The Queen v Fernando Mendes
| Jurisdiction | Cayman Islands |
| Judge | Mr. Justice Charles Quin |
| Judgment Date | 11 August 2014 |
| Court | Grand Court (Cayman Islands) |
| Docket Number | INDICTMENT NO: 81/2011 |
The Hon. Mr. Justice Charles Quin
INDICTMENT NO: 81/2011
IN THE GRAND COURT OF THE CAYMAN ISLANDS
CRIMINAL SIDE
Ms. Toyin Salako, for the Crown
Mr. Ben Tonner of Samson and McGrath for the Defendant
Defence made a submission that the Court should stop the prosecution of this case on the grounds that, to allow the trial to continue would be an Abuse of the Court's Process. Counsel on behalf of the Defendant submits that the application is founded on the Crown's failure to obtain and retain material evidence.
The Indictment, dated the 26 th October 2011, originally contained five counts. However, by the date of this trial the prosecution maintains only count 2 against the defendant — that is, the charge of Theft contrary to s.23 5(1) of the Penal Code (2007 Revision) — to which the Defendant pleaded Not Guilty on the 16 th December 2011. The particulars of the offence are that the Defendant, between the 30 th June 2009 and the 11 th January 2011, in the Cayman Islands, stole property in the sum of US$132,807.43, belonging to FINAB Ltd.
On the 10 th February 2011 the CEO, primary shareholder of FINAB and main prosecution witness, Alfonso Finocchairo (“AF”) made a complaint to the Financial Crime Unit (FCU) regarding the Defendant and matters involving Conirnbriga Investments Ltd. (CIL).
On the 11 th February 2011 AF suspended the Defendant and the Defendant was arrested at the offices of FINAB. At the time of his arrest, the RCIPS seized the laptop that was on his desk as well as the hard drive for his personal computer.
On the 14 th February 2011 AF dismissed the Defendant from the employment of FINAB for willful, gross and covert misconduct.
On the 8 th March 2011 the Defendant's attorneys wrote to the FCU — stating that the Defendant wished to make a Suspicious Activity Report (“SAR”) of suspected financial crimes within FINAB to the FCU. In this letter counsel stated that they were instructed that the complaint is time sensitive, since the view might be taken that evidence may be destroyed if prompt action is not taken
In a second letter dated the 8 th March 2011 the Defendant's attorneys set out the names of the four directors, including AF, the CEO of FINAB.
On the 9 th March 2011 the Defendant produced a statement to the FCU in which he alleged that AF and others were committing and encouraging clients to commit actions to evade US tax. In this letter the Defendant provided various email addresses of the Directors and other relevant personnel. The Defendant also stated that he was very concerned that staff had been instructed to destroy or hide evidence. The Defendant then confirmed that this evidence could prove his innocence of the charges laid against him and the criminal activity of AF and others. In this statement the Defendant affirmed that emails and other documents relating to these activities are stored on servers in the computer room at FINAB's office. Hard copies of banking transactions are kept in a storage room in the office near to the emergency exit.
On the 10 th March 2011 the Defendant's attorneys wrote to the FCU in relation to a statement and the exhibits and stated that any delay could be prejudicial to the investigation.
On the 11 th March 2011 FINAB's and AF's Office Manager, Mr. Euclides Pitta (EP) gave a statement, alleging for the first time, that the Defendant had misappropriated funds from FINAB and provided cheques and spreadsheets along with the letter. Much of this material led to the execution of a Restraint Order on the 14 th March 2011 against the Defendant. It is noted that no amendments have been made to these allegations since the 11 th March 2011.
On the 15 th March 2011 the Defendant's attorneys wrote to the FCU stating that “Time is of the essence if information germane to our client's case is to be preserved.”
On the 22 nd March 2011 the Defendant's attorneys wrote again to the FCU — enquiring after the status of the Defendant's SAR. In this letter counsel for the Defendant stated that he was very concerned about how he (the Defendant) might seek to protect any relevant information which remains in the possession of the directors and others and which may assist his case.
On the 29 th March 2011 the FCU responded to this correspondence, saying, it would not be prudent to comment on the case at this stage.
On the 4 th April 2011 the Defendant gave his second statement, which referred to his first statement. The Defendant stated that he had discretionary authority to make payments to third parties and to himself for salaries, vacations, paid trips and other out of pocket expenses. The Defendant stated that payments of amounts due to himself, could be made to third parties as authorised by the CEO, AF. The Defendant stated that evidence of this could be found in the offices with accounting records.
On the 4 th April 2011 the Defendant was arrested for money laundering and an interview was conducted. Throughout this interview the Defendant gave largely “no comment answers.”
On the 7 th June 2011 the Defendant provided a third statement — again confirming that payments had been made to him and other third parties over and above salaries and they were for vacations, paid out of pocket expenses as well as other benefits, and these were authorised by the Board of Directors. In addition, the Defendant said there was an agreement with Mr. Sergio Capela (SC) to lend him (the Defendant) funds for his personal business expenses. In this statement the Defendant reiterated his concern about the removal/destruction of evidence that could possibly support his statements.
From the time of his arrest until 5 th June 2012 the Defendant's attorneys warned the RCffS about the importance of preserving FINAB documents.
On the 19 th July 2011 the Defendant was charged with the theft of US$132,807.43, the property of FINAB.
On the 19 th October 2011 this case was transmitted from the Summary Court to the Grand Court.
On the 28 th October 2011 the trial was set for the 5 th June 2012.
On the 16 th December 2011 the Defendant pleaded Not Guilty to the theft of US$132,807.43.
On some date after the 2 nd March 2012 the Defence was served with a schedule of unused material confirming that electronic documents had been seized from FINAB during a search conducted in February 2011. This RCIPS schedule of non-sensitive, unused material contained 35 different items. Defence counsel submits that the boxes on the RCIPS schedule to the right of the items provide for the RCIPS/DPP to determine whether the item is disclosable or not. These boxes remain blank and, also, similarly the boxes for the reviewing signatures of Crown counsel, names and dates remain blank. This leads to the inference that neither the RCIPS nor the DPP addressed the vital questions of disclosure/discovery and inspection of this unused material.
On the 1 st April 20013 the Defendant applied for inspection of all electronic material received by the RCIPS.
On the 13 th September 2013 the Crown counsel, Mr. Snape, notified the Defence that no emails since 2006 had been captured by the FCU. Crown counsel informed the Defence that the police had “not captured” the emails from 2006. The FCU in-house expert was of the view that the emails may have been in a cloud server or similar to which the police did not have access. The FCU said these files are technical and difficult to extract. Furthermore, Crown counsel informed Mr. Tonner that the police have been unable to read the BANIF data file and, further, in relation to the QuickBooks file 2010, the police have been unable to read the file.
On the 15 th September 2013 the Defendant's attorneys wrote to the Crown stating that since Mr. Mendes' arrest and removal from office in February 2011, he has not had any access to hard copy or electronic documents relevant to his employment. Defence has made the point that the Defendant has been entirely reliant upon the police to seize and retain potentially relevant evidence. The Defence put the Crown on notice that the Defence may be making an abuse of process application as it would be impossible for the Defendant to receive a fair trial since he has been deprived of the very material which can undermine the allegations of FINAB and positively advance his defence.
On the 16 th September 2013 the Defence asked for the Crown to provide, in accordance with s.55 of the Police Law, the Defence with electronic copies of all emails sent from and received by the Defendant's FINAB work computer and advised that this information would be crucial to Mr. Mendes being able to defend himself in the forthcoming trial.
On the 27 th September 2013 an IT expert was contracted to do a statement and he confirmed that he told the RCIPS how to gain access to the files on the server and that any files on the serve at the time of the Defendant's arrest should still be there as there has never been, to the best of his knowledge, any cause to delete them. The expert confirmed that the FINAB server had ample storage space and he further confirmed that that the FINAB staff had access to files stored on their server. He further confirmed that QuickBooks is still being used and should have all the data from the time when the Defendant was employed at FINAB.
Between September 2013 and early 2014 efforts were made to locate emails postdated 2006 and, most importantly, the time period of the Indictment, that is, from the 30 th June 2009 to the 11 th January 2011 and nothing was obtained.
In early December Defence counsel asked if there is any additional material to the unused schedule. The DPP responded by saying that the police have stated...
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