Thursday, 27 July 2017

Hotbed of financial shenanigans!


The number of investigations into alleged financial crimes, money laundering and even the bankrolling of terrorism on the tiny Isle of Man - the offshore haven where Scottish Borders Council selected a worthless investment fund to pay for a £21 million waste treatment facility - is at an all time high, with police and other agencies stretched to breaking point.

Not Just Sheep & Rugby has had reason to pay close attention to events on the island during the last two years following the spectacular collapse of the 24-year contract between the Borders local authority, the now bankrupt New Earth Solutions Group and the equally 'bust' Manx-based New Earth Recycling & Renewables [Infrastructure] fund (NERR).

As our readers know the NERR fund - chosen by SBC councillors to finance their waste management solution at Easter Langlee, Galashiels - is the subject of investigations by liquidators Deloitte. Several other investment funds in NERR's stable, overseen by the penniless Premier Group Isle of Man Ltd, are being examined by various insolvency experts on the orders of the Manx financial services authority.

The sheer scale of the potential for financial wrongdoing has been outlined in the annual report from Gary Roberts, chief constable of the Isle of Man which has 236 officers and back-up staff, and a budget of £12 million.

According to Mr Roberts: "Levels of demand in respect of financial crime are the greatest that the constabulary has known. A series of serious and complex frauds, as well as several high profile and particularly complicated money laundering cases, continue to challenge the constabulary's capacity and capability.

"Indeed, for most of the time demand outstripped supply in terms of investigative capacity. The constabulary has around 70 people permanently dedicated to investigating crime, a little over 20% of whom are allocated to financial crime matters. I could easily allocate all 70 to financial crime investigations and still not be able to meet all of my obligations".

On the other hand, recent disclosures of information by Scottish Borders Council has confirmed the authority was completely unaware that complaints concerning the Premier Group and its collection of investment funds had been lodged with Manx police and other authorities long before the Easter Langlee deal was signed.

The council apparently did not know or realise the managing shareholder of the NERR fund was an outfit based in the British Virgin Islands revelling in the name Premier Group Distribution Inc. [PGDI] and registered in the local offices of Mossack Fonseca of 'Panama Papers' fame.

We have also found evidence that warnings were being sounded concerning the claims made about the NERR fund as far back as 2008, fully three years before the SBC/New Earth contract was finalised. Potential investors were told to "be aware" before putting any of their money into NERR.

The disappearance of millions of pounds from the fund was a prime reason for the failure of the Borders project, yet none of the authorities capable of investigating the loss of £2.4 million of public money have lifted a finger.

Mr Roberts' concerns over financial crime appear to conflict with the views of alleged victims of Premier Group who had been campaigning for years in a bid to have their complaints taken seriously.

Reports prepared for members of the Manx Parliament claim at least three officers, including the chief constable, were provided with documents in support of allegations that Premier was "obtaining bank transfers by fraud".

The constabulary is said to have chosen not to investigate the claims on the grounds that Premier's activities had been conducted outwith the IoM legal jurisdiction.

In recent weeks John Bourbon, an ex-director of Premier Group and a former head of the Isle of Man regulatory authority has described the attention now being given to the company's funds as "a witch hunt".

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