Top-secret records show Canadian companies received millions in suspicious transfers
28 Sep 2020

Off the coast of Mauritania in northwest Africa, thick black smoke billowed from a massive fishing trawler, trapping the crew on a vessel operated by a Canadian shell company.

It was July 19, 2019, and the Ivan Golubets, an imposing vessel comparable to the size of a soccer field, was fishing in the resource-rich waters of the western Sahara — considered a hot zone for illegal fishing by large trawlers — when tragedy struck.

Oleg Niculescu, a 39-year-old married father of two, ran to the engine room to investigate the source of the fire.

The burning vessel was evacuated: 59 crew members made it out, but Niculescu was never seen again.

“He was a cheerful man who loved life,” Anna Niculescu, Oleg’s wife, told a Ukrainian television station through tears.

“And in the end, everyone was saved, but he is gone.”

The trawler burned for two days before sinking about 50 metres into the Atlantic Ocean while being towed by another vessel.

Niculescu’s remains are presumed to have sunk with the wreckage, along with evidence that might have explained what the trawler was doing for eight days before the fire, when, according to location data, its tracking system was off.

“They say he was burned to death,” Niculescu’s wife said. “But there is no specific information — with a signature or a seal — to confirm that.”

In the midst of their tragedy, Niculescu’s family has spent the past year fighting for compensation from the vessel’s operators.

It’s a fight that’s taken them to an unexpected place: Canada, where the company that operated the Ivan Golubets is registered, despite having no actual business activity in this country.

Evial Business LP is registered in Calgary, and its website says it processes and sells fish from Mauritania. It has no footprint in Calgary, and Alberta corporate records leave no trace of the true beneficiaries of the company — only nominee directors in the Seychelles, a known tax haven.

“They try to hide under the umbrella of Canada’s good reputation,” said Borys Babin, an Odessa-based lawyer who has been helping Niculescu’s family navigate the courts.

The company appears in the FinCEN files, a 16-month-long investigation by the International Consortium of Investigative Journalists (ICIJ), BuzzFeed News and partners. It’s based on top-secret bank reports filed to the U.S. Treasury Department’s intelligence unit, the Financial Crime Enforcement Network, other documents and dozens of interviews.

A CBC News/Radio-Canada investigation traced the complex corporate trail and found it extends all the way from Russia to Alberta and New Brunswick, two provinces with little corporate transparency.

Along the way, Canadian corporations have become caught in a story that involves allegations of insurance fraud and illegal fishing.

It comes amid a global reckoning around corporate transparency and a move to force corporations to reveal who really owns and controls them, called beneficial ownership.

But according to some experts, Canada and many of its provinces are moving too slowly.

“If you’re a white-collar criminal and wanting to hide money, Canada is the place to go,” said Ontario NDP MP Charlie Angus, who has studied the issue over the years.

“In fact, there’s an expression that’s used internationally that if you want to clean your dirty money, come to Canada. It’s called ‘snow washing.'”

Insurance policy took effect hours before vessel sunk

Babin believes not only that Niculescu’s death could have been prevented, but also that the sinking of the vessel amounted to fraud. He believes the ship’s operators wanted to sink it in order to collect an insurance payout.

A $15 million US insurance policy written by a Russian insurance company took effect mere hours before the Ivan Golubets caught fire, according to a policy reviewed by CBC News/Radio-Canada. It names Evial Business LP, the Calgary company, as one of its beneficiaries.

“They needed to have it go underwater and sink,” Niculescu’s wife told a Ukrainian television station.

“How could they not put out the fire? It’s inconceivable there wasn’t some sort of rescue team available to put it out, even if just to find the body. They simply let it all burn out.”

The 28-year-old ship and three other vessels were together valued at a total of $16 million US in 2016, according to a Centre for Transport Strategies article. That means that the Ivan Golubets on its own would have been worth much less than the $15 million US payout.

It’s partly why Dyhia Belhabib also suspects insurance fraud.

She is the principal investigator of fisheries for Ecotrust Canada, a Canadian charity that promotes environmental sustainability, and has written a peer-reviewed study on illegal fishing in the waters off western Sahara.

“Immediately when you said that the insurance policy was effective the same day that the vessel has sunk, I immediately thought of fraud,” Belhabib said.

CBC News/Radio-Canada reached out to Evial Business LP with a list of questions, but did not receive a response.

The FinCEN Files

Niculescu’s family wrote to Evial Business LP a year ago to ask for compensation, but Babin said they never received a reply.

Babin said he Googled Evial Business LP and was surprised to find it is a small company with no presence in Canada, given the money that would be required to operate the big trawler.

A reporter who visited Evial Business LP’s address at a Calgary business plaza found no trace of the company or of any fish production. Instead, they found a corporate services company that provides mail forwarding.

But the company certainly has money.

Documents shared with the ICIJ and other news organizations by BuzzFeed News show that the company was flagged by banks for receiving more than $4 million US through wire transfers that banks deemed suspicious. The suspicious activity reports are not proof of wrongdoing.

They offer a window into how easy it is to manipulate Canada’s corporate registration system.

A New Brunswick connection

On its website, Oceanic Fisheries N.B. promises “to make your every fish come true!”

The company advertises products like smoked and dried fish as well as “delicious caviar, shrimps, crab sticks and sea cabbage.”

But despite the initials in its corporate name, there’s no evidence that Oceanic Fisheries N.B. operates in New Brunswick, a province known for its fisheries.

CBC News/Radio-Canada has found that Oceanic Fisheries N.B. is linked to Evial Business LP, according to website records and confidential banking records that tie the two companies together.

In 2016, Oceanic Fisheries N.B. and Evial Business LP both received transfers of large sums of money from senders that used the same Swiss bank, according to records in the FinCEN Files. The transfers typically happened within a few days of each other or sometimes even on the same day. For both Evial Business LP and Oceanic Fisheries N.B., the money ultimately landed at the same branch of a bank in Moscow.

Again in 2017, both companies had a similar banking footprint. Both received big transfers — more than $640,000 US to Evial Business LP and $1 million US to Oceanic Fisheries N.B. — from the same sender, one day apart. In both cases, the money ended up at a Russian bank branch.

Online records show both companies created similar-looking websites using the same registrant within weeks of each other. Both were updated on the exact same day in 2018.

Based in Saint John but banking on another continent

Despite being based in Canada, neither Oceanic Fisheries N.B. nor Evial Business LP used the Canadian banking system — a red flag for banks, according to records in the FinCEN files.

In total, Oceanic Fisheries N.B. was flagged for more than $31 million US in suspicious transfers.

By Karissa Donkin and Frédéric Zalac, CBC News, 25 September 2020

Read more at CBC News

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