A Canadian-born businessman and a real estate development firm with offices in Toronto have been named as major figures in an ongoing investigation of a massive offshore money laundering scheme that lasted for decades and ferried tens of millions of dollars.
As reported by The Toronto Star, Canadian millionaire John W. Dick and Venterra Realty Inc. – along with its Toronto principals John Foresi and Andrew Stewart – were prominently featured in a massive 350,000-page leak of offshore trust company La Hougue’s internal records.
The leak reportedly offered a detailed look into La Hougue’s accounting ledgers, correspondence, loan documentation, and wire transfers. The documents were found in Jersey in the Channel Islands, which was where La Hougue was based until it moved to Panama in 2007.
A multi-national coalition of investigators and journalists said that through copious use of forged records, creative accounting, and “corporate layering” to evade tax authorities, La Hougue moved tens of millions of dollars over several decades, with the funds ultimately going to Venterra projects.
Especially damning was a July 2000 memo by La Hougue senior executive Richard Wigley, which outlined at least 11 “methods available to enable the movement of assets offshore,” including deliberately foreclosing mortgages, harvesting consultancy fees through separate businesses, and investing in properties in Mexico.
“Naturally, I have a concern that any of these papers should fall into the wrong hands, so please guard them carefully,” Wigley said in the letter.
Through the leaked documents, The Toronto Star traced the route of the network’s typical fraudulent transaction as follows: Starting from La Hougue in Jersey, the money moved through a company called Michelin in the British Virgin Islands, and then through a US-based firm called Land Securities Investors.
LSI then transferred the funds to Venterra under the pretext of loans. Between 2003 and 2008 alone, LSI wired no less than $21 million to Venterra.
“The arrangement exploited a U.S. tax regulation to return investment money to La Hougue untaxed and with gains – a cycle that involved money moving through four companies in four jurisdictions using fabricated documents and complex structures to disguise the fraud,” The Toronto Star reported.
The leak also showed that Stewart and Foresi invested in their own projects through La Hougue, although the pair vehemently denied any wrongdoing.
“We unreservedly reject the allegations that Venterra participated in, or had knowledge of, any investment strategies designed to avoid taxation through the use of fraudulent documents,” the pair said in their written response to The Toronto Star’s investigation.
Stewart and Foresi also said that they kept themselves at “arm’s length” from John W. Dick and his enterprises, and that they have no knowledge of their “tax practices, tax reporting, financial dealings, or relationships.”
Dick’s lawyers said that he denied any knowledge of criminal transactions in La Hougue.
As of press time, none of the names in the investigation have been charged for these allegations, The Toronto Star investigation said.