KINGSTOWN, St. Vincent – Police here are investigating a fraud ring at the International Airport Development Company (IADC), where two junior employees colluded to defraud the company of EC$63,744 by billing for more food than was delivered to the company.
IADC Communication Officer Jennifer Richardson-Herbert made the announcement to the media Thursday morning by reading a press statement but did not name the two clerks or take any question because of a possible criminal investigation.
The monies were most likely siphoned off through the system used to feed Cuban workers at the project. And it is the second time in two years that food and the IADC are at the centre of probes here.
Richardson-Herbert strove to reassure Vincentians that the majority of the staff of the company, tasked with constructing the EC$652 million Argyle International Airport — the nation’s largest capital project ever — are honest and that citizens should continue to support the construction of the airport.
She said that the IADC recently discovered that two junior employees conspired to defraud the company of funds through the issuance of false invoices.
The company’s accounts department found that a purchasing clerk and a storeroom clerk “colluded possibly with the help of some vendors to bill the IADC for larger quantities of food items than were actually received by the company”.
Apparently, all parties to this collaborative fraudulent scheme shared the ill-gotten proceeds among themselves, Richardson-Herbert said.
She, however, noted that the fraud was committed through the issuance of fraudulent invoices to the company.
“No cash was stolen as we keep only small amounts of petty cash at the IADC,” Richardson-Herbert said.
About one week ago, the IADC met with the two individuals involved in the fraud and one “testified to collusion with the other staff member”. The employee who testified of involvement in the fraud resigned.
“And based on the evidence available to us, we have terminated the services of the other staff member but our investigations are continuing,” Richardson-Herbert said.
“You would understand that since this matter has a potential to become a criminal investigation, I can say no more at this time, lest we end up prejudicing any investigation that might be carried out.
“However the IADC is reserved to recover its stolen monies. And I must add here that these particular issues have been passed over to the police department and is now the subject of a criminal investigation.”
Richardson-Herbert said that the company has established “a high standard of accountability and have put in place a number of controls to safeguard the assets entrusted to us.
“In this event, two employees who should have been part of the process of safeguarding the company’s assets and should have been looking out for the good of the company instead colluded to bypass our controls to defraud the company.”
This situation, Richardson-Herbert said, is “an isolated case for which we take full responsibility and would never want to see repeated at the IADC…
“When you contribute to the project and when the Honourable Prime Minister Dr. Ralph Gonsalves works as hard as he does to find the monies for the project, everyone must feel assured that the monies entrusted to us are in good hands and are being used for the purpose for which the funds are intended.
“We are currently reviewing our controls to identify changes that can be made to forge a more effective system to deter fraud while maintaining the efficiency of our operations.
“Rest assured that the overwhelming majority of the staff at the IADC are good and hardworking people whose goal is to see the completion of our international airport and the development of our beautiful country,” Richardson-Herbert said.
She further stated that as the IADC, like anywhere else, has its bad apples.
“However, we are determined not to let those few bad apples spoil the entire bunch. We recognise the awesomeness of our charge and we are determined to get it done, with your help. Continue to support the project, continue to support the IADC, and, please, remain confident that the construction of your international airport is in good hands.”
She further stated that since the IADC is charged with the construction of the nation’s largest capital project “it is incumbent on us as a company to ensure that when we are entrusted with your money to carry out a job that we are careful with it.
“We must ensure that it is used for the purpose for which it was intended and that whenever a breach occurs that we take full responsibility for it and that we explain the facts to you.”
The announcement on Thursday confirmed rumours this week about the disappearance of cash at the company.
It also came exactly one week after businessman Denzil Bacchus, in fulfilling a 20-year-old promise to himself, presented to Gonsalves a cheque for EC$20,000, one-fifth of what he intends to donate to the IADC.
It is the second time in two years that food has been at the centre of misappropriation of funds at a government department here.
In 2010, a special audit of the Ministry of Health found that civil servants bought computer supplies and fast food and paid monies to the IADC contrary to government policy.
The Director of Audit then called on Lanceford Weekes, permanent secretary in the Ministry, to explain why monies allocated to the Cuban Integrated Health Programme were used for purposes not approved by Parliament.
Weekes was also asked to explain the involvement of the IADC in the CIHP.
That same year, Gonsalves ordered an audit of the Agricultural Diversification Programme amidst allegations that Permanent Secretary in the Ministry of Agriculture, Allan Alexander — son of House Speaker Hendrick Alexander — was involved in a business that sold to the Ministry, at exorbitant prices, items imported tax-free in the Ministry’s name.