Carlos Hill and his brother Bertram Hill were yesterday arrested during an early morning raid on Carlos Hill's upscale St Andrew home on suspicion that they have defrauded billions of dollars from lenders to the failed alternative investment club Cash Plus Limited.

Carlos Hill (right) is ushered into a car by a police officer after leaving the Organised Crime Investigation Division headquarters in downtown Kingston yesterday. (Photo: Lionel Rookwood)

The men were taken to the Kingston headquarters of the Organised Crime Investigation Division (OCID) where they were held for several hours before being transferred to the Horizon Remand Centre where they were further detained, pending questioning today.

Last night, the police said they had also arrested Cash Plus' chief financial officer, Peter Wilson.

Several documents, computers and other items were seized during the raids on nine corporate area residences, stretching from Harbour View in East Kingston to the upscale residential area of Norbrook, where the 70-year-old Carlos and Bertram were held and five high-end vehicles taken away by the police.

Assistant Commissioner of Police Les Green told a press briefing yesterday afternoon that the raids were prompted by complaints of fraud from Cash Plus investors.

Some $4 billion of investors' monies cannot be accounted for, said Green, who added that this figure could increase as the investigation, which will be extended overseas, continues.

Though Bertram was not a part of Cash Plus, "there is reason to believe" that he was involved in the alleged "fraudulent activities" of his brother, Green added.

The police action came a day after it was announced by Cash Plus' court-approved co-interim receivership manager, Kevin Bandoian, that Cash Plus would not be able to make good on its promise to start making repayments to its approximately 40,000 lenders by April 14, as Carlos Hill was unable to secure the necessary funding or "access enough liquidity".

Bandoian, in a news release, said he and his team have so far found more than 80 affiliates in several different countries within the Cash Plus Group, most of which appear to have little or no assets and/or business activity.

Yesterday, Green appealed to disgruntled investors to be patient, as the investigation into Carlos Hill's assets would be a lengthy, difficult process.

Cash Plus burst onto the local financial landscape five years ago and quickly amassed a large pool of lenders with its promise of a 10 per cent monthly return on monies loaned to the company.

Cash Plus, however, did not have the relevant licences and last December was served with a cease-and-desist order by the Financial Services Commission (FSC). Cash Plus suffered a further blow when the courts, in January, gave the go-ahead for the National Commercial Bank to close its accounts.

Several irate lenders have since filed suit in the Supreme Court to recover their monies, while other investors have, on several occasions, staged demonstrations at Cash Plus' Kingston headquarters and at the National Commercial Bank.

Yesterday's operation started at approximately 6:00 am, when a hoard of police officers and investigators from the Financial Investigation Division of the finance ministry showed up at Carlos Hill's sprawling home at 68 Norwood Drive, which was leased to Cash Plus four years ago.

The Observer was unable to find out how much the house was leased for. However, real estate agents last night said the current rate for houses in that neighbourhood ranged from US$4,000 to US$6,000 per month.

Several boxes of documents were removed from the premises along with two Honda Ridgeline pickup trucks and three SUVs - a Toyota Sequoia, a BMW X5 and an Acura RDX.

The raid on Carlos Hill's home drew scores of onlookers, including passing motorists who converged at the entrance of the premises in order to get a glimpse of Carlos Hill, who was ushered into a heavily tinted, unmarked police vehicle before being whisked away to the OCID minutes to 11:00 am.

After several hours at OCID, the Hill brothers emerged at approximately 3:45 pm and were quickly escorted to an unmarked police car and whisked away. Attorney Hugh Thompson told reporters yesterday that the brothers had spent the time at OCID filling out CIB4 forms.

Last December, the Observer reported that Carlos Hill was convicted of racketeering, mail fraud and of making a false statement in three US jurisdictions and was sentenced to near 30 years in prison.

Some 500 people were fleeced out of approximately US$8 million, through his four companies, which offered real estate and mortgage services. His conviction on mail fraud activities in Texas cost American taxpayers some US$100 million, according to US court documents obtained by the Observer.

He, however, spent just 10 years in prison before his return to Jamaica in 2002, where he formed Cash Plus. Carlos Hill was spared deportation as part of his plea deal.

Hill, who was born in Jamaica on June 20, 1947, migrated to the US with his family in 1967.

According to a case file reported in 1996 Westlaw (WL 33648765), Hill, at his April 26, 1996 plea hearing in New Jersey, "confessed that he and his co-conspirators used various corporate entities, including Citywide Mortgage Corporation and Citywide Financial Services, to engage in an 'advance fee scheme'".

Added Westlaw: "More specifically, defendant solicited and accepted money from customers (an 'advance fee' of about $25,000 - $35,000) based on a fraudulent promise to arrange funding for loans which never materialised. As a result of this scheme, Hill and his collaborators defrauded nearly 500 victims out of an estimated eight million dollars."

Westlaw also said that "At the height of the Citywide conspiracy, Hill and his cohorts controlled 35 corporations with offices across this country, Europe and the British West Indies; obtained [US]$8 million from 500 customers; engaged in numerous, sophisticated business transactions, including purchasing a national commercial bank, arranging fraudulent loans to shell corporations, establishing a law office, and creating false financial statements, letters of credit, and escrow accounts; and conducted an elaborate and complex 'Ponzi scheme' where current advance fees were used to partially fund some loan commitments and thus, perpetuate the scheme."

Yesterday, Green revealed that based on a risk assessment done by the police, special security arrangements have been put in place for commercial entities, which may be vulnerable to attacks stemming from the arrest of the Hill brothers.

He said also that Cash Plus lenders can file complaints on the security ministry's website www.mns.org.jm and that next week hard copies would be made available across the island for lenders who do not have access to the Internet.

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