Rappaport Case Ends With US$12 M Payout

The government has dropped its civil suit against ailing businessman Bruce Rappaport and his Hong Kong Company IHI Debt Settlement Company Ltd.
This after Rappaport paid the government a hefty sum of US$12 million.
The announcement came during a press conference held earlier today by Attorney General Justin Simon QC.

Reading from a prepared statement, the AG cited from a report prepared by financial forensic investigation Robert Lindquist, who had been hired shortly after the UPP administration was elected. He said the reason for discontinuing the process against Rappaport was simple:

"After months of hard negotiations based on the information provided by Mr Lindquist in his report, Mr Rappaport, through his lawyers, has agreed to settle the claim against himself and his company by paying to the government the sum of US$12 M in respect of our civil claim.

I am pleased to advise that the government is in receipt of the payment.

I will be advising our counsel in Miami to take similar steps in respect of the pending Miami case whose status, as you know from my recent statement to Parliament, is due for review in late May 2009."

While Rappaport may still have to answer criminal charges, a number of other defendants will have to answer to the civil matter.

In March 2006, Simon had filed the civil claim in the High Court of Antigua & Barbuda in respect of the IHI matter for special damages in the sum of US$14,414,904 plus interest as well as general damages and exemplary damages for fraudulent misrepresentation and malfeasance in public office.

Also name in the suit were substantive defendants, former prime minister Lester Bird; Member of Parliament Asot Michael; Bellwood Services SA, a Panamanian company; Patrick A Michael Co Ltd, an Antigua & Barbuda company; and Debt Settlement Administrators LLC of
Florida.

Lindquist had led similar investigations in Trinidad & Tobago, where over US$7 M of illegal payments to public officials had been recovered. He was instrumental in the arrest and prosecution of persons involved in the Piarco International Airport scandal. Simon said Lindquist's report was complete and comprehensive.

He stated: "The Report traces the payment by government from December 1996 of the monthly sum of US$403,334 out of the consumption tax revenue paid by West Indies Oil Company to the various persons in receipt of these monies, with details of the companies through which the monies were sent, to what bank accounts, in which countries and how these monies were finally disbursed. These monthly sums were paid out of government funds pursuant to an irrevocable letter of instructions right up until February 2006, when I obtained an Injunction from the High Court in Antigua and Barbuda stopping the continuance of the payments, and freezing the bank account here in Antigua of an associated Florida company called Debt Settlement Administrators LLC."

The AG added that the report clearly suggests that persons had plotted to steal large sums of money from the country.

"It was a gigantic conspiracy engineered and affected by persons in high places to rob this country of millions of dollars right up to the year 2021, a burden that would be carried by your children and your children's children. Consider this. These monthly payments were, by an agreement dated 11th September 1997, to be made over a period of 25 years beginning December 31 1996 (retrospectively nine months before the agreement was signed) and would have amounted to an aggregate payment of US$121,000,200. Out of that monthly sum of US$403,334 coming out of the Government Treasury, only US$199,740.25 would be legitimately paid to IHI Japan amounting to an aggregate sum of US$59,922,075 over the 25 years.

In simple arithmetical terms, US$61,078,125 in excess of the total sum due IHI Japan would have been misappropriated out of the Treasury and gone 'ahgwasa' over that 25-year period."

The AG served the Notice of discontinuance on all the defendants in respect of Rappaport and his Hong Kong Company.

The latest development, according to the AG, is "important and significant" as the UPP administration "seeks to recover through a number of civil actions the various monies and parcels of land which we allege were fraudulently appropriated by certain members of the former administration for their own personal gain and enrichment and to the detriment and financial pain to the people of this country."

The AG was accompanied by Deputy Solicitor General Karen de-Freitas Rait.

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