Laundromats and Legal Entities - part two: Limited Liability Partnerships (LLPs)

In an extended episode, we delve into the intricacies of UK LLPs and, using real examples, explain how the rules allow them to be constructed in a such a way as to hide ultimate ownership behind a series of entirely plausible, but geographically diverse entities.

And our old friend Ali Moulaye gets a mention (or two...).

Due to the complexities of the subject, there are supporting graphics on our website.

DISCLAIMER: There is no suggestion by us, explicit or implied, that any of the people or entities discussed in this or any other episode of "The Dark Money Files" is in any way connected to laundromat or other criminal activity. They are simply used as examples of how other actors might circumvent the rules.

Transcript

spk_0:   0:12
Hello and welcome to a three year season. Two dark money falls in which we shine a light into a murky world. I am Ray Blake. And with me is my co host, friend and business partner, Brian Barrow. Hologram. Hi, Ray. Here we are again, growing. It's been a busy week,

spk_1:   0:30
all right? Has I'm particularly. I know you're busy because alongside with doing this podcast, you also have a really important day angel about that. Oh, no, I do. I think being acting head of compliance and an interim money laundering reporting officer for the UK entity of a pretty significant foreign bank is in itself a demanding job. So finding the time to do these particles as well is a real investment of a chunk of your spare time, which I, for one, am very grateful for.

spk_0:   0:59
Well, I look forward to every weekit's the best part of the week. But you've had an interesting week too, I think.

spk_1:   1:06
Interesting. If, to be honest, no one near his arduous ray. But, yes, I've had a couple of really fascinating meetings looking one of them at beneficial ownership on open data on the future direction of the UK regulatory environment. So, yeah, I think we could do a dark money far special soon on some of those issues

spk_0:   1:26
that would be fun. Shall we start with the values, though?

spk_1:   1:30
Good idea on DH, given that this is a continuation of last week's initial episode on companies House Looking at limited companies last week, you want to do a quick recap for we launched into the complexities, which are about to follow.

spk_0:   1:43
Yeah, Happy to. Last week we looked at how it's possible to set up a limited company, largely following the rules while at the same time revealing virtually nothing about who the people who ultimately owned the company out. We ended up looking at a company called Poor Toro Trade LTD. Which had a legal entity as company secretary, a lady from ST Vincent and the Grenadines as its director and the same lady, along with three other people from either the same place or from Grenada as equal shareholders, which meant that he didn't need to declare a PSC

spk_1:   2:22
providing, of course, that they weren't just nominees and that someone else wass the owner or control of the company behind the scenes.

spk_0:   2:29
Well, exactly. But from this. We presumed that they must actually own the company.

spk_1:   2:35
Yes, on you found this company because it was identical in every respect to another company named after. Okay, let's not again. But there was one important difference. Ray wasn't there. Which

spk_0:   2:49
wass? Yeah, it was the PSC or person with significant control of another UK entity, this time a limited liability partnership. And I sent you the task of looking at this, interestingly named a little pity to see what you could find on DH. What it ask it wass, right? Oh, go on.

spk_1:   3:08
Well, first of all, just to continue the theme of difficult to pronounce names, it was called J C. Maureen Geology a LP on that immediately called my attention.

spk_0:   3:20
Well, I can understand that, but exactly why?

spk_1:   3:25
Well, first of all, because JSC is a common description of companies in Central and Eastern Europe stands for Joint Stock Company. And secondly, because Maureen geology yah didn't look particularly English in

spk_0:   3:37
construction. And is that it?

spk_1:   3:40
Well, no. In fact, it was such a complex investigation that with your I have to say excellent help. We've constructed a supporting structure chart or charts. I should say which were posted to our new website at the dark money files dot com to assist anyone who would like to better understand exactly what we have going to be talking about today on Bacon. Even download the graphics if they wish to to use this training aids.

spk_0:   4:07
Well, exactly. So just to reiterate that the dark money files dot com and then go to the page for Season two Episode three Now, you don't have to do that. You can continue to listen to the episode and get plenty of value out of it without, but you might find it useful. Supplement. Teo, help Follow what's going on Grand. What? You want to start with this?

spk_1:   4:29
Well, let's start. You know where we normally start with the L. L. P s designated members? Shall we show this particular elope has had 11 in total 11. Yeah, starting back in January 2011 when it was incorporated with their old friends aren't and overseas acquisitions live live on DH Milltown Corporate services Liberty. I think at that point, they moved to believe

spk_0:   4:54
Oh, you're kidding. May

spk_1:   4:56
now know about right.

spk_0:   4:58
So our Icelandic volcano company led us to put our oh trade, which led us to this L LP, which was apparently formed with two designated members whose names are all over the L O P. S involved in the dance the Storey, the Russian Laundromat and too many others to mention.

spk_1:   5:16
That's exactly right, Andi. Unbelievably, they were replaced by Inter Hold a G and old age E of the Seychelles. And they were then replaced by Tallberg on Union. Well

spk_0:   5:28
off now, Graham, A minute ago we had a misleading JSC incredibly name, and now we've got a G which would normally indicate a German company. But these are social wass, not germane. What's going on? They're grown

spk_1:   5:47
well. These optional locations allow IBC which International Business Cos Way may come back and talk about those another day to have whatever Suffolk they like at the end of their names so they can put limited or Eiji or ink or s a r a variety of commonly found Suffolk sees from other territories at the end of their names. But why would you want to do that?

spk_0:   6:13
Well, it's misleading, isn't it? At the very least, well, let's reflect on that shell way, but I mean this is a pattern we've come across before, isn't it pairs of entities swapping in and out and these particular pears? I have come up before

spk_1:   6:30
what they have. In fact, that's the three pairs that that were the foundation of the Buzzfeed article that we've referred to before, because one of the really eye catching storeys within that buzzfeed article was unethical cold, both projects which wass the central player in the port manifold case. He was Donald Trump's original campaign manager, where he was alleged to have cheated Oleg Deripaska, who's a pretty high ranking matter, nor the guard out of $17 million.

spk_0:   7:00
Well, what a brave man.

spk_1:   7:02
Yeah, Not just that, though. Colbert projects, which is still active and has just followed its accounts in 2019. It was formed a few years before Jane Seymour in geology, but they transferred designated membership, both of them to Mama Hold on Inter hold within 16 days of each other into an urn on. Then they subsequently both again transferred designated membership too tall Bergen Union World. Within a couple months of each other in 2014

spk_0:   7:31
that beggars belief. Graham, you're gonna be telling me in a minute We've both got accounts signed by Alan Mulally

spk_1:   7:38
Power. They're both gonna count side by Ali. Move, Ray. That's funny. They really do both have accounts signed by Ellie. Move. No. Yeah. So, for example, in 2015 and 16 JSC boring geology showed commissioning come off £5172 of £4874 respectively.

spk_0:   8:01
Right in that band of accounting figures that are so beloved of Mr Mulally on DH cover projects.

spk_1:   8:09
Well, for the same two years and coincidently, their accounting periods were identical. Kohlberg Project showed committed income of £5365 in £5448.

spk_0:   8:21
Well, what a coincidence atop a whole pile of coincidences. Ah, yeah, Right. So that accounts for six of the designated members. Thie three pairs. What about the other five designated

spk_1:   8:36
members? Well, actually, a company called Twin Port Express, which will come to you in a bit more detail in a minute, has twice being appointed him twice resigned.

spk_0:   8:46
Of course it has.

spk_1:   8:47
Yeah, on it currently has three further designated members a lot of similar name, actually, all of which are based in Mar Hey, in the Seychelles,

spk_0:   8:57
so it's twice had a UK LTD. Company is the designated member, as well as legal entities based in believes. So shells and there were five of those. And Nevis? Yes. Mmm. So you mentioned you wanted to come backto Import Express LTD. What was that ground?

spk_1:   9:15
Because to import expressive, it'd was. Actually the NLP is first person with significant control.

spk_0:   9:22
First person. Poor Toro. Trade wasn't first.

spk_1:   9:25
No, it was It was the second to be named. A sense

spk_0:   9:29
so to temple to express also have for exotically located shareholders.

spk_1:   9:35
No, but it did have some exotically located directive.

spk_0:   9:39
Tell Mae.

spk_1:   9:40
Oh, by the way, this company is still trading. So can I just add their usual caveat along with the rest of the entities we're talking about today? That we are just using them as examples of interesting behaviour that could be used by other so inclined to circumvent the rules for more nefarious means?

spk_0:   9:57
Well, quite now, tell us about the directors.

spk_1:   10:01
All right. I had four altogether to a company's called euro into a G and a G. Both this time of the Marshall Islands.

spk_0:   10:11
No Germany

spk_1:   10:14
or indeed, Seychelles along with a couple of individuals called Il Young Choi on DH Young Sam Kim, who are both for himself. Come here.

spk_0:   10:25
Mmm. Sometimes when we talk, I just feel that I'm back in a geography classroom.

spk_1:   10:33
Grow? Yeah, I would actually not close to the end of that particular geography lesson yet either. Right.

spk_0:   10:40
Oh, John, to move on to the shareholders of Twin Port Express ground. Yes.

spk_1:   10:47
Let's. So, Ray, your remember that the PSC rules requiring the naming of a person of significant control came into force in 2016

spk_0:   10:56
6 April, I believe.

spk_1:   10:58
Yeah. Any relevance to that day, by the way?

spk_0:   11:01
Way. Well, Parliament being the start of a new tax year.

spk_1:   11:05
Exactly. I just thought with Layla and there's a little boat. So is on Daz at the sixth of April 2016 started with New tax Year. The sole shareholder to Import Express at that moment was Bridgepoint. Eiji. Hey. Yeah, which being of the Marshall Islands doesn't actually meet the requirement because it's supposed to be registered in a location which has equivalent transparency

spk_0:   11:28
rules. But that hasn't stopped people from keeping them there.

spk_1:   11:32
No. And that could become a relevant topic of the next week or two, we might well come back, too. But no, I think, yeah, it's become a parent company. House doesn't have the resources currently to police the system people have, if anything started taking more liberties. But this was in the early days, and I think people would just less sure how things would pan out.

spk_0:   11:53
So what did they do?

spk_1:   11:55
Well, on the fifth of December 2016 they filed an update showing that over the course of the gear, they had transferred the shares from Bridge 20160.25 New shareholders.

spk_0:   12:04
Five. You say?

spk_1:   12:06
Yes. Would you like to know who they are?

spk_0:   12:09
I'd love to know. Great.

spk_1:   12:10
Okay, deep breath. And here we go. They were Lord House Development LP. Limited Partnership translates Commerce quart on Express Limited Partnership. Lux Hold Limited and Vector X.

spk_0:   12:28
Okay. Now, this is where people might want to turn to the website where we've posted a few structure Charles to help you understand all of this on Dwight's, we do strive, Teo, make a podcast as accessible as possible. There's only so much you can do with words on. I know that some people really benefit from some level of visual reinforcement.

spk_1:   12:48
They do, and I think I'm probably one of those. So I know we both feel really passionate this season. Important subject, which is why we're going to the trouble of putting these charts of nothing else on. We simply have to do it justice by going into this level of detail.

spk_0:   13:05
Okay, So before I do a quick summary of where we've got to, shall I just explain why we think this is so important?

spk_1:   13:13
Please, Ray, Please.

spk_0:   13:16
I'm sure there are some other who might be thinking that this is simply a UK problem, but that wood, in our opinion, be missing the point. Irrespective of what this particular LP gets up to. We know that other LPs and Scottish Limited partnerships which will talk about in a forthcoming episodes they used extensively in other jurisdictions as part of laundromats.

spk_1:   13:40
Exactly. Which means the understanding the way that UK entities could be structured to look convincing but which still exhibit red flags around their ownership is an important tool in the armoury of anyone working in financial crime or, indeed, anyone who needs to perform to diligence on legal entities.

spk_0:   13:58
Yuck. So to summarise where we've got to. So far we've discovered a UK LTD. Company, which was the PSC for a U K L L P, which has had a large number of well known launch remote entities as its designated members. And its first PSC has had directors from all over the world, apparently. Oh, and it has a name that appears to have more in common with Eastern European company in the U. K E l O P. Exactly. So tell me a bit more about these five new shareholders.

spk_1:   14:30
OK, well, for a start, everything with one of them is located in a different country.

spk_0:   14:35
And which of us didn't see that coming? Which countries crime

spk_1:   14:41
well from the top Lord House Development LP is a Northern Irish limited partnership. Yeah, translates commerce is registered in South Africa. Quarter Express is a Canadian Limited partners. Lux hold Limited, Texas back to Martha and the Seychelles on and finally, vector extinct is registered in Dominica.

spk_0:   15:08
Well, as she said just now, Gran were no exactly at the end of the geography lesson, always know. However, I know that one of those is a Northern Irish limited partnership, which means it will have details stored on the company's house. Register

spk_1:   15:22
it well. So companies House has a copy of the certificate of registration. Of course, being a limited partnership, it won't have and doesn't require Appear. See? But it does heaven require general and limited partners on there on the certificate.

spk_0:   15:36
Drum roll. Who are they?

spk_1:   15:39
They are with the others Tool burger. And you knew well off. Maybe it's

spk_0:   15:44
right. Let's welcome them back. S o the same companies that were previously designated members of the l L P two which Temple Express was once the PSC.

spk_1:   15:54
Yeah, very save confusing, isn't it? Quit is why we backed up this week's episode with visuals as well.

spk_0:   16:01
So is there anything else of interest you can tell us about any of these companies?

spk_1:   16:06
Well, I can tell you that my my favourite person in financial crime alley Mul LAE,

spk_0:   16:10
has signed.

spk_1:   16:11
Yes, he signed accounts for some of them. In fact, he signed accounts for Euro Inter Bridgepoint on an overseas Milltown Corporate services. Intra hold Monohull Tilburg. You knew well. And Lux, hold on. I can also tell you, Ray, the two import Express is the PSC for another 21 limited liability issues.

spk_0:   16:31
Well, I think we need to give them and it to sink in. But Graham, if two important, expresses the UK LTD. Company, and it's the PSC for 22 U. K L. L P's, it's This is a big deal. This company and its unit accounts, which are available to us on companies house, must be quite interesting to read. Oh,

spk_1:   16:56
interesting bay. They certainly are, although the latest accounts, which were filed in July 2018 only covered the year to 31st of December 2017. But they do show the company's net current assets. They are an extraordinary £2603.

spk_0:   17:14
Okay, they own or control 22 U. K L L P's and they've got net assets of £2000.

spk_1:   17:26
That's all right. I remember the new PFC Poor Toro Trade Limited has only recently fired its first set accounts, as you mentioned last week. And, of course, they were dormant. No assets of any description,

spk_0:   17:40
which is old for a company which allegedly owns or controls in u K E L L P

spk_1:   17:45
s. So clearly it was, it was the right moment to look at the accounts of the LP itself

spk_0:   17:51
on what did that tell you?

spk_1:   17:52
Well, Ray, for the year ending 30 versus General 2019. So these are nicely up to date their total commission income for the year wass £2830 which was down from the £3320 they made the previous year.

spk_0:   18:08
Okay, not great results for a firm which has had two CS and a total of 11 designated members a huge variety of exotic locations. I don't think those income figures would take you to very many of those locations with

spk_1:   18:25
no not justify the cost of maintaining order. The administration costs being fired for those locate. Quite so so on some of that right. Wouldn't you love to know the name of the person or people who signed those accounts?

spk_0:   18:40
Okay. Please tell me, Graham, that Ali moolah was not one of them,

spk_1:   18:44
right? Alan Mulally was not one of them. Thank you. Okay, that there were three people who signed on they had, say, luxuriating the names off on 28 Philomena Jupiter that Janine keeps Young and De Roda Agnese Lab Elaine

spk_0:   19:07
grand. These last two episodes have been replete with some of the most unusual and frankly unpronounceable name she could hope to come across.

spk_1:   19:14
Yes, they have. So do you think it's time to talk about what I found on the Internet when researching LP

spk_0:   19:22
Did you find something?

spk_1:   19:23
Well, sort off for being honest is really nothing other than company filings for JSC Maureen geology A L L P. But if you drop the l. L. P bit off, the search starts to get a bit more interesting.

spk_0:   19:37
Oh, go on, tell me more. All

spk_1:   19:39
right, There's a company based in Riga in Latvia, which we might have mentioned once or twice before. Called the joint stock company Maurin Shia La JIA. It passed off the Marine Shia La Geo Group, which also includes, amongst others, the limited liability company off L. L see Maureen Geology A, which is based in Astrakhan in Russia on their website, is a dot ru site and and it actually would appear that the company originated in and conduct most of its operations in and around Russia in the oil and gas industry.

spk_0:   20:18
Okay, but you were unable to find any direct connexions between the U. K L L P ever similar name on DH. These other genuine cos

spk_1:   20:28
no, no other than Les Yeux se having, I have to say the exact same name Body NLP. But

spk_0:   20:34
no. Okay, anything else of interest before we move on?

spk_1:   20:38
One other small thing which I think's worth talking about to import dress is quite interesting.

spk_0:   20:44
Oh, it's not 175 darks Lane, is it?

spk_1:   20:48
No, this is not a trip back to Potters Bar, although actually there has been something of an exodus out of dark slain to a new address in Kington in hair if it's here, and I think it could be one to what may be part of a future episode, but actually no, it's not that it's to Import. Express is registered to a p o box at Companies House.

spk_0:   21:10
Now, I've just been reading about that.

spk_1:   21:12
Good. You want to explain, then?

spk_0:   21:14
Yeah. So their hands if someone complains that the company's registered address is being used without permission. So, for instance, if we were to do a search on Companies House and one of our addresses came up is the registered address of a company that we knew nothing about? We would quite rightly complain, tow companies house and say that this is inaccurate. Now, if someone does make a complaint like that to companies, House companies House will give notice to the company concerned and request evidence to justify its use of the address. If that evidence isn't forthcoming, don't change the address to a P o box at companies house itself.

spk_1:   21:51
So? So, in effect, they write to the address that's being complained about the example. You just use the wood, right? Tio? One of our addresses. Yeah, okay. But they don't get too many replies.

spk_0:   22:04
Well, I would think No, no,

spk_1:   22:06
no, I'm just one other last thing, actually, is they will. They will keep the post. I know companies house for 12 months, after which time they destroy it. But I'm not sure they'd be too bothered about that. These companies

spk_0:   22:18
no, absolutely got social. I should I just give a last summer? It this

spk_1:   22:24
thing that's a really good idea, because there's actually quite a bit to summarise.

spk_0:   22:29
Okay, so over the last couple of episodes way, we've been on a bit of a journey. It starts out with a look at a UK company named somewhat surprisingly, after an Icelandic okay now whose name will not be spoken again on these broadcasts. It was a dormant volcano company, but since it has quite a complex and exotic structure being composed of a sort of shareholders from Sin, Vincent and the Grenadines and Grenada not just that, but there appeared to be more than 150 other companies with exactly the same structure.

spk_1:   23:06
Yes, that's that's definitely right so far, even if it's a bit surprising.

spk_0:   23:11
Mmm, So one of those other 150 companies turns out to be the person with significant control of the U. K L. L P, which has the same name as one of a group of companies which are involved in the offshore oil and gas industry in Russia. On the Baltics, the LP has a long history of legal entity designated members, all of which have been involved with other companies named as being participants in a laundromat activity, including one very similar company associated with President Trump's former campaign manager, Paul Manafort. Equally

spk_1:   23:46
astonishing but true

spk_0:   23:49
Bloop also has a previous PSC, which had a very different but equally exotic structure, and across the border, a sequence of accounts which, if true, make it very difficult to justify the extraordinary complexity and the associated expense of such intra curtain, far flung control and ownership entities.

spk_1:   24:09
Yes, and a whole host of those companies I can't help but point out, have had accounts signed by Ali Mul A at some point in their history.

spk_0:   24:17
So the Belgian dentist gets around, doesn't it?

spk_1:   24:20
He said he does, right?

spk_0:   24:23
Anything else to add?

spk_1:   24:24
I'm only that that example is one of dozens which which really do fall into the same mould. And when we come back and do our episode on Scottish limited partnerships, I think there will be some interesting echoes off what we've just talked about.

spk_0:   24:41
Great. Okay, so what can we expect next week? All

spk_1:   24:45
right, we've been sent an advance on DH currently, as we record embargoed copy of a new report which I think by the time this goes out, will have been released by Global Witness into the very subject we're currently talking about on DH. So by next week, when has been reliefs, we're going to look at that report to a special episode on how it relates to this and other episodes were recorded on where we should go from here.

spk_0:   25:13
I'm looking forward. Thank you for listening way like Listen to

spk_1:   25:24
future episodes police described through to Spotify or your normal cars provide thanks.