A High Court judge has deemed a purported $7 million loan agreement between two business partners fraudulent and a “sham document designed to deceive.”
Justice Frank Seepersad made the finding in a ruling on April 1, in a lawsuit by Advanced Hose and Marketing Ltd (AHML), of Ridgewood Heights, Tacarigua, against a contractor and two other parties as it sought to recover $7 million in funds for a construction project that did not materialise.
In its lawsuit, Advanced Hose claiming it transferred $7 million to a contractor who fraudulently misappropriated and converted the money for his own use and benefit.
In his ruling, Seepersad held contractor Cordell Philbert and his business partner Joash Ramjattan and the latter’s company ZA Limity Engineering Consultancy “colluded and/or conspired” to defraud Advanced Hose of $7 million and were liable for repayment.
He also held that the purported loan document between Philbert and Ramjattan was “procured and/or facilitated through improper and/or fraudulent means” and “its intent was to defraud the claimant.”
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“It is hereby declared that the said loan agreement was illegal and constituted a sham transaction.”
In addition to the $7 million, the three defendants were also ordered to pay interest on the sum.
The judge also directed the Registrar of the Supreme Court to send the ruling to the Disciplinary Committee of the Law Association for consideration and a possible enquiry into attorney Varun Debideen’s preparation and execution of the loan agreement.
Debideen was initially one of eight defendants, including two banks, in Advanced Hose’s lawsuit. In November 2023, Seepersad froze his assets and bank account. The case against the others was subsequently withdrawn against the others, including Debideen. In his defence, Debideen had denied wrongdoing. He said Ramjattan was his client and he was only following instructions. He also claimed Philbert transferred the money to his account as a loan Philbert made to Ramjattan to pay a multi-million-dollar judgment debt.
In analysing the evidence, Seepersad said he formed the view that Philbert was a “simple, malleable” man who was “exploited and groomed” to “unknowingly engage in a complicated, “fraudulent design.”
“The court is also firm in its view that the second defendant operated as a criminal mastermind and that he adopted a course which was calculating and cunning and which was crafted to defraud the claimant of $7,000,000.”
It was Philbert’s evidence that he did not request the $7 million transfer into his account by AHML and only found out about it from Ramjattan in a WhatsApp exchange. He said he believed the money was related to a project in Guyana. He also claimed that he believed the sums transferred to the attorney were to be held in escrow for the investor’s benefit and the remaining funds for project mobilisation. He also said he was directed to make the bank transfers and denied he agreed to loan Ramjattan $24 million, as he only had $294.17 to his name, much less $24 million.
In their defence, Ramjattan and his company admitted the funds were transferred to them but said it was a loan from Philbert, which was executed in a legally binding document.
“On the evidence adduced and having applied the law, the court is convinced and finds as a fact that the first, second and fourth defendants were all in knowing receipt of the claimant’s $7 million and that they had no entitlement or beneficial interest to same.
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“The court further finds as fact that these defendants knew of the unlawfulness of their actions and that they had the requisite intention to defraud the claimant as they engaged in overt acts which were undertaken in pursuance of that fraudulent design.
“The conduct of these defendants was criminal, callous and calculating, and they inflicted substantial loss and unjustified damage upon the claimant.”
In deciding the case, Seepersad ruled the loan agreement “made no commercial sense.”
He described it as “ a sham document which lacked commercial viability, and it was designed and drafted to circumvent ‘source of funds’ obligations so as to induce third parties, including the banks, into thinking that the sum was a legitimate loan when in fact it was not so.”
The judge admitted the purported loan agreement “caused a discernible degree of disquiet.” He questioned Debideen’s drafting and witnessing of the document without enquiring about the source of funds. He further questioned an alleged deduction for legal fees.
After finding that the loan agreement was a “sham document,” the judge said the court had to protect the public from “shysters dressed in legal robes.” He noted that Debideen did not have the benefit of explaining his preparation and execution of the purported agreement at the trial, but said the court’s concerns were “significant.” It was for this reason, he ordered the matter to be sent to the disciplinary committee.
Attorneys Jagdeo Singh, Leon Kalicharan and Karina Singh represented Advanced Hose. Kerra Bazzey represented Philbert while Narendra Latchman and Andrew Ramsubeik represented Ramjattan and his company.
