CRIME-JAMAICA: Big Fraud Cases Have Law Officers on Their Toes

By IPS Correspondents Reprint | | Print |

Sam Pragg

KINGSTON, Jul 17 1998 (IPS) - Two former bank managers are now before the courts charged with defrauding their one-time partner of more than 100,000 dollars.

Winston Munroe of the Low Income Family Foundation is being investigated by the Fraud Squad after collecting more than two million dollars from thousands of poor Jamaicans looking to own a home.

Now these people are left wringing their hands in despair. They have neither house nor money and many say they do not know where to turn

“I want to know what has happened to our money. It’s all the money we had in the bank,” says one depositor to the Low Income Foundation, Tedroy Reid. Reid’s cry echoed those of thousands of others who had entrusted their savings to Munroe in return for the promise of affordable housing.

Errol Hanchard and Barry Robinson are now before the courts for failing to produce housing units that they had promised to build on the north coast through their Jamomes Development Company after they too had collected millions of dollars from investors.

Two years ago, Donald Panton was arrested and charged with two other directors of the Blaise Financial Entities on fraud charges after those institutions were ordered closed by Finance Minister, Omar Davies after several irregularities in their operation were uncovered.

These are only a few examples of the number of prominent Jamaicans who in recent times have run afoul of the law. And while law enforcement officials are reporting that there is in fact a decline in the actual number of fraud cases on their books, they say the amount of money involved in the cases now being investigated is rapidly increasing.

“When we used to have cases involving a million or two dollars (36 Jamaican dollars = one US dollar) we used to consider it a big case,” says Deputy Superintendent of Police, Errol Samuels of the Fraud Squad. “Now you have cases involving 350 million and 700 million which is much different from three years ago.”

In 1995 , 2,429 cases of fraud were reported to the Fraud Squad. In 1996, the figure had dropped to 2,290 and at the end of last year the figure stood at 1,916.

“It is not a question of us catching more of them. It is a case of them stealing more. The money that they are stealing is much more than in past times,” adds Samuels.

There are those who are blaming the dismal state of the economy on the sharp rise in white collar crime as former top managers in these companies seeing their assets dwindling away began using illegal means to siphon off the funds before their institutions fell victims to the times.

Such also was the case of Norman Whyte of Tetrarch Investment who was arrested on a charge of breaching the Financial Institutions Act after he set up his investment company and began collecting deposits without a licence to do so.

The Jamaican economy has experienced, on average, negative growth of 1.7 percent over the last 26 years.

Although the government has been fighting to keep inflation at single digit figures for the last few years, at the end of 1997 that figure stood at 9.2 percent. Interest rates now range between 45 and 60 percent, much too high for manufacturers to survive, analysts say.

And that sector is, in fact, in decline. In 1992 it contributed 19.6 percent to the country’s Gross Domestic Product (GDP). This figure had moved to 18 percent in 1996.

In the financial services sector, the closure of banks and other institutions have become the order of the day. Some 50 financial institutions have closed over the last two years or have been taken over by the government’s Financial Sector Adjustment Company (FINSAC) because they were no longer thought to be viable.

Analysts say government will need to inject some 167 million dollars into the financial services sector for it to be once again viable.

Still others see this new trend in white collar crime as nothing more than plain and simple greed. “The get-rich-quick mentality is the cause for it. Everybody wants to get rich and drive BMWs overnight,” says Samuels.

For Davies, however, it is a matter of ethics. “It has been a very painful experience for me in carrying out the assessment of the financial sector to see evidence which suggests that the highest ethical standards were not observed,” adds Davies.

And although several of those who have sought to throw ethical standards of operation through the window have been nabbed, there are still some who are concerned that many others will “get away” because of flaws in the justice system.

“To even begin to crack corruption we must have a justice system that punishes wrongdoers, whether they are from upper St. Andrew or below Cross Roads, whether they wear business suits or baggy clothes. White collar crime must be recognised for what it is – blatant thievery and an affront at development,” says Howard Hamilton, President of the Jamaica Chamber of Commerce.

But Samuels insists that the scales of justice have always been well-balanced. “Our task is really to deal with criminals regardless where they are from,” he says.