Sunday 25 September 2016

Panama Papers: How one small Dublin house is a link in chain of global web of corruption

Published 04/04/2016 | 02:30

A non-descript house in Dublin's Drumcondra is a surprising link in a global chain of businesses linked to the Panamanian law firm, Mossack Fonseca, at the centre of the leaked so-called 'Panama papers'. Photo: AP Photo/Arnulfo Franco
A non-descript house in Dublin's Drumcondra is a surprising link in a global chain of businesses linked to the Panamanian law firm, Mossack Fonseca, at the centre of the leaked so-called 'Panama papers'. Photo: AP Photo/Arnulfo Franco

A non-descript house in Dublin's Drumcondra is a surprising link in a global chain of businesses linked to the Panamanian law firm at the centre of the leaked so-called 'Panama papers'.

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The house is home to Pegasus Trust, an Irish firm that provides accountancy, international trust and corporate services. That largely involves helping owners set up and register companies, including drawing up incorporation documents and trust deeds.

Its services include tax registrations, setting up bank accounts and document notarisation.

Since 2013, the company also offers insolvency services.

According to the leaked Panama papers, which feature details of offshore companies used by individuals and companies to avoid taxes, almost one in three of the 360 Irish linked companies that feature in the leaks were represented by Pegasus Trust.

There is no suggestion of any wrongdoing by Pegasus Trust or its clients.

Pegasus, in a statement, said the companies featured in the Panama reports were historic clients and that no new clients had been taken on for more than a decade.

The Pegasus Trust itself is run by accountants Robert Becker, its managing director, and Hugh McGowan, who is also operations director. In addition, Paul McKenna is listed on the website as business and marking manager .

Pegasus Trust's website features a picture of Dublin's financial services hub in the docklands, but it address is listed as 30 Botanic Avenue, Dublin 9, an ordinary-looking house in the Dublin suburb of Drumcondra.

The company has been around since 1992. It was initially part of a global group, but became an independent operation following a management buyout in 2003, according to its website.

Despite the location, the business offers services across far-flung jurisdictions - from the Bahamas and Virgin Islands to China and the Seychelles, according to its own website.

"We specialise in providing a full management service for Irish resident companies seeking to establish Irish trading status for corporation tax purposes and/or access to Ireland's double-taxation treaty network.

"We are flexible in our approach and work with our clients in creating intelligent solutions together," the website says.

"The key to the success of any structure is managing the structure so that it complies with the requirements of the jurisdictions involved.

"This requires in most cases that there is a proper management structure in place to run the company.

"In some cases, this will involve the provision of Irish directors; in other cases, it may also be necessary to provide employees. Pegasus has managed several significant trading entities and has the expertise and personnel to fulfil the necessary requirements," it says.

According to the Companies Office, 124 companies have their addresses at the Botanic Avenue property, ranging from international holding companies to local roofers and medical businesses.

Q & A

What’s this about?

Probably the biggest leak of data ever. It’s a huge leak of confidential documents revealing how the rich and powerful use tax havens to hide their wealth.

How much data are we talking about?

No less than 11.5 million documents from 2.6 terabytes of data.

Where did it come from?

The internal database of the world’s most secretive companies, Panamanian law firm Mossack Fonseca, the world’s fourth biggest provider of offshore services.

What does that mean?

The company helps clients protect their wealth in secretive offshore tax regimes.

Panama: they make hats and canals there, don’t they?

Also, a well-known haven for offshore accounts.

What’s in the files?

The details of 214,000 companies incorporated by the firms.

What’s the time period?

The more than 11 million documents date from 1977 to December 2015.

What’s in the documents?

Cash transfers, incorporation dates, links between companies and individual.

And this shows what?

Basically a firm enabling people to play by different rules.

What do the documents illustrate?

How to help clients launder money, dodge sanctions and evade tax.

Is it hooky to use offshore accounts?

No, it’s perfectly legal and there are valid reasons for doing so.

And the law firm says?

It says it has operated beyond reproach for 40 years and has never been charged with criminal wrongdoing.

What is the cast of stars involved?

The leaked documents show links to 72 current or former heads of state, including dictators accused of looting their own countries.

Who are we talking about?

The families and associates of Egypt’s former president Hosni Mubarak, Libya’s former leader Muammar Gaddafi and Syria’s president Bashar al-Assad.

What’s the Russian connection?

There’s a suspected billion-dollar money laundering ring run by a Russian bank and involved close associates of President Vladimir Putin. This operation was run by Bank Rossiya, which is subject to US and EU sanctions following Russia’s annexation of Crimea.

How did it work?

Money was channelled through offshore companies, officially owned by one of the Russian president’s closest friends.

Putin has friends?

Sergei Roldugin, he’s a concert cellist who has known Putin since they were teenagers. He introduced him to his future wife, Lyudmila. He’s even the godfather to Putin’s daughter Maria.

How much are we talking about here?

On paper, Roldugin has personally made hundreds of millions of dollars in profits from suspicious deals.

And this is all going to him?

Documents from Roldugin’s companies state that: “The company is a corporate screen established principally to protect the identity and confidentiality of the ultimate beneficial owner of the company.”

Where’s Putin’s name then?

His name doesn’t appear but his close circle friends have earned millions from deals that couldn’t really have done without his backing.

How deep is Putin into it?

There’s a web of secret offshore deals and massive loans worth $2bn leading back to the door of his dacha.

Where does it go?

The trail starts in Panama, around Russia, Switzerland and Cyprus.

Anything else juicy?

In the mix is an investment is a private ski resort in Igora where Putin’s younger daughter, Katerina, got married in 2013.

Putin is quite a manly chap, does weights, rides bare chested, fights bears and so on. Does he ski too?

He’s a keen skier and he’s a big fan of this resort. When he attended its launch 10 years ago, he was filmed scooting along the snow. He came back five years later and left his bodyguards trailing in his wake as he slalomed down the mountains.

And there was a wedding?

Three years ago, he was back for the wedding of his daughter Katya. The groom was Kirill, the son of another old friend of Putin.

Did we see the photos in Hello! magazine?

Allegedly, the couple rode in old-fashioned sleigh drawn by three white horses. But there were no photographs as there was tight security and the 100 VIP guests sworn to secrecy with mobile phones banned.

What’s the Irish link?

There’s an Irish company in Drumcondra, on the northside of Dublin, which pops up as a client of Mossack Fonseca.

Is it well known?

Intertrade Projects Consultants Ltd, which is about as vague and boring a company name as you could expect.

But it’s probably got a salubrious headquarters in a multi-storey office block?

Not quite. Its address is in a residential area on Botanic Avenue.

Anything to see here?

It worked as a sales agent and conducted what are known as sub-agency agreements with offshore companies and it then shared commission on sales.

These structures have been controversial in the arms industry because of links to the possibility of being used for bribery.

Who did it work for?

Clients included an Italian firm, which is one of the world’s biggest aerospace and defence conglomerates, with deals involving military aircraft, torpedoes and electronic warfare equipment.

And there’s another Irish firm?

Again, based on Botanic Avenue, the Pegasus Trust, which offers offshore location services in places like the Bahamas, the British Virgin Islands and the Seychelles.

How much business?

Busy little bunnies out in Botanic Avenue. There are 360 different companies with links to Ireland in the leaked documents and a third of these are represented by Pegasus Trust. Pegasus told ‘The Irish Times’ these were historical clients and that no new clients had been taken on for more than a decade.

Sounds like a James Bond movie?

Except that Bond has never been seen on Botanic Avenue. Yet.

Irish Independent

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