Judge calls for criminal probe into attorney’s ‘possible fraud’

• Blasts ‘seriously unethical behaviour’

• Urges ‘disciplinary action’ by the Bar

• Deals ensnared Colina, Mortgage Corp


Tribune Business Reporters

A Supreme Court judge has urged the director of public prosecutions to investigate an attorney for “possible fraud” over a series of six-figure transactions involving the same real estate parcel.

Justice Keith Thompson, in a February 23, 2021, ruling, also called on the Bahamas Bar Association to take “disciplinary action” against Troy Kellman, an attorney with Hanna, Kellman & Company, in relation to “seriously unethical behaviour” over two deals that ensnared a BISX-listed insurer and the government’s Bahamas Mortgage Corporation.

Mr Kellman, who declined to comment when contacted by Tribune Business yesterday, saying he was unaware the ruling had been issued, first represented both Colina Insurance Company and Lion Management Company in a $175,000 deal involving an apartment building and associated land in the Estella Anne Tract in western New Providence.

A $10,000 deposit was paid to Colina, as vendor, and the sales agreement stipulated that the purchase price balance was to be paid within 60 days. However, Lion Management Company never paid the outstanding $165,000 even though the publicly-listed life and health insurer had sent the property’s conveyance to Mr Kellman on July 18, 2012, so he could arrange its execution by the buyer.

Colina, which ultimately replaced Mr Kellman as its attorney with Alexiou, Knowles & Company, the law firm of its principal, Emanuel Alexiou, determined that Lion Management Company had defaulted on the deal and that the transaction was null and void.

However, Mr Kellman failed to return Colina’s conveyance and its other documents associated with the failed sale. This forced the insurer to initiate legal action to recover the documents, and for which it obtained a default judgment, but Colina alleged the papers had yet to be returned.

And, unknown to the BISX-listed insurer, Mr Kellman - even before it determined the sale was void - had lodged and recorded the conveyance in the Registry of Records on March 20, 2013, despite the sale to Lion Management Company never being completed.

This had the effect of transferring title to Lion Management Company even though it had never paid for the property. Colina Insurance Company alleged that it only became aware of the deception when it instructed Alexiou, Knowles and Company to search the Registry of Records after Mr Kellman refused to return its documents.

Justice Thompson’s ruling, and the legal filings it records, showed Mr Kellman moved “like a bolt of lightning” in playing a central role in a second deal for the same piece of real estate where he again represented both parties.

Some seven days before the conveyance involved in the failed Colina deal was lodged for recording, Mr Kellman and his firm were instructed to conduct a title search on that same property - still belonging to Colina, but now shown as owned by Lion Management Company in the registry - by the Bahamas Mortgage Corporation.

The Mortgage Corporation’s legal filings revealed that Mr Kellman produced a conveyance transferring the same Estella Anne parcel from Lion Management Company to new buyers, Caleb Dorsett and Shamene Bain, that was dated March 14, 2013. And that very same day he submitted a report to the Mortgage Corporation stating the buyers had good title, and there were no liens or outstanding taxes due on the property.

Both these events occurred some six days before the Colina conveyance was lodged for recording, and they persuaded the Mortgage Corporation to make a $237,500 loan that was secured on the apartment building and associated land via a mortgage loan.

Some $46,000 of the loan proceeds were used to renovate the property, but the Mortgage Corporation said the deal ran into problems because Mr Kellman failed to obtain the then-Stamp Duty exemption for Mr Dorsett and Ms Bain as first-time home buyers.

This ultimately resulted in the conveyance being left unstamped and unrecorded, as due taxes were not paid, and Mr Dorsett and Ms Bain subsequently defaulted on the loan. When it moved to repossess the property, in a bid to realise its mortgage security, the Mortgage Corporation uncovered the details involving the failed Colina transaction.

Justice Thompson’s ruling, and legal papers filed in connection with the case, reveal multiple connections between Mr Kellman, his law firm and several of the parties involved in the two deals.

Lion Management Company, the purchaser in the first deal, and whose shares were said to be beneficially owned by Rudolph Rolle, listed Hanna, Kellman & Company as its registered office.

And Mr Dorsett, the purchaser in the second deal, was said to be an attorney “whose chambers at all material times were situated in Columbus House” at the corner of East and Shirley Streets. This is also where Mr Kellman and his law firm are based, and Mr Dorsett’s office was said to be “in close proximity”.

Finding that there had been “certain seriously unethical behaviour”, Justice Thompson said that based on his understanding of the Penal Code it “appears to be a criminal offence involving possible fraud” that was committed by Mr Kellman.

As a result, he ordered that his judgment be sent to the Bahamas Bar Association for “disciplinary action” and to Garvin Gaskin, the director of public prosecutions, “for investigations concerning any breach of the Penal Code with the hope that this matter is in fact given the attention it ought to receive”.

Focusing directly on Mr Kellman, Justice Thompson blasted: “When attorneys act in matters such as these, they sit in a position of trust. A vendor should have no fear of dishonest actions when handing over the documents in a conveyancing transaction.

“Attorney Kellman drafted the agreement for sale in the first transaction, and had full knowledge of its contents. He also drafted the agreement for sale in the second transaction being fully aware that the first transaction was not completed.

“Despite several requests and notices to complete, he never responded as he ought to have. What is even more damning is the fact that not only was he served with various documents joining him personally and his firm, but also judgments in default. There was still a deafening silence from him...,” Justice Thompson added.

“This behaviour is not acceptable and requires serious attention by the relevant authorities including the Bahamas Bar Association, as I am of the view that Kellman’s actions were intentional and calculated.

“The Bar has a duty to the public at large to ensure that persons practicing law are trustworthy and not allowed to bring shame and disgrace to this honorable profession. The reputation of the profession must be protected at all costs.”

Finding that Lion Management Company “had nothing to convey” to Mr Dorsett and Ms Bain as a result of failing to complete the Colina deal, Justice Thompson ordered that all conveyances in the matter were “null and void and... set aside”.

He repeated previous Orders that Mr Kellman and his law firm, Mr Dorsett and Ms Bain, and Lion Management Company repay the $237,500 to the Mortgage Corporation with interest running at 10 percent per annum from the day the attorney received the loan proceeds almost eight years ago.

Commenting has been disabled for this item.