Tuesday, October 17, 2017

CHEAP DUMMIES

Emrith paid US$750 for fake directors in shell company Panama...

Camini Marajh investigates

Hercibelle Gonzalez Molina

Yenny Martinez Dutari

Yakeline Perez Barria

Yadira De Paz

Ricardo Acosta


KEN Emrith, a politi­cally connected businessman and close asso­ciate of Jack Warner, went to extreme lengths to set up a Panamanian offshore structure that employed dummy di­rectors and corporate offi­­cers as props that gave his business shell—Pendrey Associates Corpora­tion—the smell of legitimacy, leaked files from the 2.6 terabytes of data from the global law firm Mossack Fonseca & Co have revealed.

Emrith, who disappeared from the Warner controlled Dr Joao Havelange Centre of Excellence in November 2010 to take up a position behind the scenes at the National Infrastructure Development Company Ltd (Nidco), the State-owned infrastructure company in charge of the procurement of the US billion-dollar highway project, paid the Panamanian law firm an additional US$750 ($4,950) fee for the provision of fake directors and corporate officers.

Mossack Fonseca (MF), which specialises in setting up untraceable shell companies, provided Emrith with an offshore structure that—on paper—had all the makings of a legitimate business entity, inclu­ding five MF employees who provided dummy director duties as and when needed.

The law firm at the centre of an offshore accounts scandal also set up a bank account for Pendrey Associates at the Bank of St Lucia International Ltd (BOSLIL) and later facilitated the opening of another offshore account at PKB Privatbank in Switzerland.

Sunday Express investigations found that one month after he was inserted into the State-owned infrastructure company, Emrith knocked on the door of one of the world's five biggest wholesalers of offshore secrecy to set up a corporate structure that provided him with financial privacy and obscurity for his off-the-books transactions with Joao Procopio, a convicted money launderer and top lieutenant of Brazilian crime boss Alberto Youssef, also convicted of financial crimes rela­ting to the US$300 billion Petrobras bribery scandal in 2014.
Web of subterfuge

Secret internal documents leaked from Mossack Fonseca reveal a complex web of sub­terfuge by Emrith, who used a seemingly legiti­mate transaction for a port development project in Namibia as cover
for a US$1 million payment from OAS, paid through a Procopio-managed shell corpora­tion—Santa Tereza Services Ltd—which was set up as a front for money laundering and other corrupt transactions, according to testimony provided by Procopio and Youssef in plea deals struck with federal prosecutors in Brazil.

Emrith has refused to talk about his offshore holdings in Pendrey Associates or his other 50 per cent shareholding interest in Proteus Holding SA, another MF-created offshore corporation, on the ground that he “owes fiduciary duties” and a “duty of confidentiality” to his business associates.

On Friday, he remin­ded this reporter that: “I am a private businessman and as such would expect that my private business should remain private.”

The Trinidad Express Newspapers is among the more than 100 reporting partners of the International Consortium of Investigative Journalists (ICIJ) that have worked on analysing the largest journalistic leak in history, made public earlier this month by a flood of media reports around the globe.

A document cache of 11.5 million encrypted records leaked to German newspaper Suddeutsche Zeitung by an anonymous source and shared with the Washington DC, USA-based ICIJ led to an unprecedented ICIJ-organised global collaboration, involving 376 investiga­tive journa­lists in 109 news outlets, including the author of this article.

The Suite 5 connection

The leak, which contained details into more than 214,000 offshore entities connected to people in more than 200 countries and territories, has unleashed a tsunami of secrets about a dozen current and former world leaders and over 140 politicians and their families, in addition to some of the world's most powerful and richest people and financial institutions like UBS and Credit Suisse.

Address of record: Former First Citizens chairman and attorney Nyree Alfonso's law offices in Port of Spain was Ken Emrith's address of record at Mossack Fonseca (see circled area).

Data highlights con­nected to Trinidad and Tobago reveal six offshore corporations, three clients or intermediaries, one beneficial owner who is Emrith and 15 shareholders.

There are a myriad number of locals who initiated the process of setting up offshore companies but failed to follow through.

There are also law offices and a Port of Spain accounting firm connec­ted to the data, as well as individual business people.

Emrith, a political lightweight who practised at staying below the radar, used the Port of Spain law offices of attorney and former chairman of State-owned bank First Citizens, Nyree Alfonso as his address of record with the Panamanian law firm, secret documents reveal.

MF's records reflect Suite 5, 13-15 St Vincent Street, PoS, Trinidad, West Indies as Emrith's address of record.
The address also appears in MF-issued invoices for incorporation and other services provided to Emrith.
Alfonso, who acknowledged an attorney client relationship with Emrith dating back to about 15 years, in an e-mail response to the Sunday Express, said: “I do not know anything of a company called Pendrey Associates which you have identified as Mr Emrith's Panamani­an-registered company, and I doubt from my knowledge of the forma­tion of offshore companies in other jurisdictions—not Panama—that my law offices in Port of Spain Trinidad could have been used as the address of record for any Panamanian offshore com­pany.”

Shelf companies

Emrith's response to questions relating to his locally incorporatedvcompany, Pembury Con­­sultants, and his use of Alfonso's law offices as his address of record with Mossfon was: “Ms Alfonso has indicated to me that you have sent her some similar questions, for which I am advised she shall respond to you in due course.”

Alfonso said Pembury was one of two shelf companies she had for “any client” requiring the use of a corporate vehicle at short notice.

She said it was a “common practice” and she had incorporated “se­v­eral such companies for use by the firm's corporate clientele” over the years.

Like aged wine, the sale of shelf companies is a quite lucrative segment of MF's operations, which has an array of already established offshore corporations. 

Internal MF memos discuss the demand for vintage corporate vehicles as the preferred mechanism for customers seeking complete anonymity for transactions.

Alfonso said she offered the Pembury shelf company to Emrith in 2010 when he approached her to set up a new company.

The attorney, who was listed as a director and company secretary of the 2007-incorpora­ted Pembury, said: “As a consequence of the requirement under the Companies Act that a limited liability private company must have a complement of at least two directors, I remained a director of the company until a second director was nominated. At this juncture, I resigned as a director and subsequently as secretary of the company.”

Emrith replaced Rhys Thomas, chief executive of a Florida, USA, concern called Gables Associates, as a director of Pembury on October 8, 2010.

His brother, Kerry Emrith, a hospital admi­nistrator in Florida, replaced Alfonso two days later.

Alfonso was replaced as company secretary on February 8, 2011, by Davica Persad.

All three of the new Pembury officers shared the same 279 Cipero Road, San Fernando, address.

The Warner hire?

On Friday, Emrith defended his decision to not comment about his offshore business dealings.

“All my business transactions are subject to the duty of confidentiality,” he said. Exactly what that duty is, he did not say, given no privilege is attached to allegations of wrongdoing.

Lawyers, bankers and doctors are not exempt from this legal requirement, according to court rulings in several jurisdictions.

Asked to state his specific job designa­tion at Nidco and to say who recommended him, Emrith said: “I was never employed by Nidco, so the question of job description and recommendation does not apply. I was never an employee of Nidco.”

He later admitted he was hired as a marketing consultant “with a specific assignment to the water taxi”.

He also made clear that: “I had no role to play in either the selec­tion or award of this (highway) contract.”

The man who hired Emrith, Dr Carson Charles, the former president of Nidco, was hazy with the details.

He could not remember who made the call to place Emrith in the State-run agency, overseeing the procurement process of the contentious and very expensive highway project.

“It could be Jack (Warner, then minister of Works and Transport), it could be somebody else. I can't say who recommended him for the position,” he said, insisting Emrith was not involved in any aspect of the negotiations with OAS or the award of the contract.

“He is not a technical man,” said Charles, adding, “he has no expertise in negotiating contracts. So, no, the suggestion that the contract was manipulated in favour of OAS is rubbish.”

Charles initially said Emrith was hired as a communications consul­tant but called to correct the information after talking to Emrith himself.

He said Emrith was paid about $15,000 to $20,000 a month.

On Friday, Attorney General Faris Al-Rawi told Parliament Emrith was paid $35,000 a month for the 12-month period November 18, 2010, to August 2, 2011.

Swiss bank account

Emrith leap-frogged from Nidco straight to a job with the Brazilian construction giant on the Point Fortin highway project after OAS had secured a signed contract with the People's Partnership administra­tion, at more than a billion dollars over the engineer's estimate.

Attorney General Al-Rawi said Pembury was hired as an OAS consultant on the same highway project and was paid a near $900,000 by Nidco up to May 2013.

In an April 5 telephone interview, Charles insisted when Emrith left Nidco, “he was really an OAS man”.

He refuted suggestions Emrith was an agent or a go-between for OAS, noting when Emrith went across to OAS, “we were happy for him. I presumed that he simply got a better job”, said Charles.

This paper's investi­gation of Emrith's off­shore dealings reveal the US$1 million paid through the New Zealand shell—Santa Tere­za—originated from the British Virgin Islands-registered subsidiary OAS African Investments Ltd.

An OAS payment of US$1.6 million was routed through Santa Tereza's Swiss account at PKB Privatbank on July 17, 2013. Just over US$1 million was wire-transferred to Pendrey's St Lucia account on July 19, 2013.

When the St Lucia bank refused to apply the funds, a Youssef associate by the name of Jose Luiz Pires, an investment banker with a Sao Paulo firm named Queluz, arranged to set up a Swiss bank account at PKB for Emrith.

In e-mail correspondence sent to Emrith and MF's lawyer, Daniel Leon, Pires informed Emrith: “After reviewing your certificate, it will require 02 directors of Pendrey sign the general resolution.

A man named  Nelson Jaramillo

“And send me, copy by e-mail and original by courier. Also, I will need too the copies passport and address the directors. Please, my colleague Mauro Romaldini, that stay in Lugano (Switzerland). He makes a control after the account is open. Please do not send documents to him.” Romaldini worked with both Queluz and PKB Privatbank.

Bank statements for the Santa Tereza account obtained from a Brazilian prosecutor show Emrith received a US$50,000 payment from the New Zealand shell on December 12, 2013. As reported previously, he also received an initial US$10K payment from Rafael Jara­millo, whose brother, Nelson, was the business development manager for OAS in Ecuador.

Nelson's LinkedIn profile, a business-orien­ted social networking service, also lists his involvement with projects in Venezuela, Brazil, Panama and the Carib­bean. According to his profile, he was the business development manager for Construtora OAS for Panama and the Caribbean region between February 2010 and December 2012.

This newspaper has received a whistle-blower report detailing Warner's alleged behind-the-scenes involvement and backroom deal-making with OAS officials du­ring the 2010 World Cup in South Africa.

In a June 4, 2010, e-mail to the whistle-blower, Nelson Jaramillo writes: “On my side everything is approved, if you get the meeting we can all go to SA and meet with him!!!”

The whistle-blower responded: “I have already set things in motion for that. I spoke to his secretary re: FIFA and she will let him know. I am hoping for the best. In the meantime start putting it together.”

Warner has dismissed reports of a deal as “dotish”.

• To be continued

—Contact the reporter on this story at camini.marajh@trinidadexpress.com