A nondescript suburban building in North London would appear to be an unlikely address to figure in the 31-page indictment of Donald Trump’s former campaign manager.
But the modest two-storey construction, containing offices, finds itself at the end of a trail of one of the 32 companies listed in the explosive filing.
Despite being only a few years old, the Finchley address, nestled between a church and an insurers, is the incorporation address of thousands of businesses.
Yesterday, one of these companies appeared in the indictment against Paul Manafort and his former business associate, Rick Gates.
Under a section headed ‘The Scheme’, the document filed by the Special Counsel conducting the probe into Russian meddling in the 2016 presidential election, lists offshore accounts allegedly used by Manafort to wire over $12 million (£9 million) into the US on which he is alleged to have paid no taxes.
Most of the accounts are listed as companies incorporated in Cyprus, an island long-associated with Russian money-laundering.
But one company was incorporated in the far-less sunny climes of North London – that of Pompolo Limited, registered at 2 Woodberry Grove, N12 0DR.
But Pompolo Limited isn’t the only company to have used this address – it is one of around 3,250 separate entities all created since 2013 with many of them now dissolved.
Bizarrely, the founding director of all of these companies is 86-year-old Barbara Kahan, who has an incredible 17,636 roles to her name – although none has lasted more than 24 hours.
So what’s going on here? Number 2 Woodberry Grove is actually home to the the workers of A1 Company Services.
Its compliance officer, Anthony Beukes, appeared taken aback when approached by HuffPost UK and informed of the indictment.
He says: “We are a company formation agent. We assist our clients in the UK company registration process and also provide company secretarial and address services, if required.”
A1 Company Services did assist in the formation of Pompolo Limited but there is no suggestion it or Kahan did anything illegal or that would be related to the criminal investigation into Manafort or his business associate, Rick Gates who is listed on the paperwork.
Beukes addes: “It is very disappointing that a company we have formed may have been used for purposes, in respect of which allegations have been made, but impossible to guard against given that, as a formation agent, we have no involvement in the management or operation of the companies we form post-incorporation.”
Kahan used to be an employee of A1 Company Services and lent her name as law requires a “natural person” be listed as director upon incorporation rather than a corporate entity.
Once the process is complete, Kahan resigns and the company is handed over to the client.
The service is common business practice and setting up shell companies isn’t illegal—nor are they difficult to establish.
But the process is open to abuse and and the use of shell companies may become illegal when they are used to evade taxes and launder money—which Manafort and Gates are alleged to have done.
As noted by The Atlantic, a shell company that only exists on paper can be used…
“…solely for the purpose of masking ownership of wealth, property, and other assets, serve as a middleman of sorts, helping those behind them move funds from one place to another.”
A Reuters analysis of data from between 2006 and 2008 (more recent data is not available) shows that nearly $2 billion (£1.3 billion) was paid into the bank accounts of newly-created UK companies and limited liability partnerships (LLPs) that went on to claim in corporate filings that they were not trading and were dormant.
Receiving large sums of money while claiming to be dormant is a breach of British company and tax laws and in an effort to crack down on such practices the UK Government this year passed new money laundering regulations.
The section of the indictment against Manafort and Gates relating to Pompolo Limited reads:
MANAFORT And GATES’ Wiring Of Money From Offshore Accounts Into The United States 15. In order to use the money in the offshore nominee accounts of the MANAFORT-GATES entities without paying taxes on it, MANAFORT and GATES caused millions of dollars in wire transfers from these accounts to be made for goods, services, and real estate. They did not report these transfers as income to DMP, DMI, or MANAFORT. 16. From 2008 to 2014, MANAFORT caused the following wires, totaling over $12,000,000, to be sent to the vendors listed below for personal items. MANAFORT did not pay taxes on this income, which was used to make the purchases.
There are two wires from Pompolo Limited, one of $175,575 (£132,576) to a Vendor B, which is a home automation, lighting and home entertainment company in Florida and another of $13,325 (£10,061) to Vendor K, which is a landscaper in the Hamptons, New York, both on the same day.
“Once a company is formed, it is the responsibility of the directors of the company to ensure that they adhere to the law,” says Beukes.
The far more telling information in the indictment filed by Justice Department Special Counsel Robert Mueller, is the prevalence of Cypriot addresses.
Manafort’s lavish lifestyle – with homes in Manhattan, Brooklyn, the Hamptons, Arlington, Virginia and elsewhere – was detailed in the filing and he is said to have “used his hidden overseas wealth to enjoy a lavish lifestyle in the United States”.
He allegedly spent almost $1 million (£755,000) on rugs in two years and more than $1.3 million (£980,000) on clothes and bought a restored red-brick building in New York’s upscale Soho neighbourhood for $2.85 million (£2.11 million), also from overseas money, most often from Cyprus.
In a joint letter this week 17 European parliamentarian told the island’s President, Nicos Anastasiades: “We write to you with grave concern about the role that corrupt Russian government officials are playing in Cyprus in relation to the laundering of massive criminal schemes coming from Russia.
“We are equally concerned that while Cyprus is neglecting its duties under the European directives to combat money laundering, the Cypriot government is actively assisting the Russian government in furthering human rights violations through assistance with politically motivated prosecutions, in contravention of its obligations under European conventions.”
Greg Andres, a federal prosecutor on Mueller’s team, said his office had a “difficult time” trying to pin down Manafort’s and Gates’ net worths, making it hard to set appropriate bail arrangements.
Andres said Manafort listed a wide range of net asset values on loans and other financial documents, from as low as $20 million (£15.1 million) to as high as $100 million (£75.48 million). Gates, meanwhile, listed assets as low as $2 million (£1.51 million) and as high as $30 million (£22.64 million).
A federal judge ordered house arrest for both men, and set a $10 million (£7.55 million) unsecured bond for Manafort and a $5 million (£3.77 million) unsecured bond for Gates.
Gates and Manafort have both pleaded not guilty to all charges.
Manafort’s attorney Kevin Downing said on Monday there was no evidence that his client colluded with the Russian government while working for the Trump campaign. Neither Trump nor his campaign was mentioned in the indictment.
Manafort ran the Trump campaign from June to August of 2016 before resigning over his prior work for a pro-Russian political party in Ukraine.
The indictment said both Manafort and Gates generated tens of millions of dollars of income from Ukraine work and laundered money through scores of US and foreign entities to hide payments from American authorities.