{"id":425874,"date":"2015-06-21T16:02:03","date_gmt":"2015-06-21T13:02:03","guid":{"rendered":"http:\/\/www.moldova.org\/?p=425874"},"modified":"2015-06-21T16:02:03","modified_gmt":"2015-06-21T13:02:03","slug":"how-modest-homes-in-some-of-scotlands-poorest-areas-became-prolific-company-factories","status":"publish","type":"post","link":"https:\/\/www.moldova.org\/en\/how-modest-homes-in-some-of-scotlands-poorest-areas-became-prolific-company-factories\/","title":{"rendered":"How modest homes in some of Scotland\u2019s poorest areas became prolific \u2018company factories\u2019"},"content":{"rendered":"Reading Time: <\/span> 8<\/span> minutes<\/span><\/span>

Written by Ian Fraser and Richard Smith<\/a><\/em><\/p>\n

It\u2019s a humble ground-floor flat in Royston Mains Street in Pilton \u2013 the Edinburgh housing estate which gained notoriety as the setting for Trainspotting, Irvine Welsh\u2019s 1993 novel about drug addiction and crime.<\/p>\n

The property is the home of a 36-year-old Lithuanian, Viktorija Zirnelyte. It is also home to hundreds of companies, some of which have recently been accused of involvement in a $1 billion Moldovan bank fraud.<\/p>\n

Of the 438 firms registered at the modest looking address, some are owned by offshore vehicles based in jurisdictions such as the Seychelles.<\/p>\n

Owing to a quirk of company law and Britain\u2019s laissez faire approach to regulation, Scottish limited partnerships, which date back to the Limited Partnerships Act of 1907, are still not required to disclose their annual accounts or even the names of the people who control them. Ownership and control can be masked and layered through the use of faceless \u201cgeneral partners\u201d and \u201climited partners\u201d, and these are often based in secrecy jurisdictions like the Marshall Islands, British Virgin Islands, Cayman Islands, Belize and the Seychelles.<\/p>\n

In addition to being favoured because of their tax efficiency by private equity, venture capital funds and commercial property investors, they have become a vehicle of choice for money launderers, tax evaders, fraudsters, and other forms of skulduggery. Companies legitimately offering no more than registration services and accommodation addresses can then be used as unwitting instruments in crime.<\/p>\n

\u201cMost [limited partnerships], like a drug dealer\u2019s pay-as-you-go mobile phone, almost certainly exist for one deal before they are discarded,\u201d said former tax inspector Richard Brooks.
\nIn a special report published in Private Eye he added: \u201cThose deals, however, can be extremely valuable to the perpetrators \u2013 while devastating their victims and sustaining corrupt regimes.\u201d
\nZirnelyte\u2019s modest flat is the address of two company formation firms, Royston Business Consultancy, which Zirnelyte runs, and Arran Business Services, directed by a succession of Latvian expatriates, including Anzelika Young, n\u00e9e Trifonova, who was sentenced to 250 hours community service for mortgage fraud in February 2012 at Kirkcaldy Sherriff Court.<\/p>\n

Royston Business Consultancy played a part in the formation of companies that were named by the security firm Kroll as having facilitated a massive Moldovan bank fraud which, last November, is said to have triggered the collapse of three Moldovan banks, and last month led to 20,000 people taking to the streets of the Moldovan capital Chisinau to protest against corruption (see sidebar).<\/p>\n

In a report commissioned by Moldova\u2019s central bank, and leaked last month, Kroll alleged that Fortuna United LP and Novland Limited, both registered at 18\/2 Royston Mains Street, were involved in this fraud.<\/p>\n

Companies House data shows that, since 2013, no fewer than eight other individuals, apparently Lithuanian, Latvian and Ukrainian nationals, have given Zirnelyte\u2019s flat as their residential address. Zirnelyte was unavailable for comment. Calls to Edinburgh numbers listed as her business number were answered by the Royston Wardieburn Community Centre, where Zirnelyte was unknown.
\nZirnelyte picked up her company formation skills at Leith-based company formation specialists Lawsons & Co, which is based in Duke Street, at the foot of Leith Walk, and run by the Cypriot-born businessman Marios Papantoniou.<\/p>\n

Lawsons provide the registered addresses for 561 limited companies and limited partnerships, several of which have been named as being under investigation overseas in connection with allegations of a $20bn \u201cRussian Laundromat\u201d money laundering conspiracy (the Organized Crime and Corruption Reporting Project won a special Europan Press Prize for its extensive coverage of this scandal). In November the UK National Crime Agency confirmed it was probing aspects of the \u2018laundromat\u2019.<\/p>\n

According to the Kroll report, Lawsons\u2019 premises, shared with Papantonioiu\u2019s accountancy firm Axiano, are also the registered addresses of half a dozen companies and limited partnerships allegedly involved in the $1bn Moldovan bank fraud.<\/p>\n

Papantoniou told the Sunday Herald that Lawsons is not responsible for the behaviour of firms registered at its addresses and that neither the National Crime Agency nor any other UK authority has been in touch with him. He said: \u201cSome of the companies we create are sold to an agent in Estonia, but we are not involved in the day-to-day activities of these companies or anything else they do.\u201d In a subsequent email, Papantoniou said the Kroll report was inaccurate and he is considering suing the New York headquartered firm for defamation.<\/p>\n

Other Scottish properties hosting companies allegedly involved in Moldovan fraud include a non-descript semi-detached council house, 45 Rosehaugh Road, in Inverness\u2019s deprived South Kessock district. This is home to a further 585 opaque limited partnerships, five of which, Kroll alleges, were used for the Moldovan heist. The Electoral Register says the residents of 45 Rosehaugh Road are David A MacMillan and Latvian-born Liene Brice, both in their thirties. They could not be contacted.<\/p>\n

Another address favoured by companies said to be linked to fraud is 78 Montgomery Street in Edinburgh\u2019s East End, home of John Hein, founder of Scotsgay magazine and a former candidate for the Liberal Party, and his partner James Stuart McMeekin. Both Hein and McMeekin are directors of a company formation business named Cosun Formations Ltd.<\/p>\n

Their address is the principal place of business of 3,500 limited partnerships. Of these, five are mentioned in the Kroll report as being involved in Moldovan fraud \u2013 Avenilla Commercial LP, Intratex Sales LP, Metalforum LP, Swedtron Alliance LP and Trademarket Networks LP. Hein failed to respond to requests for comment.<\/p>\n

Overall the Kroll report identifies 28 Scotland-based companies and 20 based elsewhere in the UK, many with Latvian bank accounts, in connection with its investigation into the Moldovan fraud. The underlying network of opaque corporate entities, sometimes known as \u201cshell\u201d companies, is believed to be vastly larger, numbering at least 11,000 companies in Scotland alone. And the Scotland-based company formation specialists identified by the Sunday Herald are churning out an additional 300 limited partnerships per month.<\/p>\n

Other Scottish addresses where entities in this wider network are registered, include 16\/5 West Pilton Rise, Edinburgh. It is the base of 424 companies and limited partnerships associated with Anzelika Young, a former director of the company agents Arran Business Services. None of these companies have been accused of connection to Moldovan fraud. Mrs Young was unavailable for comment.<\/p>\n

There is no suggestion that any of these company service providers knew they were creating or serving companies or partnerships that were being used in offshore fraud, or were especially useful for such purposes. And Kroll\u2019s allegations are at this stage no more than claims \u2013 they have not yet been tested in a court of law. Where it could, the Sunday Herald asked the formation companies to contact on its behalf the entities named by Kroll, but those who responded refused to discuss any matters relating to their clients.<\/p>\n

Critics suggest the government needs to take action to clean up the sector and prevent shell companies including limited partnerships from being used as conduits for the proceeds of crime and money laundering with tougher rules and greater levels of mandatory disclosure.<\/p>\n

Labour MSP Hugh Henry, shadow justice spokesman in the Scottish parliament, said he would be tabling parliamentary questions about abuse of LPs and LLPs, and will write to both the Lord Advocate and the chief constable early this week. He also said he would table a motion for a Holyrood debate.<\/p>\n

\u201cThe Kroll report is shocking and it\u2019s also very worrying, because, on the face of it, it looks like Scotland is becoming the money laundering capital of Europe. That is frankly unacceptable.\u201d
\n\u201cThe UK government needs to look at whether or not the rules on Limited Partnerships and Limited Liability Partnerships are fit for purpose. The second thing is the regulation of the company formation agents. The Scottish government should establish whether that\u2019s an entirely reserved matter or whether there are aspects of devolved powers that could be used to bring in regulation.
\n\u201cWhy in Scotland do you have this huge proliferation of company formation agents whose output is so disproportionate to that which exists in England? We regulate lawyers, we regulate accountants, we regulate estate agents and we regulate financial advisers, but company formation agents seem able to establish completely fictitious entities, some of which are being used for money laundering and to rip off impoverished countries.\u201d<\/p>\n

\u201cThe third thing, which is clearly a Scottish responsibility, is for Police Scotland and the Crown Office to investigate whether there is any criminal activity.\u201d<\/p>\n

A Scottish government spokesman said that the law on limited partnerships is a reserved matter and therefore not its responsibility. The UK government did tighten up disclosure requirements relating to UK company ownership in its Small Business, Enterprise and Employment Act 2015, following an agreement on beneficial ownership principles at the G8 Summit in Northern Ireland in June 2013. But the SBEE Act failed to force greater transparency on limited partnerships.<\/p>\n

An spokesman for the NCA said: \u201cThe NCA remains willing to consider any formal request for assistance from the Moldovan authorities in connection with their investigation, however our initial enquiries have revealed that only a tiny proportion of the funds entered the UK financial system and therefore the jurisdiction of the UK authorities.<\/p>\n

\u201cWe continue to work closely with Companies House on the introduction of a publicly accessible central registry of company beneficial ownership information. Greater transparency of company ownership and control will make it more difficult to conceal involvement and act as a deterrent to crime.\u201d<\/p>\n

Scotland and the bank heist of the century<\/strong><\/p>\n

The alleged theft of $1 billion, equivalent to one-eighth of Moldova\u2019s gross domestic product, from three Moldovan banks last November did not just bankrupt the banks concerned. It also nearly bankrupted the former Soviet republic\u2019s economy, and sparked unrest, with 20,000 people taking to the streets of the Moldovan capital, Chisinau, to protest against corruption.<\/p>\n

\u201cA big majority of Moldovans are very, very angry with this case,\u201d said Alina Radu, director of the Chisinau-based newspaper Ziarul de Garda. They are angry with the government for failing to prevent such crimes, she said, adding \u201cbut they\u2019re also angry [with Ilan Shor, a Moldovan businessman who was allegedly the lynchpin of the fraud] and his family as well.\u201d<\/p>\n

The National Bank of Moldova, the republic\u2019s central bank, is answerable to Moldova\u2019s parliament.<\/p>\n

In response to Moldovans\u2019 clamour for justice, the parliament\u2019s speaker, Andrian Candu, published an interim report into the fraud commissioned by NMB from corporate investigators Kroll on his website. Candu said the government had \u201ca responsibility to be transparent with our citizens.\u201d<\/p>\n

Kroll singled out 28-year-old Ilan Shor as the key perpetrator of the $1bn fraud. He was charged with corruption two days later and has since been under house arrest. He denies wrongdoing. In a statement he described the allegations against him as \u201cgroundless\u201d and said he will \u201csupport the authorities in finding out the truth\u201d about the banks\u2019 losses.<\/p>\n

Shor also owns a football club, TV stations, the country\u2019s main international airport, Chisinau International Airport, and has a Russian pop-star wife called Jasmine. He made his fortune selling duty-free goods at the airport.<\/p>\n

The Kroll report alleges Shor used a labyrinth of offshore firms to extract $1 billion from three Moldovan banks \u2013 Banca de Economii (where Shor is the chairman), Unibank, and Banca Sociala.
\nThe offshore firms, including the Scotland-based ones, are alleged to have gained control of the banks using subversive means and then, in a flurry of deals on 25 and 26 November last year, improperly borrowed $767 million without providing any collateral. Total losses are expected to reach $1 billion. It is claimed that records of many transactions were afterwards deleted from the banks\u2019 computers, with documents detailing loans issued by Banca de Economii loaded into a van that was reportedly stolen and destroyed in a fire a few hours later.<\/p>\n

According to the Kroll report, Pilton-registered Fortuna United LP became involved in mid November when the loan portfolio of Banca de Economii was abruptly moved, through a series of opaque transactions, to Banca Sociala. Banca Sociala then claimed to have held a shareholders\u2019 meeting in a remote Ukrainian town on 26 November and decided to transfer the collection rights on the loans to Fortuna United.<\/p>\n

Dorin Dragutanu, the governor of Moldova\u2019s central bank, said the shareholders\u2019 meeting in Ukraine and the deal with Fortuna were \u201ccompletely fake,\u201d noting that Fortuna United had supposedly agreed to pay full price for the loan portfolio, but not until 2019.<\/p>\n

The funds were afterwards filtered through a \u201ccomplex web of transactions,\u201d said Kroll\u2019s report, with much of the money ending up in Latvian bank accounts held by \u201capparently unconnected\u201d England and Scotland-based limited partnerships.<\/p>\n

Kroll\u2019s report (dubbed the \u201cProject Tenor Scoping Phase Final Report\u201d said that a full forensic investigation was needed to identify other potential beneficiaries and recover the funds, and the Moldovan government has promised to embark on a second probe along these lines.<\/p>\n","protected":false},"excerpt":{"rendered":"

Reading Time: <\/span> 8<\/span> minutes<\/span><\/span>Written by Ian Fraser and Richard Smith It\u2019s a humble ground-floor flat in Royston Mains Street in Pilton \u2013 the Edinburgh housing estate which gained notoriety as the setting for Trainspotting, Irvine Welsh\u2019s 1993 novel about drug addiction and crime. The property is the home of a 36-year-old Lithuanian, Viktorija Zirnelyte. It is also home […]<\/p>\n","protected":false},"author":1,"featured_media":425875,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6,9,4],"tags":[],"class_list":["post-425874","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-important-en","category-justice","category-society"],"content_social_share":"Reading Time: <\/span> 8<\/span> minutes<\/span><\/span>

Written by Ian Fraser and Richard Smith<\/a><\/em><\/p>\n

It\u2019s a humble ground-floor flat in Royston Mains Street in Pilton \u2013 the Edinburgh housing estate which gained notoriety as the setting for Trainspotting, Irvine Welsh\u2019s 1993 novel about drug addiction and crime.<\/p>\n

The property is the home of a 36-year-old Lithuanian, Viktorija Zirnelyte. It is also home to hundreds of companies, some of which have recently been accused of involvement in a $1 billion Moldovan bank fraud.<\/p>\n

Of the 438 firms registered at the modest looking address, some are owned by offshore vehicles based in jurisdictions such as the Seychelles.<\/p>\n

Owing to a quirk of company law and Britain\u2019s laissez faire approach to regulation, Scottish limited partnerships, which date back to the Limited Partnerships Act of 1907, are still not required to disclose their annual accounts or even the names of the people who control them. Ownership and control can be masked and layered through the use of faceless \u201cgeneral partners\u201d and \u201climited partners\u201d, and these are often based in secrecy jurisdictions like the Marshall Islands, British Virgin Islands, Cayman Islands, Belize and the Seychelles.<\/p>\n

In addition to being favoured because of their tax efficiency by private equity, venture capital funds and commercial property investors, they have become a vehicle of choice for money launderers, tax evaders, fraudsters, and other forms of skulduggery. Companies legitimately offering no more than registration services and accommodation addresses can then be used as unwitting instruments in crime.<\/p>\n

\u201cMost [limited partnerships], like a drug dealer\u2019s pay-as-you-go mobile phone, almost certainly exist for one deal before they are discarded,\u201d said former tax inspector Richard Brooks.
\nIn a special report published in Private Eye he added: \u201cThose deals, however, can be extremely valuable to the perpetrators \u2013 while devastating their victims and sustaining corrupt regimes.\u201d
\nZirnelyte\u2019s modest flat is the address of two company formation firms, Royston Business Consultancy, which Zirnelyte runs, and Arran Business Services, directed by a succession of Latvian expatriates, including Anzelika Young, n\u00e9e Trifonova, who was sentenced to 250 hours community service for mortgage fraud in February 2012 at Kirkcaldy Sherriff Court.<\/p>\n

Royston Business Consultancy played a part in the formation of companies that were named by the security firm Kroll as having facilitated a massive Moldovan bank fraud which, last November, is said to have triggered the collapse of three Moldovan banks, and last month led to 20,000 people taking to the streets of the Moldovan capital Chisinau to protest against corruption (see sidebar).<\/p>\n

In a report commissioned by Moldova\u2019s central bank, and leaked last month, Kroll alleged that Fortuna United LP and Novland Limited, both registered at 18\/2 Royston Mains Street, were involved in this fraud.<\/p>\n

Companies House data shows that, since 2013, no fewer than eight other individuals, apparently Lithuanian, Latvian and Ukrainian nationals, have given Zirnelyte\u2019s flat as their residential address. Zirnelyte was unavailable for comment. Calls to Edinburgh numbers listed as her business number were answered by the Royston Wardieburn Community Centre, where Zirnelyte was unknown.
\nZirnelyte picked up her company formation skills at Leith-based company formation specialists Lawsons & Co, which is based in Duke Street, at the foot of Leith Walk, and run by the Cypriot-born businessman Marios Papantoniou.<\/p>\n

Lawsons provide the registered addresses for 561 limited companies and limited partnerships, several of which have been named as being under investigation overseas in connection with allegations of a $20bn \u201cRussian Laundromat\u201d money laundering conspiracy (the Organized Crime and Corruption Reporting Project won a special Europan Press Prize for its extensive coverage of this scandal). In November the UK National Crime Agency confirmed it was probing aspects of the \u2018laundromat\u2019.<\/p>\n

According to the Kroll report, Lawsons\u2019 premises, shared with Papantonioiu\u2019s accountancy firm Axiano, are also the registered addresses of half a dozen companies and limited partnerships allegedly involved in the $1bn Moldovan bank fraud.<\/p>\n

Papantoniou told the Sunday Herald that Lawsons is not responsible for the behaviour of firms registered at its addresses and that neither the National Crime Agency nor any other UK authority has been in touch with him. He said: \u201cSome of the companies we create are sold to an agent in Estonia, but we are not involved in the day-to-day activities of these companies or anything else they do.\u201d In a subsequent email, Papantoniou said the Kroll report was inaccurate and he is considering suing the New York headquartered firm for defamation.<\/p>\n

Other Scottish properties hosting companies allegedly involved in Moldovan fraud include a non-descript semi-detached council house, 45 Rosehaugh Road, in Inverness\u2019s deprived South Kessock district. This is home to a further 585 opaque limited partnerships, five of which, Kroll alleges, were used for the Moldovan heist. The Electoral Register says the residents of 45 Rosehaugh Road are David A MacMillan and Latvian-born Liene Brice, both in their thirties. They could not be contacted.<\/p>\n

Another address favoured by companies said to be linked to fraud is 78 Montgomery Street in Edinburgh\u2019s East End, home of John Hein, founder of Scotsgay magazine and a former candidate for the Liberal Party, and his partner James Stuart McMeekin. Both Hein and McMeekin are directors of a company formation business named Cosun Formations Ltd.<\/p>\n

Their address is the principal place of business of 3,500 limited partnerships. Of these, five are mentioned in the Kroll report as being involved in Moldovan fraud \u2013 Avenilla Commercial LP, Intratex Sales LP, Metalforum LP, Swedtron Alliance LP and Trademarket Networks LP. Hein failed to respond to requests for comment.<\/p>\n

Overall the Kroll report identifies 28 Scotland-based companies and 20 based elsewhere in the UK, many with Latvian bank accounts, in connection with its investigation into the Moldovan fraud. The underlying network of opaque corporate entities, sometimes known as \u201cshell\u201d companies, is believed to be vastly larger, numbering at least 11,000 companies in Scotland alone. And the Scotland-based company formation specialists identified by the Sunday Herald are churning out an additional 300 limited partnerships per month.<\/p>\n

Other Scottish addresses where entities in this wider network are registered, include 16\/5 West Pilton Rise, Edinburgh. It is the base of 424 companies and limited partnerships associated with Anzelika Young, a former director of the company agents Arran Business Services. None of these companies have been accused of connection to Moldovan fraud. Mrs Young was unavailable for comment.<\/p>\n

There is no suggestion that any of these company service providers knew they were creating or serving companies or partnerships that were being used in offshore fraud, or were especially useful for such purposes. And Kroll\u2019s allegations are at this stage no more than claims \u2013 they have not yet been tested in a court of law. Where it could, the Sunday Herald asked the formation companies to contact on its behalf the entities named by Kroll, but those who responded refused to discuss any matters relating to their clients.<\/p>\n

Critics suggest the government needs to take action to clean up the sector and prevent shell companies including limited partnerships from being used as conduits for the proceeds of crime and money laundering with tougher rules and greater levels of mandatory disclosure.<\/p>\n

Labour MSP Hugh Henry, shadow justice spokesman in the Scottish parliament, said he would be tabling parliamentary questions about abuse of LPs and LLPs, and will write to both the Lord Advocate and the chief constable early this week. He also said he would table a motion for a Holyrood debate.<\/p>\n

\u201cThe Kroll report is shocking and it\u2019s also very worrying, because, on the face of it, it looks like Scotland is becoming the money laundering capital of Europe. That is frankly unacceptable.\u201d
\n\u201cThe UK government needs to look at whether or not the rules on Limited Partnerships and Limited Liability Partnerships are fit for purpose. The second thing is the regulation of the company formation agents. The Scottish government should establish whether that\u2019s an entirely reserved matter or whether there are aspects of devolved powers that could be used to bring in regulation.
\n\u201cWhy in Scotland do you have this huge proliferation of company formation agents whose output is so disproportionate to that which exists in England? We regulate lawyers, we regulate accountants, we regulate estate agents and we regulate financial advisers, but company formation agents seem able to establish completely fictitious entities, some of which are being used for money laundering and to rip off impoverished countries.\u201d<\/p>\n

\u201cThe third thing, which is clearly a Scottish responsibility, is for Police Scotland and the Crown Office to investigate whether there is any criminal activity.\u201d<\/p>\n

A Scottish government spokesman said that the law on limited partnerships is a reserved matter and therefore not its responsibility. The UK government did tighten up disclosure requirements relating to UK company ownership in its Small Business, Enterprise and Employment Act 2015, following an agreement on beneficial ownership principles at the G8 Summit in Northern Ireland in June 2013. But the SBEE Act failed to force greater transparency on limited partnerships.<\/p>\n

An spokesman for the NCA said: \u201cThe NCA remains willing to consider any formal request for assistance from the Moldovan authorities in connection with their investigation, however our initial enquiries have revealed that only a tiny proportion of the funds entered the UK financial system and therefore the jurisdiction of the UK authorities.<\/p>\n

\u201cWe continue to work closely with Companies House on the introduction of a publicly accessible central registry of company beneficial ownership information. Greater transparency of company ownership and control will make it more difficult to conceal involvement and act as a deterrent to crime.\u201d<\/p>\n

Scotland and the bank heist of the century<\/strong><\/p>\n

The alleged theft of $1 billion, equivalent to one-eighth of Moldova\u2019s gross domestic product, from three Moldovan banks last November did not just bankrupt the banks concerned. It also nearly bankrupted the former Soviet republic\u2019s economy, and sparked unrest, with 20,000 people taking to the streets of the Moldovan capital, Chisinau, to protest against corruption.<\/p>\n

\u201cA big majority of Moldovans are very, very angry with this case,\u201d said Alina Radu, director of the Chisinau-based newspaper Ziarul de Garda. They are angry with the government for failing to prevent such crimes, she said, adding \u201cbut they\u2019re also angry [with Ilan Shor, a Moldovan businessman who was allegedly the lynchpin of the fraud] and his family as well.\u201d<\/p>\n

The National Bank of Moldova, the republic\u2019s central bank, is answerable to Moldova\u2019s parliament.<\/p>\n

In response to Moldovans\u2019 clamour for justice, the parliament\u2019s speaker, Andrian Candu, published an interim report into the fraud commissioned by NMB from corporate investigators Kroll on his website. Candu said the government had \u201ca responsibility to be transparent with our citizens.\u201d<\/p>\n

Kroll singled out 28-year-old Ilan Shor as the key perpetrator of the $1bn fraud. He was charged with corruption two days later and has since been under house arrest. He denies wrongdoing. In a statement he described the allegations against him as \u201cgroundless\u201d and said he will \u201csupport the authorities in finding out the truth\u201d about the banks\u2019 losses.<\/p>\n

Shor also owns a football club, TV stations, the country\u2019s main international airport, Chisinau International Airport, and has a Russian pop-star wife called Jasmine. He made his fortune selling duty-free goods at the airport.<\/p>\n

The Kroll report alleges Shor used a labyrinth of offshore firms to extract $1 billion from three Moldovan banks \u2013 Banca de Economii (where Shor is the chairman), Unibank, and Banca Sociala.
\nThe offshore firms, including the Scotland-based ones, are alleged to have gained control of the banks using subversive means and then, in a flurry of deals on 25 and 26 November last year, improperly borrowed $767 million without providing any collateral. Total losses are expected to reach $1 billion. It is claimed that records of many transactions were afterwards deleted from the banks\u2019 computers, with documents detailing loans issued by Banca de Economii loaded into a van that was reportedly stolen and destroyed in a fire a few hours later.<\/p>\n

According to the Kroll report, Pilton-registered Fortuna United LP became involved in mid November when the loan portfolio of Banca de Economii was abruptly moved, through a series of opaque transactions, to Banca Sociala. Banca Sociala then claimed to have held a shareholders\u2019 meeting in a remote Ukrainian town on 26 November and decided to transfer the collection rights on the loans to Fortuna United.<\/p>\n

Dorin Dragutanu, the governor of Moldova\u2019s central bank, said the shareholders\u2019 meeting in Ukraine and the deal with Fortuna were \u201ccompletely fake,\u201d noting that Fortuna United had supposedly agreed to pay full price for the loan portfolio, but not until 2019.<\/p>\n

The funds were afterwards filtered through a \u201ccomplex web of transactions,\u201d said Kroll\u2019s report, with much of the money ending up in Latvian bank accounts held by \u201capparently unconnected\u201d England and Scotland-based limited partnerships.<\/p>\n

Kroll\u2019s report (dubbed the \u201cProject Tenor Scoping Phase Final Report\u201d said that a full forensic investigation was needed to identify other potential beneficiaries and recover the funds, and the Moldovan government has promised to embark on a second probe along these lines.<\/p>\n

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