Tuesday, January 12, 2016
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The National Health Insurance (NHI) scheme’s architects have slammed as “inappropriate” an inventor’s demand that they pay a $5.154 million judgment he is seeking to enforce against them.
James Cercone, president of Sanigest Internacional, and his wife, Etoile Pinder, told Tribune Business they could not be held liable for Per Hahne’s claim against a company where they once served as senior officers and Board directors.
Tribune Business revealed in 2011 how Mr Hahne had obtained a default judgment against the Prospero Group and its majority shareholder, Ms Pinder’s father, the late Hubert Pinder, on the basis he had not been paid a single cent of the $5 million price they had agreed to pay for his invention.
Mr Hahne has been seeking to enforce the March 19, 2010, default judgment from the Ontario Superior Court of Justice ever since, but has been thwarted by Mr Pinder’s passing and an inability to trace the latter’s assets.
Now, in a December 14, 2015, demand letter sent by his Canadian attorneys to Mr Cercone and Ms Pinder, he is arguing that - as Prospero directors when events leading to his claim occurred - they are “liable” to pay the judgment.
Will Davidson, Mr Hahne’s attorney, told the Cercones: “My law firm has been retained to prosecute a claim for damages arising from the breach of an agreement of of purchase and sale entered into on April 4, 2008, between Mr Hahne and Cavitation Concepts Corporation and Hubert Pinder.”
Cavitation Concepts effectively operated as a Bahamian-domiciled subsidiary of Prospero Group, a Nevada-incorporated company that was listed on the US ‘over-the-counter’ or ‘pink sheets’ market.
As a result, Prospero was required to make regular regulatory filings with the Securities & Exchange Commission (SEC), something noted by Mr Davidson in the demand letter to the Cercones.
“As a result of these SEC filings, Prospero Group precluded any reasonable attempt by Mr Hahne to mitigate his damages,” the letter, obtained by Tribune Business, reads.
“On that basis, Mr Hahne properly has a claim as against Prospero Group.... Based upon a review of other SEC filings, we believe that you [Mr Cercone and Ms Pinder] served on the Board of Directors for Prospero Group - which is liable for this judgment - at the time of the breach.
“Furthermore, as this judgment is against Hubert Pinder, it may be enforced as against the estate of Hubert Pinder. Please contact my office to make arrangements for payment of this judgment.”
Mr Davidson warned Mr Cercone and Ms Pinder that should they fail to pay the $5.154 million, he and Mr Hahne would “take whatever steps are necessary to collect this judgment”.
Mr Hahne’s claims, and the revelation of his payment demand against Mr Cercone and Ms Pinder, threaten to embroil the NHI scheme in fresh controversy at the worst possible time from the Government’s perspective.
There is no suggestion they have done anything wrong in relation to Prospero and Mr Hahne, but the Sanigest duo are the principal designers and consultants for the NHI scheme.
These disclosures come at the critical moment for determining NHI’s design and subsequent roll-out and implementation.
Mr Pinder’s business career was both exotic and controversial, and he has frequently flown across The Tribune’s radar over several decades - starting before Tribune Business was launched as a standalone section.
In 2011, he offered to rescue Sandy Schaefer’s Robin Hood retail format with a company supposedly capitalised by $83.345 million worth of emeralds, diamonds and “precious gem investments” - a move that ultimately proved unsuccessful for all parties.
And the Prospero Group’s funky investment activities ranged from gold mining in the Central African Republic to making water from air and a purported $300 million resort development on 2,500 acres of Rum Cay real estate that has yet to occur.
Its Cavitation Concepts affiliate also once had an office on Madeira Street in Nassau’s Palmdale district. In 2003, Mr Pinder and Cavitation Concepts were forced by the Securities Commission of the Bahamas to withdraw an investment offering seeking to raise $2 million because, by holding a press conference to publicise it, they had made it a “public offering.”
Mr Hahne also previously told Tribune Business that Prospero’s SEC filings suggested he no longer owned the the EMD (Electro Muscular Disruption) Security Bracelet, which he designed for use as a security, restraint and tracking device.
As a result, his intellectual property (IP) on a device that received a US patent in August 2005 is worthless, leaving him unable to translate the EMD into monetary value.
And, in a January 7, 2016, e-mail to Tribune Business, Mr Hahne lamented: “Both James and Etoile were a part of Prospero and the machinations of Hubert L. Pinder at the time of [events leading to] my claim.
“A Canadian judgment will mean nothing to them, and ultimately it means I must follow up in a Bahamian court, for which I do not have the monies. The only way I stand a chance to collect is against the estate of Hubert L. Pinder, and we are not privy to an executor being named.”
Mr Cercone, though, denied that he and Ms Pinder had any liability for Mr Hahne’s predicament and alleged loss, as Prospero’s limited liability company status blocked this.
In e-mailed replies to Tribune Business questions, he also refuted Mr Hahne’s claims that he and Ms Pinder were Prospero officers when the negotiations over the electronic bracelet took place.
Mr Cercone said they had also been informed by a Canadian attorney that the Ontario default judgment had been set aside, and accused Mr Hahne of “fabricating realities” in pursuit of his case.
He derided Mr Hahne’s invention as “very theoretical”, and worth far less than the $5 million valuation the Canadian was assigning to it.
And, questioning whether the deal with Prospero/Cavitation Concepts was ever fully consummated, Mr Cercone accused Mr Hahne of trying to “extort” money from himself and his wife by ‘going public’ with his claims.
“We were not officers at the time of the Letter of Intent or the filings [relating to the bracelet deal],” Mr Cercone told Tribune Business.
“Either way, we are not liable as Board members of a limited liability company, as you surely understand. Furthermore, since Mr Pinder has died, there is no transfer of anything to either of us as we are also not administrators of the estate.”
While conceding that documents showed a Letter of Intent was signed between Mr Hahne and Cavitation Concepts, Mr Cercone added: “There was further documentation from Mr Pinder that Prospero was not planning on going through after due diligence.
“I think if you review the technology you will see that it is a very theoretical design that would have very serious challenges to be actually produced - certainly, far from a valuation of $5 million.
“We would have never approved even the Letter of Intent had it been presented to us for discussion. in our opinion, Mr Hahne is fabricating realities and is inappropriately directing his intent at us when we have no knowledge, nor responsibility, on any dealings he had with Etoile’s deceased father. This has been verified by our US, Canadian and Bahamian lawyers.”
Mr Cercone said Bahamian attorneys had advised him that Mr Hahne’s actions amounted to extortion, which carried a maximum five-year sentence under the Bahamian penal code. This was communicated to Mr Hahne.
Explaining how he and Ms Pinder became involved with the Prospero Group, Mr Cercone told Tribune Business that it was as “a favour” to her father when the company was undergoing “a transition period”.
“We had no activities or involvement in operations and decision making,” he said. “It was only as a favour to Etoile’s father, and only as they transitioned from the previous management team to a new team.
“We were never involved in any activities with the company, never participated in a Board meeting and quickly resigned our positions as new directors were to be appointed.”
However, a Tribune Business review of Prospero’s SEC filings suggests that both Mr Cercone and Ms Pinder had a more lengthy involvement with Prospero Group than the former is implying.
And they suggest both were on its Board of Directors when the negotiations, and Letter of Intent, between Mr Hahne and Cavitation/Hubert Pinder occurred.
The SEC filings reveal that Ms Pinder was first appointed as a Prospero director on October 10, 2006, and that she was named as the company’s chief financial officer/secretary/treasurer - and acting chief executive - on March 18, 2007.
The documents even identify Ms Pinder as the “health financing specialist for the National Health Insurance Implementation Project in Nassau, the Bahamas”.
Ms Pinder’s name is attached as the signature on several of Prospero’s financial results filings with the SEC, and Mr Cercone’s appointment was revealed in a March 11, 2008, submission.
“To fill a vacancy on the Board, the current members elected Mr. James A. Cercone to the Board of Directors, and also elected Mr Cercone to serve as chief executive , a position presently held by Ms Etoile Pinder,” the SEC filing stated. “Ms Pinder will remain on the Board as secretary and an officer of the company.”
Exactly one month later, on April 11, 2008, Prospero trumpeted the signing of the Letter of Intent with Mr Hahne for the sum of $5 million.
While Ms Pinder had relinquished the chief executive and secretary positions in early 2008, another SEC filing reiterated that Mr Cercone “had been elected to the Board of Directors and will assume the position of chief executive”.
The NHI/Sanigest duo only stepped down from Prospero’s Board of Directors on January 11, 2010, almost two years after the alleged deal with Mr Hahne.
“James Cercone and Etoile Pinder resigned from the Board of Directors to pursue, and devote on a full-time basis, the Wellness Programmes and Clinics in the Bahamas and Caribbean,” the SEC filing said.
Comments
GrassRoot says...
not sure this is newsworthy. What it shows though is that Mr.Cercone and Ms Pinder are true entrepreneurs - Bahamian style.
Posted 12 January 2016, 3:05 p.m. Suggest removal
Economist says...
***“We were never involved in any activities with the company, never participated in a Board meeting and quickly resigned our positions as new directors were to be appointed.”***
That is no excuse. A director has a duty to exercise reasonable care, skill and diligence.
Where a director played no part in the affairs of the company but relied on A throughout. He was disqualified on the grounds that his inactivity showed him to be neglectful of his basic duty of care and **unfit to be involved with the management of a company**.
So persons, by their own admission, unfit to manage a company, have a company which is advising the advising government on one of the most important national plans ever?
Scary!!!!!
Posted 12 January 2016, 3:09 p.m. Suggest removal
MonkeeDoo says...
Why does the government invariably get involved with shady people ?
Posted 12 January 2016, 3:28 p.m. Suggest removal
Islandgirl says...
Birds of a feather; you know the rest.
Posted 12 January 2016, 3:43 p.m. Suggest removal
GrassRoot says...
who is not that is in proximity of the inner circle these days?
Posted 12 January 2016, 4:01 p.m. Suggest removal
realfreethinker says...
How else you expect them to skimm off the gravy ?
Posted 12 January 2016, 4:11 p.m. Suggest removal
Well_mudda_take_sic says...
Ms Etoile Pinder is up to her ears in the Christie-led PLP government's corruption involving the corrupt officials and owners of Sanigest and its proposed NHI scheme for Bahamians which is nothing but a scheme designed to defraud all honest hardworking Bahamians to the maximum extent possible. Ms Pinder has knowingly allowed the good reputation that she once enjoyed in the Bahamian community to be prostituted for her own self-gain. Very sad!
Posted 12 January 2016, 5:22 p.m. Suggest removal
ohdrap4 says...
> And the Prospero Group’s funky
> investment activities ranged from gold
> mining in the Central African Republic
> to making water from air and a
> purported $300 million resort
> development on 2,500 acres of Rum Cay
> real estate that has yet to occur.
i am going to win the powerbaqll and buy the gold mine.
Posted 12 January 2016, 8:14 p.m. Suggest removal
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