Conference on Financial Fraud in the European Parliament in Brussels sheds new light on one of the largest financial fraud cases in history

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Financial fraud was the subject matter at a conference held in The European Parliament in Brussels on Thursday 9 November. In light of the recent revelations of the “Paradise Papers” on the vast use of off-shore companies in tax havens by the wealthiest in societies for the purpose of tax evasion, the conference paid particular attention to recent large-scale international cases of financial fraud and embezzlement.

The conference was attended by several Members of the European Parliament, journalists and representatives from NGOs and associations. The speaker panel consisted of Honorary MEP Frank Schalba-Hoth, economist Björn Hultin, journalist Gary Cartwright and journalist Jaros?aw Jakimczy.

Mr. Hultin highlighted “the sheer size and scope of many recent cases of financial fraud, amounting in some instances to several billion euros, which can have severe consequences and endanger not only a few individuals or institutions, but also put whole economies and societies at risk as these actions deprive governments of public money and resources.”

Mr. Schwalba-Hoth commented on the opportunism of criminal fraudsters in many post-soviet countries and their use of complex secretive structures in offshore companies to embezzle and launder stolen money, using the same schemes revealed in the paradise papers by large corporations to hide assets for tax evasion purposes.

In particular, one of the largest financial fraud cases in history was brought up and discussed during the conference, relating to the embezzlement and laundering of up to $10 Billion by Kazakh businessman Mukhtar Ablyazov. Mr. Ablyazov currently resides in France where he fled after British courts sentenced him to prison in 2012 and demanded the recovery of more than $4.5 Billion back to Kazakh BTA Bank. Journalist Gary Cartwright explained in detail the process and timeline of how Mr. Ablyazov is believed to have undertaken the theft. It included, amongst others, the use of a vast number of shell companies set up in off-shore tax havens, who received large scale loans for fictional property and business deals.

During the conference, journalist Mr. Jakimczy also discussed an ongoing investigation into a NGO called Open Dialogue Foundation. The organization, which was set up in Poland and has an office in Brussels, is amongst others, advocating for the defence of Ablyazov on political persecution grounds. However, the organization is believed to at the same time also have been funded, amongst others, by money donated from the network of companies owned by Mr Ablyazov. “Several companies that have donated to the NGO’s activities are flagged and sanctioned by the West”, Mr Jakimzcik argued. Gary Cartwright who has followed the case closely said “There are more questions than answers related to the funding of ODF”.

In the audience, Henri Malosse, former President of the European Economic and Social Committee called for the EU to set up better mechanisms to trace the funding of Brussels based NGOs, especially those who abuse the system. He also criticized the uneven playing field whereby large corporations and high-net worth individuals use secretive schemes to channel money to off-shore tax havens.

Mukhtar Abylazov was released from prison by French authorities in December 2016. Russia, Ukraine and Kazakhstan have requested that he is extradited. Meanwhile, Mr. Ablyazov is believed to be asking for asylum in Belgium or other countries in the EU. Mr Schwalba-Hoth said that he “did not find it likely that Belgian authorities would grant Mr. Abylazov asylum”. And Mr. Cartwright argued that Mr. Ablyazov and other financial fraud fugitives should be brought to justice and also highlighted the importance of a fair and balanced trial and process. In the meantime, BTA Bank is still trying to recover the several billion euros that are believed to remain hidden in various off-shore tax havens.


 

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