mailing list archives
Leaks reveal secrets of the rich who hide cash offshore
From: Erica Absetz <erica () riskbasedsecurity com>
Date: Fri, 5 Apr 2013 09:41:50 -0500
Millions of internal records have leaked from Britain's offshore
financial industry, exposing for the first time the identities of
thousands of holders of anonymous wealth from around the world, from
presidents to plutocrats, the daughter of a notorious dictator and a
British millionaire accused of concealing assets from his ex-wife.
The leak of 2m emails and other documents, mainly from the offshore
haven of the British Virgin Islands (BVI), has the potential to cause
a seismic shock worldwide to the booming offshore trade, with a former
chief economist at McKinsey estimating that wealthy individuals may
have as much as $32tn (£21tn) stashed in overseas havens.
In France, Jean-Jacques Augier, President François Hollande's campaign
co-treasurer and close friend, has been forced to publicly identify
his Chinese business partner. It emerges as Hollande is mired in
financial scandal because his former budget minister concealed a Swiss
bank account for 20 years and repeatedly lied about it.
In Mongolia, the country's former finance minister and deputy speaker
of its parliament says he may have to resign from politics as a result
of this investigation.
But the two can now be named for the first time because of their use
of companies in offshore havens, particularly in the British Virgin
Islands, where owners' identities normally remain secret.
The names have been unearthed in a novel project by the
Washington-based International Consortium of Investigative Journalists
[ICIJ], in collaboration with the Guardian and other international
media, who are jointly publishing their research results this week.
The naming project may be extremely damaging for confidence among the
world's wealthiest people, no longer certain that the size of their
fortunes remains hidden from governments and from their neighbours.
BVI's clients include Scot Young, a millionaire associate of deceased
oligarch Boris Berezovsky. Dundee-born Young is in jail for contempt
of court for concealing assets from his ex-wife.
Young's lawyer, to whom he signed over power of attorney, appears to
control interests in a BVI company that owns a potentially lucrative
Moscow development with a value estimated at $100m.
Another is jailed fraudster Achilleas Kallakis. He used fake BVI
companies to obtain a record-breaking £750m in property loans from
reckless British and Irish banks.
As well as Britons hiding wealth offshore, an extraordinary array of
government officials and rich families across the world are
identified, from Canada, the US, India, Pakistan, Indonesia, Iran,
China, Thailand and former communist states.
The data seen by the Guardian shows that their secret companies are
based mainly in the British Virgin Islands.
Sample offshore owners named in the leaked files include:
• Jean-Jacques Augier, François Hollande's 2012 election campaign
co-treasurer, launched a Caymans-based distributor in China with a 25%
partner in a BVI company. Augier says his partner was Xi Shu, a
• Mongolia's former finance minister. Bayartsogt Sangajav set up
"Legend Plus Capital Ltd" with a Swiss bank account, while he served
as finance minister of the impoverished state from 2008 to 2012. He
says it was "a mistake" not to declare it, and says "I probably should
consider resigning from my position".
• The president of Azerbaijan and his family. A local construction
magnate, Hassan Gozal, controls entities set up in the names of
President Ilham Aliyev's two daughters.
• The wife of Russia's deputy prime minister. Olga Shuvalova's
husband, businessman and politician Igor Shuvalov, has denied
allegations of wrongdoing about her offshore interests.
•A senator's husband in Canada. Lawyer Tony Merchant deposited more
than US$800,000 into an offshore trust.
He paid fees in cash and ordered written communication to be "kept to
• A dictator's child in the Philippines: Maria Imelda Marcos Manotoc,
a provincial governor, is the eldest daughter of former President
Ferdinand Marcos, notorious for corruption.
• Spain's wealthiest art collector, Baroness Carmen
Thyssen-Bornemisza, a former beauty queen and widow of a Thyssen steel
billionaire, who uses offshore entities to buy pictures.
• US: Offshore clients include Denise Rich, ex-wife of notorious oil
trader Marc Rich, who was controversially pardoned by President
Clinton on tax evasion charges. She put $144m into the Dry Trust, set
up in the Cook Islands.
It is estimated that more than $20tn acquired by wealthy individuals
could lie in offshore accounts. The UK-controlled BVI has been the
most successful among the mushrooming secrecy havens that cater for
The Caribbean micro-state has incorporated more than a million such
offshore entities since it began marketing itself worldwide in the
1980s. Owners' true identities are never revealed.
Even the island's official financial regulators normally have no idea
who is behind them.
The British Foreign Office depends on the BVI's company licensing
revenueto subsidise this residual outpost of empire, while lawyers and
accountants in the City of London benefit from a lucrative trade as
They claim the tax-free offshore companies provide legitimate privacy.
Neil Smith, the financial secretary of the autonomous local
administration in the BVI's capital Tortola, told the Guardian it was
very inaccurate to claim the island "harbours the ethically
He said: "Our legislation provides a more hostile environment for
illegality than most jurisdictions".
Smith added that in "rare instances …where the BVI was implicated in
illegal activity by association or otherwise, we responded swiftly and
The Guardian and ICIJ's Offshore Secrets series last year exposed how
UK property empires have been built up by, among others, Russian
oligarchs, fraudsters and tax avoiders, using BVI companies behind a
screen of sham directors.
Such so-called "nominees", Britons giving far-flung addresses on Nevis
in the Caribbean, Dubai or the Seychelles, are simply renting out
their names for the real owners to hide behind.
The whistleblowing group WikiLeaks caused a storm of controversy in
2010 when it was able to download almost two gigabytes of leaked US
military and diplomatic files.
The new BVI data, by contrast, contains more than 200 gigabytes,
covering more than a decade of financial information about the global
transactions of BVI private incorporation agencies. It also includes
data on their offshoots in Singapore, Hong Kong and the Cook Islands
in the Pacific.
Dataloss-discuss Mailing List (dataloss-discuss () datalossdb org)
Archived at http://seclists.org/dataloss/
Unsubscribe at http://datalossdb.org/mailing_list
Risk Based Security (http://www.riskbasedsecurity.com/)
Risk Based Security equips organizations with security intelligence, risk
management services and on-demand security solutions to establish
customized risk-based programs to address information security and
Tenable Network Security (http://www.tenable.com/)
Tenable Network Security provides a suite of solutions which unify real-time
vulnerability, event and compliance monitoring into a single, role-based, interface
for administrators, auditors and risk managers to evaluate, communicate and
report needed information for effective decision making and systems management.
- Leaks reveal secrets of the rich who hide cash offshore Erica Absetz (Apr 05)