Does it need another overhaul? Yes or No?
Basseterre, St Kitts – St. Kitts and Nevis’ Citizenship by Investment Programme continues to receive heavy criticism from potential applicants and agents who have been asking what’s really is going on.
Most industry experts feel that there is need for another radical overhaul.
The latest outpouring of disapproval has been directed towards Montebello Residences, a long-approved real estate project located at Olivee’s in St Kitts that appears to be going nowhere fast.
Reportedly, a business called Caribbean Dreams Management Consultants registered in Abu Dhabi, United Arab Emirates and run by a Mariam Zaki has taken over the management of the project and is said to be continuing the construction of the condominium units under a new name.
Sources claim that the project has come under severe criticism because it is yet another example of how the St Kitts and Nevis CIP has been corrupted by the CIU, now under the leadership of Les Khan.
Khan appears to have abandoned his earlier vigilance as a regulator of the St Kitts and Nevis programme when he, as an employee of IPSA International, reviewed it in 2014 for the then Labour Administration after the United States Financial Crimes Enforcement Network (FINCEN) advisory.
Khan then made 21 recommendations to overhaul and improve the St Kitts and Nevis programme.
At that time Khan had indicated a desire to be employed by the St Kitts and Nevis Citizenship by Investment Unit (CIU) but the Labour administration felt it would have been unethical to hire him.
Soon after the change of administration in St Kitts and Nevis in 2015, Khan was given the job as CEO of the St Kitts and Nevis Citizenship by Investment Unit (CIU) and has been managing the programme since then.
Meanwhile the reputation of the St Kitts and Nevis Citizenship by Investment Programme has been virtually destroyed, after the issue of passports to questionable characters like Mr and Mrs David Kaplan and the introduction of the Hurricane Relief Fund in 2017 after hurricane Irma which it is alleged is being used as slush fund in the prime minister’s ministry.
Mr. Khan is said to have received substantial commissions on the reported 1700 applications which were received in the six-month period and processed at US$150,000 each, resulting in passports being issued.
This questionable route to citizenship made the Sugar Industry Diversification Foundation (SIDF) a defunct option, as the Hurricane Relief Fund with its six-month duration led to the introduction of the Sustainable Growth Fund.
To add to the confusion, the Hurricane Relief Fund also virtually wiped out the already struggling real estate option of the programme and financially ruined some developers.
As a result of this fiasco, many St Kitts and Nevis passport holders stand the risk of having their applications reviewed following revelations that a massive fraudulent scheme was being perpetrated among Agents in the Middle East market.
Several of the agents, apparently with full compliance of the CEO of the St Kitts and Nevis Citizenship by Investment Unit, had become engaged in awarding passports to unsuspecting clients of the real estate option, when in fact they had applied for and were approved under the Hurricane Relief Fund Option.
News of this rocked the programme to the core and created an instant and enormous loss of confidence, instability and uncertainty in a programme that was already racing rapidly to the bottom of what is now a global multimillion dollar industry, after being the global gold standard of CIPs for decades.
In the upshot, the attorney-general of St Kitts and Nevis visited the region and made and a still unfulfilled promise of investigating this criminal matter. This has only made matters worse and has done very little to restore confidence.
The situation further worsened when it became known that to appease real estate developers, CEO Khan introduced the sale of shares in companies to groups of persons investing in the real estate option.
It became a serious laughing matter when developers in St Kitts discovered that Caribbean Dreams Management Consultants has been awarded a license to sell 750 shares in four to five buildings of 75 rooms, of which only 15 have been constructed but remain undelivered over the last six years of construction.
Eyebrows are being raised and industry leaders are asking a number of questions. Is there any relationship between the new developer and the CEO of the St Kitts and Nevis Citizenship by Investment Unit? Was any due diligence done on the new developer, and is there any track record of delivery for this company?
Can any serious construction be carried out if the developer is only netting US$35,000 per investor? Is this another massive fraud that is taking place in the programme when paper/shares are now being sold for passports?
The vision of the St Kitts and Nevis Citizenship by Investment Programme was to promote the sale of fully constructed units in order to generate economic activity, especially the multiplier effect of construction activities with its related impact on employment and other benefits for the citizens. It was this anticipated economic activity that led to the introduction of the St Kitts and Nevis CIP in its first iteration in 1983.
There are more questions than answers and if the reputation of the St Kitts and Nevis CIP is to be restored, there is urgent need for a full investigation and restructuring of the St Kitts and Nevis Citizenship by Investment Programme, as something appears amiss.
It is little wonder that the Minister of Foreign Affairs, Mark Brantley has said that the Financial Crimes Enforcement Network (FINCEN) advisory remains in place as the US Treasury Dept has indicated it has no confidence in the St Kitts and Nevis Citizenship by Investment Unit and the Citizenship by Investment Programme generally.