Tracking Dirty Transnational Trades
December 18th| CIJR and BIJC
A team of reporters connects the dots between investigations of high-value football transfers, the companies involved and the tax havens they use to shield themselves.
The lucrative world of football transfers gets shaken from time to time by law enforcement agencies, but they stop at national borders and so rarely see the full picture of sophisticated manipulations that enrich agents, brokers and their backers, but not players or fans.Now, a team of reporters from the Organized Crime and Corruption Reporting Project (OCCRP), has spent several months, starting with an investigation in Brazil, then combed through the records of more than 50 companies and investigations in Uruguay to Ireland, from the British Virgin Islands to Luxembourg, Romania, France and Bulgaria to get at the scope of dirty transfers.
“We were acting for a reputed financial institution.'' She said she did not know who are or were the beneficial owners of Liburd and Dahmer. “We fully relied upon Interconsult with which we have a good professional relationship.”They pieced together a maze of companies and off-shore havens, through which agents have moved large transfer payments while avoiding taxes and fees to football clubs. The team found shady financial deals behind the transfers of some of the top football names in the world.
Many of these cases involved power stakeholders as well as agents all duly licensed by football’s world governing body, FIFA (Federation Internationale Football Association), which repeatedly declined to comment on the discoveries.
A Brazilian story
Porto Alegre sits at the confluence of five rivers that form a delta and feed into Lake Guiaba. With a population of more than 4 million, it is Brazil’s 10th largest city and a major economic center.Police raids here in the early 2000s turned up documents that detailed what the government deemed suspicious football transfers1 between Brazilian and European clubs.
Police didn’t start out to investigative football. They were on a manhunt, looking for Emil Todorov Ivanov , a Bulgarian Interpol listed as wanted. In their search, police raided a few Bingo companies where the Bulgarian was an associate. In the headquarters of companies where Ivanov operated, they found commercial contracts, some using the fake Paraguayan name of Emilio Teodoro Gonzalez Rojas.
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Porto Alegre, Brasil
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Most of these documents were found in a downtown Porto Alegre office belonging to Bingo Cazes Emprendimentos e Participações Ltda. This company and Slon Euroamérica Comercial Ltda. were connected to Ivanov and to Juan Jose Mateo Walter, a football agent accredited by FIFA. The documents found showed that Ivanov, sometimes using his fake identity of Rojas was the representative of a company facilitating Brazilian football transfers, called Lodford Trading.
The story further unfolded when the Brazilian investigators found that another of the main character involved in these transfers, and in business with Ivanov and Mateo Walter, was Jose Maria Minguella, a world-famous football agent. In the 1990s he brought the most famous Bulgarian football player, Hristo Stoichkov, to FC Barcelona. With Stoichkov, Bulgaria took fourth place in at the 1994 World Cup in the United States and Barcelona took the European 1992 Champions Cup in Barcelona.
Another company used in conjunction with Lodford is Markroy Investments Limited based in Dublin, Ireland. The Brazilian investigators claimed that Markroy, which played a role in the transfer of the Brazilian player Christian Correa Dionisio, belongs to Minguella.
Markroy received more than $3 million US from this transfer and checks with the Irish registrar of companies show that Markroy director Michael Joseph Doyle provided dummy beneficiaries to those who wanted to hide their involvement in companies. Doyle was denied a fiduciary license by the Guernsey Financial Services Tribunal. The Tribunal’s action came after it had reviewed an appeal of a determination by the Guernsey Financial Services Commission, which indicated it did not think his application for a license was valid. It characterized Doyle as dishonest and his company as having inadequate safeguards against money laundering. Minguella and Walter have history together: both were sentenced to prison in 1996 for participating in a fraud against Iberia, the Spanish airline . They were aware that an employee of a travel agency was buying discounted plane tickets, at children’s prices, then charging full price and the two were benefitting from the fraud. The judge assessed a 40 million pesetas fine but reduced their sentences to six months served, acknowledging a material error in an earlier sentence of one year in prison. At the time, Minguella and Walter were already transferring Brazilian players to European clubs.
Jose Maria Minguella
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The Brazilian authorities thoroughly examined the documents seized in Porto Alegre and found that another important role in the suspicious transfers was played by Argentinian Carlos Marcelo Arguello. Arguello, through a Luxembourg-based company, European Sports Management , facilitated the transfer of Pavon from the local Porto Alegre football club, Internacional, to Benfica Lisbon. Arguello has FIFA accreditation as an agent.
Arguello, Walter, Minguella and Ivanov were, according to the Brazilians, suspects in a transnational money laundering and tax evasion ring because, they said, the amounts declared with the fiscal authorities in cases of football transfers were much smaller than the amounts mentioned in the seized documents. The Brazilians found that the missing money was sent to bank accounts in tax havens such as Andorra.
OCCRP reporters found the same group behind questionable football transfers in Romania, France and other European countries.
The Bulgarian Connection
OCCRP obtained show that in 1994, Ivanov set up Multigroup Paragruay SRL12 along with Mario Mihaylov Iordanov. Just a year earlier, Bulgarian authorities investigating Iordanov in connection with a criminal case ordered him not to leave the country. Those authorities say Iordanov’s whereabouts are unknown to them and his wife who is seeking a divorce is searching for him by putting notices in newspapers.Multigroup Paraguay is the Paraguayan branch of Multigrup, a powerful business group in Bulgaria that authorities and the Bulgarian media have connected with organized crime. The founder of the group, Ilia Pavlov , was shot in the heart in March 2003 .
Casket and priests at gravesite of Ilia Pavlov.
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Company records show that Minguella, Walter and Arguello are connected through a Bulgarian company called Lobet Developments . The company, involved in construction and real estate, is registered at 24B Dondukov Boulevard in Sofia, the capital of Bulgaria. Archived records of Lobet Developments indicate that, in the mid 1990s, the company was administered by Juan Jose Mateo Walter and the listed owner was Jose Maria Minguella. In December 1998, Minguella was replaced by the Luxembourg company, European Sports Management (ESM) and Walter was replaced by Arguello
Arguello and ESM are also mentioned in the 2001 Brazilian Senate papers as being involved in tax evasion in connection with the Brazilian transfers. Arguello also played a role in football transfers that are under investigation in Romania.
In December 2002, the owner of Lobet Developments changed again. ESM’s place was taken by another Luxembourg-based company, European Financial Control AG, with an address listed at 33 L-2520 Alee Scheffer. That is an address shared by another Arguello company, UCI S.A., United Consultants International. In UCI S.A., Arguello is the administrator and is associated with Andreas Fellman. Both UCI and Andreas Fellman, a German national, acted as administrators of European Financial Control.
At the same time, Bulgarian Elka Ivanova Aleksandrova, 64, joined Lobet. Business connections of Aleksandrova go back to IGM AG, one of the biggest companies involved in gambling in Bulgaria. Other partners in IGM were Ilia Pavlov, the Multigrup leader killed in 2003; Mladen Mihalev-Majo, owner of another controversial Bulgarian business group, SIK and of the Slavia football team and Vasil Bozhkov, the richest Bulgarian citizen and the owner of CSKA Sofia football team.
Both, Pavlov and Bozhkov have been ranked among the richest people in Eastern Europe in lists published between 2002 and 2007 by the Polish weekly, Wprost.
According to Bulgarian registry of companies, Vasil Bozhkov was involved, in 1995, with a company called Tanev, Sirakov & Co . Lachezar Tanev and Sirakov were Bulgarian national team football players. Another partner in this company was Stoyne Manolov another Bulgarian businessman heavily involved in gambling and in IGM. The structure of the company changed over time and, in 2003, the name changed to Management Agency Tanev. A new company entered the association: European Financial Control AG (EFG), the Luxembourg company that participates in Lobet Developments. EFG took the place of European Sports Management, in December 2002.
Tanev, another accredited FIFA agent, and Minguella are partners in yet another company, Gimera in Sofia. Tanev’s agency has been involved over the years in the transfers of some of the most successful Bulgarian football players.
Minguella and Bozhkov sat next to each other at a CSKA Sofia game in September 2003 as yet another signal of their connections.
Behind Romania’s Newly Rich
In the fall of 2008, a major Romanian financial publications, Capital, published a list of the richest Romanians. At the top of the list was George “Gigi” Becali, a colorful character who has owned the Steaua football club, a 1986 European champion. He leads a political party with leverage on the Romanian political scene and is involved in numerous scandals regarding illegal payments to football clubs to help eliminate Steaua’s rivals. Gigi Becali
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The same year the list of richest Romanians list was published, prosecutors were drawing up a list of football transfers involving Romanian clubs . At the top of their list in the investigation were brothers Victor and Ioan Becali, cousins of Gigi Becali and major Romanian football agents, suspected of money laundering.
Victor, Ioan and Gigi Becali were associated in a company called Melody Bar SRL and Victor Becali has said he will bring new football players to Steaua. In Melody, the Becalis were associated with Nicu Gheara, a Romanian businessman secret services has under surveillance for alleged organized crime. The Becali brothers stood trial along with a famous Romanian football player now turned agent, Gheorghe “Gica” Popescu. Popescu played for FC Barcelona and for Galatasaray Istanbul before going to work with the Becalis on transfers. FIFA failed to respond to questions about its licensing of these agents.
The Romanian indictment gives a clear picture of how a web of companies in the Netherlands and the British Virgin Islands provides confusion and cover for evading tax payment in many transfers.
Take the example of Dan Alexa, a Dinamo club player transferred to a football club in China. The prosecutors came across an e-mail from Carlos Marcelo Arguello, of European Sports Management, to Victor Becali. In that e-mail, Arguello points out to Becali that a company in the Netherlands, Pyralis Investments B.V.. owns 50 percent of Alexa’s playing rights. The Romanian prosecutors say that money due to Dinamo was illegaly diverted to Pyralis and to another company based in the British Virgin Islands.
The prosecutors identified a series of BVI and Dutch companies the Becali brothers and Gica Popescu have used. All the Dutch companies led to Johan Versluis who told prosecutors he was only following directions given by BVI companies, among which is Tierney International Limited. He told prosecutors he did not know who was behind the companies.
Although Minguella’s name is nowhere mentioned in the Romanian indictment, the OCCRP team found many connections between Minguella and the Romanian transfers under investigation. These connections show involvement by the same Minguella-Arguello-Walter group involved in the Brazilian transfers and in the Bulgarian businesses.
The main BVI company towards which money was diverted from Romanian transfers is Tierney International. This company, together with Carlos Marcelo Arguello, was involved in the Luxembourg-based European Sports Management (ESM).
Tierney International, together with Makin Limited, an Isle of Man based company, and Arguello entered ESM in 1996 and replaced three BVI companies: Crabbe Limited, Liburd Limited and Dahmer Limited . The last two are currently represented by a Luxembourg lawyer, Janine Biver. She is presented as a proxy, representing the beneficiaries of Dahmer and Liburd . She is a partner in the Luxembourg branch of Linklaters, a law firm with global operations. Both Liburd and Dahmer are owners of Symphony Credit Select 1 S.A. and Allegro Investment Corporation, both based in Luxembourg. They are special purpose vehicles which issue financial notes worth billions of Euros. In 2008, they issued 300 million Euros worth of notes.
Biver, in two answers to emailed requests for comment, acknowledged that she had appeared at the incorporation of Symphony, with Dahmer Limited and Liburd Limited as founders. She said, “We were acting for a reputed financial institution.’’ She said she did not know who are or were the beneficial owners of Liburd and Dahmer. “We fully relied upon Interconsult with which we have a good professional relationship,” she said. She suggested contacting Alexis Kamarowsky at Interconsult and provided his email address.
Kamarowsky is the managing director of both Symphony and Allegro. He is a former associate of Juan Jose Mateo Walter in the Luxembourg-based P.S.M.-Personal Sports Management . Walter is a long time associate of Minguella and a former associate of the fugitive Todorov in Brazil . Another director of Allegro, Federigo Cannizzaro di Belmontino, was also involved in ESM.
There are other connections from some members of that group to Romania. The Romanian registry of companies shows that Minguella has a company there called Promomarketinvest Development SRL. His associates are Spanish citizens and the main activity of the company is real estate investments. Company headquarters are in a posh Bucharest district, at 51 Primaverii Boulevard. In the same office are the headquarters of a few companies established by Gica Popescu, one of the football agents investigated and an associate of the Becali brothers. (SEE DOC). Popescu’s companies also deal with real estate. Popescu refused to answer OCCRP’s questions and told us to contact his lawyer. The lawyer asked for questions to be sent via e-mail but didn’t provide any answers either.
The Kiss of France
The connection between Romanian dirty transfers and the Minguella network stretches to an ongoing investigation in France. The French judges, Renaud Van Ruymbeke and Françoise Desset, are in charge of an investigation regarding the transfer of the Brazilian football player, Christian (Christian Correa Dionísio) from Paris Saint Germain (PSG) to Girondin Bordeaux. Christian was a football player in Porto Alegre, where Minguella, Walter, Arguello and Bulgarian fugitives were active in transfers.The French newspaper “L’Equipe” mentioned on March 29, 2007, that Christian’s transfer followed the Netherlands-British Virgin Islands route, the same one used in the questionable Romanian transfers. L’Equipe said that 5.8 million Euros were illegally diverted to a Minguella-controlled company in the Netherlands, Intermark BV. Intermark BV was used, according to the Romanian indictment, in many transfers involving the Becali brothers.
Only Pieces of the Puzzle
The French, Romanian and Brazilian investigations glue together pieces of the Minguella network but, apparently because law enforcement agencies investigate only within their borders, the Minguella network has been able to operate at a transnational level and seems to have moved its money from football transfers to real estate businesses. They have formed companies in tax havens such as the British Virgin Islands or Guernsey by using bank accounts in countries such as Luxembourg and Gibraltar to hide organized crime and corruption behind a veil of bank secrecy, enabling them to avoid taxes and fees. By Paul Radu and Stanimir Vaglenov
Source: CIJR and BIJC
