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    How a Canadian businessman lost everything in Cuba

    How a Canadian businessman lost everything in Cuba
    JEFF GRAY
    The Globe and Mail
    Last updated Friday, Mar. 20 2015, 8:14 PM EDT

    Canadian businessman Sarkis Yacoubian only knew his Cuban interrogator –
    the Cubans call them “instructors” – as Major Carlito. When they first
    met in the dim basement of the Havana house where security agents had
    initially imprisoned Mr. Yacoubian in July, 2011, he says Major Carlito
    greeted him by grabbing his own crotch.

    “If you are expecting that the Canadian embassy is going to come to your
    help, this is what they are going to get,” Mr. Yacoubian, 54, says his
    captor warned him. Then, he says, Major Carlito accused him of being a
    spy, an accusation that would eventually be abandoned before the
    Canadian was convicted by a Cuban court of corruption charges and
    expelled last year.

    His story, and that of Toronto-area businessman Cy Tokmakjian, who was
    released from incarceration in Cuba last month after a similar
    corruption trial, are cautionary tales for would-be investors in Cuba.

    However, some say the historic Dec. 17 announcement of Canada-brokered
    talks to normalize Cuba’s relations with the United States – plus recent
    moves by leader Raul Castro to liberalize the economy – still has
    Canadian investors and entrepreneurs interested in the Communist-ruled
    island.

    Despite Major Carlito’s threat, the Canadian embassy did closely
    monitor’s Mr. Yacoubian’s status as he spent two years in jail before
    facing any formal charge. And the ambassador attended Mr. Yacoubian’s
    2013 trial, which saw him sentenced to nine years in prison and fined
    $7-million for corruption, tax evasion and doing “economic damage” to Cuba.

    Mr. Tokmakjian, 74, spent more than three years in prison. Two of his
    Canadian employees who had been blocked from leaving Cuba were also
    recently freed. His Concord, Ont.-based Tokmakjian Group reportedly had
    a $90-million-a-year business on the island importing vehicles and
    construction equipment. His assets in Cuba were seized. Mr. Yacoubian, a
    former employee of Mr. Tokmakjian’s who broke away from his boss to
    build what he said was a $20-million-a-year business in Cuba bringing in
    similar products, says all of his assets on the island were also seized.

    Both were caught up in what has been described as an anti-corruption
    sweep. Some of their Cuban employees as well as Cuban state officials
    were jailed. Several Cuban officials associated with a joint venture
    with Toronto-based miner Sherritt International Corp., Canada’s largest
    investor in Cuba, were also convicted of corruption offences in 2012.
    And a handful of other foreign businessmen in Cuba, including Briton
    Stephen Purvis – who told reporters his captors also initially accused
    him of espionage – and Frenchman Jean-Louis Autret were also imprisoned.
    Both have since been freed.

    Mr. Yacoubian’s account of his ordeal sounds plucked from a spy novel.
    But even though months before his arrest he did buy a 2011 Aston Martin
    – James Bond’s car of choice – he says he was no spy.

    He also says he was not corrupt and was only following common business
    practices in Cuba. He said he was forced to hand over 1 or 2 per cent on
    many transactions for what he called “protection money” for Cuban
    officials for routine things, such as permission to operate a mechanics’
    shop or to obtain payment for goods sold. But he insists he never paid
    kickbacks to obtain contracts as the Cubans alleged. He questions why he
    was targeted.

    “If there’s a traffic light that’s red, everybody passes. Now that I am
    passing you say, hold on a second, you can’t do that,” he said.

    Before Mr. Yacoubian was arrested at gunpoint at his Havana offices in
    July, 2011, he had been running his own business in Cuba for 15 years
    after breaking away from Mr. Tokmakjian and founding his own company,
    Tri-Star Caribbean Inc., in the mid-1990s.

    During his two and a half years in some of Cuba’s most notorious
    prisons, Mr. Yacoubian says he sank into a depression, attempted a
    hunger strike and threatened suicide. He says he was arbitrarily moved
    from cell to cell, which he described as “psychological torture.” But
    early on he says he was treated much better, held in a house in Havana,
    even playing dominoes with his captors. He was also allowed out to visit
    his elderly mother, who had flown into Havana, and from whom his
    imprisonment was kept secret.

    He says he told his captors about the practices of other companies and
    of Cuban officials who received payments, and says he was made to
    testify against Cuban officials at what he said were closed sessions
    with military prosecutors.

    Toronto-area Conservative MP Peter Kent, who represents the Thornhill,
    Ont., riding where Mr. Tokmakjian and his family live, visited both men
    while they were held at La Condesa, a prison an hour outside of Havana.
    He says their cases and those of the other foreign businessmen is
    chilling investment in Cuba.

    “They have lost a lot of significant investment because, I believe, of
    the treatment of guys like Cy and [British national] Purvis and others,”
    Mr. Kent said, adding that businessmen from close U.S. allies but not
    from Venezuela, China or Russia had been targeted. “There, but for the
    whim of somebody in the Interior Ministry, they would either find
    themselves in jail one day or their assets seized.… It doesn’t matter
    how well you’ve behaved, you’re vulnerable.”

    In Mr. Tokmakjian’s case, the Cubans alleged that he paid for vacations
    in Varadero, a barbecue and a flat-screen TV for Cuban officials, as
    well as for casino chips for a Cuban delegation on a visit to Niagara
    Falls, Ont. But Mr. Kent called these “confected charges” and said the
    Cubans refused to allow various expert witnesses to testify in Mr.
    Tokmakjian’s defence, before sentencing him to 15 years in jail in what
    his company called a “show trial.” Mr. Tokmakjian has denied all of the
    allegations against him. Through a lawyer, he declined to be interviewed
    for this story.

    Cuba, by comparison with many of its Latin American neighbours, appears
    to have less large-scale bribery involving high-ranking officials, says
    Alexandra Wrage, who runs a non-profit called Trace International and
    advises multinationals on anti-corruption. But lower-level officials,
    she says, are often engaged in more widespread run-of-the-mill
    corruption demanding small payments or perks from foreigners.

    “The consequences for corporations are kind of terrifying,” Ms. Wrage
    said. “You have a whole population that has basically been trained into
    the idea that they need to circumvent the rules to survive.”

    Still, those risks – and the stories of Mr. Yacoubian and Mr. Tokmakjian
    – don’t appear to be dramatically dampening enthusiasm for investment in
    Cuba from Canada. In one sign of the demand, national law firm Gowling
    Lafleur Henderson LLP will announce this week the launch of a new Cuba
    practice to help guide foreign investors there.

    Gowlings is working with Gregory Biniowksy, a Canadian lawyer who has
    lived in Cuba for more than 20 years, who says he has seen a significant
    boost in interest from Canadian investors since December, with none
    overconcerned about being thrown in jail: “My experience with Canadian,
    European and even American investors that are looking at Cuba is that it
    doesn’t seem to be playing much of a factor in their calculations.”

    Mark Entwistle, a former Canadian ambassador to Cuba who now works as a
    consultant for investors in the country with Toronto-based Acasta
    Capital, says it is quite possible to do business in Cuba without paying
    bribes. He said he could not comment on the specifics of the two cases
    but said he did not think they were scaring business away: “I don’t
    think there has been any great impact of these specific cases and the
    media attention they have generated on people interested in exploring
    the Cuba opportunity.”

    When asked, even Mr. Yacoubian himself declines to outright warn
    Canadian businesspeople to avoid Cuba: “The businessmen are smart. There
    is a risk-reward factor. I am not going to comment. If they want to try
    it, they can try it. It worked for me for 20 years. And then I lost
    everything.”

    Source: How a Canadian businessman lost everything in Cuba – The Globe
    and Mail –
    http://www.theglobeandmail.com/report-on-business/international-business/latin-american-business/canadian-businessman-accused-of-spying-lost-everything-in-cuba/article23569652/

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