The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Privy Council yesterday paved the way for a battle over assets allegedly belonging to convicted drug trafficker, Samuel ‘Ninety’ Knowles, after it ruled that the US government’s $13.9 million confiscation order against him can be registered in the Bahamas.

The UK court, the highest in the Bahamian judicial system, overturned a previous Court of Appeal verdict that found the confiscation order could not be registered under the Proceeds of Crime Act because there was no written request from the US Attorney General to do so.

The Court of Appeal also ruled that Mr Knowles’ relatives, who claimed ownership of the assets ‘frozen’ on behalf of the US authorities since 2001, should have been notified of the confiscation order because it affected their interests.

This, too, was rejected by the Privy Council, which found that the ‘confiscation order’ was separate from efforts to enforce it, and that as a result it only affected Mr Knowles.

The ruling now enables the US government to seek forfeiture of Bahamas-based assets that it claims belong to Mr Knowles, paving the way for a new legal battle with his family, who allege they belong to it and were obtained via legitimate means.

The Privy Council said an “historic feature” of the case was the failure to determine the ownership of the assets, which have been subject to a ‘freeze’ order made on the US government’s behalf almost 16 years ago.

“The assets frozen included some dozen or so different parcels of real property, several of them condominium units, approximately nine bank accounts, and the assets of a car rental business at the [Lynden Pindling International] airport which is called A1 Car Rentals Ltd,” the Privy Council judgment said.

“It has always been the claim of the US prosecutors that the assets restrained were in reality in the beneficial ownership of the defendant, albeit carefully acquired in the name of his relations in an attempt to put them beyond the reach of the authorities.

“Equally, it has always been the claim of the defendant [Mr Knowles], and of various members of his family plus the car rental company, that these assets were nothing to do with him, but were, rather, the fruits of the honest endeavours of his relations.”

The Privy Council said fear that the US would seek to eventually enforce the ‘Proceeds of Crime’ order against the assets had likely motivated Mr Knowles’s family and relatives to oppose registration of the original ‘confiscation order’.

“It is an historic feature of the long-drawn out progress of this prosecution that although the original restraint order has been discharged, and replaced by a fresh one dated 9 June, 2011, in marginally more restricted terms, there has not been any trial of the question of the ownership of the restrained assets, nor of the source of the funds from which they were acquired, despite the passage of some 16 years since the first order was made,” the Privy Council noted.

“It is plain from the documents which the Board has seen that neither side has grappled properly with the issues of ownership or source of funds.”

The Privy Council said “much fuller evidence” was required to determine ‘ownership’ of the disputed assets.

“If the other respondents [Mr Knowles’s relatives] wish to assert that they own the assets beneficially, it is likely that they will have to produce evidence of the source of legitimate funds from which they were acquired,” it added.

Turning to the US ‘confiscation order’ itself, the Privy Council found that while it could be viewed as ‘ambiguous’, because it came from a different country, it was seeking payment of funds that were obtained in connection with criminal activities.

Siding with the initial Supreme Court verdict delivered by then-senior justice Hartman Longley, the Privy Council found that the US government had requested the ‘confiscation order’s registration, and that there was no need for Mr Knowles’s relatives to have been served with notice of the proceedings.

Damian Gomez QC, the former minister of state for legal affairs, appeared for Mr Knowles and his relatives, while UK-based QC, Peter Knox, acted for the Government and the US.