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torontostar.ca
Caymans ruling trial key
Canada expects decision soon in bid to get records
Kevin Donovan
STAFF REPORTER
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A court in the Cayman Islands will soon decide whether to lift the country's infamous secrecy rules in the case of a Canadian business duo accused of money laundering and tax evasion.
The Grand Cayman Court is reviewing an application by Canada's justice department, a Toronto court was told yesterday. Canadian authorities want access to banking and corporate records because they believe it will prove lawyer Tom Baker and accountant Michael Graye pulled off a scheme that made them millionaires at the expense of taxpayers and investors.
Baker and Graye are charged with masterminding a scheme that saw multi-million-dollar fees mysteriously removed from four companies, sent through the trust account at Baker's former law firm to the Swiss Bank, then on to a company called Mogul Holdings in the Caymans. Baker's trial started last month; Graye's is on hold because he was arrested recently in the U.S. on unrelated charges.
The total amount of the fees taken from the companies was $18 million. The amount of the federal tax believed evaded was, in total, about $5 million. Baker and Graye were earlier investigated for stealing the money but only charged with evading the taxes due, and with laundering the funds.
At Baker's trial last week, Madame Justice Patricia German was told that the Caymans holds the key to the case. Prosecutors and investigators have, over the years, been rebuffed by the Caymans when they have tried to get Mogul's corporate and banking records.
For years, the international community gave the Caymans a failing rating when it came to co-operation among law enforcement officials in money-laundering investigations.
But last summer, the Organization for Economic Co-operation and Development took the Caymans off its watch list of unco-operative countries.
"It was now considered a co-operative jurisdiction," said investigator Jim Talbot of the Canadian Customs and Revenue Agency. He told court that Canadian officials put together a new request (two previous requests had been denied) and sent it to the Caymans.
"We were told the attorney-general will accede to our request after the Grand Cayman Court has seen it," said Talbot. They are hoping to hear word soon, court was told.
Talbot said other requests have been made to Switzerland and France for banking and corporate records in the case, and to interview witnesses related to the case. Some were denied, some were allowed, but none were entirely successful. |
