The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Court of Appeal has overturned the US government’s bid to enforce a $14 million seizure order against the Bahamas-based assets of convicted drug offender, Samuel ‘Ninety’ Knowles.

Anita Allen, the Appeal Court’s president, in a ruling that was backed by her two fellow judges, found the Supreme Court’s decision to register a 2008 asset Forfeiture Order against Knowles was “unsafe” because the US government had failed to comply with procedures set out under Proceeds of Crime legislation.

In particular, Justice Allen found that the US government submitted no written request to the Attorney General’s Office for the Forfeiture Order – made in the south Florida district court – to be registered in the Bahamas.

This failed to comply with the Proceeds of Crime (Designated Countries and Territories) Order’s section seven, proving fatal to US efforts to enforce the Order against Mr Knowles’ local assets – chiefly his A-1 Car Rentals business, and the vehicles seized from it by the Bahamian authorities.

And the Court of Appeal found that the US government also breached Proceeds of Crime Act protocols in failing to publish the Forfeiture Order and inform other affected parties of its existence.

Crucially, while Knowles himself knew about it because he was present at the US court hearing, his family members –Samuel Knowles Snr, Valerie and Lucinda Knowles – plus A-1 Car Rentals were not informed. They were therefore unable to mount a defence, contrary to the Act.

In a verdict that is likely to be perceived as both a blow, and something of an embarrassment, for the Attorney General’s Office and US Justice Department, the Court of Appeal noted that the Forfeiture (asset confiscation) Order was issued by the US courts against Knowles on June 23, 2008.

This aimed to seize Knowles’ Bahamian assets following his conviction on drug charges, for which he is now serving a long prison term. He was extradited from the Bahamas on August 28, 2006.

Justice Hartman Longley registered the US Forfeiture Order on August 9, 2011, following an application where only one side, the Attorney General’s Office (representing the US government), was present. He dismissed efforts by Knowles and A-1 Car Rentals to discharge his decision 21 days’ later.

The Court of Appeal, though, noted that Justice Longley “readily admits there was non-compliance” with the Proceeds of Crime (Designated Countries and Territories) Order’s section seven.

For a foreign asset seizure Order to be registered in the Bahamas, a written request must be submitted by the requesting state – in this case, the US – and lodged with the Supreme Court’s registrar.

Justice Longley had decided it was “reasonable to infer” from the evidence presented to him, and the absence of conflicting evidence, that the US had made the proper written request.

But the Court of Appeal said “no documents” were before him when he made the Order from which it was “reasonable” to conclude such a ‘Letter of Request’ had been submitted by the US.

And only two affidavits from different attorneys (one a pupil in the Bahamian Attorney General’s Office) were submitted to support the US application when the Knowles defendants attempted to have it discharged.

”One thing is certain, and that is that there was no written request for registration of the Forfeiture Order from the proper authority of the United States of America to the Government of the Bahamas lodged in the Supreme Court,” the Court of Appeal found.

The Court of Appeal said the real issue was whether this was a procedural failure, which prevented the Bahamian court from registering a foreign asset confiscation Order, or something that the courts could “waive”.

Given that the Attorney General’s Office admitted no ‘written request’ existed, and that this gave it the authority to initiate proceedings, Justice Allen said the Supreme Court’s decision to accept the affidavit evidence ran contrary to the Proceeds of Crime Act’s provisions.

“It is my view that without a written request as prescribed, the respondent [Attorney General’s Office] had no authority to initiate proceedings for registration under section 50 of the Act, and the court had no jurisdiction to grant the Order,” Justice Allen concluded.

The Court of Appeal also backed the arguments by Knowles’ family that as they had no notice of the US proceedings, they were unable to defend themselves – something that also contravened the Proceeds of Crime Act.

Noting that the Forfeiture Order was never published, the Bahamian court said this should have been done to give third parties with a legitimate interest in the assets to be seized an opportunity to challenge the proceedings.

Describing an affidavit from a US government attorney as “disingenuous”, Justice Allen suggested failure to publish the Order undermined “procedural fairness” with respect to Knowles’ family.

Pointing out that “the private ownership of property by innocent third parties” had to be protected, the Appeal Court said it “cannot lightly overlook or dispense with” the “disregard” the US and Bahamian government had shown for the Proceeds of Crime Act’s mandatory requirements.

Given these breaches, the Court of Appeal found Justice Longley’s decision to register the $14 million forfeiture Order was “unsafe” and “substantively affect the validity of the judge’s decision”.