Buccament Bay Resort in its former glory. (Internet photo)

A British judge who, on Monday, ordered an accounting firm to pay Harlequin Property SVG Ltd. US$11 million, says that Harlequin’s business model might be said to bear “the hallmarks of a serious and significant scam”.

In his ruling, Justice Coulson said that the case that Harlequin brought against Wilkins Kennedy, its accounting firm between 2006 and 2010, “does not lack startling features”.

He noted the ongoing Serious Fraud Office investigation into Harlequin, adding that putting the words “Harlequin Property” into any search engine or social media “immediately brings down a shower of invective and complaint by their erstwhile investors.

“There have been significant findings of fraud and dishonesty against Mr. [Padraig] O’Halloran, in connection with the construction of the resort, made by the High Court in Dublin,” he said.

O’Halloran is owner and controller of ICE, a construction firm that worked with Harlequin from 2008 to 2010.

The judge further noted that there have been defamation proceedings, resolved by an apology and a payment of money to manager of Harlequin, Dave Ames and his wife, Carol, as a result of a website which published lies about and threats against Harlequin.

The website was discovered to be the work of Jeremy Newman, a senior employee of Wilkins Kennedy, who provided services to Harlequin at the same time as being ICE’s chief financial advisor.

As it relates to the actual location of the resort, the judge said that despite the “limited land purchased by Harlequin at Buccament Bay, and the very obvious physical restraints of the site as a whole, there was no limit to the number of deposits which were taken for the proposed resort there, with the result that there was a huge imbalance between the properties for which a 30% deposit was paid to Harlequin, and the number of properties that had been (or were realistically going to be) built at the Buccament Bay resort.

“This discrepancy was exacerbated by the fact that, of all the numerous Harlequin projects in the Caribbean and elsewhere, it was/is only the Buccament Bay resort that has ever been built. So, although more than 1,900 deposits were taken for Buccament Bay, and 8,200 overall for all Harlequin developments worldwide, only 195 units have been built at Buccament Bay and none anywhere else. Of those completed units, only about 16-20 are now owned and occupied by the 1,900 investors: the other buildings are used as hotel rooms, with Harlequin, not the investors, receiving the sums paid by the holiday-makers who stay at Buccament Bay. These two elements of the Harlequin business model might be said to bear the hallmarks of a serious and significant scam.”

The construction works at the resort were funded by deposits made by Harlequin investors who wanted to purchase cabanas or apartments, either at this resort, or other resorts planned by Harlequin round the world.

However, the deposits were not ring-fenced, so there was no link between an investor’s 30 per cent deposit for a property at one of the Harlequin resorts, and the destination of that money.

The money might go to any other of the numerous Harlequin developments, or might be used for entirely different purposes altogether, such as the generous commissions paid to Harlequin’s sales agents, the large sums paid to the Ames family as directors of the web of related Harlequin companies, or separate enterprises altogether, such as the Harlequin travel agency, and the sponsoring of Port Vale FC, the judge said.

Harlequin paid ICE US$52 million not only without any sort of written contract, but without any detailed agreement as to the scope of the works to be carried out, the monitoring of those works, or their valuation.

Although fixed weekly payments were agreed in significant sums, these payments were not in any way tied to interim claims for payment made by ICE, let alone an independent valuation process operated on behalf of Harlequin SVG.

From 2008, Harlequin made a considerable number of payments to ICE at US$125,000 per week.

These were subsequently increased to US$165,000 per week.

In March 2009, the weekly payments increased again to US$400,000 per week.

“ICE received the agreed amount every week, regardless of what, if any, work they had carried out,” Justice Coulson said, noting that an Irish court described the situation as “extraordinary”.

Justice Coulson commented: “That is, if anything, an under-statement. In my view, for a project of this size, the fact that there were no financial controls whatsoever beggars all belief.”

The judge further said that the fact that Wilkins Kennedy acted for both Harlequin and ICE, not only on other projects, but specifically in respect of the Buccament Bay construction works.

“This unsatisfactory arrangement unraveled in two separate strands of the evidence.”

He said an unusually close relationship developed between Padraig O’Halloran, owner and controller of ICE and Martin MacDonald, a partner in Wilkins Kennedy, which acted as Harlequin’s accountant and business advisor between 2006 and 2010.

MacDonald was variously referred to as Harlequin’s Chief Financial Officer or Financial Director, and Mr. Ames’ right hand man.

“Eventually, Mr. O’Halloran offered Mr. MacDonald a job, and Mr. MacDonald agreed to be his best man, although the lavish stag weekend at the Monte Carlo Grand Prix occurred at just the time that the relationship between Harlequin and ICE began its final, inevitable collapse. Since Mr. MacDonald reported Harlequin to the SFO (Serious Fraud Office) in June 2010, with assistance from Mr. Newman and Mr. O’Halloran, he has invested half a million pounds in a business venture with both men,” the Justice Coulson said.

The judge further said that internal documents emanating from Wilkins Kennedy in the early part of 2010 reveal an attempt by Wilkins Kennedy to protect ICE at all costs and “to ensure that Harlequin paid ICE as much as possible (whether it was justified or not) before the inevitable parting of the ways.

“This was the strategy that was adopted, regardless of the value of the work that ICE were doing (or, by then, not doing). On a project where Wilkins Kennedy, through Mr. MacDonald, was attending meetings on behalf of Harlequin purportedly to argue with ICE about money, it meant that WK were on both sides of what was (and remains) a very bitter dispute.”

Harlequin awarded $11m but might not get any of it

5 replies on “British judge says Harlequin has ‘hallmarks of a serious and significant scam’”

  1. I think the Peters Hope resort should be put on hold until more information is garnered from this bogus Buccament Resort issue. It can and will shows that SVG is not a place to invest or visit for 5 stars hotel resorts accommodation. All these bogus deals will also affect AIA once tourists learn of what’s taking place with hotel accommodation in SVG.
    But then again, what can we expect from an illegitimate, bogus, corrupt and vindictive government? It would be hard to know if some of that money was passed under the table to people in SVG. I won’t be surprise if part of it didn’t end up in Panama. Is it any wonder that crime is rampant in SVG, especially with the minister of security making all excuses, blaming others for his failure to protect the lives of Vincentians?
    For those ULP lemming who say. Why blame Ralph for the crimes committed in SVG and crime is committed all over the world”: I say crime was never this bad until the ULP came in to government using criminal actions and Ralph is the minister of security and the buck stops there.

    1. I am not denying that corruption may have taken place in some of these deals, but contend that the main problem is that the mainland is unsuited for five-star hotel development, as you rightly claim, which few of our people and fewer of our politicians want to face up to. This is why all we end up with is the likes of Dave Ames based on the observation that beggars can’t be choosers. We deserve Ames and Ames deserves us.

      As for AIA, it is being constructed mainly to attract developments like the Buccament resort which therefore means it should never have been built.

      The corruption you refer to is the effect of the nature of our mainland resources, not the the other way around, as you seem to claim.

  2. Just another in a long list of scams on the mainland: Harlequin Hotels and Resorts (Dave Ames and family), Owens Bank and New Bank (the Nano family), Ottley Hall marina (Aldo Rollo), Safe Harbor International Bank (James Tierney and Thomas Mangione), and Millennium Bank  (William Wise), among others.

    There are three important lessons here: (1) our mainland does not have the potential to attract foreign direct or other investment except from people and institutions like these, (2) our only real economic potential has always been in the area of agricultural production, even as the potential in this area continues to decline, and (3) stay tuned for the unfolding over the next two years of the Argyle airport homegrown political scam.

    Many thanks to Peter Binose for alerting us to the Harlequin fiasco years ago.

    When I first started to follow Harlequin, my eyebrows were immediately raised by the hybrid quasi-time share and full ownership investment sales model advertised on the first version of their site. The resort was being peddled not so much as a picture perfect holiday destination but as a perfect investment proposition for small investors, something that is rare in the Caribbean tourist industry but a sales pitch thousands of British investors, many of them retirees, fell for hook, line, and sinker.

    The worst is yet to come. I don’t know whether plea bargains are available in Great Britain, but if they are, it will be interesting to see whether Dave Ames names any high-ranking officials in SVG as being part of his alleged scam in order to get a reduced jail sentence.

  3. Here is a review posted two days ago on TripAdvisor for Buccament Bay Resort. Check for yourself to see that this review is typical of the current state of affairs at the resort which will surely be shuttered very soon. The looters will be out in droves unless the police secure the site!

    “Do not bother booking at Buccament Bay Resort in St. Vincent….the resort is almost in receivership. The workers are on strike and haven’t been paid for two months. The hotel management will lie to you about everything. All the restaurants were closed, no welcome drink upon arrival, spa is closed, pool not being cleaned and there are numerous tiles missing. Most of the temporary employees are rude and can’t be bothered to assist you with anything. The place hasn’t been taken care of in some time. Washrooms that were by the pool only 3 out of 6 of them were operational as well as 1 of 6 sinks. Cold buffet meals almost daily for all 3 meals and food would run out fast. Our villa had a leak in the ceiling and wasn’t cleaned all week nor were we given clean towels. Worst place ever!!!!” (
    https://www.tripadvisor.ca/Hotel_Review-g147380-d1719145-Reviews-Buccament_Bay_Resort-St_Vincent_St_Vincent_and_the_Grenadines.html ).

  4. The entire 350-page ruling can be found below:

    http://www.bailii.org/ew/cases/EWHC/TCC/2016/3188.html

    Acording to the judge, our very own distinguished member of the bar, Sam Commissiong, a man found guilty of unprofessional conduct in 2002 and fined $EC5,000, has much to answer for:

    “I find that he was an untruthful and unreliable witness…. Harlequin’s difficulties on this topic were exacerbated by the fact that their evidence about land acquisition came principally from Mr Commissiong, their SVG lawyer. On this topic, I find that his evidence was untrue, and probably deliberately so. He had given clear and confident evidence, both written and oral, in the Dublin proceedings, and in the attempt by Mr and Mrs Ames to discharge the world-wide freezing order which had been obtained by a number of the disgruntled investors. Yet when he came to give oral evidence before me in St Vincent, possibly because of the clear and persistent cross-examination to which he may not previously have been exposed, Mr Commissiong resiled from a great many of his previous sworn statements. At one point he even suggested – without justification – that his affidavit in the freezing order proceedings bearing his name ‘had been tampered with.'”

    The judgement also shows that Harlequin built and sold villas (mostly never constructed) on land that the company did not own — property still belonging to Bernard Punnett and his sister (who refused to agree to the sale of property jointly owned with her brother and inherited from their father) and several Rasta owners of farmland that they refused to sell to Ames.

    The fallout from this and related judgments will haunt us for years to come.

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