By Robert Di Pano
IT WOULD BE in the best interest of the Turks and Caicos Islands from an enforcement standpoint to deny convicted Caribbean Ponzi schemer David Smith’s application for parole.
The Governor and Parole Board members are encouraged to stand strong despite Smith’s alleged prosecutorial cooperation and not be short-sighted in a decision to grant an early release.
In June 2010, Jamaican-born Smith pled guilty in the Turks and Caicos Islands to running a foreign exchange Ponzi scheme, bilking investors out of upwards of $220 million.
OLINT TCI, Ltd and TCI FX, Ltd operated under the radar for several years, until drawing scrutiny from TCI regulators in 2007.
The parole hearing naturally concerns offenses committed within the TCI, contrary to common law and relevant criminal ordinances.
Complicating the picture, however, is Olint TCI’s multinational and US component, behaviour for which Smith has also pled guilty and was independently sentenced to 30 years in US federal prison.
Smith’s camp might emphasize this element of double jeopardy and cite the substantial assistance he has provided law enforcement to date. They might also remind TCI authorities that a reputable audit report can be interpreted to show that some $154 mm of the $220 mm was actually paid out to investors, diminishing the headline figure for losses and perhaps the ultimate seriousness of the alleged offenses.
But the TCI authorities have already considered these arguments and showed substantial leniency towards Smith by imposing what is a relatively light (by international standards) 6.5-year sentence for conspiracy to defraud and launder money.
Smith’s cooperation and guilty plea were previously taken into account in reducing the number of charges in the TCI Supreme Court from 30 to 7 and in awarding the maximum 1/3 sentence reduction.
While the concept of parole for non-violent, first-time offenders is well-established in modern legal systems, Olint victims who lost their homes and life savings will likely tell a different story.
Or perhaps the passage of time and ultimate sentencing has healed wounds and will cut down on the anticipated victim submissions to the Parole Board.
The TCI has endeavoured to shore up various aspects of its governance since the unfortunate events of 2009, including beefing up parole processes and procedures.
The Smith parole decision will provide a substantial test of these new policies and afford the TCI the opportunity to send a clear message to would-be financial criminals.
Regardless of the outcome, the severity of Smith’s US sentence looms large in the background.
Robert Di Pano, an attorney in New York, New Jersey and Florida, writes frequently on the area of financial crimes.
Note: the opinions expressed in Caribbean Journal Op-Eds are those of the author and do not necessarily reflect the views of the Caribbean Journal.