The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The US Justice Department will not challenge a Court of Appeal verdict over more than $8 million that once belonged to convicted ‘con man’, Derek Guise Turner, allowing Loretta Butler-Turner’s family and other defrauded Bahamian victims to determine how this sum is to be distributed.

Sources familiar with developments, and documents seen by Tribune Business, have confirmed that the Attorney General’s Office - which represented the US government in the case - has withdrawn its plans to appeal to the Privy Council.

That seemingly clears the way for the FNM deputy leader and her family, plus other confirmed Bahamas-based victims of Mr Turner, to work out - with the help of the Supreme Court - how the $8.016 million is to be divided among the creditors.

However, this may not be that simple - depending on who you believe. Tribune Business understands that Mr Turner, who returned to the Bahamas in August 2011, has been attempting to reclaim his former Bahamas-based assets through the Supreme Court.

With the US Justice Department having withdrawn its claim to the funds, the parties involved are due back before Justice Stephen Isaacs on June 25, 2013, for the next hearing in the case.

What will happen here is uncertain. Sources told this newspaper that with the US Justice Department out of the way, the June 25 hearing is merely to determine how the $8.106 million will be distributed between Mr Turner’s Bahamas-based creditors.

However, Mr Turner is understood to believe he can still challenge the default judgments previously entered against him, which resulted in the seizure of all his Bahamian bank accounts and three properties, which were subsequently sold.

Yet his ability to do so was challenged by sources familiar with the matter, who suggested Justice Isaacs had already thrown Mr Turner’s effort out on the grounds it had already been rejected at a previous court hearing.

Indeed, the only thing that is certain is the withdrawal of the Attorney General/US Justice Department.

“The Attorney General will not pursue this before the Privy Council,” one well-informed source told Tribune Business.

The Court of Appeal had previously ruled that there were “no assets in the Bahamas” to which the US Justice Department’s $55 million forfeiture order against Mr Turner could be attached, due to previous judgments obtained by the FNM deputy leader’s family and other investors.

The Butler family and their companies, Franklyn Holdings and Milo B. Butler & Sons Investments, had initiated proceedings against Turner and his companies in 2005, and subsequently obtained default judgments against him.

The Butlers and their fellow Bahamas-based investors had agreed a plan to distribute the more than $8 million raised from selling Turner’s Bahamian real estate assets, but the US Justice Department objected to this.

Represented in the Bahamian courts by the Attorney General’s Office, the US Justice Department argued - ultimately unsuccessfully - that the $8.106 million be “repatriated to the United States and made available” to all victims of Turner’s multinational fraud.

The Court of Appeal, backing the Supreme Court’s decision, rejected this on the grounds “that there were no assets in the Bahamas to which the December 2009 Forfeiture Order could attach”.

A previous forfeiture Order, dated February 2006, was “nullified” because Turner had succeeded in appealing the length of sentence - although not the conviction - that he received.

Mr Turner, who pleaded guilty to wire fraud, had induced Peter Davis, a Bahamas-based investor, to place $4.7 million with him - over a seven-month period between February-September 2001 - for investment purposes.

Mrs Butler-Turner and her family, including Franklyn Butler Snr and husband Edward Turner, also placed funds with Turner’s unregistered investment scheme.

Tribune Business revealed previously that the Butler family had invested a total $2.75 million with Turner’s financial fraud. The New Zealand-born con man is unrelated to the FNM deputy leader and her family, though.

“The funds were used by Turner to acquire Paradise Island Garden Villas A and D, Lot Number 5 Ocean Club Estates, Paradise Island, and Turning House, 700 Bay Street,” the Court of Appeal judgment disclosed.

These assets were acquired in the name of Turner’s Turning Properties Ltd. 700 Bay Street was previously the headquarters of Mohammed Harajchi’s now-defunct Suisse Security Bank & Trust, and is now home to the offices of Davis & Co, the law firm of Deputy Prime Minister Philip Davis.

As revealed previously by Tribune Business, Turner has been back in the Bahamas since August 2011, although living a far more modest lifestyle than his previous Paradise Island existence.

He is understood to still be living in rented accommodation in Ocean Place, a complex on the Cable Beach strip located close to the $2.6 billion Baha Mar development.

And Turner’s abode is across the street - almost opposite - the residence of Prime Minister Perry Christie and his family.

The Bahamian court proceedings have attracted attention as far away as Australia, given that Turner’s victims there were awaiting the Court of Appeal’s ruling.

They had hoped the US Justice Department would win, because then the $8 million proceeds from this nation could be pooled with the Australian recoveries.

Had the US Justice Department won, and an asset pool featuring US and Australian creditors been formed, the latter would have recovered “15 cents in the dollar”, as opposed to “7.02 cents in the dollar” - a more than 100 per cent increase or doubling of the recovery.