Haiti La fortune d'Aristide

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Follow Aristide's Money Offshore
Lucy Komisar, 2005-11-12
Haiti Democracy Project web page item #3319 (http://www.haitipolicy.org)

(Lucy Komisar is a New York journalist who since 1997 has written about
offshore bank and corporate secrecy and money-laundering and how the
offshore system enables international financial crime and corruption as
well as drug and arms trafficking, corporate fraud, terrorism,
dictatorship, and tax evasion. She is a founder and member of the
steering committee of the Tax Justice Network, an international NGO that
opposes offshore tax evasion by corporations and the wealthy.)
Add former Haitian President Jean-Bertrand Aristide to the long list of
corrupt and repressive officials who have used western banks and
companies and offshore tax havens to plunder their countries and launder
the stolen money.
Aristide and his associates looted government coffers, wrote checks to
front companies for nonexistent purchases, padded invoices to get
kickbacks from vendors, secretly owned companies that cheated Haiti of
taxes, and laundered the money they stole through shell companies and
secret bank accounts set up in the U.S. and the offshore tax havens of
Turks and Caicos and the British Virgin Islands.
Aristide's corruption is documented by incorporation papers, copies of
bank checks, bank transfer documents, invoices, company payment
statements, and sworn testimony.
Nearly $20 million has been documented as stolen between 2001, when
Aristide took office as president for the second time, and 2004, when he
fled or was forced out of the country according to varying accounts.
An administrative commission of inquiry says that at the beginning of
the chain of transfers, ex-director general of the government bank
Rodnée Deschineau moved $19 million in government funds through the
accounts of Aristide's governmental "Private Secretary Account." I have
copies of twelve checks drawn on that account from 2001 to 2002 and
cashed by the Bank of the Republic of Haiti for sums of $100,000 to
$600,000, and totaling $4,662,000.
The information, including the private secretary checks, was collected
by the Central Unit of Financial Information (UCREF), an agency set up,
as in other countries in recent years, to investigate money laundering,
and by the Administrative Commission on Inquiry (Commission d'Enquete
Administrative) headed by former Haitian senator Paul Denis. Denis was
charged by the current government with investigating corruption during
the Aristide years. His report says Aristide and his collaborators
transferred $17,489,415 abroad.
The Haiti investigators' mandate till now has been to look at events
during Aristide's second term. However, the attorneys in the lawsuit
have the option of using the discovery process to look into earlier
practices, including during the 1990s when Aristide was in exile, when
he continued his first term (1994 to 96), and when his close associate
Rene Préval was president (1996 and 2001). This would likely
considerably increase the amounts involved.
The documents are the basis of a Haitian government lawsuit filed in
Miami Nov. 2, 2005, under the U.S. RICO (Racketeer Influenced and
Corrupt Organizations) statute. The defendants are listed at the end of
this report. The Haitian government seeks to recoup the stolen money
plus penalties allowed by the law. Allegations also appear in a New
Jersey lawsuit filed by a former employee of IDT, a U.S.
telecommunications company accused of paying kickbacks to Aristide.
Payoffs to Aristide or his associates were also made by drug
traffickers, according to the testimony of half a dozen Haitians
indicted by the U.S. for helping the transit of cocaine through Haiti to
the United States.
Ira Kurzban, Aristide's Miami lawyer, declined to discuss any of the
facts or allegations in this report.
This investigation raises questions beyond the corruption of the
Aristide administration. It is a case study in how corrupt individuals
use the offshore banks and corporate secrecy system and
easily-incorporated shell companies at home, offshore and elsewhere to
loot their countries' treasuries and facilitate international crime.
There are about 70 offshore jurisdictions around the world. Among the
most famous are Switzerland, Grand Cayman, Luxembourg, British Virgin
Islands, Jersey, Liechtenstein. Offshore centers allow companies and
bank accounts to keep their records, including owners' names, secret
even from regulators and law enforcement. Some of them give this secrecy
right only to foreigners. Offshore financial centers are the parallel
financial services system for criminals: for corporate crooks and
fraudsters, tax evaders, drug and arm traffickers, terrorists and for
government officials who steal from their countries. The big
international banks all have offshore subsidiaries where they can hide
the money of clients who are evading taxes at home or committing other
crimes. And in many countries, including the U.S., it is relatively easy
to set up companies and bank accounts without providing documentation
about the true owners.
Corrupt Western business people, negligent or complicit bankers and
offshore tax havens – all the enablers of corruption -- make a lot of
money by helping the world's crooks. And provide the capital for those
crooks to stay in power, and they tilt the playing field against the
interests of firms and individuals who do business honestly.
The U.S. was involved in the Aristide case in two ways. The offshore
system was used to collect kickbacks or divert payments from American
companies that should have gone to the Haitian government. U.S. banks
moved large amounts of money for shell companies set up in the U.S.,
Haiti and offshore.
Haiti's Telecom Sector is estimated at 400 million minutes a year,
valued at $48 million.
Foreign phone companies that provide calling services to other countries
must pay for routing of their calls on the switching equipment of the
receiving country, which records the time of calls. Foreign companies
routinely pay a per-minute rate for these calls.
Teleco, Télécommunications d'HaVti, the Haiti national telephone
company, made agreements with telephone companies, including IDT
(Newark, NJ), Fusion Telecommunications (New York), Skyytel (Montreal),
Cinergy (Miami) and IPIP/Terra (Miami), granting them rights to connect
to Haiti phone lines. A suit by the Haiti government filed in Miami Nov.
2 says that payments to Teleco were diverted or kicked back to
Aristide's group through companies and bank accounts in the offshore
Turks and Caicos Islands and the British Virgin Islands. The offshore
companies, described as "agents" or "consultants" for Teleco, were used
for the benefit of Aristide and his associates.
The suit focuses on the years of Aristide's second term, but according
to a report by Christopher Caldwell in the July 1994 American Spectator,
kickbacks or diverted payments were nothing new. He says that when
Aristide was in exile in Washington, 1991-1994, he ordered that the
proceeds from Haiti's international phone traffic handled by the Latin
American division of AT&T be moved to a numbered bank account in
offshore Panama. He says Aristide used the settlement accounts of Teleco
in the US to finance his return to power in 1994 and that the practice
continued after he was returned to office in 1994.
The Caldwell report was cited by reporter Mary O'Grady in an article
about the telecom scandal in the Wall Street Journal last year. Asked if
it was true, Jim Byrnes, head of AT&T Corporate Media Relations, told
me, "AT&T declines to comment on a characterization in a media report
from 1994, or a paraphrasing of that characterization in The Wall Street
Journal." Caldwell did not respond to phone and email messages asking
for more details.
The recent case with the most evidence of Aristide corruption involves
IDT, a telecommunications company founded in 1990 and headquartered in
Newark, NJ. A former employee says the company vice-president told him
that IDT in 2003 agreed to pay kickbacks to Aristide's offshore bank
account in return for a favorable phone deal in Haiti.
Michael Jewett, who in 2003 was associate regional vice president for
the Caribbean at IDT, made the charges in a suit for wrongful dismissal
filed in federal court in Newark in October 2005. He said that during
discussions on the agreement, Teleco sought bribes in exchange for a
cut-rate price and that IDT agreed to kickbacks. Under U.S. law,
American companies would have to pay 23 cents a minute to Teleco for its
services in completing calls from the U.S. Teleco was offering 9 cents a
minute, with 3 cents kicked back.
Jewett said he'd been told that the initial Teleco proposal called for
IDT to first deposit funds in a U.S. bank account. He said IDT decided
that was too risky: that it might pay and get no agreement. (No honor
among thieves.) He said that Jack Lerer, IDT Executive Vice President
for International Business Development, went to Haiti in August 2003 and
met Aristide to work out an accord. A month later, he said, Lerer met
with Jewett and told him that the deal was that IDT would deposit money
in an offshore account set up for Aristide under the name Mont Salem, in
the offshore Turks and Caicos. Jewett said Lerer told him they had to
move fast so that they didn't lose the deal.
Jewett's suit says, "Plaintiff asked defendant Jack Lerer what Mont
Salem was, and he replied it was the private bank account of the
President of Haiti, Mr. Jean Bertrand Aristide, that had been created by
legal counsel for President Aristide, Adrian Corr, member of the law
firm Miller, Simons and O'Sullivan." Jewett testified that Lerer
appointed him the "go-between for all commercial correspondence between
Teleco Haiti and Mont Salem." He said Lerer told him "not to reveal the
details of the Teleco Haiti deal with anyone within IDT." Jewett says he
repeated protested that the deal was illegal. After it was completed, he
was fired.
In October 2003, IDT concluded an agreement with Teleco to pay 9 cents a
minute for Teleco's services. Instead of making payments directly to the
Haiti government company, it would make them to Mont Salem as Teleco's
agent. Under the agreement, Teleco would actually receive only 6 cents a
minute, and the other 3 cents would be kept by Mont Salem as kickback.
Teleco's records were falsified to show Mont Salem as the carrier, not
IDT.
In one six-month period, February to April 2004, IDT paid $302,588 in
kickbacks to the Aristide group, according to the Haitian government
lawsuit.
Mont Salem was in fact a shell company. Timothy O'Sullivan of Miller,
Simons and O'Sullivan was listed as Mont Salem's registered agent.
One of the functions of offshore law firms is to set up shell
companies – fake or front companies – that have no purpose other than to
carry out phony transactions to justify the movement of money into
crooks' secret accounts. Mont Salem's incorporation papers show
registration in June 2000 with capital of $5,000 – not much for a real
company. The owner of shares was "M & S Nominees Ltd," not the real
owners, just another name for Miller, Simmons, at the same address.
"Nominees" means "stand-in" or "strawman." Using nominees hides true
owners, a typical offshore ploy when the real owners are up to no good.
Mont Salem was, like all such shell companies, exempt from taxation. M&S
just had to promise that "the operation of the proposed Company will be
conducted mainly outside the Turks and Caicos Islands." The local folks
don't want corrupt companies and criminals doing business on their
doorstep, but they don't care if they loot other countries and people.
If IDT did as alleged, it violated U.S. Federal Communication Commission
rules. When it entered its agreement, calls from the U.S. to Haiti were
covered by the ISP, International Settlements Policy, which required
transparency and nondiscriminatory rates. That meant that U.S. carriers
had to pay 23 cents a minute for phone calls sent to Haiti. Companies
would have to inform the FCC and all competitors if they negotiated a
deal for lower rates. IDT didn't do that. After November, Haiti was
exempted from the ISP rules, so rates for U.S. telcoms were open to the
market.
If IDT did as alleged, it also violated the U.S. Foreign Corrupt
Practices Act, which bans payment of bribes or kickbacks to get foreign
contracts.
The Department of Justice, the Securities and Exchange Commission and
the United States Attorney in Newark, New Jersey, have initiated
investigations into Jewett's charges.
IDT's CEO James Courter and the company's attorney in the Jewett case,
Leslie Lajewski (Grotta, Glassman & Hoffman), both declined to return
phone calls and emails seeking comment. However, Courter has been quoted
publicly as saying that Jewett is a disgruntled ex-employee with no
evidence.
IDT, whose business plan apparently included lucrative deals with
Haiti's politicians, appears to play the same political game at home.
James Courter, a Republican New Jersey congressman from 1979 to 1991, is
a friend of Vice President *** Cheney. When Net2Phone, an IDT internet
phone company, went public in 1999, he arranged for Cheney to buy 1,000
initial shares. Cheney paid $15,000 for the shares and sold them the
same day for $26,574, a neat profit of 77.2 percent.
Republicans are prominent on IDT's board of directors, which includes
Jeane J. Kirkpatrick, a former ambassador to the United Nations; Jack F.
Kemp, the former New York congressman and Republican vice presidential
nominee; James S. Gilmore III, a former governor of Virginia; and Rudy
Boschwitz, a former senator from Minnesota.
Pete Wilson, the former governor of California, is on the board of its
IDT Entertainment subsidiary. And until he resigned in fall 2005,
William F. Weld, the former Massachusetts governor who plans to run for
governor of New York, was a director of the IDT board and chairman of
its governance committee. IDT corporate governance gets failing marks
from the Corporate Library and Institutional Shareholder Services, which
rate companies for institutional investors.
The lone IDT Democrat, Leon E. Panetta, a former congressman who was
chief of staff in the Clinton administration, is on the board of the IDT
Telecom unit.
After the suit, the IDT audit committee engaged the law firm Latham &
Watkins to look into the matter. In September 2004, IDT proposed to
Teleco that it end the agency agreement with Mont Salem and not allow
any agent to make or receive payments in violation of US Foreign Corrupt
Practices Act. But even then, Teleco billed IDT at 6 cents rather than
9, because its records showed that the agreed price. Later an increase
for all carriers in Aug. 2004 increased the IDT rate.
According to the Haiti lawsuit, a similar kickback deal was worked out
for Skyytel, a Montreal company. Its 2003 agreement with Teleco provided
for payment of 9 cents a minute to Mont Salem as Teleco's agent. Again,
Teleco would get only 6 cents a minute, with the rest sent as bribe and
kickback to the Aristide group. The Teleco records were falsified to
show Mont Salem as the carrier, paying Teleco 6 cents a minute. The
difference of $872,371 was paid as kickbacks.
Skyytel president Colin Povall denies that kickbacks were paid. He
explained how the deal was made. "Mont Salem approached us. I heard they
were going to go after IDT and not give us the original deal they made.
They [Mont Salem] were very secretive as to how they got their license
to do this. They said we're a licensed carrier."
He told me, "Mont Salem had the direct contact, we never met anybody in
Haiti. Fred Beliard is the only one I met. He was dealing with some
powerful people." Beliard, a Haitian is accused in the lawsuit of
participating in a scheme to misappropriate Teleco profits by granting
telecoms reduced rates in exchange for kickbacks.
Povall said, "Beliard had promised us a tremendous amount of capacity,
but I think they gave it to IDT. Our prices were between 7.2 and 8
cents; we made a margin of a half to a penny, which is reasonable in
this business. We were reselling Mont Salem's capacity. What deal they
had, they kept it very secretive. They always told us they were paying 6
cents. They had their partnership; they didn’t reveal it was through
Aristide. Adrian Corr, we only heard about him when it came to sign the
contract; his name was on the contract."
Why didn't Skyytel go directly to Teleco? Povall said, "In a perfect
world that would be great. You have to have the contacts. The way they
fast track is they had someone, Aristide placed people inside. Instead
of Teleco approaching and making a bid, they sought out
telecommunications companies to facilitate deals. Any teleco on earth
would die at the chance of selling minutes to Haiti. There are a lot of
minutes. If you have a decent margin. It doesn’t make sense that
Teleco would bother making those payouts."
He said, "When the FBI called us, we were more than cooperative. They
asked us to be witnesses, and we agreed on it. I told FBI I'll give the
entire file and you can check what we paid. We asked them to give us
immunity. We did nothing wrong, but how they construe it…." He added,
"Mont Salem, whatever they were paid, they must have paid their
partners. Their partners are not legitimate partners but government
partners."
One of Skyytel's advisors is Ron Beliard, who acknowledged by phone that
he is related to Fred Beliard.
Corr and Fred Beliard are defendants in the Haiti government suit.
Where did the money go? Who really owns Mont Salem?
I phoned Adrian Corr. I asked him who the real owners are. He said, "As
in Delaware, you can have nominee directors." [Delaware. Hmmm. It is
true that Delaware is the American "offshore" venue, where crooks from
around the world can set up companies, secure in the knowledge that
Delaware authorities will not fuss if the names of verifiable owners are
not listed. Delaware just collect the profitable registration fees.]
Were there nominees (fake owners) in this company? "I don’t know: you
put me on the spot," said Corr. "I don’t want to answer any questions ab
out this. I have lawyers retained; it's better you speak with them. It's
[former New Jersey] Governor Byrne's law firm." His attorney Kerrie
Heslin at Carella Byrne in Newark did not respond to numerous requests
for comment.
Neither did Mont Salem's Newark lawyer, Michael Weinstein (Podvey,
Meanor, Catenacci, Hildner, Cocoziello & Chattman). I told him, "I'd
like to know more about Mont (Mount) Salem: who owns it (the real
owners, not the nominees), what its business is, how it got involved
with Teleco." His reply was, "No comment."
The Haiti government lawsuit charges that IDT is not the only American
company that appears to have paid kickbacks or diverted payments.
Fusion, a telecommunications company run by former high-level Clinton
Administration officials, is said in the lawsuit also to have made a
suspect deal. Fusion's politically well-connected board has included
Marvin Rosen, former finance chair of the Democratic National Committee;
Massachusetts Congressman Joseph P. Kennedy II; and Thomas "Mack"
McLarty III, Clinton special envoy to Latin America. Kennedy and McLarty
resigned, and John Sununu, chief of staff for former President George
H.W. Bush, joined the advisory board.
The Clinton administration played an important role in offering asylum
to Aristide when he was forced out of the country by a military coup and
used its influence to get him restored to power in 1994.
Fusion Telecommunications (New York) began operating in Haiti in1999 and
provided services to Teleco until June 2002. The Haiti government
lawsuit says Fusion made some payments to CW Holdings, a company with a
bank account in Florida.
Fusion, through its representative, Howard Rubenstein Public Relations,
told me that in mid-2001, "Teleco notified Fusion Telecommunications
that Teleco had assigned its âAccounts Receivable to a factor identified
as CW Holdings." The money was "less than $1 million a month." Howard
Rubenstein Public Relations said, "Fusion was instructed to make
payments that it owed to Teleco to the account of CW Holdings in a bank
in Florida. In invoices that Fusion received from Teleco, Teleco
accounted for Fusion’s payments to CW Holdings as payments made to
Teleco. Fusion made payments to CW Holdings for three months until
Teleco instructed Fusion to make all future payments directly to Teleco.
CW Holdings acknowledged to Fusion that its factor agreement with Teleco
had ceased. Consistent with the instructions Fusion received from
Teleco, CW Holdings directed Fusion to make payments directly to Teleco
going forward. Fusion complied with this request."
Howard Rubenstein PR said, "At no time has Fusion Telecommunications
ever made improper payments or engaged in any improper activity. More
specifically, during the time Fusion Telecommunications did business
with Teleco, Fusion Telecommunications did nothing improper and made no
illegal payments."
Fusion did respond to a query about the cost of the minutes it paid to
CW Holdings and Teleco or about the location of CW Holdings.
Turks and Caicos may not have been the only offshore center used to
siphon off kickbacks. The lawsuit says that Cinergy (Miami) made
payments through Toscana Telcom, in the offshore British Virgin Islands.
Asked about that, Washington Cruz, owner of Cinergy, said on the phone,
"I have nothing to comment to you."
IPIP Communications (Henry Frandzi) and Terra (Joel Esquenazi), which
took up the IPIP contract, are also named as having made suspicious
contracts. James Dickey, attorney for both Miami companies, said he
could not discuss the matter. He said, "It is our practice that we do
not comment on any lawsuit at any time."
An interesting footnote is that the lawsuit says that in this period,
AT&T refused to divert payments offshore. AT&T spokesman James Byrnes
was more comfortable commenting on this than about the past story of
diverted payments. He said that he could not provide any details of what
had occurred, but emailed that, "AT&T has a firm policy against making
payment that can end up being used as bribes of foreign government
officials. Such payments would violate AT&T's internal code of conduct
as well as the Foreign Corrupt Practices Act."
Another case involves shell companies set up in Haiti, and not offshore.
They were Digitek, owned by Lesly Lavelanet, brother-in-law of
Aristide's wife, Mildred Trouillot Aristide, and VJLS Computer Services
and Accessories, owned by Marie Alice Valin and Sonia Jean Louis,
Haitians who were evidently nominees. UCREF discovered that VJLS was a
fictitious corporation with a fictitious place of business but that it
nevertheless received more than $16 million in public funds. Lavelanet
is a defendant in the Haiti government suit.
The lawsuit raises questions about payments that Digitek received from
Sam Ash, the New York musical instruments store. It says that on Jan.
28, 2002, VJLS wired $467,171 from its account at the Bank of the
Republic of Haiti to the account of Sam Ash Music Store at Chase
Manhattan Bank in New York to buy a stadium sound system. The system was
apparently delivered. The suit says that there was a commission of
$67,650 for Digitek and return of an overpayment of $24,850. On Feb. 26,
Sam Ash sent Digitek a check for $92,500 for the commission and refund.
David Ash, the company attorney, told me, "We didn’t know that the
Haitian government was involved. It is not uncommon for us to deal with
contractors. Contractors typically receive a profit on the materials and
labor they put into whatever project they are involved in. Digitek
placed an order. They said it had something to do with some festival. We
filled the order and delivered the merchandise. We delivered an
invoice."
He said, "It was correct, there was an overpayment. They put too much
money in my account. It can happen that a contractor says the bill is
going to be "x" amount, that includes my commission and profit on labor
and materials. We asked for instructions on what to do with the excess
money. The instructions were to send the money to Digitek."
Asked why the wire transfer had come from VJLS instead of Digitek, Ash
replied, "I don't know the relationship between them; it may have been
as client-contractor or as related companies. That is why we requested
instructions on where to send the check for the remaining funds." He
added, "If we were going to do a kickback, which I would not permit in
this company, we would have written an inflated invoice and given the
money under the table to someone." He pointed out that it was the
initial payment by Digitek, not the invoice by Sam Ash, that was
inflated. The question of what Digitek did with the $92,500 refund must
be asked of Lavelanet.
Aristide and his group were sophisticated users of the world's money
laundering techniques, one of which involves correspondent banking. A
correspondent account is an account that a bank has in the bank of
another country so that it can move its clients' money to and from that
country. Until the U.S. Patriot Act passed in 2001 after the discovery
that Al Qaeda had moved money via correspondent accounts, American banks
could accept "bundled" transfers from foreign banks that didn't indicate
the senders. That has changed, but the system still makes it easy for
U.S. banks to accept dirty money whose senders are vouched for by a
corrupt sending bank and passed off as clean.
The group also used the money laundering technique called layering, in
which illicitly obtained cash is transferred numerous times to obscure
its origins and finally placed where it can be accessed without any
trouble.
Digitek and VJLS were part of money movements that involved
correspondent accounts and layering. This is how that worked.
The Denis report says that from Sept. 2001 to Nov. 2003, Digitek
received more than $8 million for purchase of cell phones and
modernization of the communications network of the National Palace and
police. But current government investigators could obtain no bid
information, no contract, or any proof that the goods were delivered.
Where did the money go?
On February 27, 2003, Digitek was paid $239,000 by a check drawn on the
government bank's correspondent account at Citibank (NY) for equipment
for Telco. The suit says it never delivered that equipment. Instead, it
allegedly bought a CD for Global Spectrum, another shell company
Lavalanet controlled. In October, Global Spectrum transferred $256,000 –
the CD plus interest – to an account in the name of Trujillo & Sons at
the Bank of the Republic of Haiti. The money was then wired to a
Trujillo account at Ocean Bank in Miami.
Trujillo & Sons is a Miami company that deals in rice and other
foodstuffs. It is family owned company run by Alberto Trujillo and Lucas
Trujillo Jr. and has packaging plants and a warehouse in Northwest Miami
and distributes to the U.S., Caribbean and South America. Alfonso Perez,
lawyer for the company, said Trujillo & Sons does $100 million of sales
a year. He said that some of the Haitian merchants mistrusted local
banks and did not have accounts through which they could transfer
payments to the U.S., so that they
The lawsuit says that funds moved through front companies were used to
buy rice and other products from Trujillo to resell in Haiti. The fronts
were used to obscure transactions with paper work and to provide a
rationale for siphoning "commissions."
The check register of the Bank of the Republic of Haiti shows fifty-five
checks from October 25, 2001 through August 12, 2003, totaling
$16,447,795 made out to VJLS, which between October 2001 and March 2004
wire-transferred nearly $14 million to the Ocean Bank, Miami, account of
Trujillo & Sons.
Sometimes the money was run through other shell companies. VJLS
transferred about $3.6 million in public funds to the front company Se
Pa'n and Quisqueya accounts at the Bank of the Republic of Haiti. Se
Pa'an and Quisqueya were purportedly run by Ricardo Sanon, who was
listed as managing director in 2002 although he was a 25-year-old
student. At least $2.3 million moved from front companies to Trujillo.
There is no indication of any illegal activity by Trujillo.
Offshore corruption goes hand-in-hand with tax evasion. Corporations and
the wealthy use shell companies and secret bank accounts to evade taxes
and shrink the treasuries of the developing world. The rice purchase
scam is a small example of this. According to the Denis report, the
provisions shipped by Trujillo were imported without the importers,
Josesph Dieuseul Tchakounté and Global Spectrum, paying customs duties
of $1,346,706.
Sometimes, says the suit, the illicit funds went to the U.S. banks
accounts of U.S. shell companies, among them Southborder Enterprises and
Giovanna of Miami.
Southborder
According to the lawsuit, Aristide and his group set up Southborder
Enterprises in Florida, listing it at 1362 NW 58 Street, Miami, an
address that does not exist, with phones that were not working numbers.
Still, checks from the Private Secretary account of the Bank of the
Republic of Haiti paid it $965,836 for hand-cranked AM/FM radios,
T-shirts, bumper stickers and pins.
Giovanna of Miami is listed at a Miami phone number that does not
answer. Its owner Michelle Cardozo has an unlisted phone. But Giovanna
of Miami was a very active company when it came to receiving Haiti cash.
On Jan. 24, 2002, about $169,000 in government funds was wired to the
company's Richmond, VA, Bank of America account for equipment for the
Security Police for the National Palace. About $204,000 was paid April
11, 2002 to the company at the Bank of America for musical instruments
for the Presidential Security Unit's brass band. About $162,000 was sent
to the company at Bank Atlantic July 11, 2003 for equipment for the
Security Police for the National Palace. Some $208,000 was sent to the
company at Bank Atlantic July 30, 2003 for equipment for the
Presidential Security unit. Another $143,000 wired Oct. 30, 2003 for
more equipment. Nov/ 12, 2003 the $283,000 transfer was for musical
instruments. Nov. 24, 2003 some $270,000 was wired for equipment. And
then another $146,000 sent for equipment. The invoices continued, and
they were paid; the total came to more than $2 million.
The address listed for the company so active in providing equipment and
musical instruments to the Haitian Security Unit was a rented mailbox at
a UPS store. The 2005 Dun and Bradstreet report for the company could
not figure out its "line of business," noted that its employees were
"undetermined," it had no banking or finance record, and was located at
a residence owned by Cardozo. Bank of America corporate headquarters was
asked what kind of due diligence was done on Giovanna of Miami and if
these transfers had been scrutinized. There was no response.
Though a Miami resident, Cardozo in October 2004 made a $500
contribution to Rep. Maxine Waters, a California congresswoman active in
the defense of Jean-Bertrand Aristide.
One shell company with a U.S. account could not be found registered in
either Haiti or the U.S., which leaves the possibility that it was
incorporated offshore. A wire Jan. 24, 2002 transferred $1.7 million
from VJLS to an account of the Haffey Corporation at HSBC Bank, Miami.
Haiti investigators could find no evidence that a company called Haffey
exists either in the U.S. or Haiti. Kathleen Rizzo Young, spokesperson
for HSBC, said, "We do not provide information on particular customer
accounts as to do so would be in violation of the laws requiring
customer privacy. I can tell you, however, that HSBC maintains strict
anti-money laundering policies and procedures. We obtain KYC (Know Your
Customer) information on all accounts, conduct due diligence on
customers as required, and in particular do enhanced due diligence on
customers determined to be of higher risk. We monitor transactions, and,
as necessary, report any transactions deemed to be suspicious as
required by law and regulation." Nevertheless, the Haffey transaction
apparently came in under the radar.
Americans should be concerned that shell companies are being set up in
the U.S. to facilitate corrupt transactions. They must also be concerned
about an American bank that provides an account to a shell company with
such little due diligence that it doesn't discover that companies that
receive transfers of large sums of money are offshore companies whose
true owners cannot be verified or are registered at mail boxes and lack
working phones.
Drug traffickers were among the earliest satisfied patrons of the
offshore money-laundering system. U.S. indictments and testimony in the
cases of half a dozen Haitians charged and convicted of cocaine
trafficking show that Aristide government officials protected and
participated in moving the illegal drug through Haiti to the United
States. By 2004, about 8 percent of the cocaine entering the U.S. came
through Haiti, a major increase during Aristide's time in office.
Beaudouin Jacques Ketant, the most notorious drug dealer in Haiti, told
a U.S. court that Aristide controlled 85 percent of the cocaine flow
through Haiti. Ketant, who was originally a customs employee at the
Port-au-Prince airport, said at a February 2004 sentencing hearing that
he had paid up to half million dollars a month in bribes to Aristide and
Oriel Jean to allow planes with cocaine to land on National Route 9 near
Port-au-Prince. He had smuggled cocaine to Ft. Lauderdale, Miami, West
Palm Beach, New York and Chicago.
Oriel Jean, who headed Aristide's Presidential/National Palace security
from 2001 to 2003, testified that he and other Haitian law enforcement
officials got hundreds of thousands of dollars from Serge Edouard, who
ran an operation that imported cocaine from Colombia to Miami and New
York. He said that Aristide approved a national security badge for
Edouard so he could travel in the country without police searches. He
said Edouard kicked back money to Fondation Aristide.
Other traffickers indicted by the U.S. include:
· Jean Nesly Lucien, former chief of police, who admitted money
laundering. He worked with Ketant, helping to move drug shipments into
Haiti from where they would go to the U.S. He had his police delay and
divert DEA agents from interdicting ships and got $50,000 and 5 kilos of
cocaine for each shipment.
· Romaine Lestin, former head of police at Port-au-Prince airport, who
took kickbacks to provide security for drug flights. He was part of
Ketant group. He pleaded guilty to importing cocaine.
· Rudy Therassean, former commander of national police Brigade of
Research & Investigation, pleaded guilty to accepting protection money
from drug traffickers in 2001-2002.
· Evans Brilliant, former head of national police anti-narcotics
brigade, allowed a Colombian plane with over 1,000 kilos of cocaine to
land on a highway near the capital. He routinely took bribes for this
and other traffic.
· Fourel Celestin, former president of Haitian Senate, leader of the
Lavalas party, and advisor to Aristide, received tens of thousands of
dollars to ensure transport of cocaine through Haiti.

Under U.S. law, anyone who moves money of illicit origins – the profits
of crime – into U.S. bank accounts violates the U.S. statute against
money laundering. Anyone who offers bribes or kickback to get a foreign
contract violates the Foreign Corrupt Practices Act. That means that the
evidence of this lawsuit ought to prompt an investigation by the Justice
Department into whether U.S. law has been violated.
The offshore system protects crooked clients by refusing to provide
information about shell companies and bank accounts to private parties.
However, the U.S. Justice Department can request information under
mutual legal assistance treaties. Even then, getting information is
problematical, since while the legal niceties are going on, the culprits
usually move their registrations and accounts to other venues.
Americans also need to care because the collection of bribes and
kickbacks from foreign companies and the use of shell companies and
secret accounts in tax havens helps looting by dictators and corrupt
officials in all parts of the world and provides the funds that help
keep them in power. It is the same system that Saddam Hussein ran in the
Oil for Food program. It is the system used by dictators Sani Abacha in
Nigeria, Benazir Bhutto of Pakistan, Omar Bongo of Gabon, Ferdinand
Marcos of the Philippines, Carlos Menem of Argentina, the rulers of
Angola and Equatorial Guinea, and of course Francois Duvalier in Haiti.
American business people who offer bribes or kickbacks to get foreign
contracts violate the U.S. Foreign Corrupt Practices Act and are liable
to prosecution by the U.S. Justice Department. Bankers who fail to do
"know your customer" investigations or report suspicious transactions
violate the U.S. anti-money laundering law.
Aristide was elected president of Haiti for a five-year term from
February 1991 to February 1996. In September 1991, he was forced into
exile by a military coup. In September 1994, a U.S.-led force acting
under a U.N. resolution invaded Haiti to oust the military regime and
restore Aristide to the presidency. He returned to Haiti to serve the
remainder of his first term, until February 1996.
Then, until February 2001, former prime minister Rene Preval, a man
close to Aristide, served as president. Aristide returned to office in
February 2001, in elections which, because of evidence of fraud, were
not certified by the Organization of American States' electoral
observation mission.
In February 2004, Aristide resigned and flew first to the Central
African Republic and then to South Africa.
The accused, as cited in the Haitian government lawsuit, are:
· Former President Jean-Bertrand Aristide. He lives in South Africa in a
secret location.
· Faubert Gustave, minister of the Economy and Finance 2201-4. He lives
in Sarasota, FL
· Rodnée Deschineau, General Manager of the Banque Populaire Haitienne,
owned by the government from 2001-4. He lives in Dorchester, Mass.
· Lesly Lavelanet, the brother-in-law of Aristide's wife, Mildred
Trouillot Aristide. He controlled several companies, including Digitek
SA and Global Spectrum SA. He lives in Coral Springs, FL.
· Fred Beliard, who participated in schemes to misappropriate Teleco
profits. He lives in Cooper City, FL.
· Alphone Inevil, Director of Planning at Teleco from 1997 to 02, then
Director General to 04. He participated in scheme to misappropriate
Teleco profits. He lives in Lakeland, FL.
· Jean Rene Duperval, Director for International Affairs for Teleco from
2003 to 04 and participated in the scheme. He lives in Miramar, FL.
· Adrian Corr of the law firm of Miller, Simons and O'Sullivan in the
Turks and Caicos Islands.
Links
Haitian government lawsuit (English)
UCREF report (French)
UCREF is the Haitian Financial Intelligence Unit (FIU).
Commission d'EnquPte Administrative (Paul Denis) report (French)
Jewett suit against IDT (English)
Lucy Komisar is a New York journalist who since 1997 has written about
offshore bank and corporate secrecy and money-laundering and how the
offshore system enables international financial crime and corruption as
well as drug and arms trafficking, corporate fraud, terrorism,
dictatorship, and tax evasion. She is a founder and member of the
steering committee of the Tax Justice Network, an international NGO that
opposes offshore tax evasion by corporations and the wealthy.
She is a member of the Council on Foreign Relations, a past board member
of PEN American Center, the writers organization, and a past Vice
President of the National Organization for Women.
Her books are Corazon Aquino: The Story of a Revolution (New York:
George Braziller, 1987), political biography of former president of the
Philippines.
Down and Out in the U.S.A.: A History of Public Welfare (New York:
Franklin Watts, 1973 and 1977), history of the American welfare system
from colonial times to the present.
The New Feminism (New York: Franklin Watts, 1972; Paperback Library,
1972), primer on feminism, including history, law, work, education and
origins of contemporary movement.
She was a John D. and Catherine T. MacArthur Foundation grantee and a
John Simon Guggenheim Foundation fellow. She has received research
grants from The Nation Institute, The Fund for Investigative Journalism,
The Fund for Constitutional Government, The United Church Board for
World Ministries and other organizations.
Her articles have appeared in the New York Times, Washington Post, Los
Angeles Times, Christian Science Monitor, Wall Street Journal, Miami
Herald, Chicago Tribune, Newsday, Boston Globe, Baltimore Sun, Atlanta
Journal and Constitution, San Francisco Chronicle, St. Louis Post
Dispatch, San Diego Union, Philadelphia Inquirer, Arizona Republic,
Toledo Blade, Sacramento Bee, Toronto Star, Minneapolis Star, Bulletin
of the Atomic Scientists, The Progressive, The Nation, The New Republic,
Salon, Corpwatch, Alternet, Pacific News Service, In These Times, The
Observer (London), and El Pais (Madrid).
Haiti Democracy Project web page item #3319 (http://www.haitipolicy.org)


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