Overview:
The Supreme Court of Palau has convicted Ephram Polycarp, operator of the Palau Commemorative Coin Company, of multiple counts of tax fraud and failure to pay taxes spanning a decade of international coin-minting deals. The case, prosecuted by the Office of the Special Prosecutor, revealed that Polycarp concealed substantial royalty income while falsely reporting no business activity.
By L.N. Reklai | Island Times | October 6, 2025
KOROR, Palau — The Supreme Court of Palau has found Ephram Polycarp, operator of the Palau Commemorative Coin Company (PCCC), guilty of multiple counts of tax fraud and failure to pay taxes tied to a decade-long series of international coin-minting contracts. The case was brought by the Office of the Special Prosecutor (OSP) under Special Prosecutor Tamara Hutzler.
Polycarp was convicted on eight counts of filing false and fraudulent tax returns in violation of 40 PNC §1701c and nine counts of failure to pay tax under 40 PNC §§1204 and 1421, covering activities between 2014 and 2024. Two counts were dismissed under the statute of limitations, and one resulted in acquittal due to insufficient evidence. The court ordered a pre-sentence report by October 30, 2025, with sentencing set for November 4, 2025.
The court determined that Polycarp, acting as the head of PCCC, intentionally concealed substantial royalty income from Coin Invest Trust (CIT), a Liechtenstein-based minting company, while filing business tax returns declaring “zero revenue” or claiming “business not active yet.”
Evidence presented by prosecutors showed that:
- In early 2014, Polycarp received a USD 64,000 royalty payment from CIT but filed a return claiming no income.
- Between 2015 and 2017, he received USD 32,000 annually in royalties while continuing to report zero gross revenue.
- In 2019, after his authorization to issue legal tender coins was revoked by the Ministry of Finance, he continued approving coin designs and negotiating payments without disclosing his lack of authority.
- In 2023, he signed a new contract with CIT while falsely representing that his company remained officially sanctioned to manage Palau’s legal tender coin issues, concealing USD 160,000 in payments from tax authorities.
The OSP’s case established that Polycarp “repeatedly and willfully misrepresented his business activities to evade tax obligations,” the court ruling stated.
The conviction comes as Coin Invest Trust—Palau’s long-time coin minting partner seeks formal approval for a new agreement with the National Development Bank of Palau (NDBP) to continue producing commemorative coins under Palau’s name.
National Development Bank of Palau (NDBP) sought Olbiil Era Kelulau (OEK)’s resolution approving a deal with Coin Invest Trust (CIT) to mint commemorative coins for Palau. The proposed contract includes a $1 million ratification payment from CIT to NDBP, followed by annual payments of at least $80,000 for three years, $88,000 for two years, and potentially $100,000 per year if extended for a second five-year term.
According to the NDBP CEO, the funds would be allocated to residential housing and small business loan programs. The letter emphasized that CIT is not implicated in the OSP’s criminal investigation against Polycarp and that the company has cooperated with the authorities. It also cited CIT’s long-standing reputation and past collaborations with institutions such as the U.S. Mint and the British Royal Mint.
Under 26 PNCA §123(l), NDBP holds exclusive authority to negotiate and manage legal tender coin agreements on behalf of the Republic.
The Special Prosecutor recently concluded another tax evasion case involving former Speaker Sabino Anastacio. The case was filed under Misconduct in Public Office and Violation of the Tax Act. The case went to deferred prosecution and the former Speaker was ordered to pay taxes on income from land sales, with penalties and interests waived.
The case of fraud and misconduct in public office filed by the Special Prosecutor against the former Chairman of Aimeliik State Public Land Authority, Sriderio Rengulbai, for taking state land rental payment and claiming it as his personal funds was dismissed due to failure to file the case after the court rejected a request for deferred prosecution.
The Office of the Special Prosecutor plays a key role in upholding accountability and combating corruption in Palau, pursuing cases involving tax fraud, misconduct in public office, and financial misrepresentation to protect public integrity.