Extradition of convicted Ponzi scheme operator from Turks and Caicos still in limbo

The chief magistrate ruled that moneylaundering offences were extraditable offences under TCI law but a wire fraud offence was not because, in his view, a like offence did not appear in the relevant schedule in relation to extraditable offences. The chief magistrate did not purport, by making that finding, to rule that the US was in any way restricted in how it chooses to deal with Smith. 

Extradition in this case cannot and does not, however, fetter the jurisdiction of a US court if and when Smith is returned to the US.

David Smith, with the assistance of his attorney, Oliver Smith, who is both US and TCI qualified, had negotiated a plea agreement with the US Department of Justice that included a provision not to challenge extradition. Contrary to the plea agreement, Oliver Smith submitted to the TCI Court that the agreement he had negotiated on behalf of his client was not binding in the TCI, even though much of it was facilitated to allow David Smith to serve part of his sentence in the TCI. 

The Department of Justice is reportedly considering Oliver Smith’s position as it is somewhat unusual for an attorney to negotiate a plea bargain in one jurisdiction only to openly undermine it in another.

Having spoken to US authorities, TCI’s director of public prosecutions (DPP), John Masters, said he cannot see how the TCI magistrate’s decision does anything more than lawfully deliver David Smith to the US for them to deal with in accordance with their domestic laws.

There is, however, another issue to be resolved before Smith is extradited and that is the issue of his unpaid confiscation order in the TCI.

On April 25, 2012, the TCI Supreme Court ordered, amongst other things, that Smith pay $20,919,950.53 or serve eight years imprisonment in default. Smith was granted an extension until October 24, 2012, to pay that amount. He did not and is not entitled, at law, to get any further extensions of time to pay. Therefore, as it stands at the moment, Smith is in custody for both the extradition and confiscation matters.

Smith has applied to the Supreme Court of the TCI for a certificate of inadequacy that, if accepted, may reduce the amount of the confiscation order and thereby the sentence in default. Smith’s application is being opposed by the DPP and the attorney general and is due to be heard on Tuesday.

If the court dismisses or varies Smith’s application, he will still have to serve an additional term of imprisonment in default unless he pays the confiscation order. In that event, the extradition proceedings lapse and will need to be recommenced at a later date by which time, the laws regarding extradition may be modified so that there will be no question as to whether wire fraud is an extraditable offence.

The DPP, together with attorney general Rhondalee Braithwaite-Knowles, will reportedly discuss appeal options regarding Smith’s extradition once the proceedings set down for Tuesday have been completed.

“Due to the gravity of the offences committed by David Smith and the impact it has had on the lives of many innocent people,” Masters said he has assumed personal conduct of all outstanding matters relating to David Smith and “will leave no rock unturned to ensure that justice is done.”




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