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Bahamas island saved from ‘a complete loss’

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JOSEPH CAMMARATA

• Insurance ‘unfreeze’ deal for alleged fraudster

• Alleges Abaco property ‘looted and in disrepair’

• Fears Dorian-type hit; SEC sceptical of figures

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian private island, which is among the most valuable assets owned by an accused $40m securities fraudster, was yesterday rescued from becoming “destroyed and a complete loss” via a US court-approved deal.

Judge Chad Kennedy, sitting in the eastern Pennsylvania district court, oversaw an agreement between Joseph Cammarata and the Securities & Exchange Commission (SEC) that will allow the former to unfreeze some $38,000 in a last-ditch bid to insure Sandy Cay just days before the Atlantic hurricane season hits its traditional peak.

Mr Cammarata, who with his co-accused is facing both civil and criminal charges that he stole monies intended to compensate victims of earlier securities frauds, is alleging that the SEC in obtaining a freeze over all his bank accounts and other assets has “neglected the preservation” of their value.

He claimed, in an August 16, 2022, letter to Judge Kennedy that some $14m worth of assets had been placed in great peril through becoming “abandoned, [falling] into disrepair, being broken into, looted and presently uninsured”. The most important and treasured asset in this collection, Mr Cammarata added, was Sandy Cay, his private island near Man-O-War Cay in the Abacos, which was totally exposed to another major hurricane strike three years after Hurricane Dorian hit.

Blaming Tribune Business coverage of his legal woes for a previous inability to obtain the necessary property and casualty insurance, he argued that obtaining coverage was “now more urgent” as “the worst of the hurricane season is August, September and October and we need to insure these assets”. There may be just days to do this if the present Atlantic disturbance becomes a storm, and insurers close their doors to new business.

Mr Cammarata argued that such a move was in the interests of all parties, including the SEC, US Justice Department and his alleged “victims”, as Sandy Cay - and its potential sale would be one of the latter’s best recovery sources should he be found guilty at trial by a jury.

His reasoning proved persuasive as all parties, including the US district court, SEC and Mr Cammarata’s estranged wife, Nina, agreed to unfreeze $38,000 from a Merrill Lynch account so that the initial deposit can be paid for insurance coverage on Sandy Cay. NAGICO Insurance (Bahamas) was said to require an $123,858 premium to effect cover for 12 months from tomorrow, September 1.

Describing Sandy Cay as “a priceless asset”, Mr Cammarata said efforts in January 2022 to obtain sufficient insurance protection had been rejected by another underwriter due to his legal troubles. This, according to court documents obtained by Tribune Business, occurred despite a $32,000 deposit being offered.

“As stated in my previous letter, and to the SEC for the last six months, the largest assets including Sandy Cay are abandoned, in disrepair, being broken into, having property looted of building materials, with trespassers coming and going,” Mr Cammarata wrote to Judge Kennedy on August 16.

“The Cay and associated boats are all uninsured after the insurance company terminated because of the negative publicity fed to Bahamian media just minutes after the SEC filed their civil lawsuit and injunction against me. It has been nearly impossible to secure new insurance while the property is abandoned and not maintained, with risks for theft, fire, boats sinking and equipment failing without regular occupants or employees.

“This is a priceless asset, [for] which the SEC has provided nothing more than a $32,000 insurance payment in January which was then rejected by the insurance company and returned, because of” the publicity surrounding the US Justice Department and SEC charges.

Tribune Business assures Mr Cammarata that it was not “fed” any details regarding his case by the SEC or anyone connected to it. Meanwhile, Sandy Cay’s island manager and staff had all been terminated from the property last December because they were not being paid due to his assets being frozen.

In an earlier August 4, 2022, letter to Judge Kennedy that was handwritten because the printer was not working at the US federal prison where he is detained, Mr Cammarata blasted: “Since December 2021 my insurance was dropped and not a single agency will insure me with the pending litigation. They all stated that they do not underwrite clients with a high profile litigation [such] as mine....

“Sandy Cay, since being abandoned and in disrepair with no employees present, has started to experience crime for the first time ever. There have been break-ins, looting, trespassers and my unpaid caretaker is seeing it all (from my security cameras) in New Jersey until the electricity gets cut off, which is any day. Not a penny has been paid in months.”

Returning to his August 16 missive, Mr Cammarata said his then-attorney “convinced me begrudgingly” to hire KW Property Management & Consultants to assess Sandy Cay back in February 2022 despite fears this would be “a waste of money and time”.

KW has managed properties in Bimini, including at Bimini Bay and Bimini Sands, with homeowners at the latter criticising its performance and ultimately initiating legal action. “I was again proven to be correct. The owner of KW recently came just a few weeks ago with his wife, on an apparent vacation, and had no means of getting to and from the property,” Mr Cammarata wrote. 

“It is now mid-August, in the peak of hurricane season, with no insurance and not a penny paid in maintenance, repairs or upkeep.... Sandy Cay is in urgent need of funding before it is destroyed and a complete loss. We require an immediate $150,000 for the next three months of operation, which include bringing certain employees back to repair and maintain the property and boats, which is also mandated by the insurance policy.

“It also requires $50,000 for repair and maintenance items such as generator repairs and parts, water maker membranes, and various other paint and construction items just to bring the property from its state of disrepair. The proposed insurance premium, which is required to be effected within 30 days of August 9, is approximately $124,000 (annual premium for the property,” he continued.

“Some employees are ready to return to work, and the property manager was [is] able to secure a new insurance policy if we are able to get immediate funding to make the necessary repairs, have staff present, required maintenance and secure the property from any more trespassers and theft.”

Mr Cammarata was backed by his estranged wife, Nina, who is Sandy Cay’s co-owner even though divorce proceedings are pending and she was never previously involved in the island’s financial or operational affairs. She alleged in an August 22, 2022, affidavit: “In short, there is no one physically present on the island, and thus it is vulnerable to looters and vandals.

“It is my understanding that some damage may have already taken place. Additionally, I have been advised that there is no insurance for the island and the boats that are docked there. This is particularly problematic because it is now the height of hurricane season. There is an immediate need to physically secure the property, fix the damage that has occurred and insure it.”

Mrs Cammarata said Sandy Cay’s manager, Wallace Okulicz, had informed her he was available to carry out the necessary work. He had also revealed there were outstanding $18,389 debts for past due utilities and worker salaries that had not been paid.

Besides Mr Okulicz, she alleged that there were four other Sandy Cay employees who maintained the island and effected post-Dorian repairs. These were Wesley Albury, the general utility worker, and others responsible for the grounds and general maintenance. 

“On a monthly basis, the total amount of workers’ pay is $21,360. In addition to this pay, the island incurs about $1,485 in utility bills (electricity, WIFI, etc), $1,600 in fuel, and $800 for a boat slip (a boat slip is required in the Abacos). Thus the total monthly amount required to secure and maintain Sandy Cay is approximately $25,245,” Mrs Cammarata asserted, supporting her former husband’s demand that $234,000 be released to address Sandy Cay’s woes.

Ultimately, the parties could only agree to unfreeze 16.2 percent of that sum  - the $38,000 for the NAGICO insurance deposit. The SEC argued that the different sums put forward by the two Cammaratas were not backed by the necessary supporting documents and, while not opposed to securing insurance coverage, said the couple had failed to justify the $25,000 total monthly running costs - 85 percent of which was accounted for by staff wages.

Comments

DWW 6 months, 3 weeks ago

Amazing that foreign unlicensed entity is given an illegal contract to provide property management services, jwith the US court condoning and actually enabling this illegal business activity to occur. Wow!

1

Proguing 6 months, 3 weeks ago

Typical type of "foreign investor" this country attracts

1

DJBarr 6 months, 3 weeks ago

Lets get rid of irresponsible foreign investors. Starting with the Chinese. They're the worst.

1

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