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Sep 12, 2013

Investors in the new Dangriga market say there’s a Ponzi scheme

A protest is planned for Friday in Dangriga where a million dollar renovation of the Dangriga Market has run into trouble. The project had been behind schedule and tonight, construction works on the market have come to a complete halt with word that contracts have been canceled. Two aggrieved investors involved say there is a Ponzi scheme afoot involving the Social Investment Fund. After pumping hundreds of thousands of dollars, the project has been abruptly stopped because the funds were allegedly used to bailout the contractor from pervious debts. The investors have been directed to remove all materials, equipment and workmen from the site by two p.m. on Friday when the project will be formally handed back to SIF. News Five’s Isani Cayetano was in the south today and has this report.

 

Isani Cayetano, Reporting

The renovation of a market building in Dangriga, work which should have been completed several months ago, is once again at a standstill, following a recent decision by the Social Investment Fund to terminate a contract awarded to a well-known developer.  The project, estimated at a cost of over a million dollars, was initially granted to Kenard Smart, principal of K&G Ltd.

 

Gilbert Swazo

Gilbert Swazo, Mayor, Dangriga

“Last year in May, the contract was signed for the commencement of works here in Dangriga for the renovation and extension of this market.  At that time all the vendors were taken out of the market and relocated to a temporary facility which the Dangriga Town Council prepared.  We were told at that time and the contract reflects that the market, at that time, would have been completed by the end of July.”

 

It’s been several weeks later and despite an infusion of capital into the project, it has not been able to meet the deadline.  The problem, according to Lyndon Bailey, who has invested a significant sum of money in the undertaking, is that the contractor has not been transparent with his financial affairs.

 

Lyndon Bailey

Lyndon Bailey, Investor

“When I came in the project was a bit [disorganized], they have men just walking around.  When I get here [there] was no material, nothing for the workers to work with and that’s when Mr. Smart came to me and said that he wanted to walk away from a project in Dangriga.  And I asked him why and he said, well, he ran out of money.”

 

With his company in arrears and a closing date quickly approaching, Smart turned to Bailey for financial assistance.  After a brief assessment of the situation, Bailey got onboard with the project.

 

Lyndon Bailey

“Mr. Smart was behind me every day.  I told him, “Take your time, I can’t jump into something without checking it out thoroughly.”  But he was saying to me that he only had thirty days left because seventy days was days that SIF has put against him and somewhere in the contract if you reach a hundred days they can terminate the contract.  So he had thirty days left.  So it’s like he was in a haste to get things started.  Anyway, I jumped onboard and I get the first twenty-five thousand dollars and I went to Benny’s because I said now, this guy done run eena problems so one of the things that come to my mind was that I will not put any money into his hand.  I will go and do the purchasing of materials myself.”

 

During that time Bailey infused a total of seventy-five thousand dollars of his own money into the project but creditors kept knocking at Smart’s door wanting to collect the debt.

 

Lyndon Bailey

“What I did, I sent my foreman around Dangriga and said, because people were hunting him down for money but we didn’t want to put our money in here and then him taking out money to pay other people that he previously owed.  So we personally went and talked to some of these people and told them, “you all will get your money but you would have to just take time and get it little by little as the project goes forward.”

 

Isani Cayetano

“Now while you were trying to avoid a situation where he was using your funding to pay off his other debts, it’s the very same thing that you’re finding yourself in now whereas he indebted to you to some extent and he has brought onboard other investors in an effort to pay you off.  Give me an idea as to how much money you have invested personally into this project?”

 

Lyndon Bailey

“I have invested seventy-five thousand dollars in the first instance.”

 

When that was not enough Smart turned to Gush and Emy Ramirez for another financial bailout.  What happened next can only be described as a Ponzi scheme.  The couple, believing his sales pitch, invested over a half a million dollars into the project.

 

Emy Ramirez

Emy Ramirez, Investor

“He made us an offer and we got onboard because the timing was crucial and we did what SIF wanted, in terms of releasing some payments from the bank and whatever.  Quickly we approached SIF and the members of SIF, the C.E.O. and the project manager, we had a meeting together and they assured us that everything was okay, everything was in order and they brought us the amount that was left for payments which was seven hundred and odd thousand [dollars] right and that they were extending this project providing ex amount of money can be pumped in.  So we thought okay fine, we need to pump in so that this project can definitely go through.  With our bit of experience with construction we thought, okay fine, this is good, it could be completed providing we put material and of course have the finance to keep it going, like the labor and all that.  I did understand that there was an amount; it was on a revolving basis.  I would have put down certain amount and it would have been revolving; however Mr. Cano said that I put down even more.  So I thought, well it’s okay it’s a strong organization I thought.  It’s SIF; we’re dealing with a serious body, that’s what one would think.  You don’t expect anything else.  So I went ahead and I signed an amount for five hundred thousand and I think an amount for one hundred [thousand dollars] for labor.”

 

Work continued at the site and according to the couple, an assessment conducted by engineers attached to SIF confirmed that all was in order.  That was until Dangriga Mayor Gilbert Swazo received an email last Saturday informing him that the contract awarded to Smart, who had in turn essentially subcontracted Bailey, as well as Gush & Emy, had been cancelled forthwith. Reporting for News Five, I am Isani Cayetano.

 

In Friday’s newscast we will look at what went awry in the Social Investment Fund. 

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Viewers please note: This Internet newscast is a verbatim transcript of our evening television newscast. Where speakers use Kriol, we attempt to faithfully reproduce the quotes using a standard spelling system.

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3 Responses for “Investors in the new Dangriga market say there’s a Ponzi scheme”

  1. Initiate says:

    Jeez, I didn’t know Dangriga had investors!!!

  2. keep conning Belizeans, it is funny says:

    This group needs to step aside.

    BILK, the for-profit, private government UDP company, needs to run all the Ponzi deals.

  3. Rufus says:

    This story stinks to high heaven. There are many questions that need answers. Where was the system of checks and balance? Who was overall responsible for project management? Why wasn’t the Dangriga Town Board more actively involved? The sad part about this story is that Dangriga will end up with an incomplete market (yes, they’ll try to finish it but not to the original specifications) and the crooks will move on and get other projects down the road. Only in Belize!

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