Connect with us

BUSINESS

How Roman Abramovich Used Shell Companies and Wall Street Ties to Invest in the

Using a network of banks, law firms and advisers in multiple countries, Roman Abramovich invested billions in American hedge funds.

Send any friend a story

As a subscriber, you have 10 gift articles to give each month. Anyone can read what you share.
Matthew Goldstein and

To hear more audio stories from publications like The New York Times, download Audm for iPhone or Android.

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.

Continue Reading

BUSINESS

Camara de Comercio Empresarial launches its first NFT-PUG BUSINESS collection

The Business Chamber of Commerce is an international association that was born in 2010, as a board of entrepreneurs and after more than 12 years of operations has developed different platforms to meet the needs of the market. One of its most recent projects is its first collection NFT-PUG DE NEGOCIOS.

These units of value are based on the Blockchain, which allows each collectible to be unique and limited, meaning that only a particular number of pieces exist, ensuring that it is a good investment for all holders should they wish to resell it to make a profit.

The Business Chamber of Commerce adds that purchasing the said PUG BUSINESS + collection will allow investors to get real experiences through their NFTS. Among the benefits you get as a holder is an access to the Investment Academy, access to PUG FEST (music festival with DJs), and access to PLATEIA NFT Beachfront Hotel in the 3-day and night package for the PUG DE NEGOCIOS + holder including a guest.

In addition, discounts are granted on purchases made in the companies of the Business Chamber of Commerce, and sponsors of the project, among other exclusive benefits.

Joseph Lynch, director of the Business Chamber of Commerce, points out that each collection has been designed to the highest quality standards. In this way, the variables in each design make each NFT unique, which increases its appeal to its owners. Criptopunk and Ape Yatch Club are some successful collections of this style that have been valued at hundreds of thousands of dollars due to their representativeness.  

To be part of this project you only have to visit their official web pages www.pugdenegocios.io and www.camaradecomercioempresarial.org and start living the NFT-PUG DE NEGOCIOS experience.

https://www.instagram.com/camaradecomercio.empresarial/

https://www.facebook.com/CamaraComercioEmpresarial

Continue Reading

BUSINESS

“The Millionaire Maker”

We have all been bombarded with ads promising the one secret to wealth beyond our wildest dreams.

Once again targeted through algorithms, personal information, and cookies that leave us vulnerable to scam artists and con men.

That’s what surprised me about Charles Schwartz. His clients refer to him as ‘The Millionaire Maker’. You see, Charles has never run a Facebook ad promoting what he does. For someone who has been retiring entrepreneurs for over 15 years, you’d be stunned to learn that he did not even have an Instagram account until 2020. When he joined social media, he gained 100k followers and did a 6-figure launch in a weekend.

In a saturated market, it is refreshing, all bit perplexing, that Charles avoids the limelight.  From time to time, he pops his head up to lecture at Ivy league schools like Yale, train our United States Coast Guard on human behavior, and speak at think tanks for Fortune 500 companies. If you can catch him, hold on tight.  He adores human behavior, systems, and leveraging something he coined ‘persona shifting’.  Speaking to his former clients, they shared how without his persona shifting, the seemingly endless income stream would never be possible.  Most of his past clients I spoke to, quickly acknowledged the generational wealth he creates, yet they all wanted to talk about something else.  Some spoke of how Charles saved their marriage, helped them reconnect with their kids, and others walked back from the brink of suicide.  It seems that there is more to this ‘Millionaire Maker’ than just the bottom line.

On this evening, he was speaking with a group of successful entrepreneurs on stage about scaling companies. Most were speaking the normal regurgitated sales pitch, but Charles wasn’t.  Instead, he started exploring the issues of those who raised their hands to ask questions.  He would speak about scaling, systems, branding cycles, and K.L.T. Most of us had never even heard of K.L.T. (Know, Like, and Trust) prior to this evening. His authenticity was infectious and his energy was relentless. There was something strange watching him speak on stage. As people spoke, he seemed to know what they were going to say before they said it. He could identify exactly what the hurdle was, and then gave them concrete steps on how to fix it—all in a matter of minutes from meeting them.  It ‘broke some domes’ as he likes to put it.  One audience member was having a hard time understanding, so Charles asked if he minded coming up and trying something.  

It is difficult to explain what happened next. Charles started identifying which ‘version’ of this audience member was showing up. He explained that we all have versions of ourselves; from the one who does not think they are enough, to the unstoppable force. He explained that if we give all the resources to the first version, nothing gets accomplished. But, if we can master being the ‘ideal’ version, everything becomes easy. 

He then spent no more than three minutes on stage with the audience member, and POOF!  Clarity, direction, and a step-by-step plan came flying out of this audience member’s mouth.  It was like Charles had unlocked this super power that was within him. I looked to my right, and the lady next to me was feverishly journaling while repeating, “it all makes sense now.”    Charles went on to pivot people and break down plans to scale their companies within minutes.  People he had never spoken to before, and industries he had no experience in. 

He kept saying, “Humans are predictable, leverage that. When you unlock their truth, you can scale anything.” 

To my surprise Charles is a Wall Street Journal Best Selling Author, but what he did next made my jaw drop. An audience member asked where he could pick up a copy of the book.  Charles quickly responded, “Please don’t buy it, that is what Instagram is for.  Send me a direct message and my team will send you a digital copy.” 

So, we all whipped out our phones, and sent his account (iamCharlesSchwartz) a DM saying FREEBOOK. 

Within 24 hours, there it was, but something was off. There was no upsell. No ‘pay for shipping’, no attempt to purchase anything.  Just a wall of authenticity and a free digital copy of the book.

For the rest of the evening, we mingled and I watched another strange phenomenon.  People walked up to Charles, talk for a few minutes, and then quickly either sat down to take notes, or called their business partners explaining how everything just changed.  On my way to talk to Charles, I passed a group of guys he had just spoke to, saying to each other, “Dude! This is going to make millions.” Yet you would never know it by looking at Charles.  Casual clothes, scruff, and always holding a water bottle.  He was as quick to share a hug as he was to share advice.   I won’t tell you what we spoke about, but what I will say is I am pretty sure, ‘the Millionaire Maker’ has struck again. 

Continue Reading

BUSINESS

Company news: Boys & Girls Club of Syracuse announces new members of executive team – syracuse.com

The Boys & Girls Clubs of Syracuse has made organizational changes, adding four women to its executive team.

Jenni Gratien was named its new executive director. Gratien’s appointment makes her the first woman to have this position at the organization. She previously worked at Chadwick Residence where she worked for almost 12 years and served as the executive director for the last six.

>> Send us your company’s news about People in Motion

Note to readers: if you purchase something through one of our affiliate links we may earn a commission.

Registration on or use of this site constitutes acceptance of our User Agreement, Privacy Policy and Cookie Statement, and Your California Privacy Rights (User Agreement updated 1/1/21. Privacy Policy and Cookie Statement updated 5/1/2021).

The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Advance Local.

Community Rules apply to all content you upload or otherwise submit to this site.

Continue Reading

Trending

Copyright © 2017 Zox News Theme. Theme by MVP Themes, powered by WordPress.