Seven-year, cross-border investigation sees fraudsters jailed

Three fund managers have been jailed for a total of 12 years and three months after committing large-scale fraud amounting to more than $8 million.

Following a seven-year investigation by the National Crime Agency (NCA), Frederic Marino and Yoshika Ohmura were sentenced to 7 years 6 months and 3 years 6 months respectively, while Aurelien Bessot was handed a 15-month suspended sentence.

The three men had abused their various positions by committing fraud whilst managing the Libya Africa Investment Portfolio (LAP), a sovereign wealth fund established by the Libyan government for its people amounting to around $800 million (£665 million).

In 2009, Marino and Bessot set up an investment company, FM Capital Partners (FMCP) based in Knightsbridge, London, which was responsible for investing funds from the LAP.

The investigation found that the investments were structured through Swiss investment banker Yoshiki, generating finder fees that were under-declared and laundered through a series of shell companies the men had set up in the Seychelles and Cayman Islands. Between 2009 and 2014, their activities caused LAP to lose $8.45 million.

Concerns were originally raised in 2014 when Libyan Board members of FMCP instigated a full investigation into the management and investment of their funds.

An independent auditor was appointed to conduct the investigation, which resulted in the seizure and analysis of around five million company records and a 350-page report.

However, while being formally interviewed by the auditors, Marino left the building and fled to Norway.

Following this, the NCA began its investigation, interviewing witnesses and amassing evidence from numerous jurisdictions across the globe.

As a spokesman for the NCA said, it was “an extremely complex investigation with multi-jurisdictional challenges.” He added that the size of the sentence handed out sends “a clear message to anyone in the financial sector about the consequences of abusing their position.”

Roger Isaacs, Forensic Partner at Milsted Langdon, said: “The very large size of the fund will have made it easier for the fraudsters to have concealed the monies they stole, which though substantial in absolute terms were relatively small compared with the overall value of the investments.

“Indeed, the fact that the investigation took seven years, is an indication of how complex it was but also suggests that it would have been extremely costly.

“Often the cost of this type of prosecution is prohibitive and beyond the resources of the NCA, which is why there are a growing number of cases that are privately prosecuted.

“With the help of forensic accountants, it is possible to use a private prosecution not only to deliver justice but also to recover funds for victims using such tools as confiscation and compensation orders and freezing assets at the outset so that they cannot be dissipated, while the proceedings are in progress”.

Source: NCA

Posted in The Forensic Blog.