Digicel seeks to dismiss US lawsuit over Haitian tax allegations

US-based lawyers for Digicel, the Caribbean and Pacific Islands telecoms company owned by Denis O’Brien, want a court to dismiss a complaint by US-based Haitian emigrants who accuse it of being part of a “conspiracy” to divert taxes on telephone calls. Digicel has strongly denied any wrongdoing.

Digicel is one of five businesses and several current and former political leaders of Haiti, one of the company’s most important markets, who are being sued in New York by the Haitian emigrants over an alleged “scam”.

The case revolves around levies that the Haitian government applies to all international phone calls and money transfers to and from the country.

A fee of $1.50 is automatically added to every money transfer, while an extra 5 cents per minute is added to every international call, including those connected on Digicel’s network. The cash is purportedly to fund free education in Haiti, but the complainants allege the money has disappeared elsewhere.

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In their $1.5 billion US lawsuit, the plaintiffs allege that instead there was a “ruse” by the “co-conspirator” respondents in the case diverted the education taxes, which they allege are instead spent corruptly by Haitian politicians.

Other companies being sued include rival Natcom, three money-transfer companies including Western Union, former Haitian president Michel Martelly and both of his successors in recent years.

Levy scheme

The levy scheme was started in 2011 by Mr Martelly, a former singer, who vowed to overhaul the education system. The scheme has been repeatedly criticised by Haitian emigrants, however, who say the country’s education system remains in dire straits.

There have also been numerous allegations previously of cash going missing from the fund. Mr O’Brien, for example, has previously responded to concerns that $26 million had allegedly gone missing by promising to seek an audit from the government.

In a submission to the New York court, Digicel’s lawyers say the plaintiffs alleging fraud do not spell out what allegedly fraudulent statements Digicel is supposed to have made: “As it is difficult for Digicel to understand precisely what it is being accused of, the [complaint] should be dismissed.

“Plaintiffs do not allege a single specific fact about Digicel’s representations to its customers about the $0.05 fee, which is fatal to their claim.”

Digicel also argues that a US court has no business establishing the legality or otherwise of a Haitian tax.

“The Haitian justice system would have a much greater interest in the outcome of the lawsuit and would be best positioned to interpret Haitian law,” its lawyers argued. “Many of the relevant acts took place in Haiti, key witnesses are Haitian citizens . . . and the case will turn on the . . . validity of a Haitian tax.”

Further to its US legal filings, in a statement to The Irish Times last night, Digicel said it had “filed a motion to dismiss as we believe the claims are without merit”.