Updated: September 26, 2020 7:53:08 am
FinCEN’s archives contain a 20-page “intelligence assessment” on the mirror network and list 54 shell companies that they say moved billions of dollars annually from Russia through European stock markets to other jurisdictions starting in 2011.
NAMED on the List of Liechtenstein, Swiss Leaks, Panama Papers and Paradise Papers, the Indian-born owners of diamond conglomerate Rosy Blue are back. This time, with one of the largest transaction sets reported by banks to the US financial regulator, FinCEN.
Members of the Rosy Blue clan, led by founder Harshad Mehta; her son Rihen Mehta and brother Dilip Mehta and their companies are subject to various SARs (Suspicious Activity Reports) filed by Standard Chartered Bank, New York, according to records investigated by The Indian Express.
Behind these red flags, the US bank has said, are now its huge volumes of intra-corporate transactions (“circular”) which, according to SARs, may include “using” loans in a bank to pay other loans; “Unusual flow of funds” between group companies; and adverse media reports.
By the way, the latter include The Indian Express’ coverage of its overseas transactions and its operations in “high risk” jurisdictions such as India, Bahrain and the United Arab Emirates (UAE).
A key SAR puts the total number of “suspicious” transactions related to Rosy Blue and its affiliates, between 2014 and 2016, at a staggering 6,265. Its value: $ 4.98 billion.
Rosy Blue and 7Cs (the diamond and jewelry group founded by Harshad Mehta in Dubai) conducted up to 893 transactions totaling $ 603.64 million in 2016.
And 746 of these were forwarded or received by Rosy Blue, of which Dilip Mehta is the CEO.
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For this scrutiny, the SARs show, the bank took into account the transactions linked to the eight most active Rosy Blue accounts: in the US, Brazil, Dubai, Hong Kong and Bahrain together with its correspondent banks.
The bank noted that Rosy Blue’s internal payments, which the companies made “among themselves,” amounted to $ 392.56 million, nearly 65% of the total value under scrutiny.
A transaction mentioned by the bank (the amount is not specified) is marked as “paid to the Commission … to Sheikh Faisal Bin Qassimal Thani”.
Al Thani has been described as a Sheikh from Qatar and owner of Al Faisal Holdings, an entity that “operates 50 businesses in nine industries, none of which have apparent ties to the diamond and jewelry industry …”
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Along with the list of bank accounts held by diamond firms, the bank has included affiliated companies in the US, India, Dubai, the Netherlands and Belgium, marking various entities with the name Rosy Blue and the fact that they were ” direct customers “of the bank. for providing “loan and commercial financing services” to some of the companies.
FinCEN has also pointed to the company’s operations that were reported in the media: the creation of a series of offshore companies with Mossack Fonseca, exposed during the 2016 ICIJ-The Indian Express investigation into the Panama Papers; allegations of tax fraud and forgery in Belgium and a transaction trail linking Rosy Blue to an alleged corruption case in Brazil.
In the Panama Papers, the US financial watchdog has linked to reports in The Indian Express that members of the Rosy Blue family were associated with at least 24 offshore companies incorporated in the British Virgin Islands, Seychelles. , British Anguilla and Mauritius.
The Belgian trail relates to tax evasion allegations against more than 100 Antwerp-based diamond cutters, including Dilip Mehta. The case, FinCEN noted, began in 2005, when cash was seized from a courier and subsequent seizures in Switzerland revealed documents linked to Rosy Blue, all indicating alleged tax fraud. In the RAE it is noted that Rosy Blue was among the defendants in the trial. Dilip Mehta has previously denied any role in the scam.
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In relation to the Brazilian scandal, the RAE cites a judicial document in the public domain that made reference to a payment involving Rosy Blue. The case is part of a broader investigation in Brazil that uncovered corruption at the state oil giant, Petrobras.
It is significant that members of the Mehta family first appeared on the Liechtenstein list of 18 account holders, in which they were found to have made deposits in two LGT Bank trusts.
This is also mentioned by Standard Chartered Bank along with the fact that the Government of India initiated legal proceedings against the account holders for possible tax evasion and that the Supreme Court had made the names of the 18 account holders public in 2014.
On the HSBC Geneva (“Swiss Leaks” 2015) list, they were among 77 entrepreneurs linked to the diamond industry: six members of the Rosy Blue clan together had deposits totaling $ 53.63 million for 2006 -2007, and Dilip Mehta’s account showed a balance of $ 8.77 million.
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While Harshad Mehta did not respond to questions mailed to him, when asked about SARs, Dilip Mehta, CEO of Rosy Blue, told The Indian Express that Rosy Blue was regularly audited by external auditors for the financial, labor and environmental compliance.
“Rosy Blue is one of the few companies in the diamond industry that submits its CSR report to the United Nations Global Compact … FinCen has not consulted or brought charges against any Rosy Blue entity, neither myself nor members of my family. FYI, more than 80% of Rosy Blue’s revenue was derived from third parties on a constant basis, over several years.
“During the relevant period, several banks stopped financing the diamond business, so there may be transactions where the financing has passed from the withdrawing banks to the continuing banks. Please note that Rosy Blue has significantly reduced her bank debts during that period and in recent years.
“For the record, the promoters of the Rosy Blue group of companies outside of India are not Indian citizens or Indian residents and they are all foreign companies from the Indian perspective. Most importantly, we echo what you said in your questions: that the information in suspicious activity reports is not necessarily evidence of any crime or crime. “
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