Post by Richard Thompson Ainsworth on Nov 3, 2015 8:20:00 GMT 4
VAT Fraud and Terrorist Funding - The Azizi Extradition Allegations Part II
Richard Thompson Ainsworth
Boston University - School of Law; NYU - Graduate Tax Program
September 24, 2015
Boston Univ. School of Law, Law and Economics Research Paper No. 15-29
Abstract:
This paper considers the remaining seven (7) Missing
Trader Intra-Community (MTIC) fraud schemes alleged (some conceded) to
have been conducted by Samir Azizi, a 25 year old German/Afghan citizen,
who was extradited from the United States to Germany on April 14,
2015. The MTIC fraud schemes considered in this Part II involve alleged
losses of €45,801,403 under 63 further criminal counts.
Underlying
both Parts of this assessment is a fundamental (but unanswered)
question: “Who exactly is Samir Azizi? Is he the mastermind of a
multi-million euro VAT fraud, a fundraising fraudster for terrorist
organizations, or a youthful face-of- convenience disguising the
involvement of larger criminal organizations?”
The terrorist
connection is the most troubling aspect of this case. Judge Howard R.
Lloyd in his Extradition Order states that “… there were also indicators
that perpetrators were using the VAT procured through such fraud, not
only for personal enrichment, but also to finance terrorism.” The
prosecutor’s allegation is in the Formal Request for Extradition (FRE)
states: “There are numerous indications here that the cash flows are
used to finance terrorism.”
Instead, the facts and fiscal
dynamics of these frauds sketch out a cash flow MTIC fraud that uses
payment platforms to direct a predetermined “cut” of the “profits” to
“workers” and to “investors.” The workers do not appear to be
terrorists, but the investors may be a different story. The investors
are the people who have put up tens of millions of euro to prime the
pumps of this fraudulent enterprise, and these individuals could well
have other interests.
What we have in the Azizi extradition is
the German government’s view of Samir Azizi’s activities. What makes the
Azizi extradition unique is that the FRE is not just government
allegations; it is also full of admissions. Some of these admissions are
expressly referenced by the German prosecutor not just as a statement
of Azizi’s interpretation of events, but as a statement of fact that the
German government has confirmed as true though further investigation.
There are three sections of the FRE where this occurs: a three page
section dealing with the operation of payment platforms; a four page
section dealing with payment platform allocation of profits among the
investors; a six page section that details the involvement of the
Deutsche Bank (Frankfurt and London) in the fraud chain.
But
there is more. From the Complaint we know there is much, much more,
close to 3,000 pages more in the Azizi confessions that has not been
disclosed to the court, nor to the US Attorney and the defense team, and
which has certainly not been made public. Within these 3,000 pages is
most likely the extended discussion of the terrorist connection that
appears to be referenced by the German prosecutor in the RFE and is
echoed by Judge Howard R. Lloyd in his Extradition Order. There are most
likely more references to the payment platforms, and to the involvement
of the Deutsche Bank. None of this detail needed to be brought forward,
although it is clear that it is ready.
There is a second shoe to fall, but it is not ready to fall yet.
Trader Intra-Community (MTIC) fraud schemes alleged (some conceded) to
have been conducted by Samir Azizi, a 25 year old German/Afghan citizen,
who was extradited from the United States to Germany on April 14,
2015. The MTIC fraud schemes considered in this Part II involve alleged
losses of €45,801,403 under 63 further criminal counts.
Underlying
both Parts of this assessment is a fundamental (but unanswered)
question: “Who exactly is Samir Azizi? Is he the mastermind of a
multi-million euro VAT fraud, a fundraising fraudster for terrorist
organizations, or a youthful face-of- convenience disguising the
involvement of larger criminal organizations?”
The terrorist
connection is the most troubling aspect of this case. Judge Howard R.
Lloyd in his Extradition Order states that “… there were also indicators
that perpetrators were using the VAT procured through such fraud, not
only for personal enrichment, but also to finance terrorism.” The
prosecutor’s allegation is in the Formal Request for Extradition (FRE)
states: “There are numerous indications here that the cash flows are
used to finance terrorism.”
Instead, the facts and fiscal
dynamics of these frauds sketch out a cash flow MTIC fraud that uses
payment platforms to direct a predetermined “cut” of the “profits” to
“workers” and to “investors.” The workers do not appear to be
terrorists, but the investors may be a different story. The investors
are the people who have put up tens of millions of euro to prime the
pumps of this fraudulent enterprise, and these individuals could well
have other interests.
What we have in the Azizi extradition is
the German government’s view of Samir Azizi’s activities. What makes the
Azizi extradition unique is that the FRE is not just government
allegations; it is also full of admissions. Some of these admissions are
expressly referenced by the German prosecutor not just as a statement
of Azizi’s interpretation of events, but as a statement of fact that the
German government has confirmed as true though further investigation.
There are three sections of the FRE where this occurs: a three page
section dealing with the operation of payment platforms; a four page
section dealing with payment platform allocation of profits among the
investors; a six page section that details the involvement of the
Deutsche Bank (Frankfurt and London) in the fraud chain.
But
there is more. From the Complaint we know there is much, much more,
close to 3,000 pages more in the Azizi confessions that has not been
disclosed to the court, nor to the US Attorney and the defense team, and
which has certainly not been made public. Within these 3,000 pages is
most likely the extended discussion of the terrorist connection that
appears to be referenced by the German prosecutor in the RFE and is
echoed by Judge Howard R. Lloyd in his Extradition Order. There are most
likely more references to the payment platforms, and to the involvement
of the Deutsche Bank. None of this detail needed to be brought forward,
although it is clear that it is ready.
There is a second shoe to fall, but it is not ready to fall yet.
Number of Pages in PDF File: 22