The Federal Court has ordered that a company associated with Melbourne business figure “Diamond” Joe Gutnick be wound up and declared insolvent amid allegations of millions of dollars of dishonest related party transactions.
The Federal Court on Wednesday appointed liquidators to the publicly traded mining company Merlin Diamonds Limited after a provisional liquidators’ report showed it had just $1331 in the bank and liabilities of $13 million.
Judge Michael O’Bryan said a liquidator would allow for investigations into a number of inter-company loans, related party transactions and “round robin” payments that “have the appearance of uncommercial and dishonest transactions”.
The Australian Securities and Investments Commission’s had requested a liquidator to be appointed after an investigation into Mr Gutnick, one of Australia’s best-known business figures. The ordained Rabbi was once a regular on the BRW Rich 200 list and a benefactor to many Jewish charities. As president of a stricken Melbourne Football Club during the 1990s, his financial support kept the club alive.
In a scathing judgment on Wednesday, Justice O’Bryan said Merlin “does not appear to take its legal obligations seriously,” had expressed “no contrition” for various corporate transgressions and faced a “strong prima facie case” that it had contravened the Corporations Act, particularly when it came to two related companies called Chabad and Axis.
Corrupt Mayor de Blasio donor Jona Rechnitz faces new FBI probe in L.A.: court papers
Notorious Mayor de Blasio donor Jona Rechnitz faces a new FBI investigation in Los Angeles, only months after he was sentenced for bribing public officials in New York.
Rechnitz’s latest legal trouble was revealed as part of an ongoing $7 million debt dispute in Los Angeles County Superior Court with a Beverly Hills investor, Victor Franco Noval.
Rechnitz’s attorneys wrote in a letter made public late Monday that they could not respond to the civil suit because it relates to the “subject matter of an ongoing criminal investigation led by the FBI.”
Noval’s attorney Ronald Richards said the FBI investigation was likely examining allegations Rechnitz was running a scam involving loans in exchange for diamonds he didn’t actually own.
“Basically he was borrowing money on diamonds that weren’t his — on top of creating one lie on top of another to keep the loans going,” Richards said.
DAN GERTLER, MAGNITSKY, JUNE 15, 2018 AND A SET OF ANNOUNCEMENTS
We reiterate that this is an opinion based upon research, public filings and other information available online as well as a wide array of analyses. Our contentions are not to be taken as doctrine. They are opinions.
Within that Opinion, we also commented on the date of Glencore’s victorious well-publicized announcement, made on June 15, 2018 and the significance of that date. On that date Glencore proclaimed that it had resolved payment issues with Dan Gertler. Those payment issues were adversely affecting shareholders in Glencore, a publicly traded company; and following that announcement shareholders celebrated. Dan Gertler was allegedly due hundreds of millions of dollars which were being tied up; and the uncertainty was holding the stock price hostage. The announcement set it free.
We remarked that in the context of those June 15 announcements, Glencore along with the help of the US and Swiss governments, had come up with a workaround that would allow them the ability to pay Gertler without violating the Magnitsky Act sanctions. What was remarkable to us was another announcement made on the same exact day as the Glencore announcement.
And here is where we made an error. We mistakenly stated that both the Glencore Announcement and the US Treasury Magnitsky Sanctions were announced on the same day. We were unequivocally mistaken as to the dates. The announcement of that day, June 15, 2018 by the US Treasury, were the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) Sanctions.
Indeed, Magnitsky had been announced by the Department of the Treasury on December 17, 2017, seven months earlier. For your perusal we have posted the Magnitsky Sanctions Notice below and highlighted the relevant section.
The Treasury Department announcement we posted yesterday was actually the announcement of the OFAC sanctions against entities related to Dan Gertler.
The Magnitsky Act, formally known as the Russia and Moldova Jackson–Vanik Repeal and Sergei Magnitsky Rule of Law Accountability Act of 2012, is a bipartisan bill passed by the U.S. Congress and signed into law by President Barack Obama in December 2012, intending to punish Russian officials responsible for the death of Russian tax accountantSergei Magnitsky in a Moscow prison in 2009.
Since 2016 the bill, which applies globally, authorizes the US government to sanction those who it sees as human rights offenders, freeze their assets, and ban them from entering the U.S.
The main intention of the law was to punish Russian officials who were thought to be responsible for the death of Sergei Magnitsky by prohibiting their entrance to the United States and their use of its banking system. The legislation was taken up by a Senate panel the next week, sponsored by Senator Ben Cardin, and cited in a broader review of the mounting tensions in the international relationship. Browder later wrote that the Magnitsky Act found quick bipartisan support because the corruption exposed by Magnitsky was blatant beyond dispute, and “[t]here wasn’t a pro-Russian-torture-and-murder lobby to oppose it.”p. 329
In November 2012, provisions of the Magnitsky bill were attached to a House bill (H.R. 6156) normalizing trade with Russia (i.e., repealing the Jackson–Vanik amendment) and Moldova. On December 6, 2012, the U.S. Senate passed the House version of the law, 92–4. The law was signed by President Barack Obama on December 14, 2012.
In 2016, Congress enacted the Global Magnitsky Act, which allows the US government to sanction foreign government officials implicated in human rights abuses anywhere in the world.
Generally speaking, the Magnitsky Act is intended as a means to control the flow of money generated from activities that violate human rights. While arguably Dan Gertler is not a “government official” as strictly defined by the Act, his place in the morally challenged list of Magnitsky sanctioned individuals is his connection to Joseph Kabila’s activities in the Democratic Republic of Congo. The DRC is not the only mineral wealthy impoverished nation where Gertler’s activities provide a thriving source of profiteering.
In no uncertain terms, businesses and partnerships that profit from digging and mining in the DRC (amongst others) while the Congolese people work in deplorable conditions, starve, have little to no access to healthcare and suffer all manner of indignities fit the definition for Magnitsky Act purposes. Whether or not Gertler got a fair shake is up to his attorneys to litigate. Alan Dershowitz, one of Gertler’s attorneys/lobbyists has commented that he believes that Gertler is being wrongly sanctioned. He may be right. That’s for him to defend.
But if you assume for a second that the Sanctions are a form of justice, we find ourselves asking how Gertler has been able to walk sanctioned waters without drowning. It is inconceivable that he has not had a top official negotiating to part those seas. That is the genesis of this opinion.
In theory, if the Magnitsky Act were to be applied in spirit (and not just in faulty drafting), it would prevent someone engaging in any activities profiting from human rights abuses to have access to any capital, regardless of currency. Unfortunately, the Magnitsky Act, like many other US laws, their related acts or sanctions, have loopholes. The Magnitsky Act has no shortage of holes for educated treasure-hunters and they are best manipulated, like many US finance and tax laws, by the uber-wealthy. Mere mortals simply don’t have the advantages of lobbying teams. The loophole within Magnitsky that Glencore and Gerler were able to circumvent was the focus on business transacting and rendering payment in US Currency – the Dollar, the ever famous Greenback.
As we understand it, under Magnitsky a payment not made through a US company and/or in US Dollars, does not trigger sanctions. And, well… human rights be damned. Such is the case with the Glencore deal.
The US government, the Swiss government and others structured an artfully created carve-out that allowed Glencore to be unencumbered by its association with Gertler, allowed Gertler to retain access to hundreds of millions of dollars allegedly due and owing to him and provided Glencore’s shareholders some comfort. Our view is that someone with a savvy sense of finances, the law and intergovernmental relationships was responsible for orchestrating the shifting tides, lobbying the US President to sign the OFAC paperwork on a particular date, and drafting and negotiating the Glencore/Gertler payment deal. In our opinion, the person or people had to have a vested financial interest in the outcome of those negotiations, enough legal savvy to understand the nuances, enough inside information into Glencore’s activities and the ear of the US Government.
The timing of the OFAC announcement on the same day as the Glencore announcement was either a really stupid mistake made by super savvy business-people, a misunderstanding, a Glencore leak or a poorly timed coincidence. We do not believe in coincidences.
To the OFAC announcement, Consistent with Magnitsky Act, OFAC can also block the transfer of assets between related entities of those individuals sanctioned under Magnitsky. In Gertler’s case, the “not exhaustive” list which OFAC announced on June 15, 2018 includes entities with which Gertler is associated; and as of June 15, 2018 the list of entities had been expanded to 34. Interestingly, Glencore, which has acknowledged time and time again a partnership with Gertler, has not had its assets frozen under OFAC.
That simple reality makes us wonder, who in the US government, the Treasury Department, the “Powers that Be” in these decisions has money invested in Glencore, a publicly traded company, such that Glencore has so far escaped unscathed and is, indeed, able to both continue to transact even with its associations to Gertler, and to pay Gertler, so long as those payments are not rendered in US Dollars. It is also able to continue its own mining activities unhindered.
Moreover, and perhaps more interesting, we note that regardless of which notice circulated on June 15, 2018, it is utterly inconceivable whomever negotiated that deal did not know the sanctions were coming down the pipeline and was not working on behalf someone with a vested financial interest. The shares of stock, as far as we have seen, went wild during the week immediately following the announcement.
To our view, there are two other very interesting points that can be made here. First, why was Glencore not itself sanctioned under the US Treasury’s announcement of June 15, 2018? It would seem that if the US Treasury sanctions were worth their weight in salt where Gertler is concerned, Glencore should have had its assets frozen with the 34 other Gertler associations. We are sure there are a valuable set of reasons why Glencore did not meet the criteria; but we can’t think of any.
Second, are there not tax implications of a decision to exclude payments under Magnitsky?
By our analysis (and it could be wrong), Magnitsky Act money, being money generated in US Dollars, is taxable under US tax laws. It is deemed a part of the long-arm jurisdiction of the US tax system, however much we may disagree with that long-arm. In contrast, once money is deemed to be outside of the scope of Magnitsky, that money is likely also outside the scope of the US Department of Finance’s taxing authority.
As such, it is our belief (and we could be wrong), that not only did Gertler and Glencore’s negotiator find a loophole to allow payment to Gertler, but also found a loophole for Gertler to avoid paying US taxes on this money. Moreover, we are guessing that he has also managed to skirt paying taxes on that hundreds of millions of dollars in any other jurisdiction. It is likely all quite legal and all a function of how the money was characterized in order to avoid Magnitsky.
Our only possible conclusion under the totality of all of the informaiton is that senior government officials in multiple countries were involved in the negotiations that both allowed Gertler to continue operating as though nothing had happened, wholly unencumbered by Magnitsky and that allowed Glencore to continue its operations, given its association with Gertler and Kabila.
We reiterate that this is only an opinion. It is a theory, based upon publicly available information, logical conclusions and some guesswork and should be taken as nothing more.
DAN GERTLER, HIS MONEY, THE PEOPLE WITHIN HIS VORTEX, THE DRC, GLENCORE, MAGNITSKY AND BOMBARDIER – PART I
This is unequivocally our Opinion. It is based upon an analysis of current events and relevant FARA filings. We have posted some of the filings as images on the bottom of this page.
We believe that recent news about Dan Gertler and those lobbying on his behalf are a red herring, a distraction. They are really old news. We believe that the importance in creating smoke and mirrors is to provide a different narrative to Giuliani’s involvement in the Ukraine and his potential connection with Dan Gertler, whether directly or through intermediaries. We are working on that connection.
This is an opinion and should not be taken as anything more.
In 2017, a number of registrations were made which disclosed to the government that several companies were representing lobbying efforts for both the Democratic Republic of Congo and Dan Gertler. We feel that the DRC and Gertler are inextricably intertwined. He has a long and storied history with Kabila which in 2017 we wrote about extensively.
The Panama Papers contain more elicit information about Gertler than about almost any other single subject; and his business dealings are creative, if nothing else. Again, this is an opinion.
We are not particularly fond of an industry which underpays citizens to dig for diamonds, cobalt, copper, emeralds and other riches and then makes zillions of dollars on the labor of those citizens who work to barely survive. Meanwhile their employers (using that term loosely) travel on a fleet of Bombardier Planes, have lavish meals delivered to Kinshasa, consistent with the laws of Kashrut of course, the cost of which is more than many of the citizens of the DRC will see in two generations of lifetimes.
We firmly believe that a mineral wealthy country should have citizens who share in that wealth and are not enslaved by it. It is our opinion that the DRC’s citizens are the victims of the vast amounts of wealth of Gertler, Kabila and their networks of associates. We believe it can only be viewed as a Shanda. There but for the Grace of G-d go I…
In 2018 Alan Dershowitz, Gertler’s attorney (and therefore privileged confidant), Louis Freeh, also an attorney and a former FBI director between 1993 and 2001, and Gary Apfel, also an attorney, (the same brilliant attorney who notably assisted in the defense of Shalom Rubashkin and took on the issues of Criminal Justice Reform) were being paid to lobby on behalf of Dan Gertler. This is not new news. This is also not meant to create the illusion that somehow they are responsible for what is happening in the DRC. We voice no such opinion. They are lobbyists and attorneys and are getting paid to do a job.
The relevant filings were made under FARA in 2018.
What is notable is that at least one document was signed in 2019 and was only now reported on at any great lengths in the CNBC News report (posted below). It is our position, an opinion, that this is all a great distraction. It is nothing new and should not be viewed as such.
It should be clearly understood that Dan Gertler was sanctioned under the Magnitsky Act. This was reported by the US Department of the Treasury in a Press Release on June 15, 2018. The full text of that press release, which we are accepting as true and genuine by virtue of its source, is listed on the next page of this report.
Through crafty maneuvering, and we believe with the help of a current confidant of President Trump, on the same day he was sanctioned, Glncore which allegedly owed Gertler millions, found a workaround to be able to pay Gertler his money. That workaround was to pay him in Euros through overseas bank accounts and companies.
It is our opinion, that the Magnitsky Act sanctions are worthless if a company can “workaround” them by utilizing foreign currency and sources of currency exchanges. Ultimately he is getting paid hundreds of millions of dollars whether he accepts them in “Greenbacks” or in some other currency. The Sanctions should apply to any currency, not just US Dollars, or there really is little point to them at all.
We also find the timing of the announcement of the sanctions and the settlement with Glencore (the company liable to him for back pay) to be somewhat questionable, if not outright insulting to anyone who believes that this is actually a sanction.
We believe that the arrangement with Glencore was back-channeled by another paid consultant with either direct or indirect connections to Gertler. It is that last piece of this opinion that we are working on.
Diamond and mining tycoon Dan Gertler has been under U.S. sanctions since 2017 for corruption, human rights abuses in the Democratic Republic of Congo
Alan Dershowitz, an ally of U.S. President Donald Trump, and former FBI director Louis Freeh have officially registered with the U.S. government as lobbyists for Dan Gertler, an Israeli billionaire known for shady deals and corruption accusations.
According to CNBC, Dershowitz, who has never been registered as a lobbyist before, said he was only acting as Gertler’s lawyer.
The lobbying registration, despite only being released now, records the effective start date as October 17, 2018. Dershowitz was advising Gertler as early as last year, according to a New York Times report.
The decision to hire lobbyists is not surprising in itself. “He’s an international businessman and it’s very difficult to do business internationally” when under sanctions, Peter Jones, a campaign leader at international NGO Global Witness, told Al-Monitor.
The place of both Dershowitz and Freeh in Washington and their relationship to the current administration are significant, however.
Louis Freeh, who is also an attorney, was FBI director between 1993 and 2001. He registered to act as a lobbyist for the first time in March this year, but is known to have ties with other controversial figures. This includes former New York mayor and Trump lawyer Rudy Giuliani, whom Freeh hired to pressure the Romanian president, according to a report in The Independent, in connection with Hunter Biden.
The original sanctions against Gertler said he “amassed his fortune through hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals in the Democratic Republic of the Congo,” mainly through his personal relationship with former President Joseph Kabila.
High-profile defense attorney Alan Dershowitz and Louis Freeh, a former FBI director, have registered to lobby for an Israeli billionaire investor who’s been sanctioned by the U.S. government.
Dan Gertler, who the Treasury Department said amassed his fortune through “corrupt deals” in the Democratic Republic of Congo, hired Freeh Sporkin & Sullivan LLP to lobby Treasury’s Office of Foreign Assets Control, according to a registration statement it filed with Congress today. The filing was first reported by CNBC.
The Trump administration included Gertler in a crackdown it announced in December 2017 on human rights abusers and corrupt actors around the world. OFAC has also sanctioned 34 individuals and entities it says are tied to him, freezing their assets and shutting them out of the U.S. financial system.
Treasury said Gertler used his close friendship with Joseph Kabila, then president of the DRC, to act as a middleman for the sale of mining assets, requiring multinational countries to go through him to do business with the Congolese government. It estimated that between 2010 and 2012, the DRC lost $1.4 billion in revenues from the sale of under-priced assets to offshore companies linked to Gertler.
Dershowitz said he doesn’t agree with the government’s charges, but would present a defense in the proper venue. “Gertler is a wonderful, charitable man who’s done a great deal of good for the world,” he added.
The lobbying registration was required because his attorneys will be making legal arguments before a federal agency rather than a court, Dershowitz said. “You have to register,” he said, adding that he will be acting as a legal consultant. “I’m not a lobbyist.“
Freeh’s office declined to comment. A call made after business hours to Gertler’s office in Israel was not immediately returned.
Feds Investigate Jeffrey Epstein’s Art Collection – US prosecutors are fighting to keep the disgraced billionaire financier Jeffrey Epstein behind bars while his lawyers argued in court that he should be able to stay at his Upper East Side mansion ahead of his trial for sex trafficking. Assistant US Attorney Alex Rossmiller cited the “art and diamonds” found in Epstein’s $77 million home, along with an expired passport listing his country of residence as Saudi Arabia, as reasons he should be denied bail. “Certainly, the first question for a defendant of this tremendous means is how much money does he have?” Rossmiller asked in court. “How much is in diamonds or art?” (Epstein, incidentally, is known to have a certain creepy taste in art, for instance decorating his home with a custom mural of himself standing in the middle of a prison tableau.) Two new accusers have also stepped forward alleging Epstein sexually abused them when they were underage, adding to a growing list of women that includes the artist Maria Farmer. (Courthouse News)
Who Oversees Enforcement of The Magnitsky Act and Dan Gertler’s Payments from Glencore Belie Enforcement
DISCLAIMER: The below Euractiv.com piece is an Opinion Post, republished in part without the permission of the author or the Euractiv.com Ltd. company and/or their website.
We are re-posting with links to the original.
This current interest comes at the heals of recent violence in the DRC: “The Congolese army has arrived at Glencore’s largest copper and cobalt mine following the deaths of over 40 informal miners on the site.” (The Financial Times) “The latest tragedy struck at a site owned by Kamoto Copper Company, a subsidiary of FTSE 100 giant Glencore. The company has reported incursions of up to 2,000 people a day on its giant mining concession, which, at 5,200 acres, is difficult to secure.” (The Telegraph)
For the purposes of the Global Magnitsky Act in the US, it is unclear within the context of the United States enforcement mechanisms who enforces the Global Magnitsky Act within the branches of US Government. The Sanctions against Dan Gertler, a former partner of Glencore, were issued by the Department of Treasury and Foreign Assets (OFAC); but Glencore’s announcements in 2018 that it would pay Gertler in a currency other than US Dollars to avoid triggering the sanctions or asset seizures was announced with a measure of glee in 2018. It would seem, therefore that even though the US has enacted the Global Magnitsky Act it lacks teeth or in the alternative, those with teeth are easily bought.
“Glencore said it believed payment of the royalties in a currency other than U.S. dollars to Africa Horizons Investments Limited and Ventora without the involvement of U.S. entities would address applicable sanctions obligations. It added it had discussed the matter “with the appropriate U.S. and Swiss government agencies”. [Reuters]
Based upon Glencore’s own comments, it would appear that they colluded with US and Swiss government agencies to avoid compliance, or rather to find loopholes in which payment would comply. Either way, this means that Gertler continues to get wealthier off the backs of the Congolese people and The Magnitsky Sanctions, intended to prevent exploitation of human rights are meaningless.
We believe that there is a connection to Gertler with high ranking officials in the United States government or with people who have the ear of US officials and with that, a means of guaranteeing that those who would be overseeing the sanctions simply look the other way.
We take the general position that the are no coincidences, everything is political and nearly everyone has a price.