Money transfer tax used for Martelly beach house among lawsuit allegations against Haitian rulers

By The Haitian Times, April 1, 2022

The lawsuit against Haiti’s last three presidents and remittances and phone companies — Celestin v. Caribbean Air Mail — has been winding its way through the courts since 2018. In 2021, a district court dismissed it on the grounds that United States courts cannot render another country’s laws invalid. On Thursday, a federal panel of three judges weighed in, saying the case may proceed.

The Haitian Times dug through a 29-page ruling on the lawsuit from the United States Court of Appeals and the Celestin v. Martelly detailed lawsuit to provide a recap. Below are 15 major allegations and legal developments to know about based on that review.

  1. Defendants— Haitian government officials and multinational corporations—conspired to fix the  prices of remittances and telephone calls from the United States to Haiti. The defendants allegedly agreed to produce official instruments, including a Presidential Order and two Circulars of the Bank of the Republic of Haiti (BRH) to disguise their agreement as a tax for domestic education programs.
  1. Martelly allegedly orchestrated a far-reaching price-fixing agreement with the Corporate Defendants before becoming President in 2011. The  “mechanism” for implementing the agreement was a Presidential Order and two Circulars of the Bank of the Republic of Haiti that Martelly would issue after taking office.
  1. The Presidential Order set a “floor price for all incoming international call[s]” at $0.23 per minute and required that $0.05 per minute be “turned over to the Government.” Similarly, the Circulars “memorialized” Defendants’ agreement to add a $1.50 fee to remittances of food and money sent to Haiti from certain countries, including the United States.
  1. Under both the Presidential Order and the Circulars, the Corporate Defendants and Natcom collected these surcharges as a condition of eligibility to provide services.
  1. Martelly represented to the public that these policies would raise revenues  to support a Haitian compulsory education program. But in fact, Plaintiffs say, no such program existed.
  1. Rather, just months after publication of the Presidential Order, “it was discovered that [$26] million in the new National Fund for Education was missing.” Plaintiffs assert that each Corporate Defendant retained a portion of the fees it collected rather than transmitting the full amount to the Haitian treasury. 
  1. Martelly, and successors Jocelerme Privert and Jovenel Moise, during their respective terms, profited personally from the fees as well, according to the suit. 
  1. For example, according to one accusation, Martelly used the transfer tax money for a beach house.
  1. Furthermore, the Presidential Order and Circulars ran afoul of Haitian law because “only the parliament may raise taxes and fees for the benefit of the state.” As part of the scheme, Plaintiffs allege, Defendants told customers that these fees were in fact collected pursuant to a “lawful tax” for education.
  1. A district court in 2021 granted Defendants’ motion to dismiss all claims based on (1) the act of state doctrine and (2) in the alternative, as to some Defendants, forum non conveniens.
  1. A federal panel of judges on March 31 chose to REVERSE the district court’s dismissal of the antitrust claim under the act of state doctrine and VACATE the dismissal of the fifteen state-law claims for reanalysis under the proper standard. it also REMANDED the case for further proceedings.
  1. We may give the Presidential Order and Circulars their full purported legal effect and still conclude that Plaintiffs have plausibly alleged illegal price-fixing under the Sherman Act.
  1. Plaintiffs’ antitrust claim depends not on “whether the alleged acts are valid, but whether they occurred” in a way that gives rise to liability. 
  1. The plaintiffs are listed as: Odilon S. Celestin, Widimir Romelien, Goldie Lamothe-Alexandre, Vincent Marazita
  2. The defendants are listed as: The Caribbean Air Mail, Inc., Western Union, Unitransfer USA Inc., Unibank S.A., Unigestion Holding, S.A., DBA Digicel Haiti, Western Union Financial Services Inc., Michel Joseph Martelly, Jocelerme Privert, Jovenel Moise, Natcom S.A., Government of Haiti


Posted April 14, 2022