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Proceeds of crime, not taxpayer funding SSL fraud investigation- Gov’t Loop Jamaica

The Government has moved to clear the air regarding the source of the funds that are being paid to the remaining staff of the fraud-hit Stocks and Securities Limited (SSL) to ensure the continuation of the investigation at the private securities dealer.

Finance Minister Dr Nigel Clarke recently revealed that it is costing up to $15 million monthly to pay the remaining staff and undertake other activities at SSL while the investigation is in progress.

Stung by the latest criticism that $300 million of taxpayers’ money was being pumped into the SSL probe, minister with responsibility for information, Robert Morgan, has stated that the $300 million is from the proceeds of crime. He also noted that much of the money has been earmarked to upgrade and expand the building of the lead investigative agency, the Financial Investigations Division (FID).

On Thursday, Morgan posted a statement from the Ministry of Finance and the Public Service to X (formerly Twitter), seeking to clear the air.

According to the statement, “The… FID is using the proceeds of assets confiscated under Jamaica’s proceeds of crime legislation to fund the extraordinary expenses it incurs in the SSL fraud investigation.

“These funds do not constitute tax revenue. These funds arise from the FID’s work in identifying, restraining, forfeiting and monetising the proceeds of crime. That is, these funds arise from the confiscation of ill-gotten gains.”

Earlier, Clarke responded on X to Dr Andre Haughton, the Opposition Spokesman on Commerce, Technology and Innovation, who had raised questions about the $300 million.

Clarke accused Haughton of “maliciously” trying to tear down the Government after Haughton posted that, “Just heard the Government has set aside $300 million to pay for #SSL mishap so far. This is getting more and more ridiculous every day… where are the nurses’, police and teachers’ pay…”

Clarke told Haughton that, “Jamaica is a democracy. As such, political competition is good. However, the naked pursuit of power through the origination and propagation of inflammatory, sensational, uninformed and false claims does a disservice to our country.

“Rather than seeking to edify, to educate and to build, you seek to maliciously tear down. My friend, it is such a short-sighted approach,” Clarke stated.

The lengthy statement from the Finance Ministry that was posted by Morgan indicates that the $300 million in question relates to financial resources arising from confiscation of ill-gotten gains that are held in an interest-bearing account under the control of the FID, Jamaica’s asset recovery agency.

“It is vitally important for Jamaica that the perpetrators, conspirators, co-conspirators in alleged fraudulent schemes at SSL are brought before the Jamaican courts. Achieving a successful investigation requires the deployment of specialised resources.”

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According to the statement, the $300 million was earmarked to fund the expansion of the building currently occupied by the FID, “as well as to fund the extraordinary expenses incurred by the FID in the SSL fraud investigation.”

It explained that the bulk of the $300 million was earmarked for capital works at the FID’s building. This will result in a more than doubling of the agency’s staff complement from over 90 to over 190 positions.

The statement noted that SSL still has custody of approximately $30 billion in client funds across 8,000 client accounts.

“This has been necessary to facilitate the investigation. Retention of some of SSL’s staff complement, along with the maintenance of custody of client funds for the time being, have, for example, allowed investigators to eventually determine that the scope of fraudulent activities has affected 70 accounts, up from the 40 first suspected…,” said the statement.

It stressed that the 8,000 accounts require staff to respond to voluminous client queries, to maintain client records, to update Know Your Customer documentation for client accounts and, importantly, make preparations for the eventual transfer of client assets to other brokers designated by clients.