BVI Offshore Business: Grey Area

An inquiry in Brazil raised concerns about money laundering and made Brazil investigate the company behind the transfer of the 2 of the world’s most gifted young footballers to West Ham.

Carlos Tévez and Javier Mascherano are successful South American football players, stars of the Argentina World Cup squad, who had been acquired from Corinthians. But, as it came out later, West Ham did not pay anything for them.

The officials of Brazil’s organised crime taskforce and the Brazilian intelligence agency investigated a subsidiary of a secretive offshore investment company, Media Sport Investment (MSI), and its background after it took over Brazil’s leading club, Corinthians.

A company linked to a takeover bid at West Ham that previously owned both footballers is being under investigation regarding allegations about money laundering. So, it is quite possible that talented footlballers became the victims of the partnership MSI-Corinthians which was necessary to launder money.

The identities of the individuals who stand behind the deal are known to very few. However, there are allegations that the money being laundered through Corinthians could belong to Boris Berezovsky. Though, he is not the only one who purportedly participated or stood behind the deal.

Mr Berezovsky is a mathematician-turned-entrepreneur, who was the oligarchy’s wealthiest and most powerful player until Russia’s President Vladimir Putin turned upon him. Since then Berezovsky has lived in exile in the UK, until he was given a UK passport under the name Platon Elenin. However, he will be instantly arrested, if he returns home.

Another man connected with the deal is a former Communist Party official from Georgia, the owner of Dinamo Tbilisi football club and Mr Berezovsky’s old friend Badri Patarkatsishvili, 50. He faces arrest on fraud charges if comes to Russia as well.

One more influential figure in the West Ham story seems to be Pini Zahavi – an Israeli sports journalist-turned-agent that has been behind some of the biggest transfers in English football.

The only person who does not deny having a hand in the deal is an Iranian-born businessmen Kia Joorabchian, 35, whose family after the 1979 Islamic revolution fled to Kent. In 1999, Mr Joorabchian bought 85% of the one of the most influential newspapers of the post-Soviet era, Kommersant, through a British Virgin Islands-registered company.

Both Mr Joorabchian and Mr Berezovsky deny the money-laundering claims.

Continued from Thailand’s Prime Minister Shinawatra, BVI companies and taxation.

The 3rd BVI company related to political clashes is Fairmont Investments Group Ltd. The major shareholder of Kularb Kaew Co Ltd, Surin Upatkoon, transferred money from a BVI company Fairmont Investments Group Ltd to Kularb Kaew Co and there is a dispute about the correct taxation of the deal as far as it is suspected that he is a nominee of Temasek Holdings, the Singaporean government’s investment arm.

The Commerce Ministry’s investigative committee is investigating Kularb Kaew case and the identity of a nominee of Temasek Holdings.

Surin is the major shareholder of the company holding a 68%-stake in Kularb Kaew. Funds for the investment – Bt2.7 billion – were transferred from a British Virgin Islands-registered company, Fairmont, to his account. The shareholder of Fairmont is not known.

The Business Development Department indicates that Surin Upatkoon received the money from a BVI-based Fairmont to finance his investment in Kularb Kaew. If Fairmont belongs to Surin, the money should be deemed his income and be liable to income tax. If it does not belong to him, then the mysterious owner is now known. So, Surin’s role in the case raises peculiar and intriguing questions.

The Thai politicians express their opinions blaming Prime Minister Thaksin Shinawatra and this got sharp reaction. As it is known, political clashes touching upon this case as well as many other problematic issues resulted in a coup – Thailand’s 1st in 15 years.

Thailand coup d’état took place on 19 September 2006. Members of the Royal Thai Army staged a coup against the government of Thailand’s Prime Minister Thaksin Shinawatra. The coup followed a year-long political crisis involving Prime Minister Thaksin and his political opponents. The bloodless coup happened less than one month before elections scheduled on 15 October. As a result, the upcoming elections were postponed, the Constitution was suspended, the Parliament dissolved, martial law declared, protests banned and Cabinet members arrested.

Three scandals related to taxation, Thailands Prime Minister Thaksin Shinawatra and BVI companies recently resulted in sharp reaction.

The public demands those 5 persons who benefitted from the sale of shares in Shin Corp Plc to be taxed. Lawyers and taxmen insist on the taxation of capital gains realized from the shares. These are transactions connected with Temasek Holdings-Shin Corporation and British Virgin Islands-registered Ample Rich Investments Co Ltd.

Prime Minister’s wife, Khunying Pojaman, transferred shares to her brother Bhanapot Damapong at par paying no tax. Also, Prime Minister Thaksin Shinawatra transferred shares to his children, Panthongtae and Pinthongta, and his sister, Yingluck.

Bhanapot and Yingluck reaped Bt39.25 per share in profits selling shares bought at Bt10 par value at Bt49.25 apiece on January 23. Prime Minister’s children netted Bt48.25 per share on the 329.2 million shares that were bought from Ample Rich on January 20 at only Bt1per share.

The Democrats also suspect that another BVI registered company, Win Mark Co Ltd, could have been Shinawatra’s personal trust fund that could have been set up for taking and hiding profits from the 1997 baht devaluation and facilitating the family’s share transactions.

Ample Rich and Win Mark have the same address: PO Box 3151, Road Town, Tortola, British Virgin Islands. Both BVI-registered companies have also conducted similar transactions. Win Mark sold shares in 4 Thai property companies to Pinthongta in October 2004. Ample Rich sold Shin Corp shares to Thaksin’s children in January 2006.

While admitting his ownership of Ample Rich Co Ltd, Thaksin Shinawatra denies any close connection to Win Mark Co Ltd.

To be continued.

A 60-year-old man has been charged with draining more than USD 3.85 million from his corporation’s benefit plans. He used the employee pension and medical plans of a home health care corporation he owned himself.

Floyd W. Seibert pleaded guilty to just one count of embezzlement. For this he could be punished getting up to 5-year imprisonment, paying a fine of USD 250 000 and getting 3 years of supervised release when sentenced.

Seibert’s attorney, Frederick Robinson said that his client was hoping to put these matters behind him and go on with his life.

Seibert was the owner of Central Home Care Services Inc. with a home office in Largo, most  operation of which was based in Texas and Oklahoma.

In the period of April 1999 - October of 2001, Floyd W. Seibert transferred funds from Central Home Care’s pension and medical plans to a British Virgin Islands-based shell corporation, Health Care International Holdings and exchanged money for Health Care International bonds, although, the shell company had just USD 1 000 in assets. The offshore company was run by a fictitious Martin Mesquite. Having transferred the money to the offshore company, Floyd W. Seibert transferred it to  his other companies.

As a result, Seibert stole millions of USD in pension and health assets belonging to the employee benefit plan.

Joseph (33) and Ann Rooney (31) from Northamptonshire are accused of having approximately GBP 2.5 million in criminal possessions.

The couple purpotedly held GBP 2,453,000 in bank accounts.

In April, Joseph Rooney in the name of Laurence Connors purpotedly had GBP 1.7 million in bank accounts, trading as Prestige Cars. He is also accused of defrauding Barclays Bank by pretending to be Laurence Connors in order to buy a property in Desborough in June 2003. Also, Joseph Rooney is accused of converting GBP 619,000 in criminal property by means of buying Lodge Farm in Braybrooke between August 2003 and April 2004. To conceal criminal property, he purpotedly transferred the farm to a company registered in the British Virgin Islands – Rainmark Ltd. 

Ann Rooney living at the same address is accused of having approximately GBP 750,000 in criminal property in bank accounts in her own name on behalf of Josie Rooney. It is supposed that she had dishonestly claimed income support benefit between December and March 2001.

The case will have be tried by Magistrates in Northampton until October 6.

The Bank of Cyprus is sued by the trustees of bankrupt Nasdaq-listed AremiSoft Corporation in the USA for laundering the financier’s ill-gotten gains under investigation for stock fraud.

Till bankruptcy, AremiSoft Corporation was a computer software enterprise traded on NASDAQ under the ticker AREM.

The lawsuit wants from the bank the money defrauded from AremiSoft investors in a major stock market scam. So, it seeks damages of at least USD 40 million.

Lycourgos Kyprianou, former chairman and CEO of AremiSoft is alleged to have bribed auditors either directly or through associates in order to conduct false audits regarding company acquisitions. Among other things, Kyprianou has been charged by US authorities with securities fraud and money laundering. After his refusing to return and face the charges,  Kyprianou, who currently lives in Cyprus, is treated as a fugitive.

While AremiSoft Corporation was reporting artificially inflated revenues, Kyprianou and joint CEO Roys Poyiadjis purpotedly made over USD 300 million in secret sales of Aremis stock.

As part of a settlement deal, Poyadjis has returned USD 200 million to the Liquidating Trust. In accordance with the US Securities & Exchange Commission (SEC) that carries the investigation, Kyprianou as well as other officials intentionally misrepresented the company’s true financial and business conditions.

Local authorities detained Kyprianou in October 2002 suspecting him of conspiracy in defraud and exporting currency under false pretences. He was detained for a week, but released without ever being charged. AremiSoft is also accused of reporting false revenues.

As a result, US-based investors are accusing the Bank of Cyprus, with which Kyprianou had several deposit accounts. Bank of Cyprus let him engage in transactions processing tens of millions of USD from AremiSoft to his own accounts and then let him launder proceeds obtained by him in further breach of his fiduciary duties to AremiSoft. One of account was opened with the bank on the name of an offshore company incorporated in the British Virgin Islands – Southwood.

The Bank of Cyprus rejects the claims made made in the lawsuit.

The US authorities reported about the largest ever criminal tax case.

Telecom entrepreneur pleaded guilty to tax evasion and fraud. Walter Anderson was indicted in 2005 for evading USD 200 million in local and federal taxes. To hide income from tax collectors, Anderson purpotedly used offshore bank accounts and corporations.

The entrepreneur confessed to hiding hundreds of millions in income from Washington, D.C., and IRS tax collectors in 1998-1999. Now, Walter Anderson faces up to a 10-year imprisonment.

When in 1992 his 1st company Mid-Atlantic Telecom merged with another company, he incorporated companies in the British Virgin Islands to hide the income.

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Offshore bank account: any bank account opened outside of one’s native country can be considered an offshore bank account.

A Financial Mail investigation has revealed that imposing a 25 000 GBP fine on the company did not stop it.

The authorities appeared to be powerless to stop the company Hybyte that had been fined for the charging 1.50 GBP a time for jokes sent to people who had not ordered them. Also, Hybyte was banned for 6 months from offering the service. Hybyte still continued to send the unwanted and unordered messages and charge them 1.5 GBP per joke. Some people demand their money back, so Hybyte must refund these people.

Hybyte is a content provider and is still sending the unwanted jokes, so it must be responsible for this matter. However, the investigation has led the investigating team also to Icstis – the premium-rate phone-services regulator, launching a second inquiry into Hybyte, just weeks after the last was concluded. Icstis changed its policy so that it became harder to send unwanted services.

Now Icstis is planning to raise the pressure on other mobile operators (Vodafone, Orange, O2 and T-Mobile) threatening them with penalties.

Companies House informs that shares of private limited company Hybyte are held in the British Virgin Islands.

The UK Electoral Commission has received allegations that the Conservative party had an illegal property deal to raise money secretly from a foreign source using a complex real estate transaction connected with its former London headquarters.

The Tories moved out of Smith Square 3 years ago, but they acquired the freehold on the property and an adjoining building, for 15 million GBP that had previously belonged to a British Virgin Islands company Platinum Overseas Holdings Ltd.

In accordance with the documents from the Land Registry, Platinum Overseas Holdings Ltd. bought the freeholds of both properties for 12.27 million GBP in August 2001. One source told the correspondent that BVI company Platinum Overseas Holdings was owned by a group of Middle Eastern businessmen, clients of the Citibank, US.

There has been information that the Conservatives were negotiating to sell the freehold to both properties for 30 milion GBP, however, the perty denies such plans.

Being responsible for monitoring the funding of political parties, the Electoral Commission is investigating this issue but it has not revealed any actual details yet. However, the Commission criticises both Conservative and Labour parties for their secrecy and late reporting of donations.

The UK Electoral Commission has received allegations that the Conservative party had an illegal property deal to raise money secretly from a foreign source using a complex real estate transaction connected with its former London headquarters.

The Tories moved out of Smith Square 3 years ago, but they acquired the freehold on the property and an adjoining building, for 15 million GBP that had previously belonged to a British Virgin Islands company Platinum Overseas Holdings Ltd.

In accordance with the documents from the Land Registry, Platinum Overseas Holdings Ltd. bought the freeholds of both properties for 12.27 million GBP in August 2001. One source told the correspondent that BVI company Platinum Overseas Holdings was owned by a group of Middle Eastern businessmen, clients of the Citibank, US.

There has been information that the Conservatives were negotiating to sell the freehold to both properties for 30 milion GBP, however, the perty denies such plans.

Being responsible for monitoring the funding of political parties, the Electoral Commission is investigating this issue but it has not revealed any actual details yet. However, the Commission criticises both Conservative and Labour parties for their secrecy and late reporting of donations.