Post by anenro on Sept 9, 2021 21:20:28 GMT 4
The wealthy clients of Pilatus Bank
Pilatus Bank, a small private bank opened in Malta in 2013, was perhaps most notorious for its personal, ‘secret’ business model, largely catering for politically exposed persons (PEPs) under strict rules of due diligence.
Having started operations in January 2014, the bank, owned by Ali Sadr Hasheminejad, a US-naturalized Iranian scion from a wealthy family, entered the spotlight in 2017 after Daphne Caruana Galizia claimed the bank had processed a $1 million payment from the Aliyevs of Azerbaijan, to the wife of former prime minister Joseph Muscat.
While this allegation was disproved by a Maltese magisterial inquiry requested by Muscat himself, by then the banks’ other dealings came under scrutiny from financial investigations. In 2018, after Hasheminejad was arrested in the United States over sanctions-busting, an extensive compliance review from the FIAU and the MFSA was initiated with the bank’s license being suspended by the European Banking Authority.
The FIAU probe has since been concluded, with the bank now facing a €5 million fine for breaching Malta’s anti-money laundering regulations. The report gives key insights into the sheer wealth that was being passed through the bank, as well as to the types of clients that made use of the bank’s dubious services.
Clients were regularly moving millions from one account to another: one client, involved in the textiles industry, transferred over €6 million and £2 million to another company owned by the same beneficial owner. They said the funds were intended as corporate financing for the shareholder, but the FIAU said the bank failed to query why a trading company would transfer most of its funds to another company, rather than keeping the same to fund its own operations.
A separate client saw a substantial increase in their account turnover, going from €750,000 to €150 million. This would raise some eyebrows in most local banks, but Pilatus Bank wrote it off as a mere business diversification exercise, with no explanation provided on how this diversification had contributed to such an exponential increase in account turnover.
Other clients grossly underestimated the amount of money expected to be placed in their accounts.
One customer initially anticipated €80 million, but ended up receiving over four times this amount, likely around €320 million.
Another customer received the equivalent of €7 million through a first transaction, despite indicating that account activity was expected to be €3 million.
Another way the bank breached its legal obligations was an instance where 15 clients indicated that their source of wealth would be generated from the operations of the same business operation. While their expected turnover should have amounted to €390 million, the financial statements for the specific business operation referred to a comprehensive income of only €23.5 million.
One client is revealed in the report to be a well-known entrepreneur in Azerbaijan and the United Arab Emirates, being involved in various industries including agriculture, food and beverage, retail, and construction. The account turnover for this customer was set to be €5 million, but the bank held no details on the customer’s own assets nor evidence of the business earnings obtained.
#ANENROISHIMINTERNATIONAL
Pilatus Bank, a small private bank opened in Malta in 2013, was perhaps most notorious for its personal, ‘secret’ business model, largely catering for politically exposed persons (PEPs) under strict rules of due diligence.
Having started operations in January 2014, the bank, owned by Ali Sadr Hasheminejad, a US-naturalized Iranian scion from a wealthy family, entered the spotlight in 2017 after Daphne Caruana Galizia claimed the bank had processed a $1 million payment from the Aliyevs of Azerbaijan, to the wife of former prime minister Joseph Muscat.
While this allegation was disproved by a Maltese magisterial inquiry requested by Muscat himself, by then the banks’ other dealings came under scrutiny from financial investigations. In 2018, after Hasheminejad was arrested in the United States over sanctions-busting, an extensive compliance review from the FIAU and the MFSA was initiated with the bank’s license being suspended by the European Banking Authority.
The FIAU probe has since been concluded, with the bank now facing a €5 million fine for breaching Malta’s anti-money laundering regulations. The report gives key insights into the sheer wealth that was being passed through the bank, as well as to the types of clients that made use of the bank’s dubious services.
Clients were regularly moving millions from one account to another: one client, involved in the textiles industry, transferred over €6 million and £2 million to another company owned by the same beneficial owner. They said the funds were intended as corporate financing for the shareholder, but the FIAU said the bank failed to query why a trading company would transfer most of its funds to another company, rather than keeping the same to fund its own operations.
A separate client saw a substantial increase in their account turnover, going from €750,000 to €150 million. This would raise some eyebrows in most local banks, but Pilatus Bank wrote it off as a mere business diversification exercise, with no explanation provided on how this diversification had contributed to such an exponential increase in account turnover.
Other clients grossly underestimated the amount of money expected to be placed in their accounts.
One customer initially anticipated €80 million, but ended up receiving over four times this amount, likely around €320 million.
Another customer received the equivalent of €7 million through a first transaction, despite indicating that account activity was expected to be €3 million.
Another way the bank breached its legal obligations was an instance where 15 clients indicated that their source of wealth would be generated from the operations of the same business operation. While their expected turnover should have amounted to €390 million, the financial statements for the specific business operation referred to a comprehensive income of only €23.5 million.
One client is revealed in the report to be a well-known entrepreneur in Azerbaijan and the United Arab Emirates, being involved in various industries including agriculture, food and beverage, retail, and construction. The account turnover for this customer was set to be €5 million, but the bank held no details on the customer’s own assets nor evidence of the business earnings obtained.
#ANENROISHIMINTERNATIONAL