Dealing with modern financial transactions: Jamaican authorities playing catch up; Bahamas accused of facilitating "improper" financial transactions

I just landed back in Jamaica after two weeks in Nassau.

This morning I read that PM Golding has "mandated" the Finance Ministry to convene a meeting with the Attorney General and the Financial Services Commission (FSC) to help "resolve" issues related to these schemes and "help to formulate clear guidelines on the way forward for unregistered investment clubs" (see Gleaner article). A report is to be submitted by January 7. There seems to be more than an element of dog chasing its tail in these movements after recent court rulings and issuance of "cease and desist" orders againts various "investment clubs", including Cash Plus and OLINT (see cartoon from Jamaica Observer). Add to that some signs of disarray as the Gleaner and RJR also report that the new Chairman of the FSC, Michael Hylton, the former Solicitor General, has stepped down indicating he cannot remain because of "policy differences" (see RJR report). Some of the clubs have taken steps to relocate themselves: OLINT had already moved to Turks and Caicos, and Higgins Warner report that it has closed its operations in Jamaica, relocated to Argentina, and is seeking to relocate to the United Arab Emirates.

If you are interested in a seemingly disinterested view on "alternative investment schemes" you can keep up with news on "Cash plus Investment" (which I have added to the links for Interesting Caribbean Blogs).

Unrelated in a direct sense but interesting is a report in The Bahamas Nassau Guardian (see report in Jamaica Observer) that it has again been cited as a domicile for "improper" financial transactions, this time involving billionaire Igor Olenicoff in hiding millions of US dollars from the US tax authorities. The IRS The Internal Revenue Service (IRS) claimed that between 1998 and 2004 Olenicoff hid more than US$346 million in Bahamian offshore bank accounts. The case is Olenicoff's second brush with the IRS. His company Olen Properties paid US$272,024 to settle IRS claims for 1994 to 1996, after the agency originally sought US$148 million in back taxes and penalties from his company. For more on Olenicoff see article in Forbes magazine. He is no stranger to controversy and was also recently involved in speculation as to whether his company was a front for Iranian financial interests.

These islands have long been a financial playground and it will be interesting to see if the games go on as usual or if there is some change on the way.