The Anti-Corruption Investigation Bureau (ACIB) has cracked the case involving the pillaging of taxpayers’ money through a fraudulent scheme involving the Estate Management and Business Development (EMBD) company in the lead-up to the September 2015 general election and arrests are imminent.
Over the last year and a half, officers from the ACIB with assistance from a UK prosecution and investigations firm–Edmonds Marshall McMahon–have been able to piece together complex financial information which forms part of the criminal investigation being pursued by the T&T Police Service (TTPS).
A document obtained by Guardian Media revealed that a prominent politician “orchestrated a scheme that resulted in significant funds being secured and spent by the EMBD six weeks before the general election on September 7,” amounting to a staggering $549 million, just over half a billion dollars.
Investigators believed that this politician was able to implement the fraudulent scheme with the assistance of a former senior employee of the EMBD “who has now fled the country” and his “close acquaintances,” the CEOs of at least four construction companies, “who in turn engaged the assistance of subordinates.”
Investigators have painstakingly mapped out the modus operandi of the major players, several individuals and companies, who helped to facilitate this scheme from the embryonic stages to fruition.
The modus operandi, people involved
Close to five years ago, this was the modus operandi of the elaborate scheme involving a politician, prominent businessmen, advertising heads, security services, special advisers and communications specialists:
Investigators broke down the key players and their roles in the scheme.
*First, there was the controlling mind: Someone that has significant control over others
*Second, the subordinate: Someone who is under the control of a controlling mind
*Third, the launderer: Someone whose principal involvement is to receive and dissipate the criminal proceeds
How the scheme went down
- The man termed “the boss” by investigators, with the assistance of the former EMBD senior employee and a contractor, concocted a series of road upgrade projects, known as C1-C10 roads. Investigators revealed these projects “came out of the blue” and “a note to the Cabinet seeking approval for the works and funding had been drafted long before an EMBD engineer had visited the site.”
- “The boss” instructed the senior EMBD employee to add the tenth road to the draft note which was sent to the Cabinet on the basis that “one particular contractor wanted to do the job.” Investigators stated that no other justification was provided for this job and the senior EMBD employee obliged.
- “The boss” presented the note to Cabinet and the works and funding was approved on April 30, 2015, for the sum of $330,375,000 (excluding VAT). Investigators discovered that these projects did not form part of EMBD’s scope of work and, therefore, became additional funding.
- Companies owned by “the boss’s” close acquaintances were later invited to tender for the road contract.
- By the time the tender had come around, EMBD’s estimates for the cost of the roads had been arbitrarily inflated to $416,340,445 by a senior employee at the EMBD. This meant that bidders could now bid higher, the document explained.
- Bidding companies colluded with each other to predetermine who would win which road. During the lengthy investigation, police found evidence of full bid information for the C7 and C8 roads, dated before the bids being submitted, on a computer of one of the companies in question.
- The contracts were awarded to the companies with bids that were “suspiciously close to the estimates.” At least eight of the ten bids were within two per cent of the estimates.
- Once work on the roads began, it is alleged the companies submitted fraudulent claims for material not used or work not done. In one instance a company claimed $23 million for Guaracara boulders that were not used. Another company double-counted and overclaimed a similar amount for excavation work linked to road widening that was never done.
A senior EMBD employee apparently signed off on these claims. Investigators believe he “must have been complicit.” Another employee questioned the claims made by two other companies but was told by another senior EMBD employee that he had to sign off the claims because “the boss” had ordered it. An initial international expert report has confirmed the likelihood of this fraud.
- “The boss” needed the claims signed off as quickly as possible so the drawdown of the funds could be obtained from the Ministry of Finance, the investigators stated.
- On August 25, 2015, “the boss” instructed an official to submit the claim to the Ministry of Finance to make interim payments to the companies in the sum of $179,626,481.63 (TT).
- The Ministry of Finance, which initially said there was no money to meet the claims, approved $100,000,000 on September 1, 2015. The following day, the senior at a particular company, after receiving instructions from “the boss” as to how the $100m should be spent, sent a message to the senior employee at the EMBD. Investigators discovered that “the boss” would regularly instruct the senior EMBD employee who should be paid.
- “The boss” was able to help secure additional funding for the EMBD through a $400 million loan from First Citizens Bank. The investigators revealed that in total–between August 7 and September 3, 2015–the EMBD received funding to the tune of $549 million. By the close of the business on September 4, all the money had been spent. Four companies received a total of close to $400 million. Other contractors received nothing.
Investigators detailed that in exchange for winning C1-C10 contracts, having their fraudulent claims signed off and being well remunerated, “it is suspected that these companies agreed to pay kickbacks out of the proceeds, with these being either to fund (party name called) 2015 election campaign or to reward “the boss” and his friends.”
According to the forensic investigation, a paper trail revealed that “about $60m of unexplained payments has been identified to companies or individuals that appear to have no commercial connection to the companies.” In one instance, millions of dollars were paid to low-level employees in one of the companies that benefited from the fraudulent scheme. The document stated that “as the money trail is followed the amounts converted to cash increase.”
The lengthy probe also found that apart from the enrichment of certain companies, a former senior EMBD employee who cowered to “the boss’s” instructions also benefited from payments amounting to over $1 million.
Sources told Guardian Media that the money trail has led to real estate properties that were purchased in London.
During the year-and-a-half-long investigation, the ACIB conducted searches of several companies across the country. They were able to collect digital data from EMBD and other state entities. They also obtained several production orders covering at least 24 account holders and information on close to 50 bank accounts.
The ACIB was also able to obtain production orders from two telecom companies and call and message logs for at least 12 key phone numbers.
They have also obtained witness statements from EMBD staff, police officers and cybercrime officers, Central Bank, T&T Mortgage Company, Price Waterhouse Coopers and a quarry company.
Commissioner Gary Griffith confirmed that a UK firm with experience was needed to assist in the EMBD matter and other matters like LifeSport and other pending cases. But he did not give any further comments regarding the status of the EMBD case.
“Obviously, in any major investigation, I cannot give specific details. I can say there is an ongoing investigation pertaining to questionable activities at the EMBD from several years ago. As in other major investigations, as in past investigations, all the matters before it must be thoroughly investigated. I have done Emailgate, Calabar Foundation the plant-like substance at the former prime minister’s residence and others.”