Invoice intrigue

An invoice that was presented to customs officials detailing medical equipment and office furniture purchased in the name of the University Hospital of the West Indies (UHWI) for US$251,582 or almost J$40 million, listed the hospital’s address as ‘18¾ Lyndhurst Road’, documents reviewed by The Sunday Gleaner have revealed.

The invoice comes to light nearly three months after a scathing report by the Auditor General’s Department (AuGD) detailed how the UHWI “inappropriately” used its tax-exempt status to import goods for private companies, resulting in unpaid customs duties totalling more than $23 million.

The AuGD’s Performance Audit Report, which was published last December, did not publicly name the four companies cited as case studies.

The invoice, which is dated January 16, 2024 and includes the name of the UHWI’s de facto chief executive officer, Fitzgerald Mitchell, was prepared by Xnaria LLC, the United States-based firm that supplied the items.

It shows that 12 Fresenius dialysis machines, priced at US$10,260 each; 16 Realbiz mid-back leather pro chairs, priced at US$226.84 each; ‘20 medical IV stand 2-hook’, priced at US$147.33 each; and a reverse Osmosis water purification system costing US$83,700 were among the items that were shipped to Jamaica from Miami on-board the AS Savanna 107.

The UHWI’s charity status was applied to the transaction, resulting in unpaid customs duties totalling more than $10 million, though the items were never delivered to the hospital, a whistleblower revealed.

Richiez Sander, principal of Xnaria LLC, based in Pembroke Pines, Florida, acknowledged that the invoice was from his company and said his records show that payment was made by “Jacden Group of Companies”.

Majority shareholder

The Jacden Group of Companies, which includes Jacden Medical Services Clinic, operates from 18½ Lyndhurst Road, in St Andrew, and lists Member of Parliament (MP) for St Andrew East Central Dennis Gordon as its majority shareholder, public records show.

“Those transactions that I did, I did them with JACDEN Group of Companies,” Sander disclosed in an interview with The Sunday Gleaner on Thursday, noting that his firm has handled other similar types of transactions.

Gordon, the first-term member of parliament aligned to the opposition People’s National Party, declined to answer questions submitted by The Sunday Gleaner related to the invoice and the transaction, noting that as the majority shareholder of Jacden, “I don’t manage the day-to-day affairs”.

He said the only report he was aware of was the one tabled in Parliament, making reference to the AuGD’s performance audit report published in December last year.

“Therefore, you should refer only to that report rather than pursuing reputational damage based on speculation,” he said on Friday.

“Accordingly, I reserve the right to seek legal remedy for this reckless character lynching,” the first-term lawmaker warned.

Mitchell, the UHWI CEO who is on three months leave that was approved by the board of directors in January, said he was “not aware of any invoice”.

“The University [Hospital’s] address is the University [Hospital’s] address. You probably need to take up that with someone at the University. I would not have any comments on that,” he said on Friday.

“I am currently on vacation. I have no knowledge of what you are talking about,” he added.

The UHWI board of directors explained in a public statement that the decision to approve Mitchell’s time off was taken to address an extensive leave backlog and to facilitate the independent conduct of the reviews and processes now under way at the UHWI without any perception of influence.

The contents of the invoice reviewed by The Sunday Gleaner mirrors the findings of the AuGD’s performance audit outlined in case study 1.2.

According to the report, the UHWI misused its tax exemption status to facilitate the importation of office furniture and medical equipment with a cost insurance and freight (CIF) value of approximately $40.6 million for a firm it identified as ‘Private Company 2’.

As a result, Private Company 2 benefited from tax relief of $10.1 million.

Conflicting information

However the report said a review “highlighted discrepancies and conflicting information across multiple customs and shipping documents”, some of which it noted constituted a breach of the Customs Act.

It indicated, too, that 12 dialysis machines were singled out from the list of items that were imported to determine whether they were included in the UHWI’s inventory records and were in existence.

“However, UHWI did not provide the 12 dialysis machines and the other items for inspection. Our review of UHWI’s inventory records revealed that the last recorded set of dialysis machines were in January 2020,” it said.

Since the findings of the performance audit were made public, the Jamaica Customs Agency (JCA) has conducted an internal review of its database, going over all transactions involving the use of the UHWI’s charity status, sources disclosed.

The total amount of unpaid customs duties from these transactions is still being calculated as JCA officials weigh possible sanctions.

“They did not go back far enough. So what they are doing now is looking back at all the declarations done using UHWI’s charitable status. They are still digging,” one source revealed.

The JCA declined to comment on reports reaching The Sunday Gleaner that the new information uncovered during the internal review has resulted in the AuGD being called in to conduct a more thorough audit.

“Having regard to its statutory obligations, the Jamaica Customs Agency is not able to comment,” it said on Friday in an emailed response to questions submitted by The Sunday Gleaner.

livern.barrett@gleanerjm.com