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$50m Investors Getting 'Shafted At Every Turn'

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Investors with a collective $50 million exposure yesterday said they felt betrayed and abandoned by the Bahamian justice system, with their development struggling to move forward under the weight of its controversial past.

Chris Fleming and Chris Bain, two homeowners at Exuma’s Oceania Heights real estate project, told Tribune Business that they and other foreign investors were “getting shafted at every turn” in their efforts to redress previous wrongs.

While government intervention led by Deputy Prime Minister Philip Davis had removed Oceania’s initial developers, Canadian citizen Howard Obront and Bahamian attorney Anthony Thompson, and handed control of the project to a Homeowners Association, Messrs Fleming and Bain slammed the authorities for failing to take stronger action against the duo and prosecute them in the courts.

As a result, Mr Fleming revealed that Oceania owners were reaching out to the Royal Canadian Mounted Police (RCMP) to see if it could take action against Mr Obront that was similar to its bid to extradite from the Bahamas alleged Canadian fraudsters, Jeffrey Pogachar and Paola Lombardi.

He and Mr Bain also disclosed to Tribune Business that they, and other purchasers who had bought lots from Messrs Thompson and Obront, were still saddled with multiple problems the latter duo had left behind.

The issues detailed by Mr Fleming and Mr Bain include:

  • The Homeowners Association is being asked by the Ministry of Finance to pick up, and pay, a bounced $30,000 cheque submitted by Mr Obront to pay past due Business Licence fees.

  • Exuma-based realtors are warning prospective buyers to avoid purchasing at Oceania Heights, due to its past reputation and ongoing issues relating to the ability to obtain good title to property in the 40-acre development.

With some 20 existing Oceania lot buyers having walked away from their investments in frustration, Mr Fleming told Tribune Business that the sale of these properties and others were critical to generating an estimated $5.25 million to finance the development’s full build-out.

And Mr Bain expressed scepticism over whether his land at Oceania, and that belonging to other investors, was “worth anything” due to the project’s ongoing woes.

He and Mr Fleming said Mr Thompson had yet to pay $400,000, which he received as Stamp Duty payments from Oceania purchasers, over to the Treasury. This, they alleged, meant that 10 buyers still could not obtain conveyances and good title to their properties.

Mr Bain pointed out that this $400,000 would go a long way towards stocking Exuma’s newly-completed mini-hospital with the equipment and pharmaceutical drugs it needs to open.

And, with Canadian and US doctors accounting for 90 per cent of Oceania’s buyers, the debacle surrounding the project has done nothing for the Bahamas’ objective of promoting itself as a medical tourism destination.

“The long and short of it is that we’re very disappointed,” Mr Bain said of the authorities’ seeming inability to take more decisive action against Messrs Obront and Thompson.

“We have come to the conclusion, and I’m talking for all the homeowners, that there is no rule of law in the Bahamas.

“It’s becoming increasingly known that it’s lawless at the same time as the Bahamas is trying to open up a $3.5 billion project in Baha Mar and attract investors from around the world.”

To live up to its ‘tax free real estate investment’ billing, as stated on the marketing materials employed by Messrs Obront and Thompson, the Oceania project was seemingly structured as a giant ‘tax avoidance’ scheme.

Mr Thompson, as a Bahamian, was shown as the owner of land. This ensured it was not subjected to real property tax, due to the exemption for Bahamians owning Family Island real estate.

And it also meant no Stamp Duty was paid to the Treasury on the property sales either. This, though, also resulted in no conveyances being passed to Oceania buyers, meaning they did not obtain clear title to their land.

These and a myriad of other problems have undermined Oceania Heights’ development. And, apart from the damage inflicted on foreign investors and the Bahamas’ business reputation, the project was also effectively a ‘rip off’ of the Bahamian taxpayer and Public Treasury.

Messrs Fleming and Bain yesterday expressed frustration that despite an extensive police investigation, the authorities - including the Attorney General’s Office - had yet to file charges or take any other action against Mr Obront and Mr Thompson.

And they also blasted the Bahamas Bar Association’s ethics and disciplinary committees, slamming what they perceived as the ‘light’ punishment’ - six months’ suspension and a $750 fine - handed to Mr Thompson despite finding him guilty of “gross misconduct” in relation to dealings at Oceania.

“The foreign investor, on who the Bahamas depends, and not just us, is getting shafted at every turn,” Mr Bain told Tribune Business.

“Why is Mr Thompson being allowed to walk around with a $400,000 debt due to the Government of the Bahamas, when there is not enough money to open the hospital in Exuma.

“The Government says one of its objectives is to make the Family Islands more self-sustaining. What they’re doing is kyboshing that.”

And Mr Fleming added: “All the infrastructure put together by the Government to protect the foreign investor has completely let us down. They’ve done nothing to honour their commitments to foreign investors. The Bar Association, with all due respect, should be ashamed of themselves.”

Mr Bain said that unlike another Oceania real estate purchaser, who was “going ballistic, going crazy” and seeking to get the Federal Bureau of Investigation (FBI) and his US Senator involved, they had attempted to seek justice through the Bahamian system with little result.

“Chris and I are trying to deal with this rationally, trying to pass it through the legal channels the Bahamas lays down, and we’ve got nothing,” Mr Bain said.

“Why wouldn’t the Bahamas respect the rule of law and do the right thing? Exuma will benefit.”

Mr Fleming disclosed to Tribune Business that at a January 2014 meeting with Rosemary Bowe, the senior Ministry of Finance official in Exuma, it was suggested that the homeowners develop “ideas” for selling-off Oceania Heights’ remaining 35 lots and use the proceeds to pay-off a $30,000 bounced cheque from Mr Obront for back taxes.

“My position is: ‘You’re kidding me’,” Mr Fleming told Tribune Business. “We got ripped off once, and now you’re asking us to pay off the culprit’s bill?”

While Oceania’s remaining 35 lots, valued at between $150,000 and $200,000, could fetch $5.25 million if all sold at the former value, Mr Bain said this was “vastly below” what existing owners had paid for their properties.

And generating future sales could prove problematic. “Other real estate companies are telling people to stay away from Oceania Heights because they could get entangled in this legal mess, and this is why we need the Government to bring closure,” Mr Bain told Tribune Business.

Mr Fleming added that if it did, land values would increase, homes would be built at Oceania, Exuma’s economy and reputation would be stronger, and the Government would earn more taxes.

In a letter to Tribune Business, Messrs Fleming and Bain said: “To date, foreign investors have invested roughly $50 million into Oceania Heights in Great Exuma. The Government of the Bahamas did not have to spend a dime of seed money to attract this investment, even though it routinely preaches that it wishes to see out islands, like Grand Exuma, become economically more self-sufficient.

“With this multi-million dollar foreign investment, came the prospect of substantial Stamp duty payments and ongoing property taxes – vital to a government that is on the financial ropes.

“Most of the investors in Oceania are doctors, so Exuma could also gain an international brain trust of physicians – again at no cost to the Bahamas. Some of these doctors might even have relished the opportunity to serve part-time in the new Exuma hospital.”

They added: “All of this could have come to pass and, in fact, was on track to becoming a reality of benefit to Exuma and the Bahamas as a whole until the Government decided to turn its back on each and every one of the foreign investors in Oceania and decided instead to favour and protect the non-Bahamian developer and his partner, Attorney Thompson.

“On the surface of it, one has to ask why a government that is desperate for revenue would turn its back on a sure thing like Oceania Heights. The only answer is that there must be something that the government finds even more attractive than Exuma becoming self-sufficient.”

Comments

SP 6 years, 4 months ago

Looks like somebody did not receive the memorandum on whom to "lotion" and whom "grease".

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EasternGate 6 years, 4 months ago

The Bar Association is a farce. They only exist to buffer between crooked lawyers and justice

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bahamalove 6 years, 4 months ago

Mr. Fleming, you are better off waiting until after the next election, assuming that the government will change, and taking your chances to resolve this issue then. As it stands now, ain' nuttin' happening for you right now. Sorry to say this to you but this present administration is useless.

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floyd 6 years, 4 months ago

I have followed this case personally for the past several years and agree with everything these unfortunate investors in our Country have been subject too. I know the benefit second homeowners in the Island; I would like to encourage all with the powers to see that this and related matter are resolved and soon.

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