JAMAICA: OLINT'S BOSS ARRESTED IN TURKS AND CAICOS

UNCLAS KINGSTON 000121

SENSITIVE
SIPDIS

STATE FOR WHA/CAR (BPREMONT/ACADIEUX, VDEPIRRO, WSMITH)
WHA/EPSC (MROONEY, FCORNEILLE)
EEB/ESC/IFD/EPC (MMcMANUS)

SANTO DOMINGO FOR FCS AND FAS
TREASURY FOR ERIN NEPHEW

E.O. 12958: N/A
TAGS: ECON TRYS ENRG EFIN EINV ETRD EAIR IADB IBRD IMF
KCOR, KIPR, XL, JM
SUBJECT: JAMAICA: OLINT'S BOSS ARRESTED IN TURKS AND CAICOS

Ref: (A) KINGSTON 91 (021918Z FEB 09)
(B) 08 KINGSTON 704 (042015Z AUG 08)
(C) 08 KINGSTON 648 (221203Z JUL 08)
(D) 07 KINGSTON 1336 (042044Z SEP 07)


1. (SBU) Summary: After months of investigations, David Smith, head
of the alternative investment scheme OLINT, has been arrested by the
Turks and Caicos Islands (TCI) police. Charged on eight different
counts, he has been released on USD 1 million bail and is expected
to return to court in August. This action was the latest setback
for Smith and his beleaguered scheme, as only three weeks ago the
TCI High Court refused to lift a freeze order on his assets. The UK
Privy Council also handed down a ruling allowing Smith's account at
National Commercial Bank to be closed. Matters are expected to
become even more interesting, given the dissemination of an e-mail
purporting to include a list of OLINT investors as well as written
dialogue involving a number of influential Jamaicans, including
government members. End summary.

Smith's Woes Deepen
--------------


2. (SBU) Following months of criminal investigations, reputed
financial genius and head of the failed alternative investment
scheme OLINT Corporation (reftels A,B,C),David Smith, was arrested
by the Turks and Caicos Islands (TCI) police on February 6. He has
been charged with: (1) two counts of uttering forged documents; (2)
four counts of false accounting; and, (3) two counts of theft.
Smith has been released on USD 1 million bail. This latest
development comes less than a month after the TCI High court refused
to lift a freeze order on his assets. The court had ruled that the
application could be renewed after March 11, but ordered that
details of the judgment should not be released to the public. Just
last month the embattled investment scheme suffered a setback to its
legitimacy, when the UK-based Privy Council gave National Commercial
Bank (NCB) the green light to close the scheme's accounts (reftel
A). A spokesman for the TCI police also suggested that they might
seek assistance from other jurisdictions, including Jamaica.
However, local police have reiterated that they have not yet
received any formal complaints of fraud from Jamaica against the
OLINT boss.

Investors Losing Hope
--------------


3. (SBU) After the latest developments, even some of Smith's most
faithful followers are beginning to accept that their investments
might well be lost. This in spite Smith's messianic overtures on a
radio program last week, when he again called on Jamaicans to pray
for a successful outcome to his legal woes. Smith went on to liken
his current situation to the biblical story of Jonah and the whale.
Asked to comment on what Smith meant by this latest
characterization, one analyst opined that perhaps he needed a period
to contemplate, while another said he knew people were praying and
keeping hope alive. One businessman, who admitted that he took a
heavy loss, said it was easy for him to move on, as unlike a number
of investors he had not mortgaged his properties to invest in the
faltering scheme. Another US-based investor, Dr. Garth Walker, who
claims to have invested USD 2.4 million, failed in his bid to have
the Supreme Court bar NCB from paying over the money it was holding
in accounts maintained by OLINT. Walker told the court he feared
that if the money were paid over to OLINT it could dissipate.

JLP-OLINT Nexus?
--------------


4. (SBU) The OLINT saga is set to take another interesting twist, as
a series of e-mails have emerged linking the ruling Jamaica Labour
Party (JLP) with the floundering investment scheme. The e-mails
ostensibly include conversations between now prominent government
officials, JLP financiers, and OLINT functionaries during the period
leading up to and following the closely contested 2007 general
elections (reftel D). The e-mail chain also contains a list of
investors which includes some of the most influential Jamaicans.
More surprising though, is the list of financial institutions
purporting to be either directly maintaining accounts with the high
paying investment scheme or investing funds on behalf of their
clients. Ironically, one of the listed companies was, and continues
to be, the main critic of alternative investment schemes. Post will
provide further reporting and analysis via septel.

HEG