Readers who have followed the story of the Cayman Gang of Four scandal, which according to the Cayman Islands Monetary Authority, is the theft of more than $450m, from Canadian retirees and pensioners, should know by now that Country Risk in Cayman has increased of late. Many of the Island's legal and financial problems are now appearing in the media, and the global financial community has been alerted.
(1) Eight months after CIMA, and the Royal Cayman Islands Police Service (RCIPS), learned, in detail, about the massive theft of assets, neither agency has initiated an investigation, nor brought any charges against Gang members Sharon Lexa Lamb, Ryan Bateman, Derek Buntain, and Fernando Motto Mendes. In truth and in fact, neither agency has even bothered to interview the accused fraudsters.
(2) the RCIPS has been accused, by a sitting member of the Cayman government, of letting the Statute of Limitations expire on more than 40 criminal cases, of losing and intentionally destroying evidence, and negligently allowing drugs, seized from criminals, to be stolen from its warehouse, having no effective internal affairs regime, of hiring unsuitable officers, and is in dire need of a major overhaul, of staff, policies, and operating procedures.
(3) The FIFA scandal has focused the public upon a rarely-reported aspect of Cayman life: the rampant corruption which hides below the surface of the islands' seemingly legitimate business and government operation. Criminal investigation, for corruption, of Caymans residents have increased of late, in other North American jurisdictions.
(4) CIMA's totally unsatisfactory record as a regulator; Years after Dundee Merchant Bank fell into obvious insolvency, the agency has not lifted a finger to bring liquidation proceedings, to inquire into client losses, or to punish those responsible for illegally operated in Class "B" bank, without the required operating parent financial institution. Longtime Cayman residents say that CIMA has never recovered any funds, for foreign investors who are victims of fraud, and that it protects Cayman residents, and local companies & financial professionals, declining to refer any of them for prosecution.
(5) Last year's flight, in the dead of night, by the publisher of a local newspaper, who was critical of corruption, due to death threats, is more reminiscent of Russia, than a British Overseas Territory.
(6) Finally, the fact that successive Cayman government continue to hide the truth about "Caymangate," where an officially-sanctioned burglary, of a newspaper whose staff was believed to be receiving incriminating information from an RCIPS officer, illustrates another cover-up, where infinite delays are interposed, to keep the sordid truth from the public, at any cost.
All of these issues, when taken together, are more than sufficient to raise Country Risk for the Cayman Islands, as a warning to foreign investors, international bankers, and attorneys representing both groups, that clear and present dangers exist in the Caymans, and that you should be aware of them. We trust that the FCO in the UK is reading this.