Bahamian island saved from ‘total loss’

• Agreement to “unfreeze” insurance for a suspected fraudster

• Alleges Abaco property “looted and in disrepair”

• Fear a Dorian-type blow; SEC skeptical of numbers

By NEIL HARTNELL

Editor-in-chief of the Tribune

[email protected]

A private Bahamian island, which is among the most valuable assets held by an accused $40 million securities fraudster, was saved yesterday from ‘destruction and complete loss’ via a US court-approved settlement .

Judge Chad Kennedy, sitting in the District Court for Eastern Pennsylvania, oversaw a deal between Joseph Cammarata and the Securities & Exchange Commission (SEC) that will see the former release some $38,000 in a final attempt to secure Sandy Cay days before the Atlantic hurricane season hits its traditional peak.

Mr. Cammarata, who along with his co-defendant faces civil and criminal charges for stealing money intended to compensate victims of past securities frauds, alleges that the SEC, by obtaining a freeze on all of his accounts banks and other assets, “neglected the preservation” of their value.

He claimed, in an Aug. 16, 2022, letter to Justice Kennedy, that some $14 million in assets had been put at great risk by becoming “abandoned, [falling] in poor condition, broken into, looted and currently uninsured”. The biggest and most valuable asset in this collection, Mr. Cammarata added, was Sandy Cay, his private island near Man-O-War Cay in the Abacos, which was totally exposed to another major hurricane three years after Hurricane Dorian struck.

Blaming Tribune Business coverage for its legal woes for an earlier inability to obtain the necessary property and casualty insurance, he argued that obtaining coverage was “now more urgent” because “the worst of hurricane season is August, September and October and we need to insure those assets.” There may only be a few days to do that if the current Atlantic disruption turns into a storm and insurers close their doors to new business.

Mr. Cammarata argued that such a move was in the interest of all parties, including the SEC, the US Department of Justice and its alleged “victims”, like Sandy Cay – and his potential sale would be the one of the best sources of recovery of the latter if it were found. guilty at a trial by jury.

His reasoning proved persuasive as all parties, including the US District Court, the SEC and Mr. Cammarata’s ex-wife, Nina, agreed to unfreeze $38,000 from a Merrill Lynch account so that the initial deposit may be paid for insurance coverage on Sandy Cay. NAGICO Insurance (Bahamas) would have required a premium of $123,858 to carry out coverage for 12 months starting tomorrow, September 1.

Describing Sandy Cay as “an invaluable asset”, Mr Cammarata said efforts in January 2022 to secure sufficient insurance protection had been rejected by another underwriter due to his legal troubles. According to court documents obtained by Tribune Business, this happened despite being offered a $32,000 deposit.

“As stated in my previous letter, and to the SEC over the past six months, the largest assets, including Sandy Cay, are abandoned, in disrepair, broken into, with properties looted from building materials, with trespassers coming and going,” Cammarata said. wrote to Justice Kennedy on August 16.

“The Cay and associated boats are uninsured after the insurance company terminated due to negative publicity delivered to the Bahamian media just minutes after the SEC filed its civil lawsuit and injunction against me. It has been nearly impossible to get new insurance while the property is abandoned and unmaintained, with risks of theft, fire, boat sinking and equipment failure without regular occupants or employees.

“It’s an invaluable asset, [for] that the SEC provided nothing more than a $32,000 insurance payment in January, which was later rejected by the insurance company and returned, due to “the publicity surrounding the US Department of Justice and the SEC Charges”.

Tribune Business assures Mr Cammarata that he has not been “fed” any details about his case by the SEC or anyone connected to it. Meanwhile, the island manager and staff of Sandy Cay were all fired from the property last December because they were not being paid due to the freezing of its assets.

In an Aug. 4, 2022, letter to Judge Kennedy that was handwritten because the printer did not work at the US federal prison where he is being held, Mr. Cammarata blasted: “As of December 2021, my insurance has been dropped and not a only agency will insure me with the ongoing litigation. They all said they don’t subscribe to customers with a high profile dispute [such] like mine….

“Sandy Cay, since being abandoned and in disrepair with no employees present, began to experience crime for the first time. There were burglaries, looting, trespassers and my unpaid caretaker sees everything (from my security cameras) in New Jersey until the power goes out, which happens every day Not a penny has been paid in months.

Returning to his August 16 missive, Mr Cammarata said his lawyer at the time “reluctantly convinced me” to hire KW Property Management & Consultants to appraise Sandy Cay in February 2022 despite fears it was ” waste of time and money.”

KW has managed properties in Bimini, including Bimini Bay and Bimini Sands, with owners of the latter criticizing its performance and eventually taking legal action. “I have again proven that I was right. The KW owner recently visited a few weeks ago with his wife, apparently on vacation, and had no way of getting to and from the property,” Mr. Cammarata wrote.

“We are now in mid-August, the height of hurricane season, with no insurance and not a penny paid for upkeep, repairs or upkeep…Sandy Cay is in dire need of funding before destroyed and a total loss. We need an immediate amount of $150,000 for the next three months of operation, which includes the return of some employees to repair and maintain the property and boats, which which is also mandated by the insurance policy.

“It also takes $50,000 for repair and maintenance items such as generator repairs and parts, watermaker membranes and various other paint and construction items just to get the property out of its dilapidated state. The proposed insurance premium, which must be completed within 30 days of August 9, is approximately $124,000 (annual premium for the property,” he continued.

“Some employees are ready to return to work, and the property manager has been [is] able to obtain a new insurance policy if we are able to obtain immediate financing to make the necessary repairs, have staff present, carry out the necessary maintenance and protect the property against any further intruders and theft.

Mr Cammarata was supported by his estranged wife, Nina, who is co-owner of Sandy Cay, although divorce proceedings are pending and she has never been involved in the island’s financial or operational affairs . She alleged in an August 22, 2022 affidavit: “In short, there is no one physically present on the island, and therefore it is vulnerable to looters and vandals.

“I understand that some damage may have already taken place. Also, I was informed that there is no insurance for the island and the boats moored there. This is particularly problematic as now is the peak of hurricane season. There is an immediate need to physically secure the property, repair any damage that has occurred and insure it.

Ms Cammarata said Sandy Cay manager Wallace Okulicz informed her that he was available to carry out the necessary work. He had also disclosed that there were outstanding debts of $18,389 for overdue utilities and workers’ wages that had not been paid.

Besides Mr. Okulicz, she alleged that there were four other Sandy Cay employees who maintained the island and carried out post-Dorian repairs. They were Wesley Albury, the utility worker, and others in charge of the grounds and general maintenance.

“On a monthly basis, the total amount of workers’ pay is $21,360. In addition to this salary, the island incurs approximately $1,485 in utility bills (electricity, WIFI, etc.), $1,600 in fuel, and $800 for a boat slip (a boat slip is required in Abacos). Thus, the total monthly amount required to secure and maintain Sandy Cay is approximately $25,245,” Ms. Cammarata asserted, supporting her ex-husband’s request that $234,000 be released to remedy Sandy Cay’s woes.

In the end, the parties were only able to agree to release 16.2% of this sum – the $38,000 for the NAGICO insurance deposit. The SEC argued that the various sums advanced by the two Cammarata were not supported by the necessary supporting documents and, without opposing the obtaining of insurance coverage, said that the couple had not not justify the total monthly operating costs of $25,000 – 85% of which was represented by staff salaries.

Lynn A. Saleh