Cash Plus conspiracy

Bankers deny ‘Cash Plus conspiracy’
published: Wednesday | November 28, 2007

Patrick Hylton, NCB Group managing director and president of the Jamaica Bankers Association. – File

The Jamaica Bankers Association (JBA) has hit back at recent reports accusing it of orchestrating a conspiracy to cripple the operations o investment company, Cash Plus Group, by instructing its members to close the company’s accounts.

“The JBA does not decide how member institutions should address operational issues, such as the relationship between a member and its customers, whose accounts should be maintained and which accounts should be closed,” the association of bankers stated in a media release Monday.

“We have, therefore, never discussed the relationship between Cash Plus and any member institution. We have never discussed or agreed to shut down anyone’s business.

“The suggestion that there is a conspiracy among banks which are members of the JBA is entirely without foundation,” the statement said.

Clampdown claim

At least two of th investment schemes have been advising their ‘club members’ that the banks have been clamping down on their business.

The JBA, whose current president is managing director of National Commercial Bank, acknowledged that its members do collect ‘Know Your Customer’ (KYC) information for the bank’s own use and in keeping with existing laws and regulations.

“Banks have always operated on the basis that it was prudent to know their customers. Additionally, laws and regulatory guidance to prohibit improper activities have for several years required that banks collect and keep records of KYC information, and specify minimum information to be collected,” the JBA said.

The association emphasised that any arrangement to allow clients to operate an overdraft facility was entirely based on the individual bank’s risk assessments, which are judged on information supplied by the client.

It pointed out that cheques drawn on the accounts of local commercial banks take three business days to clear, while those drawn on the accounts of international banks take much longer.

“Banks in Jamaica and worldwide enter into arrangements for cheques to be drawn without uncleared funds or for accounts to be overdrawn only following appropriate checks.”

The JBA also dismissed suggestions that the alleged conspiracy was an attempt by the financial institutions to “avoid competition”.

The subscribers to the investment schemes have consistently pointed to the disparity in interest paid on bank deposits, which fall below 5 per cent per year, while returns from the schemes are quoted at 10 per cent to 18 per cent per month or 120 per cent to 216 per cent per year.

The association reiterated that it was unable to make further comments in the public due to legal constraints and efforts to preserve customer confidentiality.

john.myers@gleanerjm.com

Cash Plus boss

‘I VIOLATED UNITED STATES LAW’ – But the gov’t returned my money, says Cash Plus boss
published: Sunday | November 25, 2007

Garwin Davis, Sunday Gleaner Writer

He has been called the mystery man – the person behind several acquisitions totalling in excess of J$5 billion over the last six months alone!

But with these investments and the rapid rise of his five-year-old company – Cash Plus – comes the question which seems to be on everybody’s mind: Who is Carlos Hill?

“I am a banker by profession, who, borrowing a quote from author Napoleon Hill, believes that ‘whatever the mind of man can conceive, it can achieve’,” Hill tells The Sunday Gleaner. “I believe in the Jamaican spirit and I believe in Jamaica. This is a wonderful time to believe in Jamaica.

Cash Plus provides the opportunity for more people to accomplish their goals, both personally and financially. And if anything, our situation is getting better with each passing year.”

Is there any truth to rumours that he ran afoul of the law while residing in the United States? “Yes, that’s true, but it’s nothing that I cannot stand up and defend,” Hill responds.

“My family migrated to the United States in 1967 where, at a young age, I ended up in banking. I worked with one of the largest minority banks in New Jersey, where later on, I would end up being the president. I eventually got bored and got my own company.”

He continues: “We were doing portfolio loans and were very successful at it. We would later run into problems, in that, we loaned out too much money and weren’t able to fulfil some of our obligations. I was in violation and the U.S. Justice Department asked me if I would cooperate. The year was 1986. If you have never had a failure in life then you will never be able to appreciate what true success is.

“I have learned from that ordeal and I am a much better person today. The U.S. authorities shocked me by giving me back my loan portfolio in the end, and I have made good use of it.”

Asked whether the recent high-profile acquisitions, such as the Hilton Kingston hotel, Drax Hall Estate and Mainland International, were solid business deals in the sense that they could generate enough money monthly to keep Cash Plus in business, Hill responds: “Yes, our businesses generate enough by way of profits to satisfy our client base.”

Array of businesses

He adds: “It is not only those acquisitions we would be depending on. That’s the mistake our detractors have been making in trying to find out our trade secrets. We are also involved in food distribution throughout the Caribbean and also in North America. Our returns on that are huge.

“We have built up an array of businesses, as is evident by our foray into areas such as telecommunications, finance, hospitality, gaming, real estate, air transport, and now hardware.

“You tell me, prior to these problems that are certainly no fault of ours, have you heard any of our customers complaining about Cash Plus?”

Hill continues: “Cash Plus is only five years old but, as we can all see, we are not afraid to take on what some may view as the impossible. Once we have done our due diligence and we conclude that a deal is feasible, then we apply the laws of the marketplace. The market is where buyers and sellers of products and services meet and if we feel that we can be profitable in our acquisitions, then more often than not, we will be interested.”

Final payments

But what about those who say that the announced acquisitions of Mainland International for J$420 million (US$60 million), Drax Hall Estate for over J$7 billion (US$110 million), and the Hilton Kingston hotel J$320 million (US$42 million), have not been finalised? “It pains our detractors to admit that Cash Plus is the largest development company in Jamaica today,” Hill asserts.

“The Hilton will be paid for in full within the next nine months; Drax Hall is an exciting new project that will be paid off in full by next October, and the same thing goes for Mainland. We are not a debt-ridden company. I don’t believe in debts … I don’t like owing people. I will not sit back and allow people to defame Cash Plus anymore,” he states.

And to those who remain convinced that his business methods are so unorthodox that it is difficult to see how they could be sustainable? “Not because a method has never been tried before means it is unworkable,” Hill argues. “Our detractors will find every way to try to beat us down but as you can see, that strategy has been failing miserably.”

Theology school to train pastors in forex trading

Theology school to train pastors in forex trading – As church involvement in investment schemes deepens
published: Friday | November 23, 2007

The investment scheme, LewFam, which joined with Olint Corporation in fighting the Financial Services Com-mission, has ties to a church group.

And another church-related investment club, whose prospectus to potential investors the Financial Gleaner obtained, is offering monthly returns of between 12 per cent and 16 per cent on investments ranging from US$1,000 to US$250,000.

The club calls itself FX1 Finance Club and has at least three pastors listed as board members.

Major Neil Lewis, who is part of the Family Life Minsitries, would not discuss LewFam’s activities, saying it remained under the FSC’s ‘cease and desist’ order, but the church-based investment scheme, is modelled off David Smith’s Olint club.

These developments highlight a growing involvement of churches in increasingly controversial areas of business and finance, but which their leaders say is part of their mandate to ensure the well-being of both the spiritual and physical man.

So much has the idea caught on in theological circles that the Caribbean Graduate School of Theology is introducing a course in foreign exchange trading, under its MBA programme.

The inaugural seminar, which is to be presented by chartered accountant Evadnie Byfield-Sterling who works at the Bank of Jamaica, is set for Saturday.

Since David Smith’s investment club, through which he raises capital to play the the foreign exchange market, high-yield investment schemes have been a source of deep controversy while inspiring copycat schemes.

For instance, Olint has resisted attempts by FSC to have it register as a trader in equities, a issue that is now before the courts for resolution.

Additionally, the FSC has raised questions about the capacity of Olint, and other investment clubs, to offer returns of upwards of 100 per cent a year and has been on a campaign warning people of the dangers of Ponzi schemes and high-risk investments.

While critics of the FSC insist that there is no rule governing the establishment of private partnership/investment clubs, the regulator bases in insistence on the requirement of the Securities Act that all persons soliciting or conducting securities business in Jamaica to be authorised by the commission.

But the controversy around Olint has apparently not dampened the appetite of Jamaicans to participate in these schemes,

For example, Olint was followed in the market by CashPlus, which apparently has been raking hundreds of millions from hundreds of small investors, offering interest on the cash of over 10 per cent per month. CashPlus appears to have pumped much of the cash into real estate and other businesses, but is yet to explain its ability to pay its offered returns.

It, too, is at loggerheads over whether it needs the approval of the FSC to maintain its operations.

These quarrels have not, it seems, damped the spirit of evangelical preachers to establish similar schemes to build wealth for themselves, their churches and parishioners.

Recently, Bishop Peter Morgan of City Life Ministries told The Gleaner that he and other Christian friends had created a partnership to investment, but drew a distinction between what they did and organisation like CashPlus.

Additionally, the Caribbean Graduate School of Theology, which trains evangelical preachers, says its introduction of the foreign exchange course is based on the demand of its students.

“We are trying to move out of the periphery to the centre as to understand the various issues and articulate them correctly, thus playing a more vibrant role in national development,” said Dr. Anthony Oliver, the school’s principal.

business@gleanerjm.com

Churches join the search for wealth

Churches join the search for wealth
published: Monday | November 19, 2007

Bishop Peter Morgan

CHURCHES and clergy have joined the line of persons and organisations seeking to maximise wealth by investing in the foreign exchange trade.

Gleaner investigations have revealed that several Christian and other faith-based institutions have either been investing in schemes such as Cash Plus, Swiss Cash or have started investment groups of their own.

One minister, Bishop C.B. Peter Morgan of City Life Ministries, told The Gleaner that none of his churches are involved in the practice but said he knows it exists.

Investments

“There are churches that invest in foreign exchange and there are church leaders who invest in foreign exchange,” Bishop Morgan says.

“I know of one ministry, for example, which is a Christian ministry, that actually tries to raise funds in order to put to investment schemes, because they don’t use their normal funds to do it. They use designated funds to interest people in making foreign exchange investments which would benefit the ministry,” Bishop Morgan says.

But it is not just churches that are chasing the money market. Bishop Morgan and a group of other clergymen and Christians have formed their own group in a bid to make money.

“I would not associate what we do with something like a Cash Plus. This is something that friends do,” the Bishop says of his personal cash chasing deals.

It is not just cash that churches are trading. Well-placed government officials who declined to be named, told The Gleaner that several churches are purchasing securities. High-yielding government bonds, which are low-risk, are said to be a favourite of trading churches.

Government bonds

One church organisation is said to have recently invested $15 million in government bonds.

But the Bishop has no problem with churches and clergymen chasing cash. He said that while the church must campaign for souls for the Kingdom of God, it must also make money to do the work of the ministry.

“There is a perception that the church must not have money, which is wrong,” Bishop Morgan tells The Gleaner.

“If anything, Jesus rebukes us for not using our financial resources to good advantage.

“It is very important for churches to become good stewards of the resources that are available to them,” he told The Gleaner.

The difference between gambling and high-risk investment was a point of discussion among the Church of Jesus Christ of Latter-day Saints (commonly known as the Mormons), at its general conference in 2005.

Then president, Gordon B. Hinckley, strongly counselled church members against participating in gambling but the grey area between gambling and high-risk investment was never resolved.

The Church of England Ethical Investment Advisory Group holds that “Investing in equity markets does not fit the definition of gambling and should be viewed as good stewardship of asset neatly with the Parable of the Talents”.

“Investment rationale focuses on the expectation of a return based on informed decisions and implies responsibilities of ownership. Owning shares is analogous to owning a house or other asset type.

“However, speculative decisions, or punting on market movements for gains dependent on another’s loss may be more closel with gambling. Spread betting, a market activity, has been viewed as an unacceptable investment for Church of England monies for this reason and is therefore avoided,” according to the organisation’s question and answer document.

http://www.jamaica-gleaner.com/gleaner/20071119/lead/lead8.html