Panama Papers: One Lawyer and the Dominican Republic’s Missing Millions

go through Time Domain Network Wireline staff
May 16, 2016 at 1:58 PM

Offshore lawyer Stephen Isidore.

Roseau, Dominica (TDN)
For years, Stephen Isidore was one of the main architects of the Dominican offshore financial sector, deeply involved in the registration of shell companies that were allowed to be established in the protected areas of the Caribbean offshore tax haven. Living in a mansion that was taller than the local village health center, Isidore successfully registered more than 25 companies with Mossack Fonseca, the company at the heart of the Panama Papers. Some of these companies have names that are not well known, such as SPL Trading Limited, ALU Business Corp and CGI Worldwide Ltd. In addition to listing “holders” as shareholders in the newly formed companies, Isidore also sought the help of a now-deceased man, a former office clerk at his law firm, and a former teller colleague at the bank where he previously worked, to list them as shareholders and beneficiaries. The former office clerk’s mother immediately protested her son’s innocence in the local media, claiming that he had neither consented to nor been aware that he was listed as a beneficiary of LPR Capital Ltd, which was registered in the Seychelles in 2000. He was also unaware that he had resigned as an agent of MSF Advertising in 2012. The company had been registered in the British Virgin Islands since 1999. To make matters worse, the address listed on the Mossack Fonseca documents corresponded to a street address in Roseau where his unsuspecting mother ran a small food store. Isidore was no stranger to controversy. On November 19, 2010, he was taken to court by his former mentor and law partner, Glenworth (GON) Emanuel, on 42 criminal charges relating to the handling of EC$2.6 million (US$1 million) through their law firm on behalf of Prime Minister Roosevelt Skerrit. Charges also included fraud, theft, false accounting, breach of trust, false representation and obtaining money by deception to the tune of EC$7 million (US$2.6 million). From the outset, the case was fraught with political intrigue and police inaction. On 24 November 2010, the local magistrate, Evalina Baptiste, issued an arrest warrant for Mr. Isidore, requiring him to appear in court on 6 December 2010 to read out the charges. However, inexplicably, the chief of police refused to carry out the arrest after receiving the warrant. 6 December 2010 was a day that dealt a decisive blow to the judicial process in the Dominican Republic. Heavily armed police were ordered to cordon off the area around the court to prevent the public from entering the trial, with orders to shoot if necessary.

Isidore’s mansion is taller than the village health center.

Isidore did not appear at the appointed time, but he turned up a few hours later with his legal team, who had somehow obtained an order from a High Court judge to stay the execution of the warrant; and to restrain the Chief Magistrate or any magistrate from reading out the charges, pending the decision of an application for judicial review of the Chief Magistrate’s decision to issue the warrant. That was the situation then, now more than five years later, the High Court has still not made a ruling, and for all intents and purposes, the matter may never be judicially reviewed in the Dominican Republic, casting an ominous shadow over the country’s efforts to provide justice for those with close political connections. Meanwhile, just weeks after being taunted in court, an unknown person or persons attempted to burn Emmanuel and his wife alive on Christmas morning 2010, while they slept. Thankfully, the firebomb only burned the car in the garage, and the reinforced concrete walls ensured the arsonist’s botched attempt. The couple survived. The police subsequently dragged their feet in their investigation, and although Danny Shillingford confessed to the crime a few days after the fire, it was not until May 2013 that Acting Attorney General Julien Prevost bravely ordered the arrest of him and his accomplices. Finally on May 29, 2013, Dominican police arrested Isidore’s close friend Earl ‘Seko’ Grant and charged the convicted criminal Danny Shillingford with conspiracy to commit arson and arson. Interestingly, in a shocking reversal on 21 January 2015, the new Attorney General refused to offer further evidence against Earl ‘Seko’ Grant and the court summarily dismissed the case. Meanwhile, in August 2014, Danny Shillingford was shot by an unknown assailant but survived. The charges against him were also dismissed. In addition to his overseas business, Isidore was a close friend and lawyer to Dominica’s Prime Minister Roosevelt Skerrit and for many years was one of the main agents for the sale of Dominican passports. In October 2013, he boasted to the German newspaper Europeanceo.com that “over 12,000 people have successfully applied for and been granted citizenship since the program was established in 1993, and another 2,000 will be granted citizenship next year.” He also told the newspaper that Isidore & Associates “is the most experienced law firm on the island for those supporting the citizenship program.” Yet, despite Isidore’s boasts that the sale of 2,000 passports should have brought in nearly EC$540 million ($200 million), only EC$50 million ($18.5 million) flowed into the Dominican treasury. Furthermore, over a 20-year period, the 12,000 passports sold should have brought the government nearly EC$3 billion ($1.1 billion), but official figures show that the government collected only EC$500 million during that period. Finally, the Dominican government steadfastly refuses to release the total amount of passport sales in any given year. This has led many on the island to question whether there is any connection between the lack of transparency in passport sales, the EC$540 million ($200 million) disclosed by Isidore in 2013, and the blurred lines of the Panama Papers. People have also questioned why ordinary Dominicans with no known source of wealth would be listed as beneficiaries of companies that could be worth millions of dollars. The massive Panama Papers may hide the answers to the questions that most Dominicans care about the most. Meanwhile, local police have the more pressing task of determining whether fraud and identity theft occurred during the company registration process and whether Dominican shareholders and beneficiaries were knowing participants in the biggest financial scandal to rock the world and the corrupt island nation of the Dominican Republic.