Home Affairs Minister Walton Brown has disclosed that the sale of 120 local properties are under investigation that amounts to the loss of revenue in fees, to the tune of $40 million, on suspicion of fronting, or using Bermudians as “front men” for non-Bermudians to make land purchases.
In a Ministerial Statement delivered on Friday, Mr Brown told MPs that the amnesty period allocated has come to an end, while the Attorney General’s Chambers assists with inquiries.
“We are acting now, and people who have not approached the Government in an effort to regularise will be approached,” he said.
According to the Minister, some of the unpaid cash involved, dates back ten years, before the law was changed to crack down on cheating, by using Bermudians as ‘front men’ for non-Bermudians to obtain land licenses.
While noting that not all of the properties on file were fronting arrangement, he warned that non-Bermudians who broke the law will be prosecuted on the advice of the Director of Public Prosecutions to recoup some of the unpaid millions.
Fronting became an offence in 2007 under immigration amendments. But the licensing requirements were rolled back in 2012, amid criticism that the law was too harsh on Bermudians marries to foreigners.
But Mr Brown told MPs that there were some questionable deals that had been given a long grace period – first under a three-year amnesty after 2007, that were now under investigation.
He noted that a “further two-year period of abeyance” was granted in 2010, “to allow people to comply”, that ended in 2012. But he said the law was clear on the amount of acreage that could be owned, or held by non-Bermudians.
At one stage, Progressive Labour Party MP Derrick Burgess said he had raised the issue in the House “years ago, and was told that it was ready to go to the Attorney General’s chamber”. But the Minister said the file had “sat in the Department of Immigration”.
Opposition leader Patricia Gordon-Pamplin, asked whether the information she received that “the file couldn’t be found, emanated from the technical officers”. The Minister replied: “Anyone who makes a statement has to stand by his or her responsibility to the technical officers.”
When asked by Opposition MPs how many cases had been brought by the Attorney General, he said he would try to find out. But he said: “I will say that the perpetrators were either required to pay fines or relinquish property.”
The Minister’s announcement came in follow up to the Ministerial Statement he made on September 15th, on ‘The Next Wave of Changes to Immigration Policies and Procedures’.
Providing the “update on investigations into alleged schemes for non-Bermudians to own land without the benefit of a land license”, he noted that “prior to the enactment of the Bermuda Immigration and Protection Amendment Act 2007 (‘the Act’) non-Bermudians were utilising schemes – including Bermuda Trusts – to acquire an interest in Bermuda real estate without obtaining a license”.
“There are approximately 120 properties that are being investigated. While properties may be in contravention of the 2007 Act, it may be determined that not all are, by definition ‘fronting’ arrangements,” he said.
“The use of these fronting arrangements are estimated to have cost the Government approximately $40 million during the ten (10) years preceding the enactment of the 2007 Act.”
While noting that “the 2007 Act sought to criminalise fronting arrangements by introducing severe penalties for those who contravened its provisions”, he said the Act simultaneously “granted a three (3) year amnesty period for non-Bermudians caught by its provisions to either obtain licenses or dispose of their interest in the Bermuda real estate”.
“While some of those affected complied within the three-year amnesty period, others did not, despite the dire consequences of non-compliance.”
To combat ‘fronting’, Minister Brown said: “The Attorney General’s Chambers have undertaken to identify those non-Bermudians who continue to flout the law and to ultimately make recommendations to the Director of Public Prosecutions to be prosecuted to recoup some of the estimated $40 million referred to above.
“In order to progress this work quickly, the Government will be allocating dedicated resources to this project,” he added.
“We will be working with the Attorney General’s Chambers to ascertain the most cost-effective method for completing this initiative.”