Prosecutor wants tax fraudsters to go to jail in Emerald-case

PHILIPSBURG--The Prosecutor’s Office insists that contractors found guilty of the evasion of income and turnover tax within the framework of the so-called “Emerald case” spend time in jail, it emerged during Tuesday’s Court hearing of four suspects in this case.
 
Last month, the Court of First Instance sentenced police officer Akeem A. (28) and fireman Keith F. (53) for the deliberate filing of incorrect and incomplete income and turnover tax from January 2014 until December 2017.
 
The policeman, who had not come clean, according to the Court, was given a suspended prison sentence of 12 months, on three years’ probation, with 240 hours of community service.
 
The firefighter, who had provided statements, received six months suspended, on three years’ probation, with 120 hours of community service.
 
Regarding the community service, the Court deemed it advisable that this take place in the context of the reconstruction of St. Maarten after Hurricane Irma.
 
In both cases, the Prosecutor had demanded unconditional prison sentences of 15 months, and conditional fines of NAf. 250,000.
The Court said at the time it understood the Prosecutor’s demand, as tax had been evaded on a large scale and because “important community interests” had been violated. “That is extra bitter at a time when Country St. Maarten is trying to overcome the devastating effect of Hurricane Irma,” the Judge stated.
 
On the other hand, the Court considered that in the Caribbean part of the Kingdom suspects are seldom summoned to appear before a Judge solely for tax fraud.
 
Appeal
The Prosecutor’s Office disagrees with the sentences as imposed by the Court and said Tuesday it has filed for appeal. Also, in the cases of four suspects who appeared in Court on Tuesday did the Prosecutor call for unconditional prison sentences of 15 months and conditional fines of NAf. 250,000, on two years’ probation.
 
In total, seven contractors are summoned to appear in Court for hearing in the Emerald investigation. All have sole ownership of construction companies involved with construction and clean-up activities for St. Maarten Harbour Group of Companies for which they had failed to correctly or completely file for taxes.
 
The suspicions are the result of an investigation by the anti-corruption unit TBO into alleged fraud and corruption committed at Port St. Maarten. According to the Prosecutor’s Office, the suspects involved had failed to report income of approximately US $8 million paid to their companies for activities on behalf of the Port, in particular between 2012 and 2016.
 
These payments were not reported by the companies to the tax authorities, which is punishable by law. According to calculations by the tax authorities, St. Maarten has reportedly lost more than NAf. 6 million in tax revenue, the Prosecutor’s Office claims.
 
The Prosecutor said Emerald involves a big investigation into “large-scale corruption” at the Port in which seven small companies were involved in tax evasion. “The demands are so high because of the fraudulent context,” he explained.
 
The Emerald investigation started in April 2016 following reports in The Daily Herald and questions posed in Parliament about contracts signed between the then new owners of Checkmate Security and Port St. Maarten.
 
The contractors involved all submitted invoices to the harbour. Then Public Relations Officer at the harbour and current owner of Checkmate Security O.A., who is also a suspect in this case, allegedly was often involved with the distribution of payment cheques – usually in the amount of US $25,000 each – to the contractors. In the Prosecutor’s Office’s opinion, the invoices were false as most of the work the contractors were paid for was fictitious.
 
C.M.E. was the first suspect to appear before the Judge on Tuesday. In explaining why he had not filed for income and turnover tax, the owner of Caviar Construction said he was under the impression he had a tax holiday.
 
“It’s all fine what you’re saying, but I’m not retarded. I cannot believe that you did not know that you had to pay taxes,” the Judge said in response to that statement.
 
C.M.E., who also has a part-time job with Checkmate Security, allegedly defrauded the tax office out of NAf. 746,293, but he claimed that was “impossible.”
 
Biggest nightmare
Co-suspect S.R.A.D. allegedly was paid US $1.7 million for harbour-related work carried out by Jazz General and Operational Contracting Company between February 2012 and November 2016. He said he had not filed for taxes because bookkeeping was his “biggest nightmare.”
 
In his case, the tax office calculated a loss of NAf. 1.3 million over the years 2013 up until and including 2016. “That’s a nice amount,” the Judge commented.
 
Owner of Select Trucking Services K.G.L. said O.A., whom he knows since the 1990s, was his liaison at the harbour.
 
“Everybody knows him as a generous businessman, assisting you with getting a job and a chance to an honest living,” K.G.L. told the Judge.
 
According to the Prosecution, K.G.L. had failed to file for taxes to the tune of almost NAf. 260,000 between 2012 and 2016. The invoices K.G.L. submitted to the Port also included invoices for work carried out on behalf of Devcon Ltd. and Windward Roads, which made the Prosecutor wonder why these were submitted to the Port and not to these construction companies.
 
K.G.L. also was a suspect in the “Mahi-Mahi” case involving a shooting at The Westin St. Maarten Dawn Beach Resort and Spa’s parking garage on May 29, 2016.
 
For this crime he was sentenced on December 27, 2017, to a prison sentence of 365 days, 263 of which were suspended, on two years’ probation, for possession of US $48,700 in counterfeit money. He was acquitted of the illegal possession of a firearm.
 
Repentance regulation
Suspect S.E.W. (32), who is O.A.’s cousin, is charged with the deliberate failure to file for income and turnover tax in the amount of NAf. 800,000. He was arrested in March 2017, and had started arrangements to settle the matter with the tax office three months later in making an appeal to the so-called repentance regulation (“inkeerregeling”) for taxpayers who had failed to file for taxes but were willing to settle the matter out of Court.
 
He contested the alleged amount, saying this was merely an “estimation.” He said he had made a start with getting his company administration in order with the aid of an accountant and had reached a settlement with the tax department where the arrears in turnover tax was concerned in paying NAf. 22,000.
 
Lawyers for the defence Brenda Brooks and Shaira Bommel pleaded for their clients’ acquittal in claiming the Prosecutor’s Office did not have strong cases where the falsehood of the invoices was concerned.
 
Brooks also called on the Court to declare the Prosecutor’s cases against C.M.E., S.R.A.D. and K.G.L inadmissible for violations of her clients’ rights. The Court will give its decision in Tuesday’s cases April 17.
 
The Emerald investigation continues Thursday with the hearing of Member of Parliament Chanel Brownbill. The Prosecutor’s Office is accusing Brownbill of having failed to file income and turnover tax for US $1,262,078 in invoices paid by the St. Maarten Harbour Group of Companies to Country Construction company’s bank account. These payments were allegedly made between 2009 and 2016.
 
A preliminary Court hearing of main suspects Port Chief Executive Officer Mark Mingo and O.A. is scheduled for April 24.
 
The Daily Herald

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