Post by anenro on Jul 31, 2019 14:09:24 GMT 4
Dirty Money Spotlights Role of Family Offices as Enablers
The signs were there. Jahangir Hajiyev, chairman of the biggest bank in Azerbaijan, and his wife, Zamira, appeared to be living on dirty money.
Between 2003 and 2015, the couple spent a fortune in the U.K. They dished out 11.5 million pounds ($14.3 million) for a townhouse in the ritzy London neighborhood of Knightsbridge and another 10.5 million pounds on a golf course and club near Ascot, the famed horse racing locale. They bought a new Gulfstream jet for $42.5 million. Meanwhile, Zamira, wielding 35 credit cards, went wild in Harrods. In one week alone, she dropped about 725,000 pounds in the department store on jewelry, designer clothes and other merchandise.
The catch was that Hajiyev’s annual salary at state-owned International Bank of Azerbaijan was $70,650 in 2008, and his wife earned no significant income herself. Even so, the gap between their spending and income apparently didn’t stop a raft of enablers—lawyers, accountants, investment advisers, and other professionals—from helping the couple steer their wealth into assets in the U.K. from a web of offshore companies, according to court papers and corporate filings. Among them were fiduciary-services firm Trident Trust and multi-family office Werner Capital. They helped set up entities in the Channel Islands and Britain to acquire and hold the golf club in a structure that masked the Hajiyevs’ ownership, according to the U.K.’s National Crime Agency, which is investigating the couple’s financial dealings. It told a London court the setup was “indicative of money laundering.”
Werner Capital, based in London, is one of a new breed of hybrid investment firms catering to the ultra-rich as strict regulations drive banks to dump high-risk clients. Founded in 2008 by Tomas Mateos Werner, a former Deutsche Bank AG and Tomas Mateos Wernerexecutive, it had a website that pitched its prowess at establishing “complex, cross-border corporate governance structures” to help clients protect their assets in countries with “political upheaval, changes in legislation or unwarranted claims.” It offered a panoply of other services, from helping families buy mansions to securing residency visas and getting children into top British schools.
“It’s like a Swiss Army knife for the wealthy,” said Ben Cowdock, a senior research officer at Transparency International UK, the British arm of the global anti-corruption group. “It does everything.”
Now Werner Capital and other professional enablers have come under scrutiny as part of the NCA’s groundbreaking case against Zamira Hajiyeva. Under the terms of a new legal tool called an unexplained wealth order, she must disclose the origins of her family’s fortune. Prosecutors suspect the money was obtained illegally because her husband is serving a 15-year prison sentence in Azerbaijan for looting his bank. Authorities there are trying to extradite Zamira back to Baku to face fraud charges.
The NCA’s civil action is pulling back the curtain on some of the ways suspicious wealth worms its way into Britain, which has long been an attractive place for oligarchs and despots to park ill-gotten riches. It’s one of several recent efforts aimed at cracking down on illicit finance. Authorities are pushing for greater transparency by requiring companies in the U.K., and soon its territories, to disclose their true owners. And they’re trying to stop lawyers, accountants, and other practitioners from helping unscrupulous clients.
The signs were there. Jahangir Hajiyev, chairman of the biggest bank in Azerbaijan, and his wife, Zamira, appeared to be living on dirty money.
Between 2003 and 2015, the couple spent a fortune in the U.K. They dished out 11.5 million pounds ($14.3 million) for a townhouse in the ritzy London neighborhood of Knightsbridge and another 10.5 million pounds on a golf course and club near Ascot, the famed horse racing locale. They bought a new Gulfstream jet for $42.5 million. Meanwhile, Zamira, wielding 35 credit cards, went wild in Harrods. In one week alone, she dropped about 725,000 pounds in the department store on jewelry, designer clothes and other merchandise.
The catch was that Hajiyev’s annual salary at state-owned International Bank of Azerbaijan was $70,650 in 2008, and his wife earned no significant income herself. Even so, the gap between their spending and income apparently didn’t stop a raft of enablers—lawyers, accountants, investment advisers, and other professionals—from helping the couple steer their wealth into assets in the U.K. from a web of offshore companies, according to court papers and corporate filings. Among them were fiduciary-services firm Trident Trust and multi-family office Werner Capital. They helped set up entities in the Channel Islands and Britain to acquire and hold the golf club in a structure that masked the Hajiyevs’ ownership, according to the U.K.’s National Crime Agency, which is investigating the couple’s financial dealings. It told a London court the setup was “indicative of money laundering.”
Werner Capital, based in London, is one of a new breed of hybrid investment firms catering to the ultra-rich as strict regulations drive banks to dump high-risk clients. Founded in 2008 by Tomas Mateos Werner, a former Deutsche Bank AG and Tomas Mateos Wernerexecutive, it had a website that pitched its prowess at establishing “complex, cross-border corporate governance structures” to help clients protect their assets in countries with “political upheaval, changes in legislation or unwarranted claims.” It offered a panoply of other services, from helping families buy mansions to securing residency visas and getting children into top British schools.
“It’s like a Swiss Army knife for the wealthy,” said Ben Cowdock, a senior research officer at Transparency International UK, the British arm of the global anti-corruption group. “It does everything.”
Now Werner Capital and other professional enablers have come under scrutiny as part of the NCA’s groundbreaking case against Zamira Hajiyeva. Under the terms of a new legal tool called an unexplained wealth order, she must disclose the origins of her family’s fortune. Prosecutors suspect the money was obtained illegally because her husband is serving a 15-year prison sentence in Azerbaijan for looting his bank. Authorities there are trying to extradite Zamira back to Baku to face fraud charges.
The NCA’s civil action is pulling back the curtain on some of the ways suspicious wealth worms its way into Britain, which has long been an attractive place for oligarchs and despots to park ill-gotten riches. It’s one of several recent efforts aimed at cracking down on illicit finance. Authorities are pushing for greater transparency by requiring companies in the U.K., and soon its territories, to disclose their true owners. And they’re trying to stop lawyers, accountants, and other practitioners from helping unscrupulous clients.
