I asked James if I could host this excellent well researched article about the global money laundering business centred in London
Russian Dolls: The Biggest Corruption Scandal Never Reported
How one North London suburb is at the centre of a global network of criminal money-laundering, tax evasion and political corruption
‘A suburb is an attempt to get out of reach of the city without having the city be out reach’, an aphorist once wrote. North Finchley, with its tree-lined streets and mock-tudor houses, is a London suburb like any other. It is cut in half by the Finchley Road, one of Central London’s main radial roads running north from Regent’s Park to Golders Green. Just off the Finchley Road is the even sleepier Woodberry Grove, a cul-de-sac that hosts a curious secret: a business premises that has been used to register tens of thousands of shell companies. Some of these shell companies are perfectly legitimate. Others have been used to conceal the beneficial ownership of wealth for a plethora of reasons, including: criminal money laundering, serious fraud, embezzlement, tax evasion and political corruption. A company formation ‘cottage-industry’ has been operating out of 2 Woodberry Grove, an unassuming two-story office block that looks out onto the back of a Homebase store-yard, for almost two decades. For most of this period, the property was the registered address of Mrs Barbara Kahan, an octogenarian responsible for incorporating over 25,000 companies. The true significance of Woodberry Grove has never been uncovered?—?until now.
Who is the enigmatic Kahan? Her actual identity may or may not be of much significance. Buzzfeed News recently tracked down another so-called prolific ‘nominee director’, a 54 year-old dentist and family man named Ali Moulaye who was found to be living in the neighbourhood of Schaerbeek in Brussels. Initially non-plussed when told that his signature had been attached to so many company incorporation documents, Moulaye later told reporters that he had signed “many things, many times” for his friends in Latvia. Nominee-directors like Ali Moulaye and Barbara Kahan offer a convenient legal fiction that enables the identities of the beneficial owners of registered companies to be concealed from plain view. How these shell companies operate is colourfully explained by the use of the analogy of the (‘Matryoshka’) Russian doll. Each painted Russian doll is a “shell” encased in a nest of “shells”. Each shell conceals yet more shells. Shell companies operate in such a way as to employ complex layers of corporate governance to hide ownership of wealth and conceal transfers of money that would otherwise appear suspicious to tax authorities and financial regulatory bodies.
It is no secret that London has served as a global capital for criminal money laundering for many decades now. UK authorities and regulators turn a blind eye. Light-touch regulation has long made Britain a world haven for corporations and finance. Shell companies alone have been implicated in an estimated £80bn of criminal money laundering. In 2016, The Guardian published an expose on 29 Harley Street, a terrace house a couple of minutes’ walk from Oxford Street, and (it was revealed) a ‘centre of intricate intercontinental fraud.’ The address housed over 2,000 companies and was used by countless VAT fraudsters to swindle the UK public out of millions of pounds of tax revenue. Transparency International UK’s Hiding In Plain Sight report last year revealed the extent to which London’s company formation professionals are able to provide companies with complex structures of ownership so that illicit wealth can be easily laundered. The vast majority of this money originates from former Communists states in Eastern Europe, Central Asia and the Caucuses. One such organised Azeri ‘laundromat’ created tens of thousands of transactions to ‘layer’ £2.2 billion into the global financial system. Two UK LLPs incorporated at Suite 1, The Studio, St Nicholas Close in Hertfordshire, which houses over 1,500 companies, were used by Azerbaijan’s ruling elite in the international lobbying operation.
Woodberry Grove, though perhaps the most notorious address for global criminal corruption in recent British history, did not feature in Transparency’s International report. The story of 2 Woodberry Grove (known sometimes as ‘Winnington House’, other times as ‘Ascot House’) instead must be painstakingly pieced together by a careful examination of the paper trail left behind on Companies House, the United Kingdom’s public registrar of companies. It is first necessary to determine an outer shell, our first Russian doll, or to use another analogy, the lynchpin that holds tight the gordian knot of subterfuge. When entered into a search engine, ‘2 Woodberry Grove’ directs all hits to a company called A1 Company Services, registered by Mrs Barbara Kahan in April 2003. The company was officially dissolved in January of last year, though it still maintains an active website and domain name (moored to an affiliate company). ‘A1 is not just a faceless, web based company’, it informs readers. The ‘UK’s largest incorporation agent’ promises registered office and service address facilities ‘to protect your privacy’, as well as a ‘secretarial service’ to assist in ‘complex transactions or to help to comply with your legal requirements.’
Professional formation agents based out of 2 Woodberry Grove provide a haven for financial fraudsters. In April of this year, The Scottish Herald reported the arrest of Alexei Anokhin, a Russian national and nephew of the Deputy Minister of Defence Tatiana Shevtsova. Eight defendants including Anokhin were found guilty for their involvement in an organised crime syndicate that defrauded HMRC to the tune of a billion roubles. A Russian company in which Anokhin held shares falsely claimed to be exporting non-ferrous metals to shell companies in the UK, illegally claiming value-added-tax back on the products. The VAT fraud threw fresh light on the use of Scottish Limited Partnerships (SLPs) and “legal personality” loopholes to launder foreign money in Britain, yet another curious detail went entirely unremarked. One transaction fabricated by the Russian fraudsters falsely recorded $10m worth of copper powder as having been exported to a shell company called Hillgold Properties, incorporated by Barbara Kahan and A1 Company Services in 2010.
When prized opened, the ‘Russian doll’ of A1 Company Services is discovered to be concealing another shell inside of it. Company formation agents are often at pains to ensure that their own corporate structures are cloaked in secrecy. This confuses the audit trail, making it harder for financial authorities to track associated shell companies, transfers of money and beneficial owners. A1 Company Services was initially registered to offices at 788–790 Finchley Road, an address that is located further south on the Finchley Road, not far from Golders Green tube station. Incorporation documents revealed that 788–790 Finchley Road was, in 2003, the registered premises of the long-term acting company secretary for A1 Company Services, Temple Secretaries Limited. Barbara Kahan and Keith Kahan (presumably a relative) were listed as company directors. Until its recent acquisition, the entire share capital of A1 Company Services was held by an offshore entity called Tripodia Ltd, itself registered to a P.O. Box at the address of the Trident Trust Company (BVI) Ltd in the British Virgin Islands. The Winnington Trust was named as the ultimate controlling party. This trust was based in Leichtenstein, a country that has more registered companies than citizens. Under the laws of the principality, legal rights are held by the trustees rather than the beneficiaries.
Temple Secretaries was incorporated back in 1989 by a group of company formation agents known as ‘Pearlman Kahan & Joseph?—?788–790 Finchley Road’. Barbara and Keith Kahan were both listed as directors of Temple Secretaries alongside David Pearlman, an Israeli national who has long been resident in the UK, and ‘Joey’ Jizchak Joseph, who runs an accountancy firm called Joseph Kahan Associates based in Golders Green. What might at first have appeared to some sort of suburban anomaly is now revealed to be a complex network of professional company formation agents and corporate service providers who layer their own business dealings by utilising numerous shell companies to act as nominee directors or registered agents. Other notable Pearlman-Kahan shell entities include Company Directors Limited and Company Nominees Limited, both registered at 788–790 Finchley Road by an earlier incarnation of Temple Secretaries in 1982. Company Directors Limited have alone acted for over 69,000 companies, making the scale of the North Finchley company formation industry truly unprecedented. Hundreds of thousands of shell companies are potentially implicated by mere association to the North Finchley corporate services operation.
Temple Secretaries took their name from the fashionable area in which they operated for close to three decades. With its boutique vintage stores, kosher delis and pizzarias, Temple Fortune might be mistaken for any other affluent neighbourhood of North-West London, but its well-heeled and respectable veneer belies shady business dealings. The ground-floor offices at 788–790 Finchley Road have stood empty for some time now. Months-worth of grime and city soot coat the windows of the building. Tattered blinds have been drawn to prevent passersby from peering in. A paper note has been pasted onto the glass, re-directing visitors to an address in Arcadia Avenue, a collection of serviced office buildings near Finchley Central tube station. The note carries the watermark of ‘Centrum Chartered Secretaries’. This is actually Centrum Secretaries, incorporated by Keith Kahan in 2001, yet another trading name of Temple Secretaries. The long-serving directors of Temple Secretaries were also responsible for setting up B.C. Business Centrum Limited, first incorporated in 1978. Temple Secretaries, still trading under the name B. C. Business Centrum, currently operate out of offices based within Elscot House in Arcadia Avenue.
North Finchley’s company formation agents have long been responsible for exporting criminal corruption out of the sleepy surburb by providing countless shell companies for criminal fraudsters. One individual named Hilal Jaafar was recently disqualified from the company register for having “caused [his company] GSM Inter Trade Limited (“GSM”) to participate in transactions which were connected with the fraudulent evasion of VAT.” Jaafar caused GSM Inter Trade Limited to wrongfully claim the sum of £3,440,030 from HMRC for the VAT periods ending 02/2006 and 05/2006, including £712,530 relating to goods that were never supplied to GSM at all. Jaafar’s company was incorporated by Keith Kahan of Temple Secretaries back in 2001. In an appeal made to HMRC in 2014, Jaafar submitted a witness statement produced on behalf of his acting company secretary, Centrum Secretaries Limited. HMRC objected to this witness statement on the basis that the natural person who wrote the statement was not identified. David Pearlman was routinely recorded as acting company secretary when GSM Inter Trade Limited submitted its documents to Companies House.
Intricate connections can be drawn between North Finchley’s corporate service providers, the shell companies they offer and the activities of international organised crime syndicates. In June 2008, Italian police arrested eighteen people responsible for the so-called ‘Premium’ telecommunications scam that involved several companies based in Italy and San Marino, including: Orange, Fly Net, AT&T, TMS and Oscorp SpA. Shell companies based in London were also implicated in the scandal. One of those arrested was a 26-year-old named Niki Aprile Gatti, a computer technician who had worked for Oscorp SpA in San Marino. Just four days after his arrest, the young webdesigner was found dead during his pre-trial detention in Sollicciano maximum security prison in an apparent suicide. Niki Aprile Gatti’s mother Ornella Gemini claims that the circumstances behind her son’s death are suspect. She claims that Niki Aprile Gatti was the only defendant willing to cooperate with the Italian police and that he fully intended to testify in court. Ornella Gemini has tirelessly campaigned for the circumstances surrounding her son’s death to be re-examined by Italian investigators.
Chillingly, a connection between Niki Aprile Gatti and Temple Secretaries can now be unearthed. The link concerns the computer technician’s directorship of a company called Unwired Media Limited (formerly Oscorp Ltd) registered with the aid of Temple Secretaries and Company Directors Limited at 788–790 Finchley Road in 2006. Oscorp Ltd appears to have been set up as a sister-company to the San Marino-based Oscorp SpA. Exactly why and for what purpose the sister-company was incorporated is still mired in mystery. Few English-language news articles reporting Niki Aprile Gatti’s suspicious death can be found online. The ‘Premium’ scandal was never reported by the British press, even though it concerned major fraud and money laundering within the capital. Certainly, it appears clear that whatever Niki Aprile Gatti became embroiled in whilst living and working in London, Temple Secretaries were directly implicated in it. It appears likely that Unwired Media Limited formed a component of a wider ‘laundromat’ of shell companies used to layer transactions in order to launder money from criminal sources. It is not known whether the connection between Gatti and Temple Secretaries was ever probed by either British or Italian prosecutors.
Shell companies operating out of North Finchley have also been employed in efforts to exert insidious influence on just about every conceivable eschalon of institutional power in the United Kingdom. One such company is RISC Management Ltd, a private security and intelligence firm run by retired detectives and incorporated by Temple Secretaries in January 2005. Stephen Curtis, who founded RISC Management’s predecessor company ISC Global, was killed in a helicopter crash in 2004. He died after telling friends: ‘If anything happens it will not be an accident.’ The lawyer reportedly cultivated intimate ties with prominent Russian oligarchs and was later found to have worked for the Russian oil giant Yukos’s parent company Menatep. He had been involved in helping transfer the fortunes of a number of oligarchs into offshore accounts in the 1990s. They included the dissidents Boris Berezovsky, Badri Patarkatsishvili and Mikhail Khodorkovsky (two of whom are now dead). Alexander Litvinenko had even visited RISC Management’s Mayfair offices shortly before he died of polonium poisoning. The building was later examined by the police for traces of radiation. RISC’s CEO Keith Hunter provided a witness statement to the inquiry, confirming rumours that Litvinenko had been a confidential company source in providing due diligence on Yukos’ former shareholders. Hunter also let slip key details regarding the financial secrecy of his firm:
Sources were always paid in cash or via money transfers. For the safety of the individual we would not wish to create an audit trail.
‘Sources’ might just as well be interpreted as ‘clients’. In 2012, three former Scotland Yard police officers and a serving detective were arrested as part of an investigation into bribery within the Met police’s anti-corruption unit. The arrests came after the former governor of Nigeria’s Delta state James Ibori was handed a 13-year jail sentence by a London court after admitting to fraud amounting to nearly £50m. Ibori pled guilty to embezzling Nigerian state funds through British bank accounts and shell companies registered in the United Kingdom and its offshore jurisdictions. The offices of RISC Management were raided after the Met investigated allegations that RISC investigators may have paid bribes to police officers in order to obtain sensitive information pertaining to the Ibori case. One of those arrested was CEO Keith Hunter. Subsequent allegations suggested that RISC had targeted Met police officers to secure information about the progress of other sensitive Scotland Yard inquiries. More than 300 phone calls were made between Met police officers and RISC investigators over a 12-month period. The Crown Prosecution Service has since been accused of covering up the scandal. Other companies in the RISC-ISC company network were either incorporated at, or have links to, 788–790 Finchley Road.
Almost unbelievably, there are further even more complex corporate structures linking the former Nigerian governor James Ibori to the North Finchley-based Temple Secretaries. These concern another notorious application for the use of British shell companies and corporate service providers by foreign criminals and corrupt politicians. Conveyance recordsobtained in 2007 by Sahara Reporters (a New York-based online news agency that investigates corruption and government malfeasance in Africa) reveal that James Ibori appointed his mistress Udo Amaka Okoronkwo to act with the authority to purchase at least one property (a £388,077 Maida Vale apartment) with money stolen from the Nigerian state purse during Ibori’s governorship. It can be revealed that one of the shell companies set up by Ibori and his mistress was called Boyd Properties Ltd. In 2010, Pearlman was requested by Udo Amaka Okoronkwo to give evidence in her defence in an appeal against a confiscation order, wherein it was revealed that Pearlman and B.C. Business Centrum had provided the company for James Ibori, either newly formed or ‘off-the-shelf’. No UK media outlet has ever picked up on this detail.
Damning evidence points towards North Finchley’s corporate service providers as having played an integral role in enabling corrupt politicians to channel illicit wealth into London’s property market. Pakistani broadcaster ARY News last year revealed that Hassan Nawaz Sharif, son of the former Prime Minister of Pakistan Nawaz Sharif and heir to the Sharif political dynasty, is the beneficial owner of a shell company provided by Temple Secretaries. Nawaz Sharif was forced to resign as Prime Minister of Pakistan last year after its Supreme Court unanimously voted to disqualify him from office. The decision came a year after the Panama Papers probe revealed that three of Sharif’s four children had either owned or been authorised to act for offshore companies, many of which included companies registered in the United Kingdom. An estimated £32 million worth of funds were laundered through these offshore companies and trusts in order for the Sharif family to accumulate a vast property empire in some of London’s most sought-after neighbourhoods. Most of the Sharif real estate empire was managed by Nawaz’s son Hassan. In June of this year, Nawaz Sharif was sentenced to ten years in prison and fined $10.6 million for owning assets beyond income. His daughter Maryam was sentenced to seven years in prison on corruption charges.
Quint Paddington Limited (formerly Rivate Estates Limited), which is 100% owned by Hassan Nawaz through shares held by his company Que Holdings Limited, was incorporated by Temple Secretaries Limited and Company Directors Limited at 788–790 Finchley Road in 2007. The company was initially used to obtain millions of pounds worth of loans from British banks. This is one well known advantage of setting up a shell or ‘off-the-shelf’ company that may have remained dormant for months or years, improving its creditability among institutional lenders. Quint Paddington thereafter served as a borrower for loans provided by other offshore companies owned by the Sharif family, over ten of which have been identified. These funds were then channelled into furnishing the Sharif family with properties and other luxury goods purchased within Britain. According to a report published by Global Witness, there are 86,000 properties in the United Kingdom that have been found to be incorporated by shell companies in secrecy jurisdictions. Shell companies based in the United Kingdom play a lesser known role in providing additional layers of secrecy to criminals and corrupt foreign officials so as to obscure their beneficial ownership of real estate.
Shell companies are not only used by foreign criminals to siphon wealth from poor and developing countries. They also enable tens of millions of pounds worth of tax revenue to leave the country. Some of these funds are even used to prop up authoritarian regimes abroad. Documents unearthed reveal that Temple Secretaries were the registered parent company of Mina Corp Ltd, an entity that has been linked to major allegations of global money laundering and political corruption, including the bribing of a Kyrgyz autocrat. The company was first provided by Temple Secretaries in 2003 with registered offices at 788–790 Finchley Road. Mina Corp, which was dissolved in 2011, achieved notoriety for securing over $3 billion worth of jet fuel contracts for a U.S. base in Bishkek, Kyrgyzstan. The airbase had been a vital staging post throughout the Afghanistan war. It was later alleged that the secretive Mina Corp had served as a shell company that was primarily used to funnel illicit payments to Kyrgyz President Kurmanbek Bakiyev, an allegation that was integral in bringing down his regime in 2010.
London-based BGR Gabara, the sister-company of the Washington-based lobbying firm BGR Government Affairs, was hired to lobby on behalf of Mina Corp in Kyrgyzstan. Its founder and majority owner is none other than the Italian magnate Ivo Ilic Gabara, a former spokesman for the European Commission who more recently gained notoriety as PR man for Gina Millerwhen she launched a successful legal challenge against the UK Government over its authority to implement British withdrawal from the European Union. In years prior to this, Gabara worked tirelessly to salvage the reputation of the shadowy Mina Corp and its Kyrgyz owner Erkin Bekbolotov throughout the period that it was being investigated by the United States National Security and Foreign Affairs Subcommittee of the House Committee on Oversight and Government Reform. Representatives from BGR Gabara, as well as from the Mayfair law firm Amsterdam & Partners LLP, orchestrated a media campaign in the Kgrgyz capital of Bishkek in 2011 in an attempt to restore Mina Corp’s tarnished reputation. Kurmanbek Bakiyev’s successor, Roza Otunbayeva, later alleged that Mina Corp had attempted to lobby her son, Atai Sadybakasov, in order to represent the company’s business interests to the new President herself.
Astonishingly, but perhaps not altogether surprisingly, BGR Gabara is a company that was provided by A1 Company Services Limited of 2 Woodberry Grove, North Finchley. That both BGR Gabara and its shadowy client Mina Corp should share the same corporate service provider is surely a matter that extends beyond sheer concidence. Corporate public relations firms and political consultancies are at the heart of the ‘Russian doll’ scandal. Political consultancy (though often accepted and sometimes even celebrated as a feature of modern liberal democracy) is often little more than ‘hands-for-hire’ political mercenarism. A concern for public relations supplants a commitment to public service, spin and disinformation replace truth and political principles are cast aside in favour of cold, hard cash. BGR Gabara has long been active in this murky world of ‘reputation laundering’. The firm scours every corner of the globe for paying customers, no questions asked. Former clients of BGR Gabara have included: the governments of Bangladesh, Mauritius and Moldova, Action Congress of Nigeria, the National Liberal Party of Romania and the energy giants ExxonMobil and Statoil.
BGR Gabara was also recently revealed to have once partnered with an American lobbyist named Sam Patten (who recently plead guilty to violating US lobbying laws after failing to declare $50,000 worth of tickets to one of the Trump inauguration parties, purchased for a crony of the disgraced ex-President of Ukraine Viktor Yanukovych) in two contracts: one to “provide strategic guidance with regard to public relations and government affairs activities within the United States” for the Georgian Free Democrats and another to help the former Prime Minister of Georgia Bidzina Ivanishvili “promote a stronger Georgian democracy through fair, open, and honest elections in 2012.? Ivanishvili, who led the Georgian Dream coalition (which included the Free Democrats) to electoral victory in that year, was fined $90.9 million by Tbilisi City Court for violating party funding rules during the 2012 parliamentary elections. The former Prime Minister and Gazprom shareholder was also named as a prominent figure in the Panama leaks.
Ivo Gabara’s firm also infamously lobbied for the authoritarian regime of Nursultan Nazarbayev, the President of Kazakhstan who has routinely been accused of presiding over massive corruption and human rights abuses in the Central Asian country. BGR Gabara was featured in an expose carried out by The Bureau of Investigative Journalism in 2011. Ivo Gabara told undercover reporters posing as Uzbek cotton producers of a plot by his company to orchestrate a smear campaign against the musician Sting, who cancelled a planned performance in Kazakhstan’s capital Astana after claims of human rights violations against striking oil workers. In late 2011, BGR Gabara plunged even greater depths of corruption by defending the Nazarbeyev regime when at least 15 people were shot dead by police officers during a month-long sit-in demonstration by oil workers in southwestern town of Zhanaozen. Gabara was also filmed making claims that strongly implied his lobbying firm was instrumental in securing Nursultan Nazarbeyev’s special access to President Obama during the 2010 Nuclear Security Summit held in Washington, D.C. The CEO makes a further extraordinary claim of responsibility for ‘every op-ed that you read that has come out of Kazakhstan’.
The recently re-branded ‘Gabara Strategies’ were also recently revealed to be advising the two main former shareholders of PrivatBank, once Ukraine’s largest commercial bank. PrivatBank was nationalised in December 2016 after a two year investigation by the government of Ukraine revealed that the bank had a capital shortfall of about $5.65bn and that about 97% of its corporate loans had gone to companies linked to its shareholders. London’s High Court ordered the freezing of $2.5bn worth of assets of Ihor Kolomoisky and Gennadiy Bogolyubov, the two former shareholders of PrivatBank and clients of Gabara Strategies, late last year. The Ukrainian oligarchs have been linked to six companies that are alleged to have entered into fraudulent loan agreements with PrivatBank as a means of siphoning cash out of the lender. Half of these companies were registered in London and half were registered to various P.O. Boxes located in the British Virgin Islands. Anti-corruption campaigners have now called for a full investigation into how Gennadiy Bogolyubov was granted a Tier 1 investor visa by the Home Office and allowed to buy a £62.5 million London home.
Two of the English companies owned by Kolomoisky and Bogolyubov have connections to North Finchley. Collyer Limited appointed an entity called Corporate Secretaries Limited to act as its company secretary in November 2000. Corporate Secretaries Limited (formerly Fairwater Developments Ltd) is a company that was first registered to offices at 2 Woodberry Grove. Teamtrend Limited was registered in March 2000 by an agent who signed off on behalf of Hallmark Secretaries Limited, formerly of 120 East Road, London, but now registered to the lower ground floor of One George Yard, a courtyard based in the heart of the City of London. The registered agent was Stanley Davis Group Limited, reputedly one of the leading formation agents and provider of services to lawyers and accountants, formerly of 120 East Road, London, but also now registered to the lower ground floor of One George Yard. The firm is a big player in the company formation industry and has cultivated over forty years experience in offshore company formation services. All of the directors of Hallmark Secretaries Limited (including the agent who incorporated Teamtrend Limited) are directors of Stanley Davis Group Limited.
Here’s where things get complex. The coup de grâce of the North Finchley company formation ‘cottage-industry’ has been a major corporate re-structuring in recent years. The Stanley Davis Group recently announced its acquisition of A1 Company Services, ‘together with its many brands’. The company actually appears to have been acquired in around 2013 or 2014 by an investment fund called Xephyr Limited, a company that is ultimately owned by the Stanley Davis Group and its shareholders. Xephyr Limited now trades under several brand names, including: Company Formations 247, Quick Formations, Formations Direct Limited (who control the A1 domain name) and QF Registrars. All of these brands are based out of 2 Woodberry Grove. The office buzzer, however, simply reads ‘Formations’, making it difficult to ascertain exactly what companies now operate from the address. Another key layer of subterfuge has also been maintained. The ultimate holding company of Xephyr Limited is a company called Milstead Worldwide Limited (BVI) registered to the same P.O. Box of Trident Trust Company (BVI) Limited in the British Virgin Islands. A fresh shell has replaced the one that previously encased it, meaning that ownership of the company formation providers is still no less opaque.
The Stanley Davis Group has proven particularly adept in maintaining a veneer of legal compliance for decades, despite having proven instrumental in hiding and concealing money transfers throughout the global financial system. The company was consulted as part of the Government’s early response to the Fourth Anti-Money Laundering Directive adopted by EU countries in 2017. The maintenance of this respectable veneer of legal compliance ensures that firm can continue to lobby government in order to secure a favourable environment for corporate services in the United Kingdom. Yet the Stanley Davis Group is by no means an untainted brand. In 2012, the firm was exposed as part of a BBC Panorama investigation into providers of complex corporate structures. Investigators discovered that the Stanley Davis Group was using an intermediary in Cyprus, Sean Lee Hogan, who was himself running a nominee operation and had put his name to nearly 100 BVI and 743 UK companies. The firm were forced to issue a press statement on their company website following the broadcast of the Panorama documentary, though they still continue trading under the same name. The scale of Stanley Davis Group’s offshore operations have only recently become apparent since the Panama leaks, when the firm (a sort of British Mossack Fonseca) was revealed to be connected to at least 422 offshore entities.
Temple Secretaries have also long profited from providing offshore corporate services. A dated webpage associated with B.C. Business Centrum offers package-deal ‘offshore company formation services’ for the United Kingdom (as much of a haven for foreign wealth as any of its offshore juridisctions), the British Overseas Territories of the Virgin Islands, Marshall Islands, Gibraltar and the Bahamas. David Pearlman, founder and long-standing director of B.C. Business Centrum, featured in leaked Mossack Fonseca documents as a shareholder of two Maltese offshore entitities: Gainpass Ltd and Canopy Roots Limited. These companies were apparently provided by the Israeli branch of Mossack Fonseca in Ramat Gan, near Tel Aviv. Pearlman was also named as a director of an offshore entity registered in the Bahamas. U.S. Securities and Exchange Commission (SEC) records further confirm that Pearlman and B.C. Business Centrum Limited have been involved in offshore arrangements in the British Virgin Islands. SEC documents also name him as the secretary of The Acabus Trust, a discretionary trust based in Cyprus. A1 Company Services has been linked to an additional 91 offshore entities, mostly operating from the British Virgin Islands.
Stanley Davis Company Services Ltd, an Stanley Davis affiliate company of set up by long-serving chairman Stanley Harold Davis, was another firm named in the Panama Papers. The company was linked to IAHXON Limited, itself connected to an address registered to the offices of Atlas Corporate Services in Dubai. The chairman and founder of Atlas Corporate Services is Jesse Grant Hester, who coincidentally featured in the same 2012 BBC Panorama investigation. Hester has also been named as a trustee of The Abacus Trust (‘through arrangements introduced by BC Centrum Secretaries’) and had once acted as a director of Finchley Secretaries, a shell company set up by A1 Company Services and Temple Secretaries at 788–790 Finchley Road. His links to Pearlman-Kahan entities in North Finchley, as well as its Stanley Davis affiliates, are incontestable. His offshore operations have involved hundreds of companies and trusts based in the British Virgin Islands, Cyprus, Russia, Samoa and the UAE. Most of those involved with Finchley Secretaries were later also implicated by the Mossack Fonseca leaks. These individuals include Natalia Patsalidou (a ‘corporate service provider for Russian companies in Cyprus’) and a member of the aristocratic Montagu-Stuart-Wortley family who held shares in a Czech affiliate of Mossack Fonseca. Their connections to offshore shell companies suggest deep involvement in worldwide illicit transfers of Russian money through the safe havens of Cyprus and Dubai.
The Stanley Davis Group have been a titan in the UK-based company formation industry for almost half-a-century. Yet realize that the firm was responsible for the incorporation of SCL Group Ltd, perhaps best known as the parent company of Cambridge Analytica, the British company recently accused of harvesting personal information from more than 50 million Facebook profiles to personalise political messaging based on psychological profiles. The origins of the SCL Group Ltd have been shrouded in mystery and its connections to Stanley Davis have never properly been probed. Yet a cursory examination of SCL’s incorporation documents reveal that the company was registered in 2005 by a secretary signing on behalf of a company called SDG Secretaries Ltd. SDG Secretaries Ltd was itself incorporated by a secretary signing on behalf of Hallmark Secretaries in 2001. The Stanley Davis Group were listed as the registered agent. SCL Group’s shareholders are also directly connected to North Finchley’s shell companies. Herriot Limited acquired shares in the company in November 2005. The registered agent for Herriot Limited (formerly Rapid 7557 Limited) was Stanley Harold Davis, whose affiliate company Stanley Davis Company Services operated out of the registered address in Old Street. Davis was also named as a company director.
One of Cambridge Analytica whistleblower Christopher Wylie’s little appreciated revelations was the fact that the firm had primarily served as a shell company, with most of the work done in London by its parent company. The activities of the SCL Group in the period before the Cambridge Analytica debacle are shrouded in mystery. SCL Elections, an affiliate of SCL Group, were, for instance, commissioned by the former Latvian Prime Minister Andris Š??le of the People’s Party and the former Deputy Prime Minister Ain?rs Šleser of Latvia’s First Party/Latvian Way (LPP/LC) to assist the nationalist party alliance Par Labu Latviju! (For a Good Latvia) achieve electoral victory in the Latvian parliamentary elections of 2010. The communications strategy was designed by SCL Elections with theaim of stoking ethnic tensions between Latvians and ethnic Russian residents by essentially scapegoating ethnic Russians for “unemployment and other problems affecting the economy”. SCL also advised Umaru Yar’Adua’s ruling People’s Democratic Party (PDP) throughout the 2007 general election in Nigeria, helping to secure his victory. SCL advised the PDP to try to dissuade opposition supporters from voting “by organizing anti-poll rallies on the day of the election.” The elections were condemned by global commentators.
In addition to profiteering from their influence in democratic elections across the world, the SCL Group have consistently maintained incredibly questionable links with the UK Government, not least in the form of numerous state contracts won by the firm. In 2009, the company was granted a £400,000 contract by the UK Foreign and Commonwealth Office to carry out obscure ‘research and surveys into public opinion’, assisting the ‘UK effort to assist Pakistan in tackling the shared threat from terrorism’. Christopher Wylie has since revealed that the SCL Group were contracted by the FCO to carry out behavioural research in the Federally Administered Tribal Areas (FATA) of Pakistan, the northern areas and two locations within POK. A recent FOE request also revealed that the Ministry of Defence granted three contracts to the SCL Group: two of which were for ‘procurement of target audience analysis’ between December 2009-February 2010 (worth £125,000) and June 2014-July 2014 (£150,000). Quite astonishingly, the SCL Group were given provisional “List-X” status by the Ministry of Defence until 2013, granting the company access to classified ministerial documents.
Cambridge Analytica’s former CEO and Eton-educated Alexander Nix later informed undercover Channel Four presenters of the role that shell companies had played in the global operations of the behavioural research and strategic communications firm. Shell entities were used to establish a ‘secret presence’ in countries in which CA was contracted to work. Client operations would then be channeled through these hard-to-track entities. UK-based shell companies were almost certainly intended to conceal the beneficial ownership of these series of multinational firms. It is no secret that many of the shareholders of SCL Group Ltd were once major Conservative Party donors. These shareholders included not only the aforementioned coterie of Tory donors, but such shell companies as Herriot Limited, which later transferred its full shares to JP Marland and Sons Limited in the summer of 2013. JP Marland and Sons is a company owned by Lord Jonathan Marland, a former Conservative minister and Trade Envoy to ex-Prime Minister David Cameron who had owned shares in Herriot Limited along with his family members since the early 1990s. This indiciates that Lord Marland pocketed public money through the SCL Group’s contracts whilst he was himself a serving minister.
Members of the British Establishment are thoroughly implicated in the scandal of ‘Russian dolls’. They include public servants across the political spectrum, many of whom had cultivated complex business interests before being elected to public office. The extraordinary financial affairs of Amber Rudd, Conservative Member of Party for Hastings and Rye, had previously come to light in the British press, though they have since been forgotten in the wake of successive scandals concerning the politician. Rudd unceremoniously resigned as Home Secretary following the Windrush scandal earlier this year. Another layer of intrigue can now be affixed to Rudd’s past business dealings. She had previously been linked to a company called Monticello PLC,incorporated under the name of Gloucester Equities Ltd by Temple Secretaries in 1998. Set up at the time of the dotcom boom, Monticello was intended to offer support and services to startup internet businesses in return for equity. The directors of Monticello PLC soon became embroiled in a major share ramping scandal in the early 2000s. Amber Rudd escaped legal scrutiny, prudently resigning from the company five months after its shares were suspended by financial regulators. The full extent of Monticello’s very public fallout came later, when the company’s chief executive Mark O’Hanlon was sentenced to eighteen months in jail for his part in the scandal.
Political consultancies and strategic advice firms have become sure-proof money-earner for politicians turfed out of office. In his controversial book Blair Inc., political journalist David Hencke’s details the extent to which ex-Prime Minister Tony Blair, after leaving formal public office, ‘set up a complex, opaque corporate structure that makes it impossible to know how much money he is making.’ One such company was Windrush Ventures, registered by Temple Secretaries in 2007. It has often been described as the “trading name” of The Office of Tony Blair. The former Prime Minister used Windrush Ventures Limited to act as a repository for millions of pounds paid from a secretive liability partnership known as Windrush Ventures LP. Liability partnerships do not have any legal obligation to publish accounts, so the source(s) of the funds could not be scrutinised by the British public. This has allowed Blair’s client list to remain secret, though it is well-known that he has accepted payment for services rendered to Saudi Arabia’s oil-barons, Kazakhstan’s autocrat and Azerbaijian’s authoritarian regime. Blair has consistently used his global business connections to feather his own nest. It was announced last year that Blair had injected the £9.26 million net assets of Windrush Ventures into his new venture, the Tony Blair Institute for Global Change.
A coterie of senior New Labour figures followed their political leader in making a windfall after leaving public office. It became quite fashionable for these ex-public servants to set up strategic advisory firms to provide worldwide clients with political consultancy service. Many of these outfits were convened with the aid of the complex governance structures offered by North Finchley’s corporate services providers. In May 2010, a company called Willbury Limited was registered by A1 Company Services. Following typical procedure, the nominee director was named as Barbara Kahan. She terminated her directorship within a month and the former cabinet-minister Lord Peter Mandleson was appointed as director three days later. Willbury Limited was ostensibly set up by Mandelson to receive speaking fees and money earned through book sales. Yet he has used the company to provide himself with a £400,000 cash loan in a move which was regarded as an attempt to avoid tax. Mandelson’s willfully complex business interests have also enabled him to sidestep strict House of Lords disclosure rules. Like Blair, this has allowed him to keep his list of clients secret.
Peter Mandelson has long cosied up to Russian money, courting Russian business interests both during his time in elected office and outside of it. He sparked a minor scandal back in 2008 after it was reported that he had holidayed with George Osborne on the yacht of the Russian oligarch Oleg Deripaska. Sources claimed at the time that Lord Mandelson’s name appeared “repeatedly” in secret files held by MI5 and MI6. Files held on Oleg Deripaska also reportedly contained several references to Mandelson. In recent years, the Labour peer has become quite flagrant about his links with the Russian oligarch. Mandelson’s strategic advisory firm Global Counsel won a contractearlier this year to advise Deripaska’s EN+, a Jersey-based diversified mining, metals and energy group with core assets located in Russia. The EN+ Group owns a controlling interest in United Company RUSAL (also incorporated in Jersey), the world’s second largest aluminium company. The Finsbury PR firm, whose founder and chairman is Roland Rudd, brother of Amber Rudd and an intimate friend of Peter Mandelson (Mandelson is godfather to one of Rudd’s children), worked on the recent listing of EN+ on the London Stock Exchange. MI6 reportedly ‘raised concerns’ regarding the flotation. Mandelson and Global Counsel were later forced to drop Deripaska after the oligarch was hit by fresh US sanctions.
North Finchley’s corporate service providers have provided shell companies that have proven instrumental in enabling vast sums of money to be laundered out of the former Soviet bloc. 2 Woodberry Grove can be shown to have played a pivotal role in hosting another illegal ‘laundromat’, the scale of which is only being appreciated in light of fresh evidence. Many of these new revelations have emerged following the downfall of Victor Yanukovych, who was ousted as President of Ukraine as a result of the 2014 Ukrainian Revolution. The regime had previously been linked to major allegations of political corruption and bribery, yet it was only when the presidential palace of Victor Yanukovych was breached by protestors in 2014 that the true extent of his personal and political corruption was fully understood. Documents recovered from the presidential palace cited his ownership of three companies registered in the UK: Roadfield Capital LLP, Fineroad Business LLP and Navimax Ventures. Navimax Ventures, set up by A1 Company Services in 2008, was found to feature in the ownership structure of a major Donetsk coal trading company, Donbass Clearing and Financial Center, founded in 1999. This formed an extension of the cronyism that Yanukovych had demonstrated in his dealings with the Donbass region during his time as Ukrainian President.
New evidence has emerged concretely linking Victor Yanukovych’s personal money laundering activities to a notorious global criminal ‘laundromat’ uncovered by the Russian lawyer and campaigner Sergei Magnitsky before his death in a Russian jail-cell in 2010. Magnitsky died in suspicious circumstances after exposing serious tax fraud and money laundering among Russia’s elite. Those companies named in the documents retrieved from Yanukovych’s presidential palace share many of the same offshore shell companies (some of which are based in the United Kingdom and Ireland) and Latvian directors as were found in Magnitsky’s investigation. North Finchley’s corporate service providers feature prominently in these operations. For instance, one of the directors of Yanukovych’s Navimax Ventures was a Latvian national named Danny Banger. Banger has since been linked to a slew of companies formed by A1 Company Services, including Technomark Business Ltd, a firm that was used to launder Russian funds through Latvia’s PrivatBank. Banger and other Latvian associates have also been linked to a Cypriot-based shell company and two BVI companies used by Yanukovych. These BVI companies can be traced to a Dublin-based company formation agent called Philip Burwell, who has himself been linked to Azeri and Kazakh money laundering operations.
Even more unlikely connections emerge from these revelations. It can now be revealed that key members of Donald Trump’s presidential campaign staff have brokered connections with North Finchley’s shell companies. Rick Gates registered a shell company Pompolo Limited with A1 Company Services in April 2013. The company was shown to have been used by Rick Gates and Paul Manafort to launder money from Ukrainian sources. Gates and Manafort generated tens of millions of dollars in income between 2006 and 2015 acting as hired-hands for the Government of Ukraine, the Party of Regions (the pro-Russian political party led by Victor Yanukovych), Yanukovych, and the Opposition Bloc (a successor to the Party of Regions that formed in 2014 when Yanukobych concerned consulting work in Ukraine during the presidency of Yanukovych. Gates and Manafort actively engaged in lobbying work on behalf of the Yanukovych, the Party of Regions and the Government of Ukraine, including lobbying “multiple Members of Congress and their staffs about Ukraine sanctions, the validity of Ukrainian elections, and the propriety of Yanukovych’s imprisoning his presidential rival, Yulia Tymoshenko (who had served as Ukraine’s President prior to Yanukovych).”
Newly unsealed court filings also reveal that Manafort obtained a $10m loan from Oleg Deripaska. The Russian oligarch actively supported (and sometimes explictly directed) Manafort’s consulting work in Ukraine when it began in 2005 and in 2006. The political consultant represented Deripaska’s commercial interests in various post-Soviet states and the businessman loaned funds to Manafort’s private equity fund. The pair later signed a $10 million annual contract for a lobbying project representing Russian interests in Washington in 2006. In a personal memo the political consultant recorded his personal confidence that the deal would “greatly benefit the Putin Government.” Strategy memos indicated that Deripaska sought to lobby Western governments, especially the US, to allow oligarchs to keep possession of formerly state-owned assets in Ukraine and Manafort later promised to give Deripaska “private briefings” surrounding election coverage two weeks after he was hired by Trump to be his campaign manager. Financial records filed in Cyprus in 2016 indicate that Manafort was in debt to pro-Russia interests by as much as $17 million before he joined Donald J. Trump’s presidential campaign in March 2016.
Both Rick Gates and Paul Manafort failed to register their Russian and Ukrainian affiliation(s) and instead chose to launder the money through foreign shell companies and bank accounts in order to conceal their lobbying activities from the United States Treasury and Department of Justice. Most of the funds were funnelled through shell companies domiciled in Cyprus. The flagrant use of British-based shell companies to facilitate their lavish lifestyles reveal the extent to which they are considered familiar channels for anyone seeking to conceal transfers of illicit wealth. $175,575 was laundered through Pompolo Limited on 15 July 2013. An additional wire transfer of $13,325 from Pompolo Limited to a company owned by Paul Manafort was recorded on the same day. It can also now be revealed that Rick Gates registered an additional two companies (Skyton Limited and BCAS Europe Limited) with A1 Company Services in June of the same year. Only the purpose of Pompolo Limited, set up at 2 Woodberry Grove, has yet been uncovered.
The jury’s out, but the evidence is damning. North Finchley’s company formation agents and corporate services providers have played an integral role in facilitating criminal money laundering and globe-trotting political corruption for many decades. Yet these new revelations will raise more questions than have been answered by this preliminary investigation. How many more of the tens of thousands of shell associated with North Finchley addresses have been used by global financial criminals to launder illicit wealth? What other UK addresses feature in the same illegal ‘laundromat’ operations that have been linked to North Finchley? But perhaps most importantly, why has the nefarious use of shell companies registered from these addresses been tolerated by UK regulators and law-makers for so long?