In the wake of a report by the Ombudsman stating that three managers of the New Building Society (NBS) had been done a great injustice as a result of fraud charges that had been brought against them, the Society on Tuesday restated its case of gross misconduct against the trio and which then led to their dismissals.
Ombudsman Winston Moore’s findings last week based on a complaint by one of the fired men, former Chief Executive Officer Maurice Arjoon, has generated much public interest as he delved into a series of related areas, questioning two present ministers of the government and mentioning an allegation against former President Bharrat Jagdeo.
While the Ombudsman’s findings saw no basis for the conspiracy to defraud charges against Arjoon, former assistant Mortgage Manager Kissoon Baldeo and former Operations Manager Kent Vincent he did not draw a conclusion on the NBS’s actions as he stated: “I have no jurisdiction to pronounce on the action of the NBS Board in firing the managers and I therefore refrain from any comment.”
In its statement on Tuesday, the NBS said it had noted with “dismay recent statements emanating from the press purportedly attributed to the Ombudsman, the Honourable, Justice Winston Moore.” It did not identify which statements these were but then proceeded to reproduce excerpts from a statement made by the then Chairman of the Board, Moen McDoom SC at a Special General Meeting on September 8th, 2007.
Aside from the excerpts of McDoom’s statement, NBS said it “categorically condemns any suggestion by those bent on creating mischief and misleading the public that the Society is or was managed by Senior Government Functionaries, including former President Bharrat Jagdeo.”
It did not say where this suggestion came from but no such suggestion was contained in the Ombudsman’s report.
The Society added that “NBS, like any employer, is legally entitled to institute disciplinary action against any employee or employees for infringements that warrant disciplinary action. In this case the Society, after an investigation, exercised its prerogative to dismiss Mr. Arjoon and the two (2) other Managers referred to for dereliction of duty, negligence and/or serious misconduct. The Managers have since challenged the Society’s decision”.
McDoom’s statement traced in detail the loss of $69.9M from an NBS savings account holder and the circumstances that led to the conclusion that the trio was culpable of gross misconduct and dereliction of duty.
McDoom had noted that the matter of the fraud was first brought to his attention as Chairman of the Board not by Arjoon but instead from information he received privately on 22nd January 2007.
The $69.9M had been withdrawn over the period from 1st November, 2006 to 8th December, 2006 when the Account was closed by the person presenting the Power of Attorney to the Society.
On learning of the allegation, McDoom said he immediately brought the matter to the attention of Arjoon, requiring that he urgently investigate the matter. Arjoon, he said, then informed him that he had earlier chaired a meeting of senior management at which it was decided by the management, “that the monies withdrawn from the Savings Account in question were properly withdrawn.”
McDoom said NBS was later to discover that, on 3rd January 2007, Zainool Khan Safi, husband of the Account Holder, Bibi Shamila Khan had brought the Passbook for the Savings Account into the Society for updating. This was the same Passbook which the person presenting the Power of Attorney to withdraw the $69.9M had claimed since 31st October, 2006, to have been lost.
Filed
McDoom said that the Passbook was collected by Customer Service Clerk, Imran Bacchus, and filed. He noted that Bacchus was involved in all of the withdrawal transactions, but there was no record or report of his having brought the appearance of the passbook to anyone’s attention.
Safi returned to the Society on 19th January to uplift the Passbook when he discovered that his wife’s Account had been closed.
“Not surprisingly, Mr. Safi demanded to speak with a senior manager and was referred to former Savings/Accounts Supervisor, Mr. Kumar Ragobar who referred it to Mr. Vincent, the then Operations Manager. As you know, Mr Ragobar was later dismissed for reasons unconnected with this fraud.
“On 29th January, Ms. Bibi Shamila Khan, accompanied by her Attorney-at-Law, met with Mr. Maurice Arjoon, Mr. Kent Vincent, the Asst. Secretary, Mr. Nizam Mohamed and the Internal Audit Manager, Mr. Atma Rajaram and indicated that she had not authorised any withdrawals from her Savings Account. Ms. Khan and her Attorney were told by management that the Society would be treating the withdrawals as legitimate”, McDoom’s statement had said.
McDoom described the internal examination that was then undertaken by its auditors Jack A Alli Sons and Co. The breaches in procedures were then set out.
“Our investigations have established that over a period of some five weeks, a person by the name of Compton Chase who was completely unknown to the Bank and whose identity was never properly verified, was successfully able to present a Power of Attorney, which has subsequently, as I have stated, proven to be forged.
“This person, without presenting a Passbook required by the rules of the Society, on four separate occasions, commencing on 1st November and concluding on 8th December, transacted the withdrawals, a re-deposit and further withdrawals of sums totaling $69.9M, with full oversight and approval of the three senior managers whose services have since been terminated.
“On the first occasion the withdrawal was authorised by Mr. Arjoon and Mr. Vincent. On the second occasion the withdrawals were authorised by Mr. Vincent and Mr. Baldeo and on the third and final occasion the withdrawals were authorised by Mr. Arjoon, Mr. Vincent and Mr. Baldeo”, McDoom had said.
He had pointed out that the Society’s Rules require that an Account Holder must be in possession of a Passbook to make a withdrawal and that, if a Passbook had been lost, prior notice must be given in writing and an Indemnity form completed and submitted for a replacement.
“On the first occasion on 31st October, the person purporting to be Mr. Chase presented himself with the Power of Attorney, claiming that the Account Holder, Ms. Bibi Shamila Khan, was in Canada and volunteered a phone number at which she could be contacted. There was no phone number contact recorded for the Account Holder on the Society’s Index Card. No attempt was, however, made by the management to contact the Account Holder at her Guyana address recorded on the Card for the Account Holder, which was at Better Hope.
“No attempt was made by any of the senior managers to check the authenticity of the Power of Attorney as to whether it was registered at the Deeds Registry or, much more importantly, whether it had, in fact, been issued from the Guyana Consulate in Canada where it indicated it had been prepared.
“It would not be unreasonable to expect Mr. Arjoon to check with the Guyana Consulate in Toronto, as previously he had verified a Power of Attorney executed by the Guyana Consulate in Suriname tendered for another large withdrawal”, McDoom had argued.
Readily accessible
McDoom had noted that Vincent did call the number given by the person claiming to be Chase and spoke to a person alleging to be Ms. Khan.
“Mr. Vincent did not know Ms. Khan and relied on identifying the person on the phone from the information on the Account Holder’s Index Card. This information is not confidential and is readily accessible to a number of the Society’s employees.
“Though the person on the phone was asked to confirm authorisation of the transaction in writing and to request a replacement Passbook, no explanation was sought for the loss of the Passbook and why a replacement had not been requested. Chase was told to return the next day.
“Mr. Vincent made no other attempt to profile the person on the phone or to establish the whereabouts of the person. A phone number can be used from almost anywhere in the world. A prudent and careful manager, in the circumstances, should have requested a faxed notarized copy of the person’s ID, or Driving Licence or Passport to be sent before being satisfied of her identity.
“The faxed confirmation authorising the transaction from the person alleging to be the Account Holder, had no address or means of tracing its origin and was not notarized, yet it was accepted by the managers”, McDoom had stated.
For the second transaction, McDoom had noted that when Chase signed the fax acknowledging its receipt by him, he listed a different address to the address on the Power of Attorney and at variance with the Guyana address of the Account Holder listed on the Index Card. This also escaped the attention of the management, he had argued in his September 8th, 2007 statement.
“When Chase made the first withdrawal he was given an Indemnity Form for the Account Holder to complete for the purpose of issuing a replacement Passbook, but claimed that it had not yet been completed by the Account Holder. Nevertheless, in complete violation of the Society’s Rules and established practice, the second withdrawal was, once more, authorised.
“Again, on this second occasion, no attempt was made to establish the authenticity of the Power of Attorney, either at the Deeds Registry or from its identified source of origin at the Guyana Consulate in Canada.
“On the 20th November, Chase returned for the third time. On this occasion, he re-deposited the sum of $20,500,000 from previous withdrawals, seeking two separate withdrawals of $10,200,000 and $10,300,000.
“Once more, these withdrawals were authorized by the Managers, despite the considerable sums being consistently withdrawn, without any further attempts to check the authenticity of the documents being presented and without receipt of the Indemnity Form from the Account Holder and without the presentation of a Passbook or request for a new Passbook”, McDoom had stated.
Describing the final visit, McDoom had noted that Chase returned on the 8th December to close the Account.
“On this occasion Mr. Vincent reported receiving a call, prior to Chase’s return, from the alleged Account Holder authorizing the closure of the Account and a fax was received on the 7th December to this effect, but, again, without a traceable address and, on this occasion, not signed and, as on all other previous occasions not notarised.
“On this occasion, Mr. Arjoon thought it fit, for the first time, to direct Mr. Vincent to call the person alleging to be the Account Holder and request the Indemnity Form, which had been provided to Chase since 1st November, be completed before closure of the Account.
“According to Mr. Vincent’s report, the person he spoke with returned the call on several occasions to claim she was unable to fax the Form. The Form eventually was sent by email, though not properly completed and was not notarised. Yet, none of this gave rise to suspicion nor concern on the part of the managers and on receipt of the email, the transaction closing the Account was authorized by Mr. Arjoon”, McDoom had said.
Noting that for the final payment to be made it became necessary to redeem Treasury Bills held by the Society, prior to their maturity, McDoom had said he wished to emphasise that during this entire transaction, the matter was not brought to his attention as Chairman, nor was any member of the Board consulted.
McDoom had said “Third party withdrawals from members accounts and, most certainly, of this magnitude, demand of management, extremely careful scrutiny and strict observance of the rules and well established practices of the Society. Such scrutiny and strict observance were significantly absent on the part of the Managers.
“The three senior managers who have been dismissed and were directly involved in processing and authorizing the fraudulent withdrawals from the Savings Account in the name of Bibi Shamila Khan, did not observe the rules of the Society and were in grievous breach of established practices”.
He had said that on 12th June, the Board, having conducted its investigations, was satisfied that there was sufficient reason to interdict Arjoon, Vincent and Baldeo from duty without pay and benefits with immediate effect. They were invited to meet with the Board on 15th June to explain why serious disciplinary action, including dismissal, should not be taken against them.
However, McDoom had pointed out that the managers resorted to Court action preventing the Board from taking any further action against them. The Court, however, ruled in favour of the Society.
McDoom had added that on 3rd August, the Board, again invited each of these managers to meet and be heard separately by the Board on 8th and 9th of August. The managers chose not to attend these meetings.
On 14th August, the Board then informed the three managers of its decision to summarily dismiss them with immediate effect for serious misconduct.
The conspiracy to defraud case against the trio was eventually thrown out of court as the account holder did not show up to testify.
Moore in his report had queried why the police had not pursued Chase prior to targeting the three managers.
In his conclusions the Ombudsman said that in his opinion, it is clear that the senior management of the NBS accepted the passport and power of attorney presented by “Compton Chase” as genuine documents.
He said that it is clear that on this basis, Kent Vincent accepted the Canadian telephone number supplied by “Chase” as the telephone number of Bibi Shamila Khan and believed that the person he spoke to by telephone was indeed her.
“The standard required for conviction of a criminal offence is proof beyond a reasonable doubt for every element of the offence – the acts as well as the mental ingredients. Without intending any disrespect to anyone, I would state that carelessness, most species of negligence, foolhardiness or even stupidity are not the standard of proof of guilt for a criminal offence. I do not hereby state any finding or conclusion that anyone at the NBS should be blamed for any of these”.
He said that if Kent Vincent honestly and genuinely believed that he was dealing with Bibi Shamila Khan, his actions cannot be regarded as criminal and “this is the crucial issue that any court would have to grapple with before it could make a finding of guilt”.
He said “I am therefore at a loss to fathom why the three senior managers were placed before the Court before the arrest of the person calling himself Compton Chase”.
The Ombudsman had told Stabroek News last week in an invited comment at his office that he is required to submit a copy of his report to the persons who might be affected by anything said in the document. He said that in this regard he sent copies to President Donald Ramotar, Head of the Presidential Secretariat Dr. Roger Luncheon, Finance Minister Dr Ashni Singh, Labour Minister Dr. NK Gopaul, Attorney General Anil Nandlall, Director General at the Ministry of Foreign Affairs Elisabeth Harper, Director of Public Prosecutions Shalimar Ali-Hack, the Commissioner of Police, Seelall Persaud and Arjoon for them to make any comments.
“They have an opportunity to comment on it or remedy any default if they wish to do that”, Moore said adding that he has given a limited time frame for this to be done. He added that if these nine persons make comments then he will have to take what they say into account.
He added that the next step would be to treat the document as a special report and lay it before the National Assembly. According to Moore he has already made contact with the Clerk of the National Assembly who has indicated that he would have to lay over 100 copies of his report for Members of Parliament and the media.
There had been no Ombudsman for nearly 10 years, Moore was sworn in in January of this year.
