4
TURKS AND CAICOS WEEKLY NEWS
June 25 - July 1, 2011
NATIONAL
The nine-bedroom property, accessed by a drawbridge, is a local landmark.
Timber tycoon Tim Blixseth was once listed as one of the richest people in the US.
Gov’t wins $1.25m in evaded taxes Money to be returned to treasury following Emerald Cay success By Gemma Handy MORE than $1.25m is to be returned to public coffers after the Government successfully fought a tax evasion case against former billionaire tycoon Tim Blixseth. The cash is for outstanding stamp duty for the sprawling Emerald Cay estate in Chalk Sound in what was dubbed a “carefully crafted scheme”
to defraud TCIG. The debacle has once again called into question the integrity of the local legal profession with the two lawyers who facilitated the deal facing investigation. US timber baron Blixseth bought the nine-bedroom, private island property in August 2006. Emerald Cay Ltd, one of Blixseth’s firms, acquired it from
Published by Turks & Caicos News Company Ltd. Cheshire House, Leeward Highway, Providenciales P.O. Box 52, Turks & Caicos Islands, BWI W. Blythe Duncanson – Publisher/Editor-in-Chief Gemma Handy – Associate Editor Rebecca Bird – News Editor Faizool Deo – Sports Samantha Dash – Court Cord Garrido-Lowe – Graphics/Production Editor Dilletha Lightbourne-Williams – Office Manager Email: (Advertising) tcnews@tciway.tc, (News) tcweeklynews@yahoo.com, (Talk Back) tcweeklynews@gmail.com Tel. 649-946-4664 (office), 649-232-3508 (after hours) Website address: www.tcweeklynews.com
Worldwide Commercial Properties for $28m, meaning $2,730,000 in duty should have been paid to the Government. Instead the sale was recorded on land documents as just $10m so Blixseth paid only $975,000. Proceedings were issued against both firms, along with Blixseth and a colleague, by the Government in December 2010 after civil recovery lawyers identified the underpayment. A legal wrangle ensued with Blixseth’s lawyer blaming the former “corrupt” Government. In April, the interim administration applied for a summary judgment claiming neither the buyer or seller had a defence which ought to be tried. The Government also applied for an interim payment on account of damages, pending an assessment of the money owed. The application was heard by Mr Justice Martin last Thursday. Mr Martin found that papers relating to the deal were “fraudulent devices to hide the true consideration being paid”. He continued: “On any assessment of the facts this was a carefully crafted scheme of tax evasion. It would not have been possible without the assistance of attorneys.” He quoted the Code of
Professional Conduct which states: “An attorney must never knowingly assist or encourage any dishonesty, fraud, crime or illegal conduct nor advise his client as to how to violate the law.” Mr Martin added: “It is disappointing that any attorney should so far neglect his professional obligations as to become involved. “I invite the Attorney General to investigate and if thought appropriate to consider making a formal complaint to the Bar Council.” He calculated the interim payment by deciding that the Government would recover at least $975,000 more in stamp duty on the assessment. Interest at six per cent from August 15 2006 adds a further $282,883.56 making the total so far in excess of $1.25m. Interest continues at a daily rate of $160.27 until the debt is paid. The assessment of damages is expected to be completed later this year. The court also awarded the Government costs of bringing the case. It’s been a week of success for the Government, following an announcement days earlier that eco haven Joe Grant Cay had been returned to the Crown following lengthy legal proceedings. Governor Gordon Wetherell declared the Emerald Cay result “a very significant and good one for the TCI”. Attorney General Huw Shepheard said: “This is the second major claim on which the Government has obtained judgment, and we are again pleased that the outcome is a successful one for the Government
and the civil recovery team. “We are determined to crack down hard on cases like this. Stamp duty which is evaded is a serious loss to the Government’s budget and we will take steps to recover it where we can.” Mr Shepheard vowed he would be looking into the involvement in the scam of TCI attorneys. “We will be considering the judge’s words carefully as we reflect on what further steps to take.” He told a press briefing on Wednesday that while he may not make a public statement about it, there would “certainly be something happening”. Oregon-born Blixseth, 60, put luxury Emerald Cay on the market in June 2009 with a $75m price tag. After buying the island halffinished three years earlier, he originally planned on using it as part of his Yellowstone luxury residence club which later filed for bankruptcy. The 30,000-square foot house boasts a ‘floating’ tennis court, gym, guest house, man-made beach and several docks to accommodate Blixseth’s collection of private yachts. Once listed as one of the richest people in the US, Blixseth is the founder of ‘Yellowstone Club World’ – an elite club for the super-wealthy which includes Microsoft billionaire Bill Gates in its membership. Blixseth lost much of his wealth when the real estate market crashed forcing him to put the palatial Provo pad up for sale. His calculated 2007 net worth of $1.3bn had shrunk to $230m by 2011, according to court documents.