Offshore ‘secrecy factory’ exploiting UK loophole

Petter vieve


An Offshore firm, Alpha Consulting, has been found to have helped create companies used by members of Vladimir Putin’s inner circle, including one hiding the late mercenary boss Yevgeny Prigozhin’s yacht. The BBC has revealed that Alpha Consulting also helped form over 900 UK partnerships that used a secrecy loophole to conceal their true owners. One partnership was involved in running a sanctions-busting oil tanker, while others committed crimes. Alpha Consulting has been a secrecy factory, catering to members of Russian President Vladimir Putin’s inner circle and exploiting a gaping loophole in UK law. Some of the partnerships it helped create have been involved in alleged fraud and running an illegal essay mill. One has been accused of interfering in a foreign election.

Yevgeny Prigozhin, boss of the Wagner Group, was one of those who benefitted from Alpha’s services. His company Beratex Group Ltd was sanctioned by the United States in 2019, as a front company which concealed ownership of his private jet and yacht. Alpha Consulting said it was “never involved in any business activity” with Beratex.

Alpha also provided a director for one of Reiman’s companies who failed to declare Reiman was a “politically exposed person” – someone whose position or relationships mean they may be more exposed to risks of corruption and require a greater level of checks. Anti-money laundering expert Graham Barrow said this was “not really an oversight”. Alpha Consulting also helped create 927 limited partnerships, one in five of those registered in England, Wales, and Northern Ireland since 2017.

Limited partnerships, formed by two or more people to own and run a business, can be used to bypass transparency regulations. In 2016, UK companies were required to declare who owns them or is in control, leading to a surge in registration of these firms. However, last year, the BBC and Finance Uncovered revealed the increasing use of English limited partnerships and evidence linking them to fraud, terrorism, and money laundering. Despite this, the government has failed to extend laws requiring companies to identify “persons of significant control” to all limited partnerships.

An investigation by Alpha Consulting revealed that Offshore Alpha helped create limited partnerships used to acquire assets and hide their owners, including the Delfi oil tanker, which polluted the coast of Ukraine after it was wrecked in 2019. Internal documents show that partners like Luther Denis sign over all their powers to the secret “beneficial owner”. Alpha provided and paid 12 nominee or sham partners, who often know nothing about what the firms they help to create actually do.

A court imposed a fine on Mister Drake PC, but it has never been able to identify the real owner and the fine has never been paid. Lloyd’s List Intelligence analyst Michelle Wiese Bockmann said that the beneficial owners are ultimately liable and responsible for any environmental costs or damages caused by the vessel.

The investigation into Alpha Consulting, a UK-based limited partnership firm, has revealed eight partnerships linked to the company. In September 2020, Luther Denis was named on paperwork of another partnership, Cilkon PC, which was involved in running an oil tanker called the Ostra. The Ostra had already breached sanctions against Syria in 2019. Denis’s partnership became involved in running the tanker after its registered owner, a Russian company called Rustanker, was sanctioned for attempting to evade the US ban on trading in Venezuelan oil.

The BBC attempted to contact these partnerships and the people they were able to identify behind them but did not receive a response.Offshore Alpha said it was not aware of any of the activities of these partnerships. Financial crime consultant Graham Barrow said that this use of nominees “brings the whole process into disrepute” and makes the idea that the UK is open for business.

Offshore Alpha may have breached the law in relation to Scottish partnerships, which does require that the people who really control them are disclosed. In March 2017, the firm involved, Biniatta Trade LP, paid a US lobbyist on behalf of Lulzim Basha, leader of the Democratic Party of Albania. The lobbyist arranged access to Republican politicians and a fundraiser, where Mr Bashar was able to get a photo opportunity with then-President Donald Trump – later used in the Albanian election campaign.

Biniatta’s ownership was hidden through offshore secrecy and sham directors, but the leaked Alpha documents include an agreement from 2015, when the partnership was set up, which named the beneficial owner as a Russian national called Maxim Trofimets. In summer 2017, when the law for Scottish partnerships changed, Mr Trofimets was not declared as the “person of significant control” of Biniatta, and an Alpha nominee falsely declared that the firm had provided all the information it had to.

Alpha Consulting denied the allegation that it attempted to avoid Biniatta having to make such a declaration. The company has due diligence and anti-money laundering procedures that comply with the law. Last month, the Seychelles was added to the EU’s tax haven black list.

Read More :

Leave a Comment