in Cash Plus Ltd and Olint Corporation Ltd can reclaim the funds from those who pocketed big bucks from the ill-fated alternative investment schemes.
Attorney Abe Dabdoub is firmly of the view that there is a case to be made for the losers in at least one collapsed scheme.
On the other hand, legal experts Hugh Wildman - the appointed liquidator for the collapsed Carlos Hill-led Cash Plus - and Bert Samuels and Valerie Neita-Robertson appear to be more pessimistic about whether the savings of many hard-working Jamaicans can be salvaged in this manner.
"In the con-text of Jamaica, you would have to show that beneficiary had knowledge of the fraud being perpetrated," Wildman told The Gleaner.
But Dabdoub signalled that he would jump at the opportunity to test the court for the potential claimants.
"I think so, especially in relation to Olint," declared Dabdoub, the man who successfully spearheaded the dual-citizenship legal battles for the People's National Party.
"It (Olint) is a club and all parties must be treated equally as unjust enrichment at the expense of other club members," Dabdoub argued.
Doubting results
Samuels said provisions are made in law for representative action, but suggested that they do not go far enough to accommodate lawsuits on behalf of the unlucky investors.
Neita-Robertson also expressed doubt that a lawsuit of this nature would yield the desired result, but said she needed to study the issue more carefully.
The possibility of such an endeavour was precipitated by reports out of the United States that lawyers in that country were in the process of pursuing legal action to reclaim funds on behalf of persons who lost money in the Bernard Madoff investment scandal.
Last year, Madoff was sentenced to 150 years in prison after pleading guilty to 11 federal crimes and admitting his wealth-management business was a massive Ponzi scheme that defrauded thousands of investors of billions of US dollars.
As with Olint, operated by David Smith, and Cash Plus, the search is still on for Madoff's ill-gotten gains.
Dabdoub argued that the entire membership of an investment club could be hauled before the courts.
"You could, in law, sue the membership to return the proceeds as ill-gotten money which is not in accordance with club membership rules," said Dabdoub.
On the other hand, Samuels contended that in circumstances in which the number of claimants is many, the courts have designed the rule of convenience called represen-tative action.
Samuels told The Gleaner that there are procedures that must be followed, one of which is that the attorney must have the request in writing from the list of persons he or she is representing.
He, however, contends that the pursuit of such an action would be impractical in Jamaica.
"You see, if the citizens of a country are affected by a company and the claim is uniform, then it is really designed for that," said Samuels.
"But in a case where the amounts vary from person to person it will not work in all likelihood. Each person would have to bring the claim on their own."