26838: (news) Chamberlain: Aristide corruption (fwd)

[Bob Corbett <corbetre@webster.edu>]

From: Greg Chamberlain <GregChamberlain@compuserve.com>

(KYC News, 5 December 05)

(A financial crime investigation and reporting firm run from Florida by
British journalist David Marchant)



OFFSHORE ATTORNEY ACCUSED IN ALLEGED HAITI KICKBACK SCHEME



An offshore attorney has been accused of helping Jean-Bertrand Aristide
misappropriate millions of dollars through fraud and corruption while he
was president of Haiti.

British national Adrian Corr, a 41-year-old partner with Miller Simons
O?Sullivan, in the Turks & Caicos Islands, established and administered a
shell firm ? Mont Salem Management Ltd. ? that received and distributed
kickbacks and bribes paid by U. S. and Canadian telecommunications carriers
to Aristide and his accomplices, it has been alleged. Corr also allegedly
wrote at least one letter in which he ?falsely represented? that Mont Salem
was ?a telecommunications carrier? with operations in the U. S. and Canada.

Corr, Mont Salem Management Ltd., and Aristide are among nine defendants in
a civil lawsuit that was filed by Haiti?s Government and its national
telecommunications firm, Telecommunications d?Haiti S. A. M. (known as
?TeleCo?), at the U. S. District Court for the Southern District of Florida
on November 2, 2005. The other defendants are Faubert Gustave, a resident
of Sarasota, Florida, who served as Haiti?s Minister of the Economy and
Finance from 2001 to 2004; Rodnee Deschineau, a resident of Dorchester,
Massachusetts, who was General Manager of Banque Populaire Haitienne, a
government-owned, commercial bank, from 2001 to 2004; Lesly Lavelanet, a
resident of Coral Springs, Florida, and brother-in-law of Aristide?s wife,
Mildred Trouillot Aristide; Fred Beliard, a resident of Cooper City,
Florida, and described as a business associate of Gustave; Alphonse Inevil,
a resident of Lakeland, Florida, who was Director of Planning of TeleCo
from 1997 to June, 2003 and then Director General of TeleCo from July, 2003
to June, 2004; and Jean
Rene Duperval, a resident of Miramar, Florida, who was TeleCo?s Director
for International Affairs from June, 2003 to April, 2004.

All of the defendants have been accused of multiple violations of the
Racketeer Influenced and Corrupt Organizations Act through engaging in
fraud, corruption and money-laundering.

?This is a civil action to account for wrongs to, and recover money stolen
from, the people and Government of Haiti by the former President of Haiti,
Jean-Bertrand Aristide, and others acting in concert with him,? stated the
complaint. ?As President of Haiti, Aristide abused his power and deceived
and betrayed the Haitian people by directing and participating in ongoing
and fraudulent schemes to: (a) loot the public treasury and launder the
illicit proceeds; (b) divert and steal revenues rightfully belonging to the
Haitian national telephone company; and (c) encourage, protect, participate
and profit from illegal drug trafficking in and through Haiti. Through
these activities, Aristide and his accomplices converted to their own use
millions of dollars of public funds, breached duties of loyalty owed to the
people and Government of Haiti, and conducted the affairs of the Government
of Haiti and the national telephone company through a pattern of criminal
racketeering activities, including violations of the federal wire fraud,
money laundering and transportation of stolen property statutes.

?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, led by generals Raoul Cedras and Philippe Biamby. In
September 1994, a U.S.-led force acting under a U.N. resolution invaded
Haiti to oust the military regime and restore the Aristide presidency.
Shortly thereafter, Aristide returned to Haiti to serve the remainder of
his first term, which ended in February 1996.

?From February 1996 to February 2001, Aristide?s associate and former Prime
Minister, Rene Preval, whom Aristide referred to as his ?twin,? served as
President of Haiti. Also in 1996, Aristide founded Lafanmi Lavalas, a new
political party that Aristide controlled and to which he was appointed
?President and sole National Representative.? During Preval?s term as
President, Aristide continued to function as the de facto President of
Haiti, through Preval, Lafanmi Lavalas and others.

?In February 2001, after disputed elections in which international
observers noted extensive incidents of fraud, and which the Organization of
American States? electoral observation mission refused to certify, Aristide
again became President. Aristide?s rule was thereafter increasingly marked
by political and police corruption, violence-including murder against
opposition party members and journalists, and the brutal suppression of
human rights. On or about February 29, 2004, amidst both domestic and
international criticism and protests regarding his rule, Aristide resigned
and fled to safety in the Central African Republic. He currently resides in
the Republic of South Africa.

?As President of Haiti, and to a certain extent during the interregnum rule
of Preval, Aristide controlled virtually all of the valuable assets of the
Government of Haiti. These assets included funds of the Haitian Government
and the Central Bank; entitlements to foreign economic assistance,
including assistance from the U.S.; the right to grant employment by the
Government of Haiti; the right to decide who would do business with the
Government of Haiti; and the right to decide who could do business in
Haiti, through the granting of licenses, concessions, permits, franchises,
and monopolies.

?From 2001 or earlier, and continuing at least until February 2004,
Aristide, with the assistance and cooperation of government officials and
others hand-picked by him for this purpose, used his power to conduct a
campaign of looting against the public treasury and the Haitian people by
repeatedly directing government agencies to falsely claim that they needed
to expend public funds for legitimate purposes and then, as intended,
converting those funds, in whole or in part, to the benefit of himself
and/or his supporters, family, friends or other accomplices. The
misappropriated funds were frequently diverted and laundered through
fictitious companies, established for this purpose by Aristide and his
accomplices, both in Haiti and the United States. In all, Aristide and his
accomplices stole tens of millions of dollars from the public treasury and
transferred a portion of those funds to the United States.

?Over the same time period, Aristide, once again with the assistance of
government officials he had appointed for this purpose and others, diverted
to the benefit of himself and others revenues rightfully belonging to
plaintiff TeleCo, the Haitian national telephone company. In order to do
this, Aristide installed his accomplices in management positions within
TeleCo, and Aristide and those accomplices then caused TeleCo to enter into
agreements with certain U.S. and Canadian telecommunications carriers,
granting them significantly reduced rates for services provided by TeleCo
in exchange for kickbacks, which further reduced those rates. TeleCo
revenues were the principal source of urgently needed foreign currency for
Haiti. As a result of the scheme, Haiti and TeleCo received only part of
the telecommunications revenue to which they were entitled.

?Also in exchange for bribes and kickbacks, Aristide and his accomplices
provided safe passage for transshipments of illegal drugs to the U.S. and
appointed drug traffickers to important posts in the security services of
the Haitian Government, from which they could ensure the safety of their
trafficking operations. As a direct result of these actions, by 2004 some
20 percent of the cocaine entering the U.S. came through Haiti ? a fourfold
increase during Aristide?s rule. To facilitate his deception, Aristide and
his accomplices continued during this time to publicly voice strong
opposition to any form of drug trafficking in Haiti.

?Aristide not only abused his official power but completely betrayed his
trust to the Republic of Haiti and the Haitian people. In assuming the
Presidency, Aristide took an oath promising ?faithfully to observe and
enforce the Constitution and the laws of the Republic, to respect and cause
to be respected the rights of the Haitian people, [and] to work for the
greatness of the country. . .? Aristide instead looted, deceived and
betrayed the Haitian people. He stole millions from the public treasury,
thereby literally depriving the people of Haiti of the ability to feed
themselves. He laundered millions of dollars of such funds in the U.S. and
elsewhere in order to enrich himself and his associates, and to maintain
himself in power, while depriving his government of funds that were
desperately needed to satisfy the most basic needs of the poorest country
in the Western Hemisphere.

?The fraudulent schemes orchestrated by Aristide against the people and the
Government of Haiti were in many ways connected to and conducted in the
United States. Aristide and his accomplices set up fictitious and shell
companies in the U.S. to serve as fronts for the interests of Aristide and
his co-conspirators and accomplices, transferred stolen public funds to and
through those front companies as well as legitimate U.S. companies, used
the accounts of U.S. companies in Haiti and made extensive use of the U.S.
banking system to assist in the laundering and conversion of public funds.
Further, Aristide and his accomplices demanded and received substantial
bribes and kickbacks from U.S. telecommunications carriers, which were wire
transferred from U.S. banks, and profited from drug trafficking in and with
the United States.

?The Republic of Haiti and TeleCo now seek redress for these grievous
wrongs in the form of treble damages for violations of the federal and
state anti-racketeering statutes, compensatory and punitive damages for
theft, conversion, fraud and breach of fiduciary duty, and equitable relief
in the form of an accounting, the imposition of a constructive trust and
the entry of a permanent injunction against Aristide and the other
defendants.?

TeleCo owned and operated the only wire-line telephone network in Haiti,
and calls made from outside Haiti to persons in Haiti could be lawfully
?terminated? only by TeleCo, according to the complaint.

?As a result, any foreign telecommunications company wishing lawfully to
provide international calling service to Haiti had to arrange, directly or
through another carrier, to have its calls to Haiti terminated by TeleCo
and to pay TeleCo for providing that service. International calls
terminated by TeleCo are routed through TeleCo switching equipment that
records the international carrier and the duration in minutes for each
call, and TeleCo generally charges those carriers a per-minute rate for
terminating the calls. As a result, TeleCo was a major source of
desperately-needed foreign currency for Haiti and its people.?

In the 1980s and early 1990s, TeleCo entered into agreements to terminate
calls originating from the U. S. with ?certain large ?Class A? U. S.
carriers?, such as AT&T, MCI and Sprint?, stated the plaintiffs. ?Some of
the payments made by those Class A carriers for TeleCo?s services were
deposited into an escrow account set up at Prudential Bache to provide
funds to be used by TeleCo to upgrade its network and facilities in Haiti,?
it was stated. ?On information and belief, Aristide, while in exile prior
to October 1994, received control of tens of millions of dollars from that
TeleCo escrow account. That money has never been accounted for.

?After Aristide?s return from exile, and at his direction, TeleCo began
entering into agreements to provide smaller ?Class B? foreign carriers,
including U.S. carriers, lower per-minute rates for terminating calls in
Haiti than those available to the ?Class A? carriers. At various times
during the period from 1994 to 2004, the Class B Carriers that received
such rate concessions included Fusion Telecommunications, Haiti Direct
Access, Cinergy Telecommunications, Uniplex Telecom, Toscana Telecom,
Terra/IPIP Communications, Skyytel Ltd., Telsicom, IDT Corporation and IVM
Telecom.?

The plaintiffs alleged that: ?At Aristide?s direction, TeleCo also required
at least some of the Class B carriers to make their payments for TeleCo?s
services to offshore companies said to be operating as ?agents? or
?factors? or ?consultants? for TeleCo. Fusion Telecommunications, for
example, made at least some of its payments through C.W. Holdings. Cinergy
Telecommunications made some of its payments through Toscana Telecom, a
British Virgin Islands company. Skyytel Ltd. and IDT Corporation were
directed to make their payments to defendant Mont Salem, in the Turks and
Caicos Islands. On information and belief, AT&T was asked but refused to
make its payments for TeleCo?s service to such an intermediary.

?Starting no later than July 2003, and on information and belief starting
much earlier, Aristide, Inevil (and his predecessors in office), Duperval
(and his predecessors in office) and defendant Beliard, with the
cooperation and assistance of others, knowingly and intentionally
participated in an ongoing and fraudulent scheme to steal revenues
rightfully belonging to TeleCo. Pursuant to and in furtherance of that
scheme, those defendants caused TeleCo to grant Class B carriers lower
rates than they would otherwise have had to pay for TeleCo?s services,
demanded and received in exchange bribes and kickbacks paid to the Aristide
Group, in some cases paid by U.S. companies by means of wire transfers, and
fraudulently concealed the true facts concerning those transactions, by
means including without limitation the removal and/or destruction of
documents. By that conduct those persons stole public funds and deprived
Haiti and the people of Haiti of the honest services of their governmental
officials.

?The fraudulent scheme to steal TeleCo revenues was carried out in part
through defendant Mont Salem. Pursuant to the fraudulent scheme, defendants
Con and Beliard set up Mont Salem, a company in the Turks and Caicos
Islands, to serve as a front for the interests of the Aristide Group. At
Aristide?s direction, Inevil, Duperval and Beliard directed at least two of
the Class B carriers, IDT and Skyytel, to make their payments for TeleCo?s
services to Mont Salem. At Aristide?s direction, TeleCo?s then-counsel also
caused TeleCo to request at least one other Class B carrier, Fusion, to
make payments through Mont Salem.

?As a result of the fraudulent scheme, plaintiffs Haiti and TeleCo were
injured both because certain carriers were fraudulently granted reduced
rates for TeleCo?s services or did not otherwise pay for all of the minutes
terminated in Haiti and because some of the amounts those carriers did pay
went to the Aristide Group in the form of bribes and kickbacks, thereby
depriving both TeleCo and Haiti of foreign currency that was desperately
needed to fund Haiti?s economic development and feed its people.
?Defendants and their co-conspirators and associates intended to continue
the scheme in perpetuity, for example, drafting and executing their
contracts with IDT and Fusion so that the agreements were automatically
renewable.?

Allegations of corruption and fraud involving IDT are also laid out in two
civil lawsuits that were filed against the firm and others by former ADT
employee D. Michael Jewett at the U. S. District Court for the District of
New Jersey on March 29, 2004 and October 7, 2005 in which he claims he was
unfairly dismissed. Adrian Corr and Mont Salem Management Ltd., incorrectly
pled as Mount Salem Management Ltd. by Jewett, were among the defendants in
the first action but they were dismissed from the case for jurisdictional
reasons on November 17, 2005.

Jewett, who worked for IDT for just seven months from April 15, 2003 until
he was fired as Associate Regional Vice President for the Caribbean on
November 11, 2003, alleges in his October, 2005 action that IDT?s Executive
Vice President for International Business Development, Jack Lerer, told him
that, in 2003, IDT agreed to pay kickbacks to Aristide?s Turks and Caicos
firm in return for a favorable telephone deal in Haiti.

Jewett claims that, during discussions on the agreement, TeleCo sought
bribes in exchange for a cut-rate price and that IDT agreed to pay them.
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. but TeleCo was
offering 9 cents a minute, with 3 cents kicked back, it was alleged.

Jewett claimed he was told that one TeleCo proposal called for IDT to first
deposit funds in a U.S. bank account but that IDT considered that to be
?too high risk?. Jewett claimed that Lerer went to Haiti in August, 2003
and met Aristide to work out an accord. A month later, Lerer met with
Jewett and told him that the deal was that IDT would deposit money into an
?offshore account? set up for Aristide in the name Mont Salem,
headquartered in the Turks and Caicos Islands, it was alleged. Jewett said
Lerer told him they had to move fast so that they didn?t lose the deal.

 ?Plaintiff asked defendant Jack Lerer what Mount 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,? according to the complaint.

?Plaintiff asked defendant Jack Lerer if it was legal for IDT to make
monthly settlement deposits into the private offshore bank account of the
President of Haiti rather than depositing the settlement proceeds into the
bank account of TeleCo Haiti. Defendant Jack Lerer told plaintiff it did
not matter who got the money as long as IDT was protected from TeleCo Haiti
alleging that they had not been paid for terminating IDT?s
telecommunication traffic in Haiti.?

Jewett claimed that Lerer appointed him the ?go-between for all commercial
correspondence between TeleCo Haiti and Mount (sic) Salem.? He alleges that
Lerer told him ?not to reveal the details of the TeleCo Haiti deal with
anyone within IDT?. Jewett claims that he repeatedly protested that the
deal was illegal and that, after it was completed, he was dismissed.

As a result of Jewett?s allegations, the U.S. Department of Justice, the
United States Attorney in Newark, New Jersey, and the Securities and
Exchange Commission have all initiated investigations into IDT, according
to research by OffshoreAlert. If the accusations are proven, IDT would have
violated the U. S. Foreign Corrupt Practices Act and the U.S. Federal
Communication Commission Rules and Regulations.
IDT?s CEO, James Courter, and the company?s attorney in the Jewett case,
Leslie Lajewski, of Grotta, Glassman & Hoffman, both failed to respond to
telephone messages and emails sent to by OffshoreAlert. However, in public
comments, Courter has described Jewett a disgruntled ex-employee with no
credible evidence.

We did receive comments, however, from Colin Poyall, the president of
another telecommunications carrier that has been accused of paying bribes
to Mont Salem, namely Skyytel Ltd., which is based in Montreal, Canada.
Povall denies that kickbacks were paid. ?Mont Salem approached us,? he
explained to OffshoreAlert. ?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. 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
reduced telecommunications rates in exchange for kickbacks.

Poyall added: ?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? ?In a perfect world that would be
great,? said Poyall. ?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 telco 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 continued: ?When the FBI called us, we were more than cooperative. They
asked us to be witnesses, and we agreed on it. I told the 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 telephone
that he is related to Fred Beliard.

Another telecommunications carrier that allegedly paid kickbacks to a shell
company is Fusions Telecommunications, which is based in New York. The
Haiti government claims that Fusion made some payments to TeleCo via a firm
called CW Holdings, which maintained a bank account in Florida. Lawyers for
Haiti?s government do not know where CW Holdings is registered, stating
that they could not locate it in Haiti or Florida. A source told
OffshoreAlert that CW Holdings is represented by someone named Leonard
Whan.

Fusion, through its representative, Howard Rubenstein Public Relations,
told OffshoreAlert that, in mid-2001, ?TeleCo notified Fusion
Telecommunications that TeleCo had assigned its ?Accounts Receivable? to a
factor identified as CW Holdings?. The money was ?less than $1 million a
month?, stated Fusion?s spokesperson, adding that: ?Fusion was instructed
to make payments that it owed to TeleCo to the account of CW Holdings in
Bank Atlantic 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.?

The spokesperson added: ?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 didn?t respond to queries about where CW Holdings was registered or
the cost of the minutes it paid to that intermediary or to TeleCo.

Research by OffshoreAlert unearthed a slew of political connections between
U. S. telecommunications carriers accused of paying kickbacks. IDT CEO
James Courter, a Republican New Jersey congressman from 1979 to 1991, is a
friend of U. S. Vice President Dick Cheney. When Net2Phone, an IDT Internet
telephone 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 for a quick profit of 77.2 percent.

Prominent Republicans sit on IDT?s board of directors, which includes Jeane
J. Kirkpatrick, a former Ambassador to the United Nations; Jack F. Kemp, a
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, a former governor of California, is on
the board of an IDT entertainment subsidiary and, until he resigned in fall
2005, William F. Weld, a 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. Well was replaced on the board by former Republican
Senator from Washington, Slade Gorton. 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.

Fusion Telecommunications is operated by former high-level Clinton
Administration officials. Its board of directors 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, ex-chief of staff for former President George H.W. Bush, joined the
advisory board.

It is worth noting that the Clin
ton 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. Aristide is currently
residing in South Africa, according to the Haiti government. Ira Kurzban,
Aristide?s Miami lawyer, declined to discuss any of the facts or
allegations in this article.

Mont Salem?s incorporation papers show that it was registered in the Turks
& Caicos Islands in June 2000 with capital of $5,000. The sole shareholder
was ?M & S Nominees Ltd,? which is operated by Miller Simons O?Sullivan and
shares the same address. Its registered agent was Timothy O?Sullivan, a
48-year-old Irish national and a partner with Miller, Simons O?Sullivan.

When OffshoreAlert called Adrian Corr in the TCI and asked him to identify
Mont Salem?s real owners, he said: ?As in Delaware, you can have nominee
directors.? Were there nominees in this case? ?I don?t know, you?ve put me
on the spot,? he said. ?I don?t want to answer any questions about this. I
have lawyers retained; it?s better you speak with them. Its [former New
Jersey] Governor Byrne?s law firm.? Corr?s attorney, Kerrie Heslin, of
Carella Byrne, in Newark, New Jersey, did not respond to numerous requests
for comment. Neither did Mont Salem?s Newark-based lawyer, Michael
Weinstein, of Podvey, Meanor, Catenacci, Hildner, Cocoziello & Chattman.
When asked: ?I?d like to know more about Mont 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.?

According to biographical information contained on his law firm?s web-site,
Corr was born in Northern Ireland on July 7, 1964 and is admitted to
practice in England and Wales, and the Turks & Caicos Islands. His practice
areas are identified as ?Company Law; Commercial Law; Insurance;
Intellectual Property; Shipping; Trusts; Employment?.

___________

Footnote: Most of the research and much of the writing for the above
article was done by Lucy Komisar, a New York-based freelance journalist who
specializes in writing articles about financial crime and offshore
financial centers.