Quin J
Ruling. Cause No. POCL 7 of 2010. Daisy Rojas Perez v. Attorney General. Coram Quin J. Date: 17.6.2011 Page 1 of 10 IN THE GRAND COURT OF THE CAYMAN ISLANDS 1 HOLDEN AT GEORGE TOWN 2 Cause No: POCL 7/2010 3 4 5 IN THE MATTER OF AN APPLICATION BY THE ATTORNEY GENERAL FOR A 6 RESTRAINT ORDER PURSUANT TO SECTION 45 OF THE PROCEEDS OF CRIME 7 LAW 2008 8 9 BETWEEN: 10 DAYSI ROJAS PEREZ 11 12 13 APPLICANT/DEFENDANT 14 15 16 AND: 17 THE ATTORNEY GENERAL 18 19 20 RESPONDENT/PLAINTIFF 21 22 23 Appearances: Mr. Geoffrey Cox Q.C. instructed by Mr. 24 James Austin-Smith of Campbells for the 25 Applicant 26 27 28 Mr. John Masters, Snr. Crown Counsel of 29 the Attorney General’s Chambers for the 30 Respondent/Plaintiff 31 32 Before: The Hon. Mr. Justice Charles Quin 33 Heard: 14th June 2011 34 35 RULING 36 37 38
On the 20th October 2010 I granted a Restraint Order pursuant to an ex parte 39 application made under the Proceeds of Crime Law (“POCL”) 2008 by the 40 Attorney General, and grounded by the affidavit of Detective Constable Reuben 41 Foster (“Detective Foster”) dated the 20th October 2010, restraining all of the assets 42 Ruling. Cause No. POCL 7 of 2010. Daisy Rojas Perez v. Attorney General. Coram Quin J. Date: 17.6.2011 Page 2 of 10 held by, or on behalf of, the Defendant, Ms. Daysi Rojas Perez (“Ms. Perez”) and in 1 particular, deposits held in a Royal Bank of Canada (“RBC”) account #733-2810. 2
Leading counsel for the Defendant, Mr. Cox, applies to the Court to discharge the 3 Restraint Order dated the 20th October 2010 on the grounds that the facts and 4 matters set out in the affidavit of Detective Foster are plainly insufficient to provide 5 reasonable cause to believe that the Defendant has benefited from the alleged 6 criminal conduct. 7
Leading counsel on behalf of the Defendant submits that there is no evidence that 8 the deposits made into RBC in the Cayman Islands by the Defendant from her 9 accounts with the bank in the United States were the proceeds of criminal conduct. 10
Leading counsel on behalf of the Defendant relies on the recent English Court of 11 Appeal decision of Windsor and Others v. CPS [2011] EWCA Crim 143 delivered 12 on the 8th February 2011 by Lord Justice Hooper. In particular, Mr. Cox relies on 13 paragraph 51 of this (supra) Judgment where Lord Justice Hooper states: 14 “The statutory test is clear: the applicant for a restraint order must satisfy the 15 judge that there is reasonable cause to believe that the alleged offender has 16 benefited from the criminal conduct.” 17 In addition, Hooper L.J. added at paragraph 53: 18 “Before charge – and all the more so before arrest – there will be many 19 uncertainties. The law does not require certainty at this stage but uncertainty is 20 not in itself a reason for making a restraint order as some of the respondent’s 21 submissions might suggest. The court must sharply focus on the statutory test: 22 is the Judge satisfied that there is reasonable cause to believe that the alleged 23 offender has benefited from his criminal conduct? It is that test which the court 24 must apply and requires a detailed examination of the material put before it. 25 The presence of uncertainties does not prevent there being reasonable cause to 26 believe, but the Judge must still be satisfied that there is reasonable cause to 27 believe.” 28 29 Ruling. Cause No. POCL 7 of 2010. Daisy Rojas Perez v. Attorney General. Coram Quin J. Date: 17.6.2011 Page 3 of 10
For reasons that I set out below, and for the purpose of this Ruling, I have confined 1 myself to a review of the material put before me by the Attorney General on the 20th 2 October 2010 and not on the evidence filed by the Defendant or on the material put 3 before the Court on the morning of the hearing on the 14th June 2011. 4
Detective Foster set out a number of facts in his affidavit dated the 20th October 5 2010, with the most salient facts being Detective Foster’s averment that the 6 application was based on the commencement of a criminal investigation in the 7 Cayman Islands with regard to money laundering, and that there was reasonable 8 cause to believe that the alleged offender, the Defendant, Ms. Perez, had benefited 9 from criminal conduct. 10
Detective Foster deposed that the Cayman Islands Financial Reporting Authority 11 (“FRA”) had received a Suspicious Activity Report (“SAR”) from RBC in relation 12 to transactions involving an account opened by the Defendant in November 2009. 13 Detective Foster also deposed that the Financial Crime Unit (“FCU”) of the Royal 14 Cayman Islands Police Service (“RCIPS”) had concluded that the Defendant had 15 only visited the Cayman Islands on one occasion between the 13th November 2008 16 and the 15th November 2008. 17
Detective Foster deposed that the Defendant confirmed to RBC that she received a 18 monthly income from Media Marketing LLC and HBC Professional Group Inc. 19 totaling US$4,000.00. 20
In her account opening forms the Defendant informed RBC that her anticipated 21 annual deposit would be US$350,000.00. It transpired that wire transfers of funds 22 from November 2009 to July 2010 amounted to US$2,859,678.10, which was 23 considerably above the projected deposit amount provided to the bank. The Court 24 Ruling. Cause No. POCL 7 of 2010. Daisy Rojas Perez v. Attorney General. Coram Quin J. Date: 17.6.2011 Page 4 of 10 noted that all the wire transfers were from Media Marketing LLC directly into an 1 account in the name of the Defendant. 2
Detective Foster deposed to the fact that the RBC had been unable to contact the 3 Defendant by telephone either at home or at work. Furthermore, Detective Foster 4 stated that the RBC had made contact with HBC Professional Group and had been 5 informed that the Defendant was no longer employed with the firm and had not 6 been so employed for about three years. 7
Detective Foster deposed that the FRA had contacted the Financial Crimes 8 Enforcement Network (FinCEN) in the United States Treasury Department, a body 9 set up to detect and investigate financial crime. Detective Foster stated that it was 10 revealed by FinCEN that various Suspicious Activity Reports (SARs) had been 11 filed in relation to the Defendant for suspected medical fraud, totaling 12 US$4,245,402.00, and for suspected healthcare fraud, totaling US$3,923,595.00, as 13 well as for structured and suspected money laundering. 14
In addition, Detective Foster’s affidavit disclosed that he had been informed that the 15 Federal Bureau of Investigation (“FBI”) was interested in the Defendant. 16
I granted the Restraint Order over the assets in the Defendant’s name pursuant to 17 s.44(1)(a) of the POCL because I was satisfied that from the evidence presented by 18 Detective Foster, and the submissions made by Senior Crown Counsel, that a 19 criminal investigation had commenced in the Cayman Islands with regard to an 20 offence, and further, I found that there was reasonable cause to believe that the 21 alleged offender has benefited from her alleged criminal conduct. 22 Ruling. Cause No. POCL 7 of 2010. Daisy Rojas Perez v. Attorney General. Coram Quin J. Date: 17.6.2011 Page 5 of 10
Detective Foster was in Court when his affidavit was read by Senior Crown counsel 1 and I had no cause to doubt his sworn evidence that criminal investigations had 2 been commenced in the Cayman Islands. 3
Senior Crown counsel also submitted that the Crown was concerned that should a 4 Restraint Order not be granted, the funds in RBC would flee from this jurisdiction 5 because there was evidence before the Court that in late September and early 6 October 2010 the Defendant was trying to move the said funds from the RBC 7 account in the Cayman Islands to Costa Rica. 8
I confirm that when Senior Crown Counsel and Detective Foster appeared before 9 me on the 20th October 2010 I did not look behind Detective Foster’s sworn 10 testimony that a criminal investigation had been commenced. The evidence that the 11 Defendant was trying to move funds out of the RBC account to Costa Rica had only 12 just been revealed. This activity, and the instructions of the Defendant in relation to 13 her deposit estimate, clearly troubled the RBC sufficiently enough to make a SAR 14 to the Cayman Islands FRA. 15
Section 44(1)(a) of the POCL only requires the Court to be satisfied that a criminal 16 investigation has been commenced in the Islands with regard to an offence. There is 17 no requirement for the Court to assess the weight of the evidence, particularly at 18 this early stage, and, to adopt the words of Lord Justice Hooper, this Court should 19 be reluctant “to lay down precise guidelines for the preparation of statements for 20 the purposes of obtaining Restraint Orders.” 21
I took into account that the Defendant had disclosed to the RBC that her income 22 was US$4000.00 per month, and that she predicted an annual deposit of 23 US$350,000.00. In approximately eight months the Defendant had transferred 24 Ruling. Cause No. POCL 7 of 2010. Daisy Rojas Perez v. Attorney General. Coram Quin J. Date: 17.6.2011 Page 6 of 10 nearly six times that amount from Media Marketing LLC into an account in her 1 own name. 2
In light of that fact, and the fact that suspicious activity reports had been made in 3 the USA and in the Cayman Islands regarding of the Defendant’s movement of 4 funds, I formed the view that there was reasonable cause to believe that the 5 Defendant was benefiting from the alleged criminal conduct. 6
Having reviewed the facts and matters set out in the affidavit of Detective Foster, 7 and having heard leading counsel on behalf of the Defendant and Senior Crown 8 Counsel on behalf of the Attorney General I find that on the 20th October 2010 there 9 were sufficient grounds for granting the Restraint Order pursuant to s.44(1)(a) of 10 the POCL. 11
I understand that the Defendant may wish to challenge the Restraint Order on a 12 number of other grounds including pursuant to s.46(4) of the POCL which provides 13 that: 14 “Where the condition in section 44 which was satisfied was that an 15 investigation was started or an application was to be made, the Court shall 16 discharge the Order if within a reasonable time proceedings for the offence are 17 not started or the application is not made, as the case may be.” 18 19 In addition the Defendant may wish to rely on material which was not before the 20 Court on the 20th October 2010. 21
The Attorney General submits that the document purporting to be a summons for 22 the discharge of the Restraint Order was never issued with a date and therefore is in 23 breach of GCR O.32 r.2(2), namely: 24 Ruling. Cause No. POCL 7 of 2010. Daisy Rojas Perez v. Attorney General. Coram Quin J. Date: 17.6.2011 Page 7 of 10 “That no summons may be issued unless it specifies a date and 1 time at which the hearing will take place.” 2 3 I order that this irregularity can be cured and, accordingly, allowed the hearing to 4 continue with the date of the 14th June 2011 inserted pursuant to GCR O.2 in the 5 Defendant’s summons. 6
In addition the Attorney General applies for an adjournment in order to file further 7 evidence, including evidence from the FBI, which Senior Crown counsel submits 8 they wish to put before the Court. 9
I now set out the relevant chronology from the 20th October 2010 as I understand it. 10
On the 8th November 2010 Linwood Attorneys filed a Notice of Appointment 11 coming on the record to act as attorneys at law for the Defendant, Ms. Perez. 12
On the 13th December 2010 Linwood Attorneys filed a Summons in the Grand 13 Court to discharge the Restraint Order and for further and other Orders as this 14 Honourable Court deemed appropriate. 15
On the 16th December 2010 Linwood Attorneys filed an ex parte Summons with a 16 supporting affidavit of the same date to come off the record pursuant to GCR O.67 17 r.6. 18
On the 20th December 2010 the Chief Justice granted Linwood Attorneys leave to 19 come off the record on behalf of the Defendant. 20
On the 31st January 2011 Campbells filed a Notice of Appointment as attorneys for 21 the Defendant. There followed considerable correspondence between the parties’ 22 Ruling. Cause No. POCL 7 of 2010. Daisy Rojas Perez v. Attorney General. Coram Quin J. Date: 17.6.2011 Page 8 of 10 attorneys regarding the Defendant’s proposed application to discharge the Restraint 1 Order. 2
On the 8th June 2011 the Defendant filed an affidavit in support of an application 3 under s.46 of the POCL 2008, which affidavit had been sworn on the 23rd May 4
Attached to this affidavit but not currently on the Court file were six exhibits 5 entitled DRP1-DRP6. On the morning of the hearing of the 14th June 2011 the 6 Defendant provided the Court and Senior Crown Counsel with a hearing bundle 7 which included many documents which were not before the Court on the 20th 8 October 2010, and subsequent correspondence between the parties. 9
Senior Crown counsel submits that there was continuing correspondence between 10 the parties’ attorneys in March and April 2011 in relation to the date and form of 11 the Defendant’s proposed application to have the Restraint Order discharged. 12
On the 6th June 2011 the Respondent’s office was served with an unsealed affidavit 13 of the Defendant, together with five folders of exhibits. 14
On the 7th June 2011 the Defendant’s attorneys requested the return of the 15 documents and later on that day the Defendant’s attorneys requested the immediate 16 return of the documents and asked that the documents not be copied. 17
On the 8th June 2011 six charges were laid against the Defendant before the 18 Summary Court of the Cayman Islands which included the removal, the transfer, 19 and possession of criminal property, obtaining a wire transfer by deception and 20 false accounting, all offences contrary to POCL. The Defendant is summonsed to 21 appear before the Summary Court on the 2nd August 2011. 22 Ruling. Cause No. POCL 7 of 2010. Daisy Rojas Perez v. Attorney General. Coram Quin J. Date: 17.6.2011 Page 9 of 10
Senior Crown counsel has informed the Court that he has been taken by surprise, in 1 that, his communications with the Defendant’s attorneys led him to believe that 2 there was going to be a timetable for the filing of evidence by the parties. 3 Furthermore, the Court understands that the parties were in discussions regarding a 4 possible Public Interest Immunity (PII) application. 5
Senior Crown counsel has confirmed that the AG’s chambers does have evidence to 6 update the Court on these proceedings, but that they were waiting to receive the 7 Defendant’s material evidence before submitting their evidence in response, and 8 therefore that is the reason why that evidence is not before the Court today. 9
Having read the recent correspondence between the parties’ attorneys and heard 10 both counsel I deem it only fair to grant the Attorney General’s application for an 11 adjournment of the Defendant’s application pursuant to s.46(4) of POCL to 12 discharge the Restraint Order, or on any other ground. Apart from a short delay, the 13 Defendant will not be prejudiced and can make her submissions on the recent 14 material included in the hearing bundle and rely on any affidavit evidence or 15 exhibits, she wishes to put before the Court. 16
It will also afford the Attorney General the opportunity to file the evidence which 17 Senior Crown counsel has received from the United States, and the evidence which, 18 presumably, supports the charges laid before the Summary Court on the 8th June 19
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I should add that, subject to any restrictions which may be the subject of a PII 21 application, the Attorney General should provide the Defendant with full and frank 22 disclosure of all relevant evidence which supports the continuation of the Restraint 23 Order in order to give the Defendant a full opportunity to consider it and file any 24 Ruling. Cause No. POCL 7 of 2010. Daisy Rojas Perez v. Attorney General. Coram Quin J. Date: 17.6.2011 Page 10 of 10 evidence in response to it. This relevant evidence should be provided to the 1 Defendant’s attorneys as soon as reasonably practicable. 2
I would request that the parties’ counsel agree directions for the filing of evidence 3 and for the hearing of the Defendant’s application to discharge the Restraint Order 4 and the Attorney General’s application to continue the Order. If they cannot agree 5 directions as to the future conduct of these proceedings, I will hear counsel at a 6 convenient time. 7
Should the Defendant wish to apply for any variation of the Order to allow for 8 reasonable living expenses or to enable her to carry on her profession or 9 occupation, I will hear counsel at a time convenient to both parties. 10
Finally, I reserve the question of the costs of the hearing dated the 14th June 2011. 11 12 13 Dated this the 17th day of June 2011 14 15 16 17 18 Honourable Mr. Justice Charles Quin 19 Judge of the Grand Court 20