The Kaplans CBI Saga – More in the mortar than the pestle!

U.S. Securities and Exchange Commission
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By LR Liburd

The St. Kitts-Nevis Observer 

Shortly after the conclusion of the Prime Minister’s monthly press conference last week Monday (May 30), a release from his Press Secretary informed that the Team Unity administration had revoked the passports of two US citizens – David B. Kaplan and his wife Lisa M. Kaplan.

The reason given for the revocation, according to the release, is that “Mr. Kaplan is accused of misrepresenting investments and misappropriating investor funds. It is alleged that some of these funds were wired to a St. Kitts law firm to assist them in attaining St. Kitts and Nevis citizenship”.

The release also stated that the Team Unity administration is committed to the highest level of due diligence and transparency in relation to the Federation’s Citizenship-by-Investment programme, and that “the Kaplans’ application was processed after appropriate due diligence checks by a highly reputable, internationally renowned due diligence service provider found no evidence of impropriety or illegal activity”.

Many nationals of the twin-island Federation are however in doubt about the Government’s statement on “highest level of due diligence”.

They are claiming that since the Moghadam issue, which as of November 22, 2014 caused holders of the Federation passport to no longer have visa-free entry to Canada, the Government of National Unity had promised to diligently work in reversing that situation.

“What are they going to do now?” one citizen on condition of anonymity asked. “They had seen the effects of Moghadam’s claim of entering Canada to meet with that country’s Prime Minister, as reported by the Sun News. The Foreign Affairs Minister, Mark Brantley, who at that time was Leader of the Opposition, had told us in a nationwide address that ‘the chicken have now come home to roost’ and he blamed the Labour Government for depriving us of visa free travel. But now, who is to be blamed for the alleged crooked Kaplans?”

A Litigation Release, No. 23547, from the US Securities and Exchange Commission (SEC), stated that the body had announced on Friday, May 27, 2016 that it had filed fraud charges and obtained an asset freeze against an attorney and Nevada resident David B. Kaplan and three entities that he controls, based on an allegedly fraudulent scheme that raised S15.8M from 26 investors in eight states.

The release noted that the SEC’s complaint was filed on May 19, 2016 in the US District Court for the District of Nevada-Reno, and charges Kaplan and the three entities, Synchronized Organizational Solutions International Ltd. (SOSI), Synchronized Organizational Solutions LLC (SOS), and Manna International Enterprises Ltd.

According to the complaint, Kaplan repeatedly lied to prospective investors by stating that their funds would be invested in a low-risk, private off-shore trading program that would provide estimated monthly profits of 10 percent.

The complaint alleges that Kaplan did not use the investor funds as promised but instead used large amounts for personal benefit “including $592,000 to buy and re-model a condominium in Nevada, and $79,394 wired to a St. Kitts law firm to obtain St. Kitts and Nevis passports and/or citizenship for Kaplan and his wife”.

The facts coming out of the SEC and the action taken by the Team Unity administration led a member of the Opposition to conclude that there are more questions than answers to this issue.

Opposition Leader the Rt. Hon. Dr. Denzil Douglas is accusing the Team Unity Government of deception, claiming that it could not be trusted by citizens of St. Kitts and Nevis.

Dr. Douglas was at the time responding to the charges brought against Kaplan while a guest on a local radio talk show programme last week Wednesday.

“Between June 20 and March 2016, the court documents are showing that the two persons made application to become citizens of St. Kitts and Nevis, four months after the Team Unity Government led by Dr. Timothy Harris took office. And by March of this year, Dr. Harris, the Prime Minister of St. Kitts and Nevis, has signed the Certificate of Citizenship that made them citizens of St. Kitts and Nevis,” Dr. Douglas said.

He noted that the granting of citizenship to the couple has raised a number of questions, especially when a song and dance about the CBI programme under the Labour Party administration “when Dr. Harris was telling the world that St. Kitts and Nevis was selling passports like Ms. Mem selling black pudding on a Saturday morning and afternoon, and that criminals and money launderers were using our programme. But up to now not even one name could be mentioned by that Government”.

The Opposition Leader stressed that the US Government had made it absolutely clear to the world that the CBI programme under Dr. Harris “is attracting crooks and fraudsters and signed off by none other than Dr. Timothy Harris himself”.

He also asked a number of questions.

“Did Dr. Harris and the CIU carry out any due diligence check on this couple before he signed the Certificate of Citizenship that gave them citizenship of St. Kitts and Nevis and our passport? If the due diligence check was done, was the findings of the due diligence check ignored by Harris when he signed the certificates that made them citizens of St. Kitts and Nevis? And if no due diligence check was done, why not?

The former Prime Minister claimed that US authorities had contacted their counterparts in the Federation on May 19 when the charges were filed and that the Team Unity Government was questioned or informed by US authorities on or about Monday, May 29.

The Observer could not have confirmed these allegations due to the fact that the Government spoke very little to the issue and phone calls to a number of persons in authority went unanswered.

Dr. Douglas however asked: “Why Dr. Harris did not say something to the citizens of this country? What is it that he is hiding?”

The Observer spoke to a number of people on the streets of Basseterre, some of whom claimed “there is more in the mortar than the pestle” and asked the following questions:

  • Why did Prime Minister Harris not address this important issue during his press conference on Monday, May 30 and later sent out a release with very little details?
  • How air-tight is the Federation’s checks and balances when dealing with issuance of our passports?
  • Who does the due diligence checks on the Citizenship-by-Investment programme?
  • What information did the Prime Minister get on Mr. Kaplan and his wife before he signed their Certificates of Citizenship?
  • Was there any indication that Mr. Kaplan was being investigated in the US for fraud?
  • Which member of the Team Unity Government is going to take the blame? Is it the Cabinet Secretary?
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