The British Virgin Islands (BVI) government has filed a lawsuit against its former long-time US-based attorney seeking up to USD11 million in damages for alleged fraud and deceit relating to his involvement in the failed BVI Airways (BVI, Beef Island) project.
According to a BVI High Court form, the government is claiming full damages for “fraud and deceit” from Lester Hyman, 89, related to USD7.2 million of taxpayers’ money invested in the now-defunct airline; funds from Hyman’s alleged “secret commissions” worth at least USD212,500; any “illicit profits” he received related to the airline; the USD305,000 government paid him from 2014 to 2017; and court costs for related arbitration proceedings in New York plus interest, the BVI Beacon newspaper reports.
Based in Washington DC, Hyman had worked as a legal representative for the BVI government for 30 years and was paid USD2.5 million for his services over that period, according to the claim. BVI asset recovery attorney Martin Kenney filed the lawsuit on behalf of BVI Attorney General Dawn Smith, who had recused herself from the case due to an apparent conflict of interest.
Hyman said in court filings that he had done nothing wrong. He claimed he had never hidden payments from the government, nor had he acted otherwise unethically. He said contradictory statements he made about the payments amounted to a mistake caused by a memory lapse.
Hyman in 2013 had introduced real estate developer Bruce Bradley, the owner of the Washington DC-based Castleton Holdings LCC, and BVI then-Premier Orlando Smith, according to a ruling last year in a related case in a Washington DC court. Bradley had sought support and financing for BVI Airways. At Hyman’s urging, the government had agreed to pursue the proposal despite warnings from experts about the investment’s risky nature.
The government signed an agreement with BVI Airways, Castleton Holdings, and Colchester Aviation in December 2015 to launch flights starting in winter 2016-17 direct to Miami Int’l. However, these had failed to launch by October 2016 despite BVI Airways receiving USD7.2 million from the government. The contract was terminated in November 2017 amid finger-pointing and public acrimony as BVI taxpayers called for clarity on what the money had been spent on. In October 2018, the government hired Martin Kenney & Co. Solicitors to investigate the deal and recover the USD7.2 million. In May 2020, following a report by the BVI Auditor-General, it was announced that there would be a ‘full criminal investigation’ into the government’s investment in the airline.
BVI Airways was first founded in 2009 and started operations in May 2010 with two Jetstream 31s, initially serving the popular Beef Island to St. Maarten route three times per week. In September 2010, the airline began flying some services on behalf of Winair (WM, St. Maarten), adding Dominica Douglas-Charles to its route network.