Thursday, March 26, 2009

US Arrests Anglo Leasing Suspect

US arrests Anglo Leasing suspect

By BENJAMIN MUINDIPosted Wednesday, March 25 2009 at 22:08
The United States has arrested a key suspect in the Anglo-Leasing scandal in which Kenya lost billons of taxpayers’ money through fraudulent transactions.
A 43-year-old American, Bradley Birkenfeld may be a key lead to the controversial dealings in which the Kenyan government paid some Sh56 billion in promissory notes to bogus companies. Mr Birkenfeld, a banker and a financial advisor, has been working for UBS bank and is indicted with crafting tax-evasion schemes.
The Neue Zurcher Zeitung, a leading Swiss newspaper, has revealed that Mr Birkenfeld is intimately connected with Anglo Leasing and the Deepak Kamani brothers, alleged architects of the scam.
He signed one of the 18 fraudulent Anglo Leasing contracts on behalf of Info Talent Limited and his private residence, 20 Cours de Rive in Geneva, was listed in a second credit contract as the offices of Midland Finance & Securities Limited.
“This is a man the Kenyan government should be dying to interview to get information on Anglo Leasing,” said Mars Group director Mwalimu Mati, who broke the news on Mr Birkenfeld.
Midlands Finance has since sued the government for repayments of the never-received credit and even succeeded in blocking the Kenya Anti Corruption Commission from using a report by Price WaterHouse Coopers to prove the fraud.
“Why it was signed by the permanent secretary on the authority of the then Finance minister David Mwiraria is the enduring mystery of Anglo Leasing, and Bradley Birkenfeld may have the answer,” said Mr Mati.
Bogus financier
In November 2003, another bogus financier, Info Talent obtained 58.688 million Euros in promissory notes from the Treasury. In 2004, the company mysteriously refunded Sh509 million after Anglo Leasing was exposed by Mr Maoka Maore in Parliament in April of the same year.
That Info Talent fraud was proved by the Parliamentary Accounts Committee investigation of 2006, headed by current minister for Finance Uhuru Kenyatta.
Mr Birkenfeld has pledged to enter a plea bargain where he will volunteer information in return for his release.
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TaxesBanker Charged With Helping Billionaire Dodge TaxesJanet Novack, 05.13.08, 6:02 PM ET

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A federal judge in Southern Florida today unsealed an indictment charging two foreign bankers, one a former private banker for UBS AG, with defrauding the U.S. by helping billionaire Orange County, Calf., real estate developer Igor M. Olenicoff evade U.S. taxes on $200 million hidden in Swiss and Liechtenstein bank accounts.
One of the those indicted, Bradley Birkenfeld, is a 43-year-old U.S. citizen who, the indictment says, worked from 2001 to 2006 in the private banking division of a Swiss bank, which "also owns and operates banks, investment banks and stock brokerage businesses throughout the United States." Federal election records show a Bradley Birkenfeld contributed to candidates during that period, listing his employer as UBS (nyse: UBS - news - people ) and his address as Geneva, Switzerland.
UBS disclosed recently that the U.S. Department of Justice was investigating whether it had helped wealthy Americans evade U.S. taxes on offshore accounts. In addition, earlier this month a senior UBS employee was briefly detained by U.S. authorities as a witness in that investigation.
In a statement today, UBS said it is "continuing to cooperate with this investigation" and that "in light of the pending investigation, it is not appropriate to comment on charges brought against a former UBS employee."
Separately, UBS is also being investigated by U.S. prosecutors for its past involvement in the U.S. tax shelter industry.
Birkenfeld was arraigned this morning in Fort Lauderdale and entered a plea of not guilty. He was released on a $100,000 secured bond, and a $2 million personal surety bond, surrendered his passport and is subject to electronic monitoring. The other defendant, Mario Staggl, 43, a Liechtenstein citizen and resident, remains at large, the government said.
In the indictment, brought by the U.S. Attorney for Southern Florida, Olenicoff, who Forbes estimates is worth $1.6 billion, is named as an "unindicted co-conspirator" and referred to as IO. Olenicoff settled with the government in December, by pleading guilty to one felony count of filing a false 2002 individual income tax return; paying $52 million in back taxes, interest and civil fraud penalties; and agreeing to bring all the money in his foreign accounts back to the U.S. On April 14, he was sentenced to two years probation. Olenicoff's use of offshore accounts, which was described in a story in Forbes in 2006 (see: " The Billionaire With The Empty Pockets"), dates back to the early 1990s.
Olenicoff's attorney, Edward M. Robbins Jr., declined comment, but the indictment left no doubt as to who the unnamed billionaire was, including among other things, details about the ownership of his 147-foot yacht.
The indictment notes that in 2001, Birkenfeld's employer entered into a Qualified Intermediary agreement with the U.S. That agreement required UBS to identify any customers who received U.S. source income that was reportable to the Internal Revenue Service and to report that income. As part of the process, UBS agreed to have customers fill out IRS form W-8BEN, which requires foreign beneficial owners of bank accounts to be identified---a departure from historical Swiss bank secrecy laws.
But Birkenfeld and Staggl, the indictment alleges, defrauded the IRS by falsifying Swiss bank documents and W-8BENs, and by setting up "nominee entities" to hide the true ownership of assets. Staggl, according to the indictment, was the owner of New Haven Trust Company Ltd., a Liechtenstein trustee of accounts used to hide Olenicoff's ownership of assets.
The indictment indicates Olenicoff wasn't Birkenfeld and Staggl's only wealthy client. According to the indictment, the men marketed to U.S. taxpayers the advantages of Swiss and Liechtenstein banks for attempting to evade U.S. income taxes, "claiming that Swiss and Liechtenstein bank secrecy was impenetrable.''
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