Auditors reported unsecured CIFA ‘loans’ of $1.2m
(CNS): An administrator with Rankin Berkower, who conducted the audits of the Cayman Islands Football Association, told a jury this week how he spotted red flags during the 2014 annual review of the CIFA books and reported his concerns to the Anti-Corruption Commission. -corruption. As Canover Watson and Bruce Blake’s fraud and money laundering trial entered its third week, the crown focused on the CIFA loans that turned into sponsorship deals. Prosecutors allege these were part of a scheme by Watson and Blake to hide money stolen from regional football body CONCACAF.
The crown also suggests that these “fake loans” are also linked to the fortune of Watson and Blake’s close friend, Jeff Webb. The real loan CIFA had with Webb’s former local employer, Fidelity Bank, was a stumbling block to his promotion from CIFA president to CONCACAF president and FIFA vice-president. This loan was guaranteed by CIFA land. But as well as making Webb look bad, it undermined CIFA’s chances of securing a FIFA grant for its Center of Excellence.
An email between bank executives which was shown to the jury revealed that the bank was aware that an upcoming change in FIFA rules meant that no regional associations would receive grants for development projects if the affected properties were cluttered.
“Given Jeff’s position and since the security we hold for the CIFA facility is indeed part of the GOAL project, Jeff needs to get out of a sticky situation to avoid criticism,” a bank official wrote to a bank. other senior manager. They also discussed the likelihood of Webb succeeding Sepp Blatter as FIFA President, “provided there’s no dirt on ‘Webb and he bides his time.
Shortly after this correspondence within the bank, Watson, who at the time was a CIFA and CONCACAF official, told bank executives that the $1.6 million loan from CIFA would be repaid. by the end of 2013, some of the money from a sports equipment manufacturer. The email communication also showed that Watson had promised the bank two payments of $600,000 to reduce the balance of the CIFA loan and, more importantly, to obtain the lifting of the lien on the CITA center by the bank.
As promised, two payments of $600,000 were made from CIFA’s account to Fidelity before 2013, and as a result, the bank lifted its grip on the football seat and landed in Prospect.
When Rankin Berkower’s Matthew Adam spoke this week, he told the court that when the two unsecured loans of $600,000 each from Panama-based Cartan Int’l and Forward Sports appeared in the 2014 accounts of the associations, that worried him. He said the loan agreements were unusual because no one from CIFA but Blake signed them and because the two companies lending the money were based at the same address in Panama.
When he questioned the loans, he was told that they had both been converted into sponsorship agreements without any liability to CIFA. But Adam said to complete the audit he still needed written confirmation from the lenders or a letter of forgiveness to send directly to his auditing firm. He explained that the auditors needed documents directly from the lenders confirming the change in circumstances.
Testifying in chief, he told the court that instead he received a letter from Blake purporting to have been written by David Elmore, a representative of Cartan Int’l, saying that CIFA did not owe any money and n had no responsibility for the loan. . Adam was unaware that the companies were both shell companies which the Crown said were created and secretly owned by Watson.
Adam said he tried calling Elmore on the Panamanian number on the letter but was unable to make contact, so he contacted the US-based company Cartan instead. He then learned that Panama-based Cartan Int’l was in no way related to US-based sports tour operator Cartan, which he learned had a long-standing sponsorship deal with CIFA but did not never entered into a loan agreement. He also learned that Elmore had not signed the letter the listeners had inquired about.
When nothing came from Forward Sports, Adam said he managed to get CIFA contact details for Shakeel Khawaja. When he emailed Khawaja asking for a loan forgiveness letter, he received an email in which the Forward Sports sales agent said he knew nothing at all about a loan or a sponsorship agreement between CIFA and any Forward Sports company.
Given the disputes and contradictions over the loans, Adam said he arranged a meeting with Blake but also alerted the Anti-Corruption Commission. When he met Blake, he said, Watson was also present. He showed the men email correspondence he had received from Elmore and Khawaja, which contradicted claims made by Blake in his role as CIFA’s general secretary at the time, and told them that he reported it to ACC.
Adam said Blake seemed very nervous and concerned about the correspondence being shown to him, but Watson was calm and told him he had all the documentation, which would explain everything.
Watson then met with Philip Rankin, a partner of Rankin Berkower, and showed him a collection of documents, which he said explained the various ties and due diligence on the two companies that had made loans to CIFA that were converted. in sponsorship agreements. In a complex setup, Watson also showed Rankin various documents which appeared to indicate that at least one of the loans converted to sponsorship came from money that came to Watson for unexplained work for Cartan which was paid to CIFA instead of Watson.
The case continues.