financial-secrecy consultants - Their Role in Terror and Trafficking

What follows is an article about Ho financiual secrecy consultants equipped and facilitated Arms Transfers from North Korea to Iran.

It's time to cataloge and Assess these firms and their business clients.

Shimron Issachar

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SINCE THAI POLICE SEIZED A plane smuggling 35 tons of explosives and anti-aircraft missiles from North Korea to Iran on December 12, investigators around the world have tried to peel back many corporate and human layers to find the arms traffickers who flouted the United Nations ban against North Korean arms exports.

Whoever the arms smugglers were, they availed themselves of the same network of shell companies as was flagged by a Wachovia Bank anti-money-laundering officer in his 2008 whistleblower claim that the bank squelched his reports of suspicious financial activities ("Blowing the Whistle -- and Paying the Price," March 9, 2009).

The Wachovia wire transfers and the North Korean arms shipment were conducted under the names of corporations owned by VicAm (Auckland) Ltd., a New Zealand corporation provided by financial-secrecy consultants

GT Group, based in the South Pacific island of Vanuatu. VicAm has also appeared recently in sales by the state oil company of Azerbaijan and in a public-corruption scandal in Romania.

GT Group says it has no knowledge of what clients do with GT's nominee services. No authorities have charged GT Group or VicAm with wrongdoing.

The founder of GT Group is a resourceful 66-year-old named Geoffrey Taylor, who's spent decades promoting tax avoidance and financial secrecy from New Zealand and Vanuatu. Along the way, he's offered himself as a corporate director sporting the 800-year-old title of Lord of the Manor of Stubbington; obtained knighthood from an ersatz principality in the Australian outback, and gotten a Ph.D. from an online university of which he is president.

Sir Geoffrey's many Websites have hawked "Grand Ph.D.s" from "Standford University," passports from the Principality of Hutt River, dummy corporations for privacy-minded "politicians" and "spouses," and Vanuatu-based mutual funds that he claims were top-rated by Lipper. You can admire these feats at www.geoffreytaylor.net.

Sir Geoffrey seemed less eager for publicity when Barron's asked about the North Korean weapons. "Why are you chasing me?" he replied by e-mail. "I resigned from GT Group in 2004. I have no wish to talk to you about something I know nothing about." Taylor has disclaimed ownership of the GT Group and the Lord Stubbington Nominee Service, which he operated until passing the baton -- and the feudal title -- to his sons Michael and Ian.

But New Zealand records showed him as controlling shareholder of VicAm Ltd. right up through Sept. 8. That was a month and a half after Geoffrey's son Michael registered a New Zealand corporation called SP Trading as a wholly owned subsidiary of VicAm.

SP Trading became news on December 12, when intelligence agencies urged Thai police to inspect an Ilyushin-76 plane that stopped to refuel in Bangkok en route from Pyongyang to Tehran.

The airway bill described the cargo as "oilfield equipment" but inside the 147 cartons were explosives, rocket-propelled grenades and computerized missile launchers.

The flight crew of Kazakh and Byelorussian nationals professed ignorance of their cargo contents.
So did the GT Group, when documents revealed that the plane had been leased to SP Trading.

Contracts obtained by the anti-arms-trafficking nonprofits TransArms and IPIS showed that SP Trading had leased the Il-76 on November 5 and agreed on December 4 to fly the North Korean shipment at the behest of a Hong Kong-domiciled company.

After newspaper inquiries, GT Group issued a statement from Vanuatu saying that it had formed SP Trading at the request of a "professional client" in the U.K., and outfitted it with VicAm as nominee shareholder and a woman named Lu Zhang as nominee director. SP Trading said it knew nothing of the armaments.

Speaking for its employees, associates and corporations, the GT Group said none had knowledge of SP Trading's activities and "are in no way involved with the shipment of any items of any kind, at any location and by any means."

When Barron's asked Ian Taylor to identify SP Trading's beneficial owner -- or the U.K. client who'd ordered up the shell company -- Taylor said that information was confidential and would only be disclosed to New Zealand authorities upon their request.

GT Group isn't responsible for the activities of its customers, said Ian Taylor in his e-mailed reply. "GT Group and all its employees and management take great care to identify clients and prevent any illegal activity," he wrote. "GT Group Limited is a service provider and not a detective agency."

A spokeswoman for New Zealand's Ministry of Foreign Affairs said the agency is trying to verify "whether there's any substance to the allegations reported in the media." New Zealand has become a worrisome jurisdiction to international organizations that combat money-laundering and the financing of terrorism. An October 16 evaluation by the OECD's Financial Action Task Force praised New Zealand's passage of new anti-money-laundering statutes. But the FATF report said the nation's loose incorporation laws risk abuse.

The little nation's corporations have had wide reach. The GT Group's nominee- shareholder unit, VicAm Ltd., popped up as the winner of a recent million-barrel oil auction by the Azerbaijan government. It has won lucrative public-works contracts in Romania and created a stir when newspapers suggested that government officials were getting a piece of the action, which the officials denied.

Directors of GT Group shells are citizens of Vanuatu or the Seychelles Islands in the Indian Ocean. "Our owners and staff are all locals," says another Taylor Website. "We do not employ citizens of other countries who can be leaned upon when they return to their own countries." A Seychelles islander named Stella Port-Louis has hired on as director of hundreds of corporations -- even some domiciled in Wyoming, as U.S. Senator Carl Levin and then-Senator Barack

Obama noted two years ago in a statement that urged U.S. states to tighten up their own laws governing nominee shareholders.

Ms. Port-Louis turned up as director of a number of New Zealand corporations sponsored by GT Group, which caught the attention of Martin Woods, then a Wachovia U.K. compliance official. In June 2008 and March 2009, Woods sent whistle blowing memos to regulators about suspicious transactions featuring GT Group nominees.

He described how Wachovia had passed along some $40 million from the Latvian bank accounts of four New Zealand corporations, all with their named director being the Seychelles-based Stella Port-Louis and their shareholder being the GT Group's VicAm. Port-Louis did not respond to e-mailed queries. Woods eventually settled his employment suit with Wachovia, which offered no comment. None of the transactions has resulted in regulatory action.

"Perhaps a hardware store should not be allowed to sell bolt cutters," Ian Taylor joked in an e-mail.

-- Bill Alpert

The Rest @ Barrons Magazine, 1/4/2010

Viktor Bout' Arms Transport Caught in Tailand With North Korean Arms

12/17/09 10:53 AM EST BANGKOK — Thai authorities were acting on a tip from the United States when they seized tons of illicit weapons from a plane from North Korea, a senior official said Thursday.

The Ilyushin Il-76 transport plane was impounded Saturday in Bangkok during what officials said was a scheduled refueling stop. Thai authorities found a reported 35 tons of weaponry aboard it, all exported from North Korea in defiance of U.N. sanctions.

Speaking at a news conference, National Security Council chief Thawil Pliensri confirmed media reports that there had been U.S. assistance in the seizure, but gave no details.

He said that Thailand was waiting for advice from the United Nations on whether the weapons should be destroyed.

The U.N. sanctions — which ban North Korea from exporting any arms — were imposed in June after the reclusive communist regime conducted a nuclear test and test-fired missiles. They are aimed at derailing North Korea's nuclear weapons program, but also ban it from selling any conventional arms.

Thawil revealed little else new at his news conference, which seemed aimed at quashing some rumors. He denied that Thailand would receive a reward or bounty for the seizure, or that it was pressured to act, saying it took action "as a member of the world community."

He added, however, that Thailand would like to be compensated if possible by the U.N. for the cost of transporting the weapons, which were taken to an Air Force base in the nearby province of Nakhon Sawan.

It is still not known where the weapons — said to include

• explosives,
• rocket-propelled grenades
• components for surface-to-air missiles
• and other armaments — were to be delivered.

The plane's papers, which described its cargo as oil-drilling machinery, said the shipment was to be delivered to Sri Lanka.

Arms trade experts have speculated that the cargo may have been destined for conflict zones in Africa, Iran or Myanmar.

U.S. Treasury Department records show that the plane had previously been registered with firms controlled by suspected arms trafficker Russian Viktor Bout, who is currently being held in Thailand.

The U.S. is trying to extradite him on terrorism charges. On Wednesday, he denied any involvement with the plane, according to Russian news agency ITAR-Tass, accusing the media of trying to influence the decision in his extradition hearing.

The crew — four from Kazakhstan and one from Belarus — have been jailed on illegal arms possession charges.

The wife of Mikail Petukhov — the Belarussian identified in Thai court documents — said he had served in the Soviet military and afterward took whatever job he could find. Vera Petukhova said her husband never knows who he'll be working with before going out on a job. A friend of Petukhov, 54, added that he also never knows what he'll be transporting.

"All the containers are sealed, and the captain only gets the printout of what is supposed to be inside them. But what's inside, that's a question for the people who load it onto the plane at the pick-up point," said Vladimir Migol, who also served in the Soviet air force and noted that many ex-service men struggled to find work after being discharged. Migol said while crew members such as Petukhov would never knowingly transport weapons, they are all aware of the risk but are usually desperate for jobs.

The plane was registered to Air West, a cargo transport company in the former Soviet republic of Georgia.

Kazakhstan's Foreign Ministry said this week that the plane was leased to New Zealand company SP Trading Ltd.

Authorities in New Zealand are investigating, a spokesman for its Foreign Ministry, James Funnell said Thursday.

"We have always been staunch supporters of the sanctions regime imposed against North Korea," Funnell told The Associated Press. "So we're very concerned by these allegations and are inquiring into them."

SP Trading is listed in the government's register of companies as having offices in Auckland, New Zealand's largest city, which names Lu Zhang as its director. The company's shares are held by nominee company VICAM (Auckland) Ltd. Listed phone numbers rang unanswered on Thursday.

Impoverished North Korea is believed to earn hundreds of millions of dollars every year by selling missiles, missile parts and other weapons to countries such as Iran, Syria and Myanmar.

Associated Press writer Simon Shuster contributed to this report from Kiev, Ukraine.

(This version CORRECTS that ITAR-Tass report was from Wednesday, not Thursday.)


The Rest @ the AP

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