The Financial Intelligence Unit v Mares Corporation (Civil Side No. 63 of 2001)  SCSC 59 (18 September 2011);
THE REPUBLIC OF SEYCHELLES
IN THE SUPREME COURT OF SEYCHELLES HOLDEN AT VICTORIA
Civil Side No. 63 of 2001
The Financial Intelligence Unit=================================Applicant
Barry Galvin, State Counsel, for the applicant
Frank Elizabeth for the respondent
The applicant, a statutory body, is seeking in this application, pursuant to section 4 of the Proceeds of Crime (Civil Confiscation) Act, 2008, herein after referred to as POCA, an interlocutory order, restraining the respondent or any person having notice of this order, from disposing of or otherwise dealing with the sum of US$1,117,724.95 or any part thereof, hereinafter referred to as specified property, in the respondent's account with BMI Offshore Bank Seychelles. The applicant seeks another order pursuant to section 8 of POCA. And that is to appoint Mr Hogan as a Receiver of the said specified property to hold it on such terms as the court may direct.
The grounds of this application are stated to be that the respondent is in possession or control of specified property that constitutes, directly or indirectly, benefit from criminal conduct. Secondly that the respondent is possession or control of specified property that was acquired, in whole or in part, with or in connection with property, directly or indirectly, constitutes benefit from criminal conduct. And lastly that the value of this property is not less than R50,000.00.
The facts which the applicant asserts give rise to the foregoing grounds are that the manner in which the funds in question were transmitted to the bank account did not accord with the purported commercial activity. The failure of the respondent to furnish information and material to establish a legitimate source of the property. The false and misleading information supplied by or on behalf of the respondent set out herein. The fact that the alleged commercial documents that is to say the sales contracts and invoices supplied to BMI Bank as described herein are forgeries. The fact that the alleged forged documents as supplied by counsel for the respondent to the FIU as described herein are forgeries. The fact that on a balance of probabilities the forgery of these documents in those jurisdictions it was committed, amounts to a serious crime. The fact that these documents were knowingly and fraudulently uttered in Seychelles contrary to Section 339 of the Seychelles Penal Code. The fact that in all the circumstances the Respondent is guilty of money laundering in Seychelles contrary to section 3 of the Act of 2006/2008.
The affidavit of Mr Liam Hogan in support of those grounds and asserting those 'facts' was filed in support of this application. What Mr Hogan has basically done in his affidavit is to offer his opinion and the reasons why he holds such opinion, on the documents submitted by the respondent's attorney showing the transactions that the respondent claims to have been engaged into and which were responsible for the transfer of the said funds to the respondent's account with BMI Offshore Bank Seychelles. Mr Hogan's opinion is that the documents submitted by the respondent are forgeries intended to cover up the crime of money laundering committed elsewhere and here in Seychelles by the respondent. The other piece of evidence is that the applicant has failed to find a genuine address for the respondent as well as LEXICO LLC. The applicant further relies on the fact that the money remitted to the respondent's account was remitted in installments of US$50,000.00 each, with the final amount being less than that amount which, in the opinion of Mr Hogan, was intended to evade money laundering controls.
Mrs Svetlana Vasileva, a representative of the respondent swore a lengthy affidavit in response to the allegations made by the applicant and in part states in paragraphs 35 to 42 as follows:
'35. I aver that Eso Trade was incorporated 11th April 2005 in Varna, Bulgaria and the company is in good standing and has licence from the Ministry of Agriculture to trade. (Copy of company documents and licences attached which is in Bulgarian language but the Certificate of Good Standing and licences have been translated into English and attached and marked P20.) 35. By way of clarification, I further state that Mares Corp is engaged in the business of trading in commodities such as Rice Lentils and Egyptian White Kidney Beans which Mares Corp was about to import from Pakistan, Vietnam and Egypt for Eso Trade Ltd after receiving payments for the same from its agent namely LEXICO LLC which had received the payment from the client namely Eso Trade Ltd when the company's account was frozen by FIU making it impossible for the company to trade. 36. I aver that the source of funds for the payments made in Mares Corp's bank account comes from Mares Corp's client namely Eso Trade Ltd through its agent LEXICO LLC of 330 Robert Street, Suite 203, East Hartford, Connecticut, USA, 06108-3654 represented by Mrs Elena Frank. 37. I aver that the the funds transferred in Mares Corp bank account comes from the account of LEXICO LLC at HSBC Bank, PLC, 233 Republic Street, Valletta VLT-05, Malta where stringent anti-money laundering compliance test was conducted before the money got the green light to be transferred to the account of Mares Corp at BMI (Seychelles). 38. I aver that from HSBC Bank the money was then transferred to the account of Mares Corp Account at BMI Bank (Seychelles). 39. I aver that the total amount transferred corresponds with the Proforma invoices although admittedly there might be a discrepancy of USD 224.95 which is bank charges charged by BMI Bank. 40. I aver that the sum of USD 375, 000.00 was transferred from Cibank for beans; USD 517,000.00 was transferred from UniCredit Bulbank for rice and USD 225,000.00 from UniCredit Bulbank for lentils from Eso Trade Ltd to LEXICO LLC HSBC Bank and to Mares Corp BMI BANK. (Refer to exhibits P.5, 6, 7 and P19). 41. I aver that ll the sums were originally transferred by Eso Trade Ltd to LEXICO LLC and LEXICO LLC then transferred the money to Mares Corp at BMI Bank (Seychelles). 42. I aver that LEXICO LLC is the agent for Mares Corp.'
Section 4(1) of POCA mandates this court, to grant the order sought, 'if it appears to court, on the evidence, including evidence admissible by virtue of section 9, tendered by the applicant, that a person is in possession of property that constitutes, directly or indirectly, benefit from criminal conduct; or was acquired, in whole or in part, with or in connection with property that, directly or indirectly, constitutes benefit from criminal conduct' and the value of such property exceeds R50,000.00 'unless, it is shown to the satisfaction of the Court, on evidence tendered by the respondent that the property in question does constitute, directly or indirectly, benefit from criminal conduct and was not acquired, in whole or in part, with or in connection with property that constitutes benefit from criminal conduct.'
There is a duty cast on the applicant to show to the court that the property in question 'appears to the court' to be from criminal conduct or benefit from criminal conduct. Mr Galvin states that the standard is not on a balance of probability but on somewhat a lower standard equivalent to what he called probable cause. With regard to section 9 evidence of belief it is clear that the applicant must satisfy the court that 'there are reasonable grounds for the belief aforesaid'. It follows the grounds must be disclosed to the court upon which the Director or Deputy Director may present section 9 evidence of belief. Applications under section 3 and 4 shall be only made 'after reasonable enquiries and investigations and on the basis of credible and reliable information' that there are reasonable grounds for suspecting the statutory grounds exist for this application to be brought. Section 9(3) of POCA states,
'(3) The standard of proof required to determine any question arising under this Act, other than proceeding for an offence contrary to section 23 shall be that applicable in civil proceedings.'
Whether one applies section 9(3) of POCA and determines the question before me on a balance of probabilities or one applies it differentially, that is only to the respondent's case but apply a lower standard to the applicant's evidence as Mr Galvin would have this court do, I am satisfied on the facts before me, that there can be only one answer. The respondent has explained the source of the money in question. No attempt was made to cross examine the deponent of the respondent's
affidavit, leaving that evidence virtually unchallenged. Against that evidence and explanation is the evidence of the applicant which does not answer at all the respondent's evidence and explanation.
Other than Mr Hogan 'interpreting' the information supplied by the respondent, and forming his opinion of it, I do not see any evidence of credible and reliable information obtained by the applicant in its inquiries and investigations over this matter which would suggest that the property in question is benefit from criminal conduct. In the result I dismiss this application with costs.
Signed, dated and delivered at Victoria this of September 2011