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BREAKING TRUST – RUSSIAN CENTRAL BANK SUSPECTS OTKRITIE BANK AND BEN WORSLEY OF HIDING THE BENEFICIARIES OF BILLION-DOLLAR BANK LOAN FRAUD

1869 [1]

By John Helmer, Moscow

Investigators searching for $3 billion in funds missing from Trust Bank of Moscow, the biggest Russian bank fraud in history, have found Benedict Worsley, the Cyprus-based manager of the bank’s offshore operations, at a heavily fortified house in the south of France, where he is guarded by British gunmen formerly employed by the British secret services.

The High Court in London has revealed that in return for cash and a promise of immunity from prosecution, Worsley has agreed to cooperate in the search for the missing money. He is now reported to be employed by Otkritie Bank, which is being financed by the Central Bank of Russia, to operate the old Trust Bank. However, sources close to the Central Bank say that officials at the bank are anxious to see Otkritie start repaying the bailout loans, and  reluctant to soften the terms or extend the repayment dates as Otkritie is reported to be requesting. Suspicion is also rife in Moscow banking circles, according to one source,  that “well-known names in high places were beneficiaries of the Trust Bank loans. They don’t want to be identified or obliged to repay.”  They, according to a Cyprus source  and another in London, who knows Worsley, are “threats to Worsley, and he knows it.”

Worsley refuses to respond to emails, and he has closed the Cyprus office of Teos Management, where until late last year, he used to manage Trust Bank’s loans through dozens of companies he created and directed, on instruction from the bank, its control shareholder Ilya Yurov , and others.  Yurov has testified in the London court that he ordered forensic accountants to trace what had happened to the bank’s loan funds. The Russian state Deposit Insurance Agency (DIA) amd Otkritie Bank have also been searching.  To substantiate their application to the High Court for a freeze on Yurov’s assets in the UK and Switzerland, they have reportedly identified  asset value and bank accounts worth $830 million. For more details of the Yurov scheme, read this [2].  For the High Court records, click to open [3].

One source for Worsley’s operations has not been made public before. This is the archive known as the Panama Papers [4], compiled by the International Consortium of Investigative Journalists (ICIJ) in Washington.  According to the ICIJ, it obtained its “data through three massive leaks. The largest one comes from Panamanian law firm Mossack Fonseca, whose inner workings were exposed in the Panama Papers investigation published in April 2016 in conjunction with Süddetsche Zeitung and more than 100 other media partners.”

It is far from easy to find Benedict Worsley in the Panama Papers data base assembled by the ICIJ. For example, here is what turns up when the search box cue is Benedict Worsley [5].  Most of the listed entities were either deactivated before Yurov took over Trust Bank, or are unconnected to both Russia and Cyprus, where Worsley and Yurov have operated. One entity, Benedict Investment Corporation, was created by GSL Law in Cyprus in 2002, and is still active.  GSL [6] is a Russian law firm, based in Moscow, which provides offshore services.  It doesn’t appear to have been involved with Worsley and Trust Bank.

However, Benedict Worsley can be found in the Panama Papers, not by searching for his name, but by searching for companies he created, managed, and directs still. In order to open Worsley’s file in the Panama Papers, it is necessary to know the names of several of his companies first. Some of these  names have not been detected in the Cyprus searches before.

Here is the asset map for Worsley in the Panama Papers archive:

 

%d1%81%d0%bd%d0%b8%d0%bc%d0%be%d0%ba5 [7]

CLICK TO ENLARGE                                                           Source: https://offshoreleaks.icij.org/nodes/12169630 [8]

And here is a partial list of the companies he created which are on record in Panama:

%d1%81%d0%bd%d0%b8%d0%bc%d0%be%d0%ba6 [9]

Source: https://panamadb.org/officer/benedict-worsley_12169630 [10]

Sources who know Worsley believe he used the cashflow from Trust Bank to create companies which then acquired residential properties, where Worsley registered himself as domiciled. Sources also say that Worsley appears to be living at one or more of the addresses. Make that,  hiding in plain view. The sources claim Yurov and his associates at Trust Bank may have had no inkling.

In the French department of Gard, a few minutes west of Nimes, and an hour’s drive north of Montpellier, Worsley has registered this as his home. The address can be found in the Panama Papers – La Verrerie in the village of Dufort.  The village’s full name, combining its ancient Celtic and Roman origins, is Durfort et St Martin de Sossenac [11].

 

%d1%81%d0%bd%d0%b8%d0%bc%d0%be%d0%ba7 [12]

Source: Google.co.uk [13]

Local sources confirm they know Worsley lives in Dufort and patronizes local restaurants and bars. French visitors to the property claim it is “not palatial in style but expensively refurbished.” The French also claim to have seen “6 or 7 rosbifs [Englishmen]” acting as security guards. Another source describes the guards as armed with military-type assault weapons, not the conventional handguns of commercial security guards.

Another of the residential addresses revealed for Worsley in the Panama Papers is this apartment building in the village of Stäfa, which is on Lake Zurich, a short train-ride south from Zurich city.

%d1%81%d0%bd%d0%b8%d0%bc%d0%be%d0%ba8 [14]

Source: Google.co.uk [15]

There are still more Worsley companies and Worsley addresses. These include real estate in the UK and in Los Angeles, whose addresses have yet to be corroborated. Whether Worsley, a British passport holder, has entered the US and obtained residential papers to live in Los Angeles – or whether one of the Trust Bank shareholders currently on the lam from Russian fraud charges is living there,  is also not known.

According to this entry [16] for Swan Directors Limited, it was created by an Isle of Man management firm called Boston Limited, with another front company, Boston Nominees Limited, as one of two directors. The second director was Worsley.  Boston Nominees [17] is a front for more than a dozen other companies; Boston Limited [18] is a front for 30 companies.

Worsley’s footprints are relatively fresh. Two of the entities using these Isle of Man intermediary names, Oak Line Ltd.  and Huntington Directors Ltd.  were set up by Worsley on April 10, 2013; two more, Vaasa Consulting and Herne Consulting, were established by him on May 31, 2013.

Swan Directors Ltd. leads to a third registered address for Worsley in Prague, and this is confirmed by an additional entry in the Panama Papers archive:

%d1%81%d0%bd%d0%b8%d0%bc%d0%be%d0%ba12 [20]

Source: https://panamadb.org/address/seifertova-1042-14-prague-3-czech-republic_14077719 [21]

Here is Worsley’s apartment home when he is in Prague:

%d1%81%d0%bd%d0%b8%d0%bc%d0%be%d0%ba11 [22]

Another directorship which has surfaced for Worsley turns out to be at a British entity called Pamplona Capital Development Limited [23]. His occupation listed as “consultant”, Worsley was appointed one of the company’s two directors on October 22, 2009, and this is still current.

The other director, Kevin O’Flaherty [24], joined in 2010; O’Flaherty is titled company secretary of Pamplona Capital Development Ltd. An accountant by profession, O’Flaherty is also chief financial officer at present for the Pamplona Funds group.  In his earlier career, O’Flaherty (below, left) worked in Russia for Credit Suisse First Boston. Now at Pamplona, he works for Alex Knaster [25] (right), who is founder, chairman and currently CEO of Pamplona Capital Management.  Knaster was also at Credit Suisse and other European banks in Moscow, before Mikhail Fridman appointed him chief executive of Alfa Bank in 1998. Knaster held that post until 2004.

%d1%81%d0%bd%d0%b8%d0%bc%d0%be%d0%ba13 [26]

Russian born, Knaster [27]moved to the US with his parents during the Soviet Jewish emigration of the 1970s; he holds US citizenship. Moscow banking sources say Fridman and other Alfa shareholders have used Knaster’s Pamplona Funds for their personal investments, as well as group investments.   A decade after Knaster started the private equity group, it was reported he had $6.5 billion under management, of which about a third belonged to the Alfa group.  As of this month, the funds [28] under management have dwindled to $5.63 billion. Knaster himself works in Pamplona’s New York office, and is reported to be a billionaire.

Sources who know Worsley claim that when Knaster was running Alfa Bank, he employed Worsley in Moscow as a headhunter for bank managers. Worsley moved from Knaster to Yurov at Trust Bank. But not entirely. It is now clear that for the past seven years Knaster has kept Worsley on as a director of one of the Pamplona unit companies.

Knaster was asked to say if Worsley introduced a flow of funds or investors and their investments from Trust Bank to Pamplona, and what Worsley is still doing for the Pamplona group. Called in New York, Knaster’s assistant said he was out of the office, but would receive an email of questions. Another assistant confirmed the email had been received and would be passed to Knaster. He was asked “to clarify the relationship you have had with Benedict Worsley in the period when you were at Alfa Bank, and subsequently – for example, since October 2009, when Mr Worsley became a director of one of your group’s units, Pamploma Capital Development Ltd? Did Mr Worsley propose or introduce investors, sources of funds to Pamplona Funds, including investments from companies Mr Worsley managed?”

In New York Knaster refuses to reply.

In Moscow banking sources report there is growing concern that high-level Russian business figures do not want the Otkritie takeover of Trust Bank, or the recovery of the old bank’s loans to reach them. According to one source, “Trust Bank [29] was a grace and favour bank. So is Otkritie. When ordered to, the banks have bought Finance Ministry bonds or state corporation bonds. Loans to designated beneficiaries have also been requisitioned. The unravelling of Trust Bank has been larger than Otkritie can manage to roll up. So Central Bank funds are required. For how long, and for whose benefit – these are sensitive questions right now. It’s a hot seat Worsley is sitting on.”