The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

TWO Appeal Court judges found there was sufficient evidence to support the Crown’s case that the Wulff Road web shop belonging to Craig Flowers’ FML Group was operating/promoting the then-illegal ‘numbers’ lottery.

Their judgment, in particular, reveals that one FML employee who was detained in the police raid on the Wulff Road location answered in the affirmative when asked whether illegal web shop gaming was taking place there.

And Appeal Justice Jon Isaacs also found that Magistrate Derence Rolle “could not be faulted” for determining that the $834,629 found by police at that web shop was to pay customers’ winnings.

As reported last week by Tribune Business, where the prosecution’s case fell down was in its inability to prove that Mr Flowers KNOWINGLY permitted FML’s Wulff Road web shop to be used to promote/operate the ‘numbers’ business.

The Court of Appeal’s judgment, though, provides enough meat for observers to question whether there would have been a different outcome to Mr Flowers’ conviction quash had the police, prosecution and magistrate acted differently.

The Attorney General’s Office has yet to indicate whether it will appeal the Court of Appeal verdict. Yet had the police conducted a more thorough investigation, raiding all FML’s locations simultaneously and obtaining the same evidence as they found at Wulff Road, it may have produced a different ruling.

Dissecting the grounds on which Mr Flowers was convicted in the Magistrates Court, Justice Isaacs said section 11 of the now-repealed Lotteries and Gaming Act stipulated that an offence was committed if premises were used – or knowingly allowed to be used – to conduct or promote a lottery.

The prosecution’s case in the Magistrate’s Court was based largely on the evidence of two police officers. Corporal Nicholas Huyler said he had entered FML’s Wulff Road web shop at 2.30pm on April 28, 2009, sat down at a computer and checked the early winning ‘numbers’ in New York, Miami and Chicago.

He then placed $3 on account 295057, which had been created by his fellow officer, Sergeant Tyrone Clarke. Corporal Huyler’s activities then came to an end because police entered the web shop, and detained all staff and patrons present.

For his part, Sergeant Clarke told the court that he visited the same FML location five days earlier to set up the account. He paid $20 to a Ms Stubbs to open the account, and received the account number and a pin number, 9406. He was also instructed on how to access the website, nassaugames.com, where he could purchase ‘numbers’.

Sergeant Clarke then went through this process in his office at the Security and Intelligence Branch (SIB) five days’ later, buying three numbers at $1 apiece.

“The definition of a lottery includes the game called ‘numbers’, which is what the officers said was played by Sergeant Clarke,” Justice Isaacs found. “This is evidence the magistrate could have regard to when determining whether or not the prosecution had made out a case against the appellant [Mr Flowers].”

The FML chief’s legal team, headed by Alfred Sears QC, “took issue with the dearth of evidence to show the premises were being used for the purpose of a lottery”.

While they placed much emphasis on Sergeant Clarke’s admission that it was possible to access the nassaugames.com website from any computer terminal, Justice Isaacs found: “Nothing turns on this, as the physical location of the lottery does not defeat a section 11 charge if the evidence led discloses conduct or activities at FML Wulff Road connected to the game of numbers.

“The facilitation of the lottery is the evil attacked by the legislation, and all that needs to be shown is an activity on the premises is connected to a lottery.”

Justice Isaacs added: “The evidence in this case disclosed that at FML Wulff Road, money was placed on an account that enabled a person to log on to nassaugames.com to play the numbers game, and Sergeant Clarke did play the game using his account.

“This is evidence of the premises being used in connection with the conduct of a lottery. It is evidence to which the magistrate could have regard in arriving at a conclusion that activities connected to a lottery were taking place on the premises.”

Justice Isaacs was backed on this by the Court of Appeal’s president, Anita Allen.

“The game of ‘numbers’ is specifically included in the definition of ‘lottery’, and the evidence clearly shows that Officer Clarke was facilitated in playing numbers through the account he set up at the premises at Wulff Road, and by the access card he was given when he set up that account,” Justice Allen ruled.

“It matters not that he used a computer at some other location to play. Indeed, as the actus reus of the offence under section 11 is permitting premises to be used for any purpose connected with the promotion or conduct of a lottery, at the least Officer Clarke’s evidence established that the premises at Wulff Road were used to promote a lottery.”

When it came to the $834,629 seized from FML’s Wulff Road web shop, the Crown argued that there was “a nexus” between these funds and the offences committed.

Franklyn Williams, the deputy director of public prosecutions, pointed to an interview given to the police by FML employee, Rhodista Rolle. She, and her fellow staff, were convicted of being in a building where an illegal lottery was taking place.

“She was asked if illegal gambling was being done at FML Wulff Road,” Justice Isaacs noted. “She responded: ‘Yes, ma’am’.

“When asked to explain the process, she said: ‘The people come in, they buy their numbers and they put the money on their account and, if they win anything, they come and collect their money’.”

Justice Isaacs added: “Mr Williams contended that that bit of evidence of the course of business at the premises raised a reasonable inference the money was being kept there to pay customers’ winnings.”

Mr Flowers’ legal team attacked the way the questions to Ms Rolle were put, but Justice Isaacs said: “The fact remains that she answered them, and her answers may have provided a basis for the magistrate to infer the money was connected to the offence for which Ms Rolle was convicted.

“In that event, he could not be faulted for so inferring and moving to forfeit pursuant to section 72 of the Act.”

The Court of Appeal, though, ordered that the funds be returned to Mr Flowers and FML because Magistrate Rolle had failed to follow the forfeiture procedures set down by the Lotteries and Gaming Act.

He both failed to give an Order, and show why the monies were connected to the offences the Crown was accusing Mr Flowers of.

Both Justices Allen and Isaacs shot down the arguments by Mr Flowers’ attorneys that the new Gaming Act, and repeal of the Lotteries and Gaming Act under which he was convicted, meant the activities complained of had been “decriminalized”.

“The appellant claims that having complied with all of the requirements set by the recently enacted Gaming Act…., he ought to obtain the benefits under the Gaming Act,” Justice Isaacs said. “He submitted that he is entitled to the retrospective legitimizing/decriminalizing of the web shop industry in the Bahamas.”

Justice Isaacs’ said Mr Flowers’ argument was that complying with the new licensing requirements, including paying six years’ worth of back Business Licence fees, and the ‘retrocactive’ effect of the new law “absolved him from criminal liability”.

Yet both Justices Isaacs and Allen said there was nothing in the Gaming Act to suggest it could apply retroactively. Justice Isaacs said this was “not a tenable argument”, while Justice Allen described it as

“simply unsustainable”.

One overlooked aspect of the case was that Sergeant Clarke’s evidence indicated that FML was already operating its own Know Your Customer (KYC) due diligence, as Ms Stubbs took a copy of his driver’s licence and a separate photo of the officer, together with his personal contact details.

It is unclear, though, whether this will allay the fears of many Bahamas-based commercial banks over accepting deposits from a legalized web shop gaming industry.