On Friday 3rd June 2016, in a press release issued by the Government Information Service, the Government of Grenada announced that Mr. Charles Liu, a citizen of Grenada under the Citizenship by Investment programme, and one of the significant investors in the proposed Mt. Hartman Project, has been charged with violating anti-fraud laws in the USA.
The release also said that Government through its diplomatic and other channels was monitoring the situation and that it “stands ready to take appropriate action as the facts are ascertained”. Ms. Lisa Wang, Charles Liu’s wife was also charged in the same case.
In another release issued on 13th June 2016, the Government stated that it does not expect any negative fallout from the case against Mr. Charles Liu, because the matter has nothing to do with the Grenada CBI Programme.
The NDC made a swift reply through its political leader, expressing its strong dissatisfaction with the way the Government of Grenada is treating with the issue and calling on government to take certain immediate steps to minimise the negative impact that this development could have on Grenada’s image.
Among the steps the NDC says government should take are: (a) the revocation of Liu’s citizenship; (b) revocation of any diplomatic status or instrument he may have been given as Grenada’s commercial attaché to the embassy in Beijing; (c) revocation of the license granted to United Demei Investment Company Ltd., as an international marketing agent for the CBI programme. This company is directly connected with Charles Liu and Lisa Wang and is specifically named in the SEC’s charge against them as one of the vehicles through which Liu and Wang misappropriated the funds of their alleged victims.
Many Grenadians agree with the steps advocated by the NDC. Yet many, especially those who expect to personally benefit from Liu’s continued involvement in the Mt. Hartman project and the NNP ‘doppelgangers’ continue to defend the government. Others for the time being continue in their conspiracy of silence.
In the face of the deafening silence from those who ought to be voicing disgust with government’s stated intent to continue to do business with an accused fraudster, once again, the NDC is the lone voice crying in the wilderness, exposed to be devoured by those seeking to advance their narrow, selfish agendas.
An article written by Mr. Jerry Edwin and published on Grenadabraodcast.com on 17th June 2016 viciously attacks the National Democratic Congress and specifically, its leader, Sen. Nazim Burke. Mr. Edwin’s article might have been funny and witty were it not such a crude attempt to trivialise a matter that has caused so many Grenadians disquiet. Far from funny and genius, the article is just simply objectionable.
The article dismisses NDC’s position as mere opportunistic politicking and describes NDC’s concern for the negative impact this Liu affair can have on Grenada’s image as “fake anguish”. It relies on irrelevant matters, half-truths, sarcasm and innuendo to trivialise the NDC’s reaction to this national embarrassment and to detract from the substance of NDC’s message.
Using these tools of distraction, Mr. Edwin sidesteps legitimate concerns and in defending the indefensible, he shoots the messenger. He diagnosed Nazim Burke with “Autoenvy”, apparently unaware that Burke with the benefit of 100% motor vehicle duty concession, replaced his second hand Mitsubishi Outlander with a second hand Nissan Murano, when he could easily have purchased a Hummer. He compares Charles Liu’s situation with the Sea Wang World matter which in fact, caused the country no loss nor brought it into disrepute, except if one relies on the NNP’s “political algebra”.
As if to justify Liu’s conduct, Edwin suggests that fraud is common within the EB5 programme in the U.S. (similar to our CBI programme), therefore Grenada is no different. He fails to point out however, that unlike Grenada, in the U.S. there are functional systems in place to detect fraud and to bring the perpetrators to justice. In fact, the US has a higher rate of detection and prosecution for financial fraud than most other countries. On the other hand, never once has a fraudster of this kind been brought to justice or ordered to pay restitution in Grenada.
Much is also made of the fact that Liu and Wang are charged with civil, not criminal fraud. The Securities & Exchange Commission is the regulatory body in the United States charged with responsibility for, among other things, protecting investors from fraudulent schemes.
The SEC also has enforcement authority that allows it to bring enforcement actions against persons who violate anti-fraud laws. In addition to its civil law enforcement authority, the SEC works closely with other law enforcement agencies in the U.S. and internationally to criminally prosecute fraudsters.
There are certain factors that would inform whether the SEC proceeds with a civil case against a person, in preference to pursuing criminal charges.
These factors include:
(1). It takes more resources in terms of time and expense to prosecute a criminal case as opposed to a civil one;
(2). In many instances, even when persons are charged criminally with white collar crimes, they get short prison terms or sometimes none at all;
(3). In civil cases, the fines imposed are often times higher than in criminal cases and in that regard; there is still an element of punishment;
(4). There is a greater chance of victims recovering lost monies in civil cases. The accused persons often negotiate a settlement rather than go through a trial. This negotiated settlement usually includes restitution to victims;
(5). There is a lesser likelihood of criminal charges if the victims are not American citizens or residents. Charles Liu’s victims are Chinese nationals.
The fact that Charles Liu and Lisa Wang have, for the time being not been charged criminally does not make the fraud they are accused of any less fraudulent, any less unlawful or any less injurious to their victims. It simply means that for now, the SEC has decided to pursue them in the civil courts.
The likes of Mr. Edwin would have Grenadians believe that the National Democratic Congress is against foreign investors and even the Mt. Hartman project. However, Grenadians are aware that despite all its flaws, the NDC brought legitimate investors such as Rex Grenadian, WRB Enterprises, Baron Foods and Sandals to Grenada, creating sustainable jobs; and while in office it looked for credible investors interested in the Mt. Hartman area.
According to Mr. Edwin, the NDC is “abusing the megaphone of public opinion” and has found a victim of Charles Liu and Lisa Wang that does not appear in the SEC’s case against them. That victim according to him is “poor little Grenada’s precious reputation”. Is this gentleman for real?
Here are the facts:
(1). Liu and Wang are both charged with defrauding Chinese investors of US$27m.
(2). Liu is a citizen of Grenada under the CBI programme and possibly diplomat for Grenada. His appointment as commercial attaché permits him to seek investment opportunities abroad for Grenada.
3). Charles Liu is a major investor in the Mt. Hartman Project.
(4). Lisa Wang is Liu’s wife and CEO of United Demei Investment Company Ltd, but it is unclear whether she too is a Grenadian citizen.
(5). The United Demei Investment Company Ltd. is licenced by the Government of Grenada as an international marketing agent for the CBI programme. Lisa Wang is the point person for the company as agent for the CBI programme.
(6). The United Demei Investment Company Ltd. is specifically named on the SEC charge sheet as one of three companies through which Liu and Wang are accused of soliciting funds from their victims and then misappropriating those funds.
(7). In China, the United Demei Investment Company is promoted as “a consulting service company specialised in American and Grenadian investment immigration, medical overseas and real estate overseas services”.
(8). All business that United Demei Investment Company attracts in China whether for the Grenada investment or the America investment, are accepted by the company’s team in California, USA. (Media release from China dated 17th February 2015).
(9). The SEC charge relates to funds collected by Liu and Wang for a proton cancer treatment centre in California. An identical centre is proposed for the Mt Hartman project.
(10). According to the charge, Liu and Wang diverted US$11,845,000.00 to 3 companies, including United Demei Investment Company Ltd. and misused those funds.
Given the above facts, to suggest that there is no connection between Liu’s and Wang’s actions that led to them being charged and the Grenada project is plainly wrong.
Indeed, with this scenario there is a real possibility that funds raised for the California project ended up right here in Grenada. NDC’s call for a revocation of Liu’s citizenship and credentials and for an investigation is therefore quite in order.
One cannot forget the very negative impact and the sheer shame and embarrassment we suffered in the recent past from doing business with international fraudsters, crooks and criminals. One cannot forget too, the fact that in all cases, these fraudsters were allowed to do business in and with Grenada by a Dr. Mitchell-led government, which included some of the same persons who are in government today. We simply cannot go down that road again.
Between 1995 and 2004, Grenadian Citizenship and diplomatic status were given to fraudsters and crooks (many of whom ended up in jail) posing as foreign investors. We have not yet recovered from the effects of the exploits of Van Brink, Viktor Kozeny, Laurent Barnabe, Rita Regale, Robert Shirving, Douglas Ferguson, Eric Resteiner, Daniel Tepole and Gary Melosovich, to name a few.
Grenada acquired an unprecedented level of notoriety from the recklessness of the then (and now) administration, that allowed these common crooks to come here and pose as investors.
Today, students of law, finance and business learn about the Grenada experience with First International Bank as the biggest swindle of all times in the offshore banking sector. Documentaries have been made about us and as of yesterday, Amazon.com was advertising the last copy (with more on the way) of Owen Platt’s book One Big Fib: The Incredible Story of the Fraudulent First International Bank of Grenada. Fifteen (15) years later, that book sells like hot bread and butter.
While some may be genuinely oblivious and others may pretend not to know of the image we have abroad, as a place where crooks can freely operate; there are those of us who are fully aware, and we do not like it. Mr. Burke and the NDC must be applauded for taking a strong stand on this matter.
The potential fallout from the belief that Grenada is once again open for business with fraudsters is not limited to us acquiring a bad image internationally. The country can be negatively impacted in more direct ways.
Firstly, legitimate investors will be reluctant to do business here. Secondly, it could hurt the relationships between our local commercial banks and their overseas correspondent banks which may be uneasy about the source of large sums of money being transferred to Grenada. In turn, it will be difficult for legitimate businesses, including local ones, to transact business with relative ease.
There is another equally grave consequence that can flow from the government’s failure to take quick and decisive action on this matter. One of the accusations levelled against the Grenada government in relation to the First International Bank debacle, is that when the FBI begun investigating Van Brink and his partners in crime, it sought assistance from the authorities here.
The FBI accused the authorities of not co-operating and blocking its attempts to obtain information on Brink and company. During a lecture given in January 2016 (can be found on You Tube), in speaking to the challenges faced by agencies such as the SEC and the FBI in doing their work, the presenter dealt with the issue of non-co-operative foreign governments that protect suspected fraudsters. Guess which country was the first example the presenter named as un-co-operative. Oh yes Mr. Edwin, poor little precious Grenada!
Mr. Liu is a Grenadian citizen possibly with diplomatic standing. Is the government protecting him by refusing to revoke his citizenship and any diplomatic appointment he has? Are we again going to be cited as an un-co-operative country protecting fraudsters? What do we have to gain as a country from continuing to hang on to this relationship with Charles Liu? Is it that certain high ranking officials owe him a return favour?
Surely, as an alleged fraudster, he no longer has the standing to go out there and attract legitimate investors for Grenada. If according to the SEC’s complaint, in 2 years Liu could only raise US$27m, how long will it take to raise US$2bn for this Mt. Hartman project, especially now that he is saddled with a fraud charge?
We all must fully support the calls made by the NDC as they are quite in order. We cannot permit Dr. Mitchell and the NNP to carry on business as usual because business as usual for them, means shame and disrepute for Grenada.
The likes of Mr. Edwin are encouraged to rethink their position and for once, put precious little Grenada first. The religious community must join the call on grounds of morality and decency. The business community including the Bankers’ Association should join in too, on ground that government’s stance can hurt Grenada’s image as a suitable place to attract legitimate business.
Civil Society Organisations should join the NDC’s call as the social conscience of the nation. The Trade Unions’ Council too should join because any impression that we are open to doing business with alleged crooks and fraudsters and will even protect them, will drive away legitimate businesses and consequently, jobs for the ordinary people. Let us all open our eyes and our mouths. Stop the conspiracy of silence.
Finally, is Mr. Edwin as objective and disconnected from Charles Liu’s Mt. Hartman project as he will have us believe? Does he or anyone close to him work for the developers of the Mt. Hartman project?