The Scandal



 as printed in the Royal Gazette:

LogoPublished: June 1. 2007 10:29AM

BHC: Anatomy of a scandal

WHEN Fraud Squad officers launched their inquiry into financial irregularities at the Bermuda Housing Corporation in March 2002, the scale of corruption at the Government quango had yet to be exposed - and Ewart Brown was yet to be named as a suspect in any criminal investigation. Instead, the inquiry — and public speculation — zoned in on then-Housing Minister Nelson Bascome, BHC chief Raymonde Dill and other, lesser-profile figures, including “the man with the golden paintbrush” Paul Young, a painter whose wife was a close friend of then-Premier Jennifer Smith.

Just two months after the police inquiry was launched, Government sacked Mr. Dill, from his post as BHC chairman offering up no explanation other than that the dismissal was made “for his own protection”.

As a result, the highly-paid public servant went to the media, claiming that he would not be “the fall guy” for any misconduct carried out by any Government Ministers.

In a subsequent interview with the Bermuda Sun in June 2002, Mr. Dill alleged that key Government personal — including then- Housing Minister Nelson Bascome and former Environment Minister Arthur Hodgson — were partly responsible for the financial irregularities at the organisation.

However, today the Mid-Ocean News can reveal that Mr. Dill later told police a different story — and implicated Dr. Brown as a key figure in a scheme to siphon off money from the organisation through the over-priced sale of his private home.

In an August, 2002 interview with detectives, Mr. Dill claimed that Dr. Brown was present at a number of clandestine meetings in which the BHC boss was ordered to purchase Dr. Brown’s North Shore Road, Flatts property at a cost to the taxpayer of around $500,00 — well above the market rate.

Mr. Dill’s allegations were backed up by documents indicating that Dr. Brown attended the meetings on the dates in question.

A summary of the interview, compiled by lead investigator Detective Inspector Robin Sherwood and copied to then-Chief of Police Jonathan Smith, reads: “Dill explained that he was approached by Dale Young of the Property Group — she is the wife of Paul Young who is employed by BHC as a painter — she showed Dill a house on North Shore Road, Flatts, which belonged to Dr. E. Brown, the Minister of Transport. She was trying to have BHC purchase the property for inclusion in their housing stock. The price was $450,000.

“Dill declined to purchase the property as it was too expensive and the location was not suitable. Dill received several further calls from Dale Young trying to get Dill to ‘move’ on purchasing the property.

“He was then contacted by Dr. Brown who invited him to lunch at the Newstead Hotel. At the conclusion of lunch Dr. Brown pushed a signed purchase agreement across the table to Dill — which referred to the North Shore Road property. He still refused to sign but left with the purchase agreement.”

Det. Insp Sherwood went on to report that Mr. Dill was later contacted by Health Minister Nelson Bascome, who exerted further pressure on the quango chief.

“They met in the Senate Chamber,” the detective wrote. “Present was Dr. Brown, Bascome, Dill, and a BHC architect. Again it was explained that the price being asked was well above market value.”

A second, undated police report concluded that: “Having been informed by Works and Engineering as well as Mike Emery from Entasis that the property was only valued at $230,000-$250,000. He [Dr. Brown] arranged two private meetings with Dill, one being a private luncheon and one being in the Senate chambers in the presence of [architect] Mike Emery and Nelson Bascome. On each occasion Dill maintains pressure was placed on him to purchase the Flatts property for $500,000. The property was later purchased for this amount by Dill.

Although detectives viewed Mr. Dill as a “tainted” witness, they were able to uncover documents that corroborated his allegations.

Police obtained a copy of a contract for the sale of the property that was drawn up by realtors The Property Group and signed by both parties in January 2001.

They also recovered BHC payment input forms listing three separate payments of $140,000, $150,000 and $150,000 made to law firm Trott and Duncan, the company hired by Dr. Brown to represent him in the deal.

And police also seized a bank statement from Dr. Brown which showed that Dr. Brown paid a bill of $44.56 at the Newstead Hotel on July 29, 2000 — around the same date that Mr. Dill claimed he had his informal meeting with Dr. Brown.

The documents show that Police also drafted in independent realtors who estimated that, at the time of the sale, the Flatts property was worth no more than $330,000.

The Fraud Squad was unable to find any evidence to demonstrate that either Dr. Brown or the BHC had the property independently valued prior to the sale or that the deal was approved by the BHC Board.

They also failed to find any proof that Dr. Brown paid a bill of more than $150,000 to the BHC for renovations carried out on the property by the housing quango before the sale.

An internal Police memo written by investigator Rodney Newcombe and e-mailed to Det. Insp. Sherwood on November 17, 2003, summed up the police findings.

Subtitled, ‘BHC, Purchased Houses, 18 Northshore Road - Dr. Ewart Brown’, the memo reads: “In November 2000, BHC began renovations to the building at 18 Northshore Road. The building consists of two apartments, one upstairs and one downstairs. Consistent with other properties, BHC planned to renovate the apartments, rent them from Dr. Brown and sublet them to tenants. The rental income was to pay for the cost of the renovations over a number of years. Renovations continued until March 2001 and totalled $152,507.

“There does not appear to be an agreement signed by BHC and Mr. [sic] Brown agreeing to the conditions. Around this time, Mr. Brown and Mr. Dill came to an agreement for BHC to purchase the property. The property was then purchased from Mr. Brown for $440,000 in March 2001 ($140,000 assigned to the land and the remainder to the building). Miscellaneous bills totalling $17,070 relating to the property came in during this time as well. Therefore, total costs associated with the land and the building were $609,577 ($440,000 + $152,507 +$17,070).

“There is no estimate of the FVM [Fair Market Value] of the property on file. No support for the $440,000 purchase price could be found. However, there is a letter dated June 2000 from the Ministry of the Environment asking if BHC is interested in purchasing the property so the Ministry of the Environment could acquire a small piece of the land to use as a parking lot. The letter states that Works and Engineering valued the property at $200,000 but also states that this may be on the low side as they have been told that the owner has been offered $500,000.

“BHC policy states that all housing purchases must be approved by the Board of Directors. There is no evidence to suggest that this purchase was approved by the Board of Directors per review of Board of Directors meeting minutes. This is not in compliance with the housing purchase policy. However, the purchase documents and director signature form are signed by Valerie Dill, who is a member of the Board of Directors.”

A second, undated report concluded: “The circumstances are supportive of a conspiracy between Brown and Dill to defraud the Bermuda Housing Corporation. There may be additional persons added to this conspiracy such as Bascome and Dale Young as this matter progresses.”

Armed with the findings, Det. Insp. Sherwood wrote to the Commissioner of Police in December 2003, requesting that Dr. Brown be brought in for questioning.

The detective acknowledged that there was as yet insufficient evidence to press charges over the sale of the property, but added: “I do believe that there are sufficient grounds to speak with Dr. Brown concerning the allegations under caution. He would obviously be entitled to take legal advice and to exercise all of his legal rights.

“In order to be true to this investigation, I would submit that we need to pursue this line of inquiry. I am satisfied that we have reasonable grounds to suspect an offence may have occurred and to invite Dr. Brown for interview. In the event that he declines such an invitation, we do not have sufficient grounds to arrest him. At this point I believe we would have fulfilled our investigative role, i.e. we have pursued all available avenues open to us.”

The dossier does not show whether Dr. Brown was ever questioned about the sale and at the beginning of 2004 the Department of Public Prosecutions ruled that no criminal offence had taken place as a result of the transaction.




To e-mail click here:


to visit click here



IMPORTANT NOTICE: has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. is not an official or authorised Bermuda police web site.