| Government wins $1.25 million Emerald Cay judgment | | Print | |
| Written by Richard Green/richard@fptci.com | |||
| Thursday, 23 June 2011 12:05 | |||
 Two companies involved in the 2006 sale of Emerald Cay to American billionaire Timothy Blixseth have been ordered to pay $1.25 million in stamp duty avoided in “a carefully crafted scheme of tax evasion,” Justice G.W. Martin ruled June 20. But the judge said the scheme could not have happened without the assistance of attorneys. “I invite the Attorney General to investigate and if thought appropriate to consider making a formal complaint to the Bar Council under section 24 of the Legal Profession Ordinance,” Martin wrote. Blixseth’s Emerald Cay Ltd. bought the 30,000-square-foot mansion on the south side of Providenciales from Worldwide Commercial Properties Ltd. in 2006. The house features a two bed/two bath boat house, a caretaker cottage, a 6,000-bottle wine cellar, two adjoining swimming pools with a waterfall, tennis and volleyball courts, two boat slips and two private beaches, according to real estate listings. The government said the real purchase price was $28 million but was reported as only $10 million. Instead of receiving the real stamp duty of $2,730,000, the government got only $975,000. Martin granted judgment for the government of another $975,000 in unpaid stamp duty, plus $282,883.56 interest through June 16, against Emerald Cay Ltd. and Worldwide Commercial Properties Ltd. Blixseth and another defendant, Andrew Hawes, were never served in the case, and the judge made no findings against them. Blixseth’s lawyer, Michael Flynn of Boston, told the fp that Blixseth has never denied that his company paid $28 million for Emerald Cay and only paid the stamp duty that was required based on documents filed by Turks and Caicos Islands lawyers for Worldwide Commercial Properties Ltd. — the lawyers whom the judge brought into question in his ruling. Flynn said he voluntarily gave Laurence Harris — lead lawyer on the government’s Civil Recovery Team — all the original documents on the sale. Blixseth’s company even offered to pay the underpaid stamp duty plus interest without going to court, Flynn said, but Harris refused because the government was seeking another $7 million in damages. “We didn’t do anything wrong,” Flynn said, describing Blixseth’s company as “an innocent foreign purchaser.” Flynn vowed that Blixseth would fight “to the highest court in London” paying any damages for the transactions between “the corrupt government of Michael Misick and the seller of the property.” The judge said the issue of damages will be argued in subsequent court proceedings. “We are determined to crack down hard on cases like this,” said Attorney General Huw Shepheard. “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.” “I am also mindful of the judge’s comments about the involvement of TCI attorneys in this scheme of tax evasion. We will be considering the judge’s words carefully as we reflect on what further steps to take,” he said. Click here to read the full ruling in the case
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