V.I. – Another
man accused of participating in a scheme to defraud the government through a
property auction has admitted to his role in the conspiracy.
Warner, 43, of Est. St. Peter pleaded guilty to taking part in the plot, which
occurred during an Aug. 30, 2012 property bid conducted by the office of the
faced two charges – one count each of conspiracy and Criminally Influenced and
Corrupt Organizations Act (CICO) – in connection with the crime. However,
rather than face a jury, Warner accepted the terms of a closed plea bargain
offered by Attorney General Claude Earl Walker.
appeared in court for a change-of-plea hearing on Feb. 3 and stood before V.I.
Superior Court Judge Michael Dunston to formally admit to the crime. Under the
terms of the plea bargain, Warner entered a guilty plea to the single charge of
conspiracy and in exchange for his testimony and full co-operation against the remaining
co-defendants, the second count against him will be dismissed, Warner will
testify against the other co-defendants and he will be sentenced to a period of
one-year supervised probation. Warner also has to pay fees and court costs.
was arrested Nov. 19, 2015, following an investigation by Nicholas Peru,
special investigator in the office of the Inspector General. He was released
from custody after posting bail.
all, four men – Warner, Calford Charleswell, Paul Sabers and Edward McKenzie –
were taken into custody and charged in connection with the public auction
scheme. On Wednesday, Charleswell, who faced 14 charges stemming from the
incident, admitted his wrongdoing and pleaded guilty to the single count of
commenting on the matter, AG Walker said his office is prepared to go to trial
with the other two accused men.
we have the guilty pleas of two of the defendants, who have also agreed to
testify against the other two, and so, it appears that will have a trial
involving Sabers and McKenzie,” AG Walker said. “We can’t wait for trial
because the people of the Virgin Islands have been getting ripped off for years
in these government property auctions, and at trial, we will finally get to the
bottom of what has been going on.”
the men’s actions, AG Walker said the government auctions were not designed “to
enrich the elites.”
Gov. Mapp indicated, one of the main reasons for having these property auctions
is to give ordinary working people such as teachers, police officers and small
business owners a chance to own a home in the Virgin Islands,” AG Walker said.
“That purpose, however, has been hijacked by the sheer greed of certain people
in this community because these real property auctions have been tainted by
fraud and bid-rigging, which resulted in properties being sold way below market
According to the affidavit
filed by Peru, a property auction was conducted on Aug. 30, 2012. One of the
properties being auctioned was 97 Est. Frydenhoj, on which the opening bid was
placed at $6,442.28. The first bidder offered $75,000, a second person bid $42,000
and the third bid was $10,100; however, the bidder tracking sheet prepared by
Charleswell showed that there were only two bidders on the property, according
unwritten policy developed by officials in 2012 required that the three highest
bidders be recorded in the event that the highest bidder failed to meet the ten
percent deposit amount, but the day after the auction, the winning bidder did
not make the required deposit and the second highest bidder should have been
contacted, Peru wrote.
On Sept. 4, 2012, a deposit
of $2,000 was paid on a bid that was not noted on the record and on Oct. 11,
2012, a man paid the balance of $8,000 on the Est. Frydenhoj property and the
office of the lieutenant governor transferred the property to that man for
$10,000. Then, on Sept. 25, 2013, the man transferred the same property to
another man, according to Peru.
A woman whose name appeared
on the bidder tracking sheet told Peru that she accompanied Warner to the
auction and he completed the registration form using her name, but used his
address. She said Warner bid on the Frydenhoj property and told her that he was
bidding for a friend. On the day of the auction, Warner bid on three other
properties, but although he was the highest bidder, he failed to pay deposits
or take any of the properties, according to Peru.
The investigation revealed
that certain procedural changes made by officials at the office of the
lieutenant governor allowed individuals to fraudulently manipulate the bidding
process in a scheme in which the highest bidder purposefully makes a
substantially inflated high bid, then fails to post the ten percent deposit so
that the property would go to another bidder or individual for a substantially
low price, Peru wrote.
This manipulation prevented
potential bidders from making fair and legitimate bids on properties offered at
public auctions and potentially reduced the likelihood of the property owner
recouping any excess proceeds from the sale after taxes and fees are paid,
according to Peru.
Judge Dunston has not
scheduled a date for Warner’s sentencing hearing. Warner remains on bail pending