Chaos in the Caribbean In the 1990s, Jamaica was dealing with a major crisis in the financial sector. This is because of a series of events came together simultaneously, to create a situation where the economy would face tremendous challenges. At the heart of these issues were: rising inflation, skyrocketing interest rates, a devaluation of the Jamaican dollar, the lack of fiscal restraint on the government level and limited regulations of the financial industry. The combination of these factors created a situation where the economy went into an economic collapse. ("FINSAC Commission of Inquiry," 2010) ("Zooming in on the 90s Meltdown," 2011)

In the case of the financial sector, an outside consultant (Ted Avey) was brought in, to investigate the collapse associated with Blaise Financial. This was a large financial holding company that was considered to be: a traditional bank, a building society and an intermediary for currency transactions. In early 1996, Avey began a 12-year investigation into the firm. What he discovered, is that the owner was using the bank's money to support his lavish lifestyle. This occurred during a time, when no one was aware of these activities, until the economy began to face a number of challenges. Once this happened, it made it difficult for the company to hide these losses from shareholders, investors and regulators. To fully understand what took place requires: examining Avery's role as an expert witness for the Jamaican government, the techniques that were utilized, conducting an analysis of the bank's issues and recommending strategies to help prevent these incidents from occurring in the future. Together, these different elements will offer the greatest insights as to how the issues at the Blaise Financial contributed to the economic crisis during the 1990s. (Orienstein, 2006, pp. 54 -- 62)

Evaluate Avey's role as an expert witness for the Jamaican government.

Avery was an international forensic accountant. His...

The way that this occurred, was through having Avery carefully evaluating the transactions of the bank going back to the early 1980s. This is when many of the policies were enacted that helped executives to hide the illegal activities of banking officials. During the course of legal proceedings, this helped him to pin point where the fraud took place. This allowed the Jamaican government to link all of the various facts together. Once this happened, is when Avery was able to provide everyone with a detailed picture of fraud and the various tools that allowed it to continue. (Orienstein, 2006, pp. 54 -- 62)
Enumerate the likely techniques that Avey used to discover the connectivity between Blaise, Century and Eagle.

The most effective technique that was used is to see where depositors' funds were going. What took place is he began to compare the assets that the firm had on its books, in conjunction with the liabilities. The results were that the bank had negative liquidity despite the assumption of having tremendous assets. Once Avery began to look further, is when he determined that these funds were being diverted to help support the personal business projects of the majority shareholder (Paul Chen Young). He was investing this money into real estate projects that were considered to be very risky with the promise of providing above average returns. The problem was that these projects were never able to turn a profit and required continuous amounts of funding. (Orienstein, 2006, pp. 54 -- 62)

At the same time, the bank had invested heavily in the real estate sector through aggressive lending practices. Once the financial crisis began (with the devaluing of the currency), is when this would have a negative impact on interest rates (as they were moving higher). This caused confidence and economic activity to decline. Moreover, it made it difficult…