The High Flying Exploitation of Zimbabwe’s Diamond Trade, Same Pa and Lev Leviev – Our Gem of a Takeaway:
Lost Messiah, July 9, 2016
How does Sam Pa, a criminal who is not permitted entrance into the United States, manage to do business in New York and to hold a significant ownership stake in some of New York’s most iconic buildings? How tightly woven are Jona Rechnitz and Jeremy Reichberg with billionaire diamond magnate, Lev Leviev, who may or may not be connected to the smuggling of blood diamonds? With what currency was Jona Rechnitz paid when he orchestrated the sale of at least one of the iconic buildings from the magnate (Leviev/Africa-Israel) to the criminal (Pa/Queensway/China Sonangol)? With what form of payment were the police compensated (by Reichberg) when they closed off lanes in the Lincoln Tunnel to escort the magnate (Leviev) to a charity function which we believe to have been held in de Blasio’s honor? Finally, if we are right, how many illicit diamonds are lining the pockets of members of the far reaching communities in which Rechnitz and Reichberg lived and prospered and the myriad of people, including high ranking law enforcement officials, with whom they did business?
On February 20, 2013, Khadija Sharife published an article exclusive to a watchdog organization, 100Reporters, entitled “Disappearing Diamonds.“ In that article Sharife outlines the use of a luxury airliner (“Flying Hotel”) in the smuggling of illicit Zimbabwean diamonds. She maintains that Sam Pa was a frequent flyer aboard a luxury jetliner used as a business enterprise for smuggling uncertified, non-conflict free diamonds (blood diamonds) out of Zimbabwe. According to her report, one watchdog group estimates that billions of illicit diamonds were disappeared from Zimbabwe flown to places like New York, Dubai, London, Singapore and Cannes.
Sharife alleges that a conglomerate of companies, lawyers and investors, with connections worldwide are heavily invested in and profiting from the transport of diamonds aboard the luxury jet. Among those profiting either directly or indirectly, Sharife names Sam Pa, the 88 Queensway Group, China Sonangol and Lev Leviev.
In her article, Sharife details Sam Pa’s real estate enterprises in New York, referring specifically to Queensway’s purchases of 23 Wall Street, the Madison Avenue Clocktower building and a percentage stake in the New York Times building at 229 West 43rd Street.
If her account of the ownership of those buildings is correct, then we posit Jona Rechnitz lied to authorities when he alleged that Sam Pa/China Sonangol were duped into purchasing the 23 Wall Street building and further lied when he maintained that Sam Pa was doing a favor for a friend (the billionaire diamond magnate). Presumably that favor could have been the acquisition of the $720 Million USD debt referenced by Sharife, which Sam Pa/Queensway purchased in exchange for a significant ownership stake in The New York Times building, though we have our doubts. There does not appear to be a paper trail outlining the details of those transactions.
Sharife’s article has been updated a number of times since its publication, changes include China Sonangol’s denial of any connection to Zimbabwean diamonds. There is also some question in her article as to the corporate relationships among China Sonangol, Queensway and Sam Pa. We felt that important because we too have found that to be a perplexing matrix of interchangeable relationships.
We have reprinted what we believe to be relevant portions of her article and highlighted our references in red. To read the article in its entirety click, here.
Zimbabwe’s Blood Diamond Jet
The plane was purchased new in mid-June 2006 by Angola’s Sonangol State Corporation, a secretive entity with a long history of off-books sales of petroleum, according to the International Monetary Fund and other sources. A December 2011 IMF report, for example, cited $32 billion discrepancy in revenue from Angola’s public accounts between 2007 and 2010, largely connected to the quasi-fiscal activities of Sonangol.
Sonangol is interlocked with the China International Fund through multiple known and unknown subsidiaries. In Zimbabwe, China International’s diamond-related legal forms include the Hong Kong-incorporated Sino-Zim Diamonds Ltd., headed by nominee lawyer Jimmy Zerenie and Eliezer Nefussy, reportedly the longtime right-hand man to diamond magnate Lev Leviev in Namibia. Leviev significantly broke the global De Beers stronghold, beginning with Russia, before entering Angola’s diamond industry.
Leviev’s brother, Moshe, was named by Global Witness as a director of LLD Asia, a tentacle of Sino-Zim’s complex multi-corporate structure, primarily registered in the British Virgin Islands (BVI). LLD Asia, advertises itself as one of the largest dealers of Angolan, Namibian, Russian and other diamonds, selling to buyers in the United States, Italy, Belgium and Hong Kong. Masimba Kamba, an individual connected to Zimbabwe’s Central Intelligence Organization, the secret police, is also connected to Sino-Zim, as a director, and to a related company in the British Virgin Islands (Strong Achieve Holdings).
Also involved in China International Fund are Lo Fung Hung, Sam Pa and Alain Fanaie, who doubles as the Chief Executive Officer of China Sonangol. Following a U.S.-China Economic & Security Review Commission (USCC) report, the Hong Kong-based China International Fund, based at 27/F Two Pacific Place, 88 Queensway, Hong Kong, would become known as the 88 Queensway Group, due to its physical address.
The USCC report identified Leviev, a real estate billionaire and major diamond supplier in New York, Dubai, London, Singapore and Cannes, as a key figure in China International Fund.
Much like Hong Kong, Singapore and the British Virgin Islands are also secrecy jurisdictions, peddling sovereign-protected spaces of legal and financial opacity to international companies seeking to hide assets or conceal the identities of their beneficial owners.
“It all sounds depressingly familiar,” said Ronen Palan, a professor at the University of Birmingham and author of Tax Havens: How Globalization Really Works. “Why are complex overlapping corporate structures used? I cannot see any reasons for such complexity besides concealing financial activities, lowering taxation, and creating distance from ownership in case the airplane is used for illegal business. There are clearly no societal advantages to such structures,” he said.
The controlling face of the 88 Queensway empire is Lo Fung, while Pa has been identified as more of a behind-the-scenes operator.
In 2007, Pa, formerly a military comrade of Angola’s lifetime dictator, José Eduardo dos Santos, valued his Angolan business deals at $30 billion. Global Witness has described him as a monthly visitor on board VP-BEX to Harare. According to a Zimbabwean source, who spoke on condition of anonymity, Pa is perceived as one the Central Intelligence Organization’s most important allies.
The 88 Queensway group has used some of its wealth to make its mark in New York real estate. It bought the JP Morgan Chase building at 23 Wall Street for $150 million, paid $150 million for a 49.9 percent stake in the Madison Avenue Clock Tower, and another $50 million (along with the assumption of half the building’s $720 million in debt) for a 49 percent stake in the former New York Times building at 229 West 43rd Street, according to the USCC report.
Neither the China International Fund, China Sonangol nor Sonangal responded to repeated requests for comment. LLD Asia could not be reached for comment.
[Since publishing this report, 100Reporters has received comments from China Sonangol disputing the corporate relationships described here and denying any business in mining Zimbabwean diamonds. “China Sonangol has not purchased a single carat of diamond from Zimbabwe,” J.K. Wee, the firm’s general counsel, wrote. The firm’s full response is reprinted following the story.]
In the last year, China Sonangol is alleged to have purchased two Airbus A319s directly from the manufacturer on behalf of Air Zimbabwe, delivering the planes to hangars in Harare airport – where they remain relatively unused. As with many other China International Fund-related planes, such aircraft are either sold, relatively dormant, or leased out.
China International Fund is estimated to have invested between $500 million to $1 billion in a variety of customized luxury planes, according to sources in the aviation industry and price lists from plane manufacturers such as Airbus.
Why the interest in luxury aircraft?
Elsewhere, aircraft purchases have been used to turn billions of dollars in illicit money into licit assets – a simple case of laundering profits. Mexican drug cartels, for example, have effectively transferred over $420 billion in drug proceeds through banks like Wachovia, via shell companies based in secrecy jurisdictions such as Luxembourg and the Seychelles. Along the way, they purchased planes too.
The use of countries like Bermuda can not only conceal such deals, but also eliminate the former history and purpose of these companies. Bermuda’s no-tax location ensures that the planes will generate maximum profit, too.
“This could be the sound of how justice dies,” said Maguwu to 100 Reporters. “No wimper, no bang. Just the sound of a business filing cabinet being closed.”