US$500M probe at GRDB… GBTI prepared for court showdown over details on US dollar account

Oct 11, 2017 News

-questions raised over timing of destroyed records

A request for details of transactions at the Guyana Bank For Trade and Industry (GBTI) by the police Special Organised Crime Unit (SOCU) appears headed for a court showdown.
This was after the bank made it clear yesterday that its primary duty is to protect the confidentiality of customers.
The bank, in a public statement published in Kaieteur News, made it clear that it respects the orders of the court but has the right to approach the court if there are questions.
“GBTI appreciates its duty to comply with all Orders of Court in the same manner as every citizen of Guyana and any uncertainty concerning compliance will be a matter for the Courts to determine,” the commercial bank said in the statement.
The bank, which is controlled by the Beharry Group, was in the news over the past few days after it became known that it was locked in a battle with SOCU, since February, over a request for banking information.
Minister of Public Security, Khemraj Ramjattan, while not naming GBTI, said recently that the impasse between SOCU and the bank had stalled a major investigation involving a massive US$500M fraud.
The situation has reportedly attracted the attention of the Bank of Guyana, as regulator; the Ministry of Finance, the Ministry of Public Security and the Guyana Securities Council, among other entities.
At the centre of the problems is a major probe by SOCU of the operations of the powerful Guyana Rice Development Board (GRDB).
As the regulator of the rice industry, which spawns all three counties, GRDB was handed the job in the late 2000s to handle a lucrative deal with neighbouring Venezuela where Guyana received oil at concessional rates in exchange for oil.
GRDB, under a quota system that is now under question, selected a few millers and farmers to participate in the lucrative deal which worked out at almost US$700 per tonne of rice.
Consecutive governments, under Bharrat Jagdeo and Donald Ramotar, would advance hundreds of millions of dollars in delayed oil payments to GRBD which in turn would pay participating farmers and millers.
It was what happened to those monies that SOCU is investigating.
SOCU, a police unit that specializes in financial crimes, was earlier this year handed a forensic audit file on GRDB which raised several questions on spending.
Already, former General Manager, Jagnarine Singh; his former deputy, Ricky Ramraj; and former board members, Dharamkumar Seeraj and Nigel Dharamlall, (both Opposition parliamentarians) have been charged and are before the court.
SOCU, in February, reportedly started engaging GBTI asking for records of the US dollar accounts and details of other accounts.
Among other things, SOCU wanted records going back to 2012, including the authorization that the bank would have used to wire monies overseas.
However, despite three court orders- from the Chief Magistrate- and one production order from the Chief Justice in late August, SOCU reportedly ran into a brick wall on details.
In some cases, the documents were not certified by the bank which precludes it from being used as evidence in the likelihood in a court case.
In other cases, some of the information just was not handed over.
GBTI reportedly claimed that some documents were destroyed while in another case, a change in software caused some glitches and records therefore could not be retrieved.
According to Government sources, it is the understanding that between February and now, GBTI destroyed some records that SOCU wanted.
Under anti-money laundering laws, financial institutions are bound to keep paper and other records for seven years. GBTI, according to sources, allegedly got rid of those records after February, despite SOCU asking for them.
The bank in its notice yesterday, made it clear that as a licensed financial institution, it is regulated and supervised by the Bank of Guyana under the Financial Institutions Act of 1995 with reporting obligations to other statutory bodies which include the Guyana Revenue Authority, The Financial Intelligence Unit and The Guyana Securities Council.
“The bank as a responsible corporate citizen of this country complies with the Laws of Guyana. In areas where the laws may have conflict, the bank takes the position that its primary duty is to protect the interest of its customers and maintain the confidentiality that is associated with its fiduciary relationship to its customers. GBTI has never refused to supply information emanating from legal requests.”
SOCU has reportedly prepared charges for eight directors of GBTI for failing to comply with the court orders with the Director of Public Prosecution likely to decide shortly.
With regards to the GRDB spending, a number of millers, including on the West Coast Demerara and on the Essequibo Coast, have been embroiled, reportedly illegally receiving monies from the US account at GBTI to fund their operations.
Still a large amount was reportedly being wired through Bank of America, with little details what the payments were for.
The US account at the bank reportedly made payments also for purposes which should not have happened, officials said.
SOCU has remained largely quiet with head, Sydney James, not returning calls or answering his phone yesterday.
However, officials said that the matter is engaging the attention of the Guyana Securities Council.
Earlier this year, Minister of State, Joseph Harmon, during a post-Cabinet press briefing disclosed that GRDB officials reportedly illegally used a US dollar account to sell foreign exchange.
That investigation is reportedly held up as there are little details coming from the bank, officials said.
Sitting as a director on GRDB until earlier this year was former Chief Executive Officer of GBTI, John Tracey. He resigned earlier this year after a fraud of more than $950M was uncovered at the bank’s Bartica branch, in Region Seven.
The case of SOCU and the bank is being looked as it is testing the waters on how tough new anti-money laundering laws are working. The case is also testing the authority of court orders.

1 thoughts on “US$500M probe at GRDB… GBTI prepared for court showdown over details on US dollar account”

BeFair_SeeClear October 11, 2017 at 10:57 am

I say one thing follow the money…
Trail will lead to unchartered waters yes but the truth will be reveals …seems like SoCU is about to crack a big case