Using a network of banks, law firms and advisers in multiple countries, Roman Abramovich invested billions in American hedge funds.
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In July 2012, a shell company registered in the British Virgin Islands wired $20 million to an investment vehicle in the Cayman Islands that was controlled by a large American hedge fund firm.
The wire transfer was the culmination of months of work by a small army of handlers and enablers in the United States, Europe and the Caribbean. It was a stealth operation intended, at least in part, to mask the source of the funds: Roman Abramovich.
For two decades, the Russian oligarch has relied on this circuitous investment strategy — deploying a string of shell companies, routing money through a small Austrian bank and tapping the connections of leading Wall Street firms — to quietly place billions of dollars with prominent U.S. hedge funds and private equity firms, according to people with knowledge of the transactions.
The key was that every lawyer, corporate director, hedge fund manager and investment adviser involved in the process could honestly say he or she wasn’t working directly for Mr. Abramovich. In some cases, participants weren’t even aware of whose money they were helping to manage.
Wealthy foreign investors like Mr. Abramovich have long been able to move money into American funds using such secretive, roundabout setups, taking advantage of a lightly regulated investment industry and Wall Street’s willingness to ask few questions about the origins of the money.
Now, as the United States and other countries impose sanctions on those close to President Vladimir V. Putin of Russia, hunting down these fortunes could pose significant challenges.
Last week, the Internal Revenue Service asked Congress for more resources as it helps to oversee the Biden administration’s sanctions program along with a new Justice Department kleptocracy task force. And on Capitol Hill, lawmakers are pushing a bill, known as the Enablers Act, that would require investment advisers to identify and more carefully vet their customers.
Mr. Abramovich has an estimated fortune of $13 billion, derived in large part from his well-timed purchase of an oil company owned by the Russian government that he sold back to the state at a massive profit. This month, European and Canadian authorities imposed sanctions on him and froze his assets, which include the famed Chelsea Football Club in London. The United States has not placed sanctions on him.
Mr. Abramovich’s assets in the United States include many millions of dollars of real estate, such as a pair of luxury residences near Aspen, Colo. But he also invested large sums of money with financial institutions. His ties to Mr. Putin and the source of his wealth have long made him a controversial figure.
Many of Mr. Abramovich’s U.S. investments were facilitated by a small firm, Concord Management, which is led by Michael Matlin, according to people with knowledge of the transactions who were not authorized to speak publicly.
Mr. Matlin declined to comment beyond issuing a statement that described Concord as “a consulting firm that provides independent third-party research, due diligence and monitoring of investments.”
A spokeswoman for Mr. Abramovich didn’t respond to emails and text messages requesting comment.
Concord, founded in 1999, didn’t directly manage any of Mr. Abramovich’s money. It acted more like an investment adviser and due diligence firm, making recommendations to the directors of shell companies in Caribbean tax havens about potential investments in marquee American investment firms, according to people briefed on the matter.
Big Wall Street banks like Credit Suisse, Goldman Sachs and Morgan Stanley often introduced Concord executives to hedge funds, according to people with knowledge of those meetings.
Over the years, Concord arranged more than 100 investments in different hedge funds and private equity firms, mostly for Mr. Abramovich, according to an internal document prepared by one Wall Street firm. They included funds managed by Millennium Management, BlackRock, Sarissa Capital Management, Carlyle Group, D.E. Shaw and Bear Stearns, according to people briefed on the matter and the document.
Concord kept a low profile. It didn’t have a website. It is not registered with U.S. regulators. One of the few times it surfaced in public was in 2020, when Concord applied for and received a Paycheck Protection Program loan worth $265,000 during the pandemic. (Concord repaid the loan, a spokesman said.)
Concord’s secrecy made some on Wall Street wary.
In 2015 and 2016, investigators at State Street, a financial services firm, filed “suspicious activity reports” alerting the U.S. government to transactions that Concord arranged involving some of Mr. Abramovich’s Caribbean shell companies, BuzzFeed News reported. State Street declined to comment.
American financial institutions are required to file such reports to help the U.S. government combat money laundering and other financial crimes, though the reports are not themselves evidence of any wrongdoing having been committed.
But for the most part, American financiers had no inkling about — or interest in discovering — the source of the money that Concord was directing. As long as routine background checks didn’t turn up red flags, it was fine.
Paulson & Company, the hedge fund run by John Paulson, received investments from a company that Concord represented, according to a person with knowledge of the investment. Mr. Paulson said in an email that he had “no knowledge” of Concord’s investors.
Concord also steered tens of millions of dollars from two shell companies to Highland Capital, a Texas hedge fund. Highland hired a unit of JPMorgan Chase, the nation’s largest bank, to ensure that the companies were legitimate and that the investments complied with anti-money-laundering rules, according to federal court records in an unrelated bankruptcy case.
JPMorgan cleared the investment. Highland never learned the ultimate source of the money, the court records show.
Big hedge funds might have accepted the money even if they realized it belonged to Mr. Abramovich. At the time, the oligarch wasn’t under sanctions.
The manner in which one hedge fund received Mr. Abramovich’s money in the summer of 2012 shows the challenges facing U.S. and European authorities who hope to track down the assets of him and other oligarchs.
The manager of the fund, which oversaw billions of dollars but wasn’t a big name on Wall Street, provided a detailed accounting of his involvement on the condition that neither he nor his firm be named.
In 2012, a New York-based wealth manager at Credit Suisse, Gerald McGinley, contacted the fund manager on behalf of what he said was a wealthy family. Mr. McGinley said Concord was representing the family and was interested in investing tens of millions of dollars with the hedge fund.
The fund manager said Credit Suisse had told him that in order to receive the investment, he would have to set up a special financial vehicle in an offshore jurisdiction, so that the investment wouldn’t incur U.S. taxes. The hedge fund would receive a small percentage of the total investment as a fee, and Credit Suisse would get 20 percent of that fee.
Accompanied by one of Mr. McGinley’s colleagues at Credit Suisse, the fund manager traveled to Concord’s offices in a drab building in the New York City suburb of Tarrytown. Thick metal doors hid its offices from other occupants of the building. Inside, the walls were devoid of artwork or decorations.
Rising concerns. Russia’s invasion on Ukraine has had a ripple effect across the globe, adding to the stock market’s woes. The conflict has already caused dizzying spikes in energy prices and is causing Europe to raise its military spending.
The cost of energy. Oil prices already were the highest since 2014, and they have continued to rise since the invasion. Russia is the third-largest producer of oil, so more price increases are inevitable.
Gas supplies. Europe gets nearly 40 percent of its natural gas from Russia, and it is likely to be walloped with higher heating bills. Natural gas reserves are running low, and European leaders worry that Moscow could cut flows in response to the region’s support of Ukraine.
Food prices. Russia is the world’s largest supplier of wheat; together, it and Ukraine account for nearly a quarter of total global exports. Countries like Egypt, which relies heavily on Russian wheat imports, are already looking for alternative suppliers.
Shortages of essential metals. The price of palladium, used in automotive exhaust systems and mobile phones, has been soaring amid fears that Russia, the world’s largest exporter of the metal, could be cut off from global markets. The price of nickel, another key Russian export, has also been rising.
Financial turmoil. Global banks are bracing for the effects of sanctions intended to restrict Russia’s access to foreign capital and limit its ability to process payments in dollars, euros and other currencies crucial for trade. Banks are also on alert for retaliatory cyberattacks by Russia.
The fund manager didn’t know who Concord’s client was, and he didn’t ask.
Mr. McGinley, who now works at the Swiss bank UBS, didn’t respond to questions about his work with Concord. A Credit Suisse spokeswoman declined to comment.
After initially meeting with the fund manager, Concord executives referred him to HighWater, a firm based in Grand Cayman that specialized in providing “corporate governance services” to investment managers.
For $15,000 a year, plus other fees, HighWater would provide an employee to sit on the board of the financial vehicle that the fund manager was expected to launch to accept the wealthy family’s money, according to emails between the fund manager and a HighWater executive reviewed by The New York Times.
The fund manager also brought on Boris Onefater, who ran a small U.S. consulting firm, Constellation, as another board member. Mr. Onefater said in an interview that he couldn’t remember whose money the Cayman vehicle was managing. “You’re asking for ancient history,” he said. “I don’t recall Mr. Abramovich’s name coming up.”
The fund manager hired Mourant, an offshore law firm, to get the paperwork for the Cayman vehicle in order. The managing partner of Mourant did not respond to requests for comment.
He also hired GlobeOp Financial Services, which provides administration services to hedge funds, to ensure that the Cayman entity was complying with anti-money-laundering laws and wasn’t doing business with anyone who had been placed under U.S. government sanctions, according to a copy of the contract.
“We abide by all laws in all jurisdictions in which we do business,” said Emma Lowrey, a spokeswoman for SS&C Technologies, a financial technology company based in Windsor, Conn., that now owns GlobeOp.
John Lewis, a HighWater executive, said in an email to The Times that his firm received four referrals from Concord from 2011 to 2014 and hadn’t dealt with the firm since then.
“We were aware of no links to Russian money or Roman Abramovich,” Mr. Lewis said. He added that GlobeOp “did not identify anything unusual, high risk, or that there were any politically exposed persons with respect to any investors.”
The Cayman fund opened for business in July 2012 when $20 million arrived by wire transfer. The expectation was that tens of millions more would follow, although additional funds never showed up. The Cayman fund was run as an independent entity, using the same investment strategy — buying and selling exchange-traded funds — employed by the fund manager’s main U.S. hedge fund.
The $20 million was wired from an entity called Caythorpe Holdings, which was registered in the British Virgin Islands.
Documents accompanying the wire transfer showed that the money originated with Kathrein Privatbank in Vienna. It arrived in Grand Cayman after passing through another Austrian bank, Raiffeisen, and then JPMorgan. (JPMorgan was serving as a correspondent bank, essentially acting as an intermediary for banks with smaller international networks.)
A spokesman for Kathrein declined to comment. A spokeswoman for JPMorgan declined to comment. Representatives for Raiffeisen did not respond to requests for comment.
The fund manager noticed that some of the documentation was signed by a lawyer named Natalia Bychenkova. The Russian-sounding name led him to conclude that he was probably managing money for a Russian oligarch. But the fund manager wasn’t bothered, since GlobeOp had verified that Caythorpe was compliant with know-your-customer and anti-money-laundering rules and laws.
He didn’t know who controlled Caythorpe, and he didn’t ask.
In early 2014, after Russia invaded the Ukrainian region of Crimea, markets tanked. The fund manager made a bearish bet on the direction of the stock market, and his fund got crushed when stocks rallied.
Javier Morodo: Shaping the Future
Javier Martinez Morodo has successfully democratized investments in Mexico and Latin America through his vision of creating accessible products and services through digital means. In 2009, he founded GBM, which became one of Mexico’s largest investment companies. 10 years later, GBM was valued at over $1 billion and attracted capital from SoftBank, one of the world’s largest technology investors. During his tenure as CEO of GBM Asset Management and later as Chief Strategy Officer, Javier grew the company’s customer base from 10,000 to over 2 million and achieved a market share of over 90%, making GBM a leader in the investment industry in Mexico.
In 2021, Javier joined the team at Bitso with the goal of democratizing financial services throughout Latin America, taking on the role of Chief Strategy Officer. Under his leadership, Bitso expanded operations to Brazil and Colombia and grew its user base from 1 to 5 million in just one year, raising a round of capitalization of over $2.2 billion.
Aside from his corporate accomplishments, Javier is also an avid investor and fintech sector consultant, demonstrated by his creation of the GOAT Capital fund in 2017. He has participated in multiple flagship investment funds in the region, serving as advisor and consultant for a couple of them, including Lvna Capital.
Starting in 2023, Javier is embarking on a new professional project with the goal of guiding people to the wealth revolution. This revolution consists of a series of investment funds and specialized programs designed to help people grow their wealth. The purpose behind this is to empower people to make the world a better place through financial freedom, justice, and equity. Through multiple projects, Javier has multiplied his investment vehicles several times, generating exceptional returns. Now, he wants to help people do the same with the knowledge and experience he has gained throughout his successful career.
Javier is a visionary in the financial and investment industry, and his new project, “The Wealth Revolution,” is poised to change the game for individuals and families looking to grow their wealth. Through specialized investment funds and programs, this project will provide the tools and resources needed to achieve financial freedom, justice, and equality. With his extensive experience in the fintech sector and his successful track record of multiplying investment vehicles, Javier is uniquely qualified to guide individuals on their journey towards wealth.
It is clear that Javier is dedicated to using his skills and knowledge to make a positive impact on the world. Whether through his work at GBM, Bitso, or his various investments, he has shown time and time again that he is a leader in the industry and a champion for financial literacy and access.
In conclusion, The Wealth Revolution represents a new era of financial opportunity, and it is sure to leave a lasting impact on the industry. With Javier Martinez Morodo at the helm, individuals and families are in good hands as they take control of their financial future and build the wealth they deserve.
Success in the Film and Production World: How Actor and Director Hadi Brayteh is Disrupting the Industry with Motion Pro
The film and production industry has undergone numerous transformations over the years, leading to its growth and expansion into different fields. In recent times, technology and the internet have become the backbone of this industry, providing opportunities to showcase one’s talent and reach the right audience.
Hadi Brayteh, a Lebanese-Italian actor, director and founder of Motion Pro, is a testimony to the growth of this industry. With a background in fine arts and a master’s degree in the same field, Hadi has combined his passions and skills to create a thriving film production house.
Motion Pro, based in Lebanon and Italy, provides end-to-end production services for various projects including films, series, music videos, TV commercials, events, corporate videos, and documentaries. The company has received recognition and awards for its top-quality and cost-effective services, having collaborated with well-known brands such as Adidas, Arabica TV, Arab Idol, and UNICEF.
Aside from film production, Hadi is also interested in drone use, theatre life, documentary-making, and acting and modeling. He has over 10 years of experience in the industry and is passionate about mentoring the younger generation to help them achieve their goals.
Recently, Hadi has also shown interest in the financial markets, particularly in cryptocurrencies, as a means to achieve financial freedom. He believes that the financial markets offer a fast way to reach wealth and that knowledge is crucial in avoiding losses. He is open to helping and guiding anyone who is interested in this world.
In conclusion, Hadi Brayteh is a versatile and dynamic individual who combines creativity, adventure, and business acumen. He continues to strive for excellence in his field and is open to mentoring others. To learn more about him and Motion Pro, visit linktr.ee/HadiBrayteh and motionpro.me.
The Rise of ‘The Culture Creator’: Todd Speciale’s Journey to the Top of the Sales and Leadership Training Industry
Todd Speciale, a renowned sales and leadership trainer, has had a unique journey to success. Born in upstate New York, Speciale moved to Missouri for a few years before settling in Florida in 1998. Despite his humble beginnings, Speciale has always been driven by his love for his family and a desire to make his father proud.
Speciale’s journey began at the age of 15, when he began knocking on doors selling vacuum sweepers to make money. However, it wasn’t until he stumbled upon a pool hall at the age of 16 that his life truly changed. Intrigued by the gambling and negotiation tactics he witnessed, Speciale began to watch players for hours on end. Eventually, he picked up a pool stick and began to play himself, going on to win multiple tournaments and making a name for himself in the streets.
As his reputation grew, Speciale began to branch out into other games such as cribbage, tonk, pinochle, and gin to continue earning money. Gambling became a lifestyle for Speciale, and he eventually became the youngest district sales manager for a large jewelry organization in Florida.
In 2003, Speciale saw an opportunity in the poker craze and began running games out of his home. This led to him renting out penthouses for games and eventually quitting his retail job to focus on poker full-time. However, after being robbed three times at gunpoint, Speciale decided to leave the street life behind and go legit. He got his real estate license and entered the world of timeshare sales.
Today, Speciale is one of the top sales and leadership trainers in the world, running his own consulting firm, Make Sales Great Again. He has spoken on stage with notable figures such as Ashton Kutcher, Jack Canfield, and Les Brown, and is a 2x best-selling author with his third book set to release worldwide in 2023.
Speciale’s mission is to teach people to sell and lead the right way, emphasizing the importance of culture in success. He is also a philanthropist and Christian, and continues to change lives through his voice and teachings. You can follow him on social media platforms such as Instagram, Facebook, LinkedIn, TikTok, Clubhouse, Twitter, and check out his websites www.msgaconsulting.com, www.toddspeciale.com, www.gutcheckuncut.com.
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