On April 24 2015, the New York branch of Barclays bank filed a report to the US Treasury describing suspicious transactions in the accounts of one of its clients. The accounts in question, in Dubai and Cyprus, were held in the name of Paramount Logistics Corp (PLC), part of the private defence and aerospace group Paramount, controlled by controversial South African-born arms trader Ivor Ichikowitz.<\/p>\n
It would be the first in a string of reports Barclays produced on its client around questionable wire transfers.<\/p>\n
The Barclays reports are a fraction of a much larger trove of secret financial records obtained by BuzzFeed News and shared with the International Consortium of Investigative Journalists<\/a><\/em> (ICIJ), a nonprofit news outlet and global network of investigative reporters of which amaBhungane is a partner.<\/p>\n The leaked documents, known as the FinCEN Files<\/a>, include more than 2 100 suspicious activity reports (SARs), produced by banks and other financial entities and submitted to the US Treasury\u2019s Financial Crimes Enforcement Network (FinCEN) under anti-money-laundering provisions.<\/p>\n SARs form part of global banking compliance requirements; they are routine measures to help detect potentially illicit financial transactions. The information they contain is not necessarily evidence of wrongdoing and must be treated with caution. In essence, SARs amount to untested allegations, akin to confidential informant tipoffs, albeit based on banks\u2019 privileged access to their clients\u2019 transactions.<\/p>\n According to explanatory narratives attached to its SARs, which set out the motivation for Barclays\u2019 apparent suspicions, the bank filed the April 2015 report \u201cdue to USD wire transfers involving Paramount \u2026 and its chief executive officer and beneficial owner, Ivor Ichikowitz\u201d.<\/p>\n The narratives say these transfers \u201cappeared to be suspicious\u201d due to concerns that \u201cIchikowitz may have been involved in a potential bribery and foreign corruption scheme involving South Africa\u2019s president, Jacob Zuma\u201d; because Zuma was \u201cidentified in numerous negative news articles [as] previously being indicted on money laundering and corruption charges\u201d; and because South Africa was \u201ca high-risk geography for bribery and corruption\u201d.<\/p>\n Details of the 2015 transactions that prompted Barclays\u2019 initial report are not known, as they were not included in the leaked FinCEN material. But in September 2016, the bank widened its monitoring to include all of Ichikowitz\u2019s outgoing wire transfers citing “concerns about his source of wealth”, and undertook a review of all past wire activity for Paramount.<\/p>\n Ichikowitz\u2019s association with Zuma and the ANC was nothing new. News reports had previously revealed Zuma had flown on Ichikowitz\u2019s private jet free of charge, including to Lebanon and Kazakhstan for ANC \u201cfundraising and business meetings\u201d.<\/p>\n Zuma and several senior ministers flew the same luxury jet to New York for the 69th UN General Assembly in 2014 at a cost to the taxpayer of R3-million to R6-million, by one expert\u2019s estimate.<\/p>\n It was also known that Ichikowitz had partnered with \u201cOilgate kingpin\u201d Sandi Majali, who ran an alleged ANC front company involved in the oil-for-food programme with Iraq.<\/p>\n Ichikowitz told reporters at the time that there was nothing improper in his support for the ANC: \u201cThis was never conditional. Majali was part of the fundraising structures for the ANC and I was helping out. I never hid it.\u201d<\/p>\n In a response to detailed questions, UK lawyers representing Ichikowitz told amaBhungane he was not prepared to comment on “any allegation relating to confidential information that has been unlawfully obtained by the ICIJ\u2026<\/p>\n \u201cHe notes only that the Paramount Group of companies act in accordance with the laws of their residence and international law, and so too does our client.\u201d<\/p>\n In response to questions from the ICIJ, Barclays said in a two-page letter that it could not legally comment on particular SARs, their contents, or the individuals and businesses named in them.<\/p>\n The ICIJ documents show the bank continued filing reports on Paramount and Ichikowitz, over time broadening its reporting to include new individuals and entities in the web of Paramount-linked transfers.<\/p>\n Barclays also commissioned a \u201cpolitically exposed person\u201d review that included an April 2017 \u201cenhanced due diligence level III\u201d (EDD3) report by London-based private intelligence firm Orbis Business Intelligence.<\/p>\n Orbis\u2019s co-founder, former MI6 operative Christopher Steele, authored the famous dossier containing explosive allegations of co-operation between Donald Trump\u2019s campaign and the Russian government during the 2016 US presidential elections.<\/p>\n An EDD3 probes the background of an individual or company, typically through an in-country \u201cboots on the ground\u201d investigation rather than just desktop research.<\/p>\n The SAR narrative contains a claim by Orbis that it interviewed a source who \u201cacknowledged that Ichikowitz benefits from his donations to the ANC by being awarded major contracts\u201d.<\/p>\n \u201cThe EDD3 confirmed that Zuma and Ichikowitz have a close relationship and the report states that Zuma \u2026 [has] been flying on Ichikowitz\u2019s aircraft. The report alleged that this relationship is due to the role that Zuma holds (eg, the president of South Africa), rather than due to a friendship.\u201d<\/p>\n The SAR does not cite any evidence for these claims, but notes news reports that Ichikowitz had previously provided Zuma with an aircraft, free of charge, for ANC meetings in Lebanon and Kazakhstan.<\/p>\n Questions sent to Zuma, via his lawyer Eric Mabuza, and to ANC spokesperson Pule Mabe went unanswered, despite attempts to follow up.<\/p>\n The Orbis report written for Barclays seems to draw particular attention to Paramount contracts in Malawi \u2014 something amaBhungane previously reported on<\/a>.<\/p>\n Under then president Joyce Banda, Paramount secured a $145-million (almost R2.5-billion now) contract to supply patrol boats destined to operate on Lake Malawi, as well as other military equipment.<\/p>\n After a change of government, the deal was cancelled amid allegations that it flouted procurement processes and was prohibitively expensive.<\/p>\n According to the SARs, the Orbis report \u201cstrengthened\u201d suspicions of corruption by revealing new links to the now infamous public relations firm Bell Pottinger, \u201cwhich was allegedly introduced to Banda by Ichikowitz in order to assist Joyce Banda to improve her public profile\u201d.<\/p>\n The Telegraph previously reported that Ichikowitz\u2019s family foundation had paid the PR firm to help airbrush Banda\u2019s image. It quoted his brother Eric as saying: \u201cThe family foundation believes that President Banda is a force for good in Malawi and that she is striving to improve the lives of all Malawians.\u201d<\/p>\n He added that there was \u201cabsolutely no connection between contracts undertaken by [the] Paramount Group and its companies and any charitable work undertaken by the Ichikowitz Family Foundation\u201d.<\/p>\n The SARs, however, appear to contradict that claim, reporting payments to Bell Pottinger around that time coming from the company, not the foundation.<\/p>\n \u201cA review of Paramount\u2019s accounts at the time identified regular non-USD wire payments from Paramount to [Bell Pottinger] in or around and between January 2012 and December 2013, totalling approximately twenty-nine (29) payments aggregating to 500\u00a0000 Euro (approximately $585 245.00).\u201d<\/p>\n But the SARs are inconclusive, noting that while invoice numbers were cited on the payments, \u201cwithout reverting to the client, it was deemed impossible to opine on whether these related to the group\u2019s own activities with [Bell Pottinger] or funding for Joyce Banda per these allegations.\u201d<\/p>\n The FinCEN Files are a window into the architecture of complex financial arrangements and murky tax havens churning with money from questionable sources \u2014 a system that allows global elites to conceal wealth and wash dirty money.<\/p>\n Similar architecture was evident when amaBhungane began investigating Ichikowitz\u2019s web of offshore companies and sprawling business interests, which in addition to arms includes mining, toys and teddy bears, and consumer electronics through his family\u2019s interest in the Core Group \u2014 the sole distributor of Apple products in South Africa.<\/p>\n Cyprus company PLC sits at the heart of Ichikowitz\u2019s international business empire.<\/p>\n The company features in a separate and ongoing amaBhungane investigation<\/a> into the collapse of Paramount\u2019s South African armoured vehicle business. (See a new story on that topic next week Thursday at amaBhungane.org<\/a>.)<\/p>\n At issue in that case are claims, stoutly denied by Paramount, that profits were hoarded offshore to the detriment of the South African operating company.<\/p>\n PLC is a hub through which many of Ichikowitz\u2019s international transactions flow and, as our other reporting shows, it is the contracting party on many of the group\u2019s defence deals.<\/p>\n It also features prominently in the FinCEN Files.<\/p>\n According to documents from the trove, Barclays bank had by January 2017 noted that \u201cone thousand four hundred eighty-four (1 484) wires aggregating to $293 394,991.98 will be reported for Paramount\u201d.<\/p>\n Subsequent reporting pushed up that figure.<\/p>\n All told, Barclays facilitated $500-million (about R8.5-billion now) in transactions across the globe for Ichikowitz and his companies up to late 2017, after which records are not available.<\/p>\n Barclays appears to have been alarmed for a number of reasons, including \u201cthe possible layering and commingling of funds between Ichikowitz\u2019s investment vehicles \u2026 and his other entities for which the purpose was unknown\u201d.<\/p>\n In financial parlance, \u201clayering\u201d refers to a series of transactions designed to conceal the source of money.<\/p>\n The bank homed in on frequent payments made from PLC to Socintra, a company registered in the opaque tax haven of the British Virgin Islands and co-owned, according to the SARs, by Ichikowitz and one of his brothers.<\/p>\n More than $8-million was transferred from PLC to Socintra, which the bank identified as \u201ca provider of finance and working capital to businesses located in South Africa\u201d.<\/p>\n The SAR narrative goes on to explain: \u201cAs Ichikowitz owns Socintra, and Socintra frequently pays for Ichikowitz corporate expenses, there are concerns regarding the ultimate source of funds.\u201d<\/p>\n Socintra is also the owner of another Paramount company that bought assets out of the collapsed Paramount subsidiary in South Africa.<\/p>\n A list of transactions accompanying the SARs shows that Socintra made at least two payments totalling about $260 746 to The World of ResidenSea II Ltd, part of the World group of companies that claims to own \u201cthe largest private residential ship on the planet\u201d.<\/p>\n Former Paramount employees have told amaBhungane that Ichikowitz enjoys permanent residence on the vessel \u2014 a \u201cfloating tax haven\u201d that wanders the globe, offering ultra-luxury to those with the means.<\/p>\n One of the entities that raised eyebrows at Barclays was Mamio Holdings \u2014 an \u201cunidentifiable counterparty\u201d located in another tax haven, the Cayman Islands, with a Swiss bank account.<\/p>\n Payments between Socintra and Mamio were cause for suspicion because \u201cno material information was found in the wire payments details as to the purpose of these wires\u201d.<\/p>\n The SAR reports that \u201cthe activity appears to be circular in nature\u201d \u2014 a possible sign of financial malfeasance.<\/p>\n Paramount\u2019s \u201csame-name\u201d transfers between similarly named entities in different parts of the group, using round dollar amounts and vague payment details, aroused further suspicion.<\/p>\n Though the SARs point to suspicious activities that bear the traits common to money laundering and other illicit financial activity, they are not evidence themselves of criminality.<\/p>\n Barclays, in its letter to the ICIJ, stressed that they instead \u201csimply reflect a snapshot taken at a particular point in time of the information then available\u201d.<\/p>\n In the SARs, the bank also flagged a company called Kemet Global Ltd, which it says \u201cIchikowitz had masked his ownership of\u201d.<\/p>\n \u201cThough he is not an owner officially by structure, Barclays Corporate believes that Kemet is related to his businesses, which explains why there are transfers relating to his mine deal; therefore, Kemet will be listed as a SAR suspect in this case.\u201d<\/p>\n Barclays eventually terminated its relationship with Kemet because it was not within its \u201crisk appetite\u201d.<\/p>\n South African mining magnate Brian Menell is currently Kemet\u2019s sole director. He has told the ICIJ that the company \u201cwas originally conceived as a joint investment vehicle between Mr Ichikowitz and me. The shareholding was split between our respective investment vehicles.\u201d<\/p>\n However, he said, \u201cthe purpose for which Kemet Global Ltd was originally conceived did not materialise”, and Kemet “became a business service provider, which I run and [of which I] am the sole owner\u201d.<\/p>\n \u201cI did not at any point give any incorrect information to Barclays bank regarding the ownership of Kemet Global Limited,\u201d said Menell, adding: \u201cI am entirely confident that the compliance processes that we have within Kemet insure [sic] that all of the activities and transactions of the company are fully transparent, in accordance with correct governance, and in all cases are of a nature that would not raise any concerns on the part of any properly informed regulator or financial institution.<\/p>\n \u201cNo reasons were ever given to me for Barclays\u2019 discontinuation of its banking relationship with Kemet, and I was never given the opportunity to answer any questions to allay its concerns.\u201d<\/p>\n He pointed to \u201cthe lack of recourse against financial institutions which take arbitrary action [on] the basis of incompetent and ill-informed compliance\u201d.<\/p>\n Though the bank dropped Kemet, no such action appears to have been taken against other Ichikowitz companies flagged in its SARs, at least up to late 2017, the period for which records are available.<\/p>\n In response to the ICIJ, Barclays said: \u201cIf we conclude we have financial crime concerns, we take appropriate action and have done so in numerous cases over the years. As you will appreciate, terminating client relationships is not something we take lightly.<\/p>\n \u201cGiven the filing of a SAR is not [in] itself evidence of any actual wrongdoing, we would only terminate a client relationship after careful and objective investigation and analysis of the evidence, balancing potential financial crime suspicions with the risk of \u2018de-banking\u2019 an innocent customer and our obligation to treat customers fairly.\u201d<\/p>\n Barclays said SARs were \u201ca common and required practice\u201d, and that it files thousands of them and similar reports each year globally.<\/p>\n Through his London-based lawyers, Ichikowitz has threatened legal action against amaBhungane in terms of UK data protection and defamation law.<\/p>\n The lawyers did not address our questions, but instead posed a number of questions to us, mostly about how the data was obtained.<\/p>\n They said of Ichikowitz: \u201cNeither he nor any of the companies under the Paramount Group have been subject to an investigation by any relevant authority whether in South Africa (where Paramount has a small presence in the context of its global operations) or elsewhere\u2026 Any statement to the contrary is without evidence \u2026 and liable to be defamatory.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" Leaked US Treasury records offer a glimpse into the business empire of controversial Paramount founder Ivor Ichikowitz.<\/p>\n","protected":false},"author":7,"featured_media":21364,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[3,477,478,479,190,388,480],"class_list":["post-12719","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stories","tag-amabhungane","tag-bell-pottinger","tag-fincen","tag-icij","tag-ivor-ichikowitz","tag-micah-reddy","tag-parmount"],"acf":[],"_links":{"self":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/12719","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/comments?post=12719"}],"version-history":[{"count":1,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/12719\/revisions"}],"predecessor-version":[{"id":30172,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/12719\/revisions\/30172"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media\/21364"}],"wp:attachment":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media?parent=12719"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/categories?post=12719"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/tags?post=12719"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Bell Pottinger<\/h5>\n
Opaque offshore world<\/h5>\n
Ichikowitz and Menell<\/h5>\n