KOROR, Palau — Palau’s Office of the Special Prosecutor (OSP) has filed a criminal case against Ephram Polycarp for tax fraud related to unreported income from the sale of commemorative coins—an investigation that casts attention on a new $1 million legal tender coin agreement now awaiting legislative approval.
According to court documents, Republic of Palau vs. Ephram Polycarp (CRIMINAL CASE NO. 25-005), Polycarp allegedly failed to report over $525,600 in income between 2014 and 2023 derived from the sale of legal tender commemorative coins. The OSP asserts that Polycarp earned income from sales of the coins through his company, Palau Commemorative Coin Company (PCCC), without proper declaration to the Bureau of Revenue and Taxation, violating 40 PNC §1303 and §1304.
Prosecutors allege that Polycarp personally received payments totaling $525,600 from CIT Coin Invest AG (CIT)—the same foreign entity now proposing a new multi-year agreement with the National Development Bank of Palau (NDBP).
Despite the ongoing criminal proceedings, the NDBP is now urging the Olbiil Era Kelulau (OEK) to approve a fresh agreement with CIT. In a letter addressed to Senate President Hokkons Baules, the bank outlines a lucrative proposal: a $1 million ratification payment from CIT to NDBP, annual payments of at least $80,000 for three years, $88,000 for two more, and a potential $100,000 annually if extended to a second five-year term.
NDBP CEO states the funds would support residential housing and small business loans, and emphasized that CIT is not implicated in the criminal investigation. The letter also acknowledges the ongoing tax fraud case but stresses that CIT is cooperating with the OSP and has a long-standing reputation, including partnerships with the U.S. Mint and British Royal Mint.
NDBP holds exclusive legal authority under 26 PNCA §123(l) to negotiate legal tender coin deals on behalf of the Republic, and the bank maintains that it performed due diligence on CIT prior to submitting the proposed agreement for legislative review.
As of press time, no joint resolution has been passed by the OEK. Meanwhile, Polycarp’s trial is pending, and the outcome could have lasting implications for Palau’s commemorative coin program.
The case is ongoing and the defendant is deemed innocent until proven guilty. (By: L.N. Reklai)