Published On: Tue, Mar 27th, 2018

Emerald-suspects ducked 4 million in taxes

Emerald investigationPHILIPSBURG – The Court in First Instance handled the cases of four suspects in the Emerald-investigation on Tuesday and the demands from the prosecution against all four were identical to those issued in February against two other suspects: 15 months of imprisonment and a conditional fine of 250,000 guilders, combined with 3 years of probation. The court will pronounce the verdicts on April 17.

The Emerald-investigation focuses on irregularities at the Harbor Group of Companies. While the prosecution suspects that companies submitted invoices for work they did not, or not completely execute – making it a case of grand theft – the charges focus “for reasons of efficiency” on the easily proven fact that the suspects did not report the income from these invoices for income and turnover tax. The main suspects, Checkmate Security director O’Neal  Arrindell and harbor-director Mark Mingo will appear for a pro forma hearing in court on April 24.

United Democrats MP Chanel Brownbill is also a suspect in this investigation. He will appear in court on Thursday morning.

When he formulated his demands on Tuesday, the public prosecutor referred to the verdicts in the February-cases. Instead of 15 months of imprisonment, those suspects received extremely mild punishments. Keith Gastia Fleming was sentenced to 120 hours of community service and a conditional prison sentence of 6 months; Police officer Akeem Arrindell was sentenced to 240 hours of community service and a 12-month conditional prison sentence. The prosecutor has appealed these verdicts.

The court ruled in February that because “the tradition of prosecuting tax fraud in criminal court” does not exist yet in St. Maarten “it is not that obvious to impose an unconditional prison sentence.”

“That reasoning is incorrect,” the public prosecutor said.

Like the defendants who were in court in February, the four suspects who appeared on Tuesday are all charged with the same fiscal offenses: not filing returns for income and turnover taxes. O’Neal Arrindell, the owner of Checkmate Security instructed his bookkeeper Sheryl Peterson to compose invoices for the companies involved. These invoices were sent to the harbor, where ousted CEO Mark Mingo approved them. The companies then received a check which they turned into cash.

Between them, all accused companies invoiced the harbor for more than $8 million.

The tax office missed out on tax revenue between 746,000 and more than 1.2 million guilders per defendant.

In court were on Tuesday Chester McRoy E., the general manager of Checkmate Security who invoiced the harbor for his company Caviar; Sindo Renigio Alexandre D. (Jazz General and Operational Construction Company), Karim Gemayel L. (owner of Select Trucking Services who was involved in a shooting in the Westin parking garage on Sunday, May 29, 2016) and  Shervin Elitius W. (Rising Star Construction).

Chester E. avoided 746,000 in taxes; Sindo D. 1,299,000; Karim L. 1,259,000; and Shervin W. 800,000 guilders – putting the total of missed tax revenue for these four defendants at 4,104,000 guilders ($2,292,737).

Asked what he had done with the money he received from the harbor, Chester E. told the court that he used it “to pay for services” and “to pay  people from Dutch Quarter and St. Peters.” When he added, “I kept 10 percent to cover my costs,” the judge expressed his irritation with the defendant. “You are allowed to say what you want but I am not completely retarded.”

That he now owes the tax office 746,000 guilders is, according to E. “impossible.” He offered that he had made a mistake, thinking his sole proprietorship was enjoying a tax holiday.

His attorney Brenda Brooks asked the court to declare the prosecution inadmissible because of procedural oversights based on the ordinance national taxes. “The director of the tax inspectorate decides about the appropriateness of criminal prosecution for fiscal issues and there is currently no director.”

Sindo D., who invoiced the harbor for $1,7 million, declined to answer a question from the court whether he received his checks from O’Neal Arrindell.

“The disadvantage for the country is significant,” the prosecutor said. “That justifies a high punishment. Forged invoices are not part of the charges but they should be taken into account all the same.’

Attorney Brooks objected to that statement: “The prosecution does not have strong evidence that the invoices are forgeries,” followed by a remarkable observation: “If invoices have been submitted for work that was not done you cannot say that this was income.”

Karim L. admitted to the court that O’Neal Arrindell had been his principal at the harbor. “At the time I was not aware of the procedures,” he said to explain why he had not filed returns for turnover tax.

The harbor paid L. in total more than $1 million. One of his invoices to the port included work he had done for Windward Roads.

The public prosecutor qualified L.’s actions as “stealing from the harbor.”

Shervin W. told the court that O’Neal Arrindell is his cousin. His attorney Shaira Bommel submitted an accountants report to the court, that the public prosecutor later dismissed as “based on estimates and stories from Shervin W.”

Bommel also reacted to the prosecutors statement that the invoicing had taken place in a fraudulent context: “It does not appear from the dossier that there is fraud involved.”

The attorney said that her client had found an arrangement with the tax office to pay his turnover taxes. “If there is an arrangement, there is no disadvantage,” she reasoned, but the prosecutor later disagreed: “The law says there is an offense if it can result in disadvantage. It does not have to be so.”

Bommel maintained that her client does not belong in criminal court and that his case could have been settled with the tax inspectorate. “But that the inspectorate was doing nothing, awaiting the outcome of the criminal case.”