Unsuspecting local business owner shocked to learn that companies registered to his property used by fraudsters.
On the face of it there’s nothing remarkable about 1 Straits Parade in Fishponds. Now home to a barber shop, the building is nestled on a leafy high street corner with a KFC next door. Over the years it has housed several small businesses which have either folded or moved on.
However, a set of lucrative companies have apparently also done business from the suburban Fishponds address, at least on paper. They were identified in investigations into huge money laundering scandals spanning Moldova, Ukraine, Russia, Latvia – and perhaps surprisingly, Bristol.
The companies were set up by middlemen on behalf of secretive Eastern Europe clients who used them to set up bank accounts in Baltic states. Reports suggest that these companies provided fraudsters a veneer of legitimacy and secrecy to wash money from crime.
In one case, $1bn was drained from three of Moldova’s banks in 2014, in what was locally dubbed the ‘theft of the century’. Corporate investigators Kroll found that shell companies registered to Fishponds were among the many involved in the heist.
The Cable spoke to the owner of 1 Straits Parade, a Mr Erkan Cil, who leases the barber shop. He was shocked to learn that companies registered to his property had been used by fraudsters.
“When I bought it [1 Straits Parade], this guy called me from Latvia, and he said ‘I want to receive my letters there’.” Cil then named the caller as Vitalijs Savlovs, a businessman from Latvia.
The middlemen: UK companies for sale
A look through Companies House shows that ArranConsult Limited, a company formation agent (a company that forms companies for clients) is registered at the Fishponds address, and Vitalijs Savlovs is a listed director.
A 2017 report by Transparency International says that Savlovs is said to have had numerous links to the Latvian banking sector. He is also cited as a company service provider for companies involved in a separate money laundering case in a London High Court decision on a £130m fraud.
Cil explained how in return for £300 from Savlovs, he accepts post for the companies. A woman called Olga then collects the mail on a weekly basis and posts it to Savlovs who reportedly manages the company from Latvia.
Olga confirmed that she worked for ArranConsult and told the Cable’s reporter: “I’m just picking up letters,” adding that she was unaware of any money laundering.
“We [ArranConsult] provide addresses as an accountancy practice … I don’t think there’s anything wrong to run such a business … a lot of companies do that, provide a registered address.”
Olga’s not entirely wrong – properties peppered across the UK have also been used by ArranConsult and others to register UK companies on behalf of international clients.
A National Crime Agency spokesperson told the Cable: “We are working with our partners to improve the response to the money laundering threat.”
Adding, the NCA is working “to identify those professional enablers (lawyers, accountants, trust and company service providers) who enable laundering to happen, and to take appropriate action.”
There is no suggestion that ArranConsult, or any of its staff were knowingly involved in any illegal activity. There is however a legal duty to report any suspicious financial activity.
The $20.8bn heist
Between 2010 and 2014 at least $20.8bn was moved by Russian officials and insiders into Europe, the US and other countries, in what became known as the Russian Laundromat – the biggest money laundering operation ever uncovered in Eastern Europe.
Thousands of companies were used in the fraud. Many purchased goods and services in good faith – it is the origins of the funds that is questionable.
Data from the Organised Crime and Corruption Reporting Project reveals that five of the companies involved in Laundromat transactions were registered to Fishponds. At least $18 million of dirty money was washed through these companies.
The theft of the century and dodgy Ukrainian tax officials
A staggering $1bn stolen from Moldova’s banks in 2014. A leaked report written by investigations firm, Kroll, detailed how funds were again transferred to UK companies, with money deposited into Latvian banks.
The report names the mastermind behind the fraud as Ilan Shor, a young Israeli-Moldovan businessman and now Moldovan city mayor.
Lerson Ltd, formerly registered to Fishponds, had a 5% stake in Moldova’s Banca Sociala, a bank used in the robbery. Alise Ilsley, a Latvian national working for ArranConsult, is named as its nominee director. Although acting on behalf of clients, Ilsley is implicated in money laundering, the report states.
In yet another corruption scandal, Roman Nasirov, head of the Ukrainian tax and customs service, was arrested in 2017 on suspicion of defrauding Ukraine of $70m.
Abital LP and Iris Assets Ltd are both registered to Fishponds and affiliated to Belize’s B2B Consultants Ltd. They were flagged by Ukrainian prosecutors as ‘getaway vehicles’ in the fraud investigation used to benefit state officials. Alise Ilsley’s name crops up again, this time as a director of Iris Assets Ltd.
Meanwhile, in response to an investigation by business news publisher, Bne Intellinews, Savlovs vehemently denies having had any connection to firms used in the Moldova fraud, and disputed that an Arran Consult employee established Lerson Ltd, as cited in the Kroll report.
‘Time to prosecute’
The tale of the house next door to KFC in Fishponds isn’t an unusual one, and that’s a critical point. As long as there remains poor regulation, there will be properties across the UK that share a similar story to 1 Straits Parade. UK financial services and crooks internationally will continue to benefit, with nominee directors or ‘enablers’ rubber stamping in between.
Susan Hawley, policy director for anti-corruption NGO, Corruption Watch, told the Cable: “It’s time that HMRC started prosecuting company formation agents that don’t do their due diligence properly.
“It’s time for Companies House to be properly resourced so that it can do proper checks to verify who the real owners and directors of companies are.”
Meanwhile back in Fishponds, Mr Cil tells the Cable over the phone that he will, “Call him [Savlovs], and any letters that come there I will send back to the sender and that’s it.”