Published On: Sun, Oct 8th, 2023

CIBC FirstCaribbean criticized for inadequate supervision of Carbon Grove project

A report from our Correspondent

PHILIPSBURG -- CIBC FirstCaribbean International Bank advertised itself as the financier of Carbon Grove residences in Cole Bay. That gave them confidence in the project, said clients who signed sales agreements with real estate developer Carbon Acquisition Group (CAG). However, confidence in the bank has evaporated.

On Thursday, during the first Town Hall Meeting of CAG clients seeking justice, several attendees called for legal action against CIBC FirstCaribbean, claiming inadequate supervision of the project.

CIBC FirstCaribbean granted CAG, doing business as Melbon Enterprises, a loan of 7.5 million US dollars for the 6-acre hillside Carbon Grove estate near Union Road, as per the November 13, 2020 mortgage deed. CAG’s CEO Dwain Carbon had presented the bank with an architectural rendering of a gated community consisting of 92 homes, 64 condominiums and 28 townhouses. Carbon gave representatives of FirstCaribbean tours of the construction site where the first apartment buildings were built using funds the developer had received from a first group of lenders and investors.

Carbon invited prospective buyers to CAG’s office in Puerta del Sol Plaza Shopping Mall on Welfare Road in Simpson Bay to discuss financing options. “FirstCaribbean Bank had a representative at Dwain’s office to issue loans,” said a client who invested in Carbon Grove. “The bank had a banner at the entrance of the project in Cole Bay. That would give an investor confidence,” he said, emphasizing that he is “not some foolish investor.” Trusting the bank’s financial experts, the man bought multiple apartments.

Today, he and tens of other investors risk losing their hard-earned money to the bank. CIBC FirstCaribbean Bank’s lawyer informed residents of Carbon Grove and others with a purchase agreement that the total amount due under the loans secured by the right of mortgage exceeds 3.6 million US dollars. The letter stated: “CIBC FirstCaribbean regrets that the Carbon Grove building project executed by Melbon Enterprises NV was not successfully completed. Please note that your lawyer informed you correctly and CIBC FirstCaribbean indeed owns rights of mortgages over the apartment rights (previously) owned by Melbon Enterprises NV. CIBC FirstCaribbean reserves all of its rights, including the right to enforce its mortgage rights by auctioning the mortgaged properties.”

Emotions ran high during the Town Hall Meeting in Simpson Bay on Thursday evening, as FirstCaribbean Bank had already executed the auction of another CAG property. On June 22, 2023, a site in Guana Bay where CAG/Melbon Enterprises planned to build twelve apartments, the Saltview Residences, was auctioned by Notary Office Boekhoudt. The bank's mortgage rights superseded the rights of ten persons/families who had made a 50% deposit on the purchase price of their apartment to Carbon.

Now, the Carbon Grove community is in great uncertainty about the bank's next course of action. “How could this even happen?” one woman exclaimed, referencing Dwain Carbon's very first project, Windgate Residences, an apartment complex in Point Blanche that was auctioned off at the request of Scotia Bank. The lady said she could not comprehend how Carbon was able to receive a $7.5 million mortgage from another bank. “How could FirstCaribbean International Bank give someone a loan of that magnitude when they already had a project that was auctioned? The bank did not do a background check? How could you give him that kind of money without any supervision?”

Three weeks before the Town Hall Meeting, a resident of Carbon Grove, who is a client of CIBC FirstCaribbean, already took action by writing a letter to the bank, stating: “I must hold FCIB Bank accountable for its role in the Carbon Grove project. While we acknowledge that unforeseen challenges can arise in any project, the scale of this disaster raises questions about the bank's due diligence, oversight, and risk assessment procedures.”

The situation is dire, and the fallout is extensive, the client of CAG stated. “Dwain Carbon promised quality housing units and a secure investment opportunity to prospective buyers. However, not only were these promises left unfulfilled, but the entire project is now in jeopardy. The recent discovery of Dwain Carbon's alleged Ponzi scheme has sent shockwaves through the community. Investors are not only left without their promised homes but are also facing financial ruin due to their association with this alleged fraudulent scheme.”

As the legal ramifications of this situation unfold, the deceived homebuyer stated, “it is clear that the developer's actions will have far-reaching consequences, not only for the affected buyers but also for FCIB Bank, which played a crucial role in the project's financing.”

On behalf of the Carbon Grove community, the author urgently requests that FCIB Bank initiate “an immediate internal investigation into its involvement with the Carbon Grove project and the developer Dwain Carbon.”

In closing, cooperation is offered: “We seek transparency, accountability, and a constructive discussion on how the bank can assist in mitigating the damage caused to the investors and the local community. We understand that this is a complex and delicate situation, but we believe that a responsible and proactive approach from FCIB Bank is essential to finding a resolution. We are prepared to cooperate fully.”

CIBC FirstCaribbean did not respond to the letter.


Related articles:
Carbon’s duped clients to hold town hall meeting; seeking justice
Real estate agents advertised Carbon Grove despite warning signals



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