GEORGE TOWN, Cayman Islands, Nov. 24 – LAWFUEL – …

GEORGE TOWN, Cayman Islands, Nov. 24 – LAWFUEL – The Law News Network – The Cayman Islands Government’s commitment to prosecuting perpetrators and confiscating the proceeds of crime was reaffirmed recently with the sentencing of
Mr. Patrick Thomas Tibbetts for his role in an international money-laundering

Tibbetts was convicted of assisting Mr. Richard Homa and
Mr. Michael Gause — both of the U.S. — engage in and benefit from criminal
conduct using a “Ponzi” scheme known as Cash4Titles.(1) More than 1,800
investors from the U.S. were defrauded out of approximately $517 million in
Cash4Titles; both Homa and Gause were prosecuted in 2002 by the
U.S. Securities and Exchange Commission (SEC) and are serving
prison sentences.

Tibbetts, who was unsuccessful in his appeal against his conviction, is
currently serving a three-year sentence at Her Majesty’s Prison, Northward, in
Grand Cayman.

“The conviction of Tibbetts is tangible evidence that our
money-laundering laws will be vigorously enforced,” said the Honourable
Attorney General Samuel Bulgin.(2) “Indeed, it is our hope that like-minded
persons will be deterred from any such unwelcome activities in the Cayman
Islands. They will not be tolerated.”

Attorney General Bulgin added that the Crown will shortly be moving the
Grand Court to start hearing the confiscation aspect of Tibbetts’ sentencing
with a view to assessing and forfeiting his benefits from

The Cayman Islands was the first regionally, and among the first
worldwide, to criminalise the laundering of the proceeds of all serious
crimes, extending such legislation beyond the ambit of drug-money laundering.
The legislation gives the courts of the Cayman Islands power to restrain, and
ultimately forfeit, the proceeds of drug trafficking and all other serious
crime, including fraud.

A March 2005 assessment by the International Monetary Fund (IMF)
recognised the Cayman Islands’ anti money-laundering (AML) and combating of
financing of terrorism (CFT) initiatives. “Efforts to achieve compliance with
international standards have been top priority in the Cayman Islands…and
there is an intense awareness of anti money-laundering and combating of
financing of terrorism in the business community. The Cayman Islands
authorities have devoted substantial attention and resources to improving the
country’s anti-money laundering, legal and institutional framework,” noted the
assessment team in the two-volume report.

The Cayman Islands maintains various institutions and authorities that
work together to implement its AML/CFT regime. They include the Cayman Islands
Monetary Authority (CIMA), the Financial Reporting Authority, the Financial
Crime Unit of the Royal Cayman Islands Police and the Attorney General’s

Another important feature of Cayman’s AML regime, recognised by the IMF,
is the ability to provide mutual legal assistance to international law
enforcement counterparts. Since signing a Mutual Legal Assistance Treaty
(MLAT) with the U.S. in 1986, in excess of US$10 million arising from some 230
cases in which the two governments have cooperated, has been shared with the
Cayman Islands. Several million dollars have also been returned to the U.S.
for restitution to victims of fraud and other crimes.

In 2003, the Cayman Islands passed a comprehensive piece of anti-terrorism
legislation in addition to adopting, as part of its domestic law, United
Nations Security Council resolutions dealing with the financing of terrorism.

Looking forward, the Attorney General’s Chambers is currently reviewing a
draft bill, prepared late last year, which is proposing an even greater
emphasis on forfeiture/confiscation, including civil forfeiture.

“Enhancing our existing legislation to include civil forfeiture is an
important step forward,” said Attorney General Bulgin. “It is my wish and
certainly that of the entire government that in order to continue to
effectively combat money laundering, there needs to be greater vigilance in
hitting the fraudsters and drug traffickers harder in their pockets, by
confiscating their ill-begotten gains.”

The Cayman Islands Government has been continuously working both
domestically and internationally to maintain a strong regulatory and
compliance framework. Domestically, this includes adherence to the Financial
Action Task Force (FATF) international anti-money laundering standards.
Internationally, this includes bilateral mutual co-operation arrangements,
such as MLAT with the U.S., and various regulatory co-operation arrangements
maintained by CIMA. The Monetary Authority Law (2003 Revision) vests CIMA with
powers to make licensing, supervisory and enforcement decisions, and to
co-operate with international regulatory authorities.

About the Cayman Islands Financial Services Industry
Building on more than 40 years of steady growth, the Cayman Islands today
is recognised as a sophisticated, mature and diverse financial centre. Over
the past 15 years in particular, the Cayman Islands has focused on two main
objectives: building a world-class specialization of institutional business
and developing strong international cooperation agreements with the U.S. and
other countries. The Cayman Islands financial services industry encompasses
banking, trust services, company services, mutual funds, insurance, vessel
registration, capital markets products and the Cayman Islands Stock Exchange.

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