16 Jul 2021
What links an Italian broker accused of extorting the Vatican, South African brothers accused of absconding with bitcoin worth more than $3bn from their investors and a disgraced Turkish banking mogul who served time for harbouring his nephew after a murder?
They all recently became citizens of Vanuatu.
Since January 2020, each of them – along with more than 2,000 other people – has purchased citizenship of the remote Pacific island nation of Vanuatu, home to just 300,000 people.
A months-long investigation by the Guardian has detailed for the first time how, for US$130,000 each, Vanuatu sold passports – and with them visa-free access to the UK and EU – to thousands of individuals, including some high-profile former politicians, and also to people linked to sanctions, or facing serious allegations, or with warrants out for their arrest.
The citizenship-by-investment (CBI) scheme is not illegal and many countries around the world offer CBI programs. There are many legitimate reasons for applying, including improved freedom of movement or tax-free offshore banking privileges.
The sale of passports brought in more than US$100m to the Vanuatu government last year, with analysis by Investment Migration Insider finding it accounted for 42% of all government revenue in 2020. Revenue from the program has enabled Vanuatu, one of the poorest countries in the world, to reduce its debt stock.
But security experts have also raised concerns about the program, warning it could create a back door for access to the EU and UK and Vanuatu’s taxation laws make the country an attractive site for money laundering.
By obtaining access to internal government documents, through Vanuatu’s freedom of information laws, the Guardian can reveal a few of the highest-profile, as well as the most notorious individuals who gained Vanuatu passports through the country’s development support scheme.
In response to the Guardian’s inquiries about the individuals included here, Floyd Mera, the director of Vanuatu’s Financial Intelligence Unit, said: “Reading your list, most have allegations, pending investigations and ongoing court proceedings. A few have cases against them only after obtaining Vanuatu citizenship … If there are substantial convictions against any of these names, their citizenship may be revoked.”
He added: “Going forward, the FIU will conduct enhanced checks on the names provided in your list. If any of these persons have criminal convictions, FIU will promptly inform Citizenship Office of the updated information.”
The Cajee brothers – South Africa
Raees Cajee, 21, and his 18-year old brother, Ameer, are founders of Africrypt, a cryptocurrency investment platform that the brothers told investors in April 2021 had been hacked and crypto-tokens stolen. Lawyers for investors have since alleged that the brothers “disappeared” with bitcoin valued at roughly $3.6bn (£2.6bn).
Documents obtained by the Guardian show that Raees purchased Vanuatu citizenship in October 2020, with Ameer following suit in January 2021.
In November 2020, investors reportedly began noticing strange transfers from their bitcoin wallets – siphoned off via various “dark web” technologies designed to render them untraceable, according to the specialist law firm representing Africrypts’ investors.
In May, Raees established a UK-based shell company, Clandestine Limited. On the UK’s Companies House he listed his nationality as “Citizen of Vanuatu”. As the scandal broke in June, Raees resigned.
In an interview with the Wall Street Journal from an undisclosed location, Raees Cajee categorically denied they had absconded with the funds or any other wrongdoing, claiming they were forced to flee due to “death threats”, allegedly including by “organised crime syndicates”.
They are reported as saying the firm’s portfolio was never as much as $3.6bn and that no more than $5m is currently missing. A lawyer for the brothers told the BBC that his firm was working to prepare a dossier to demonstrate to the authorities that Africrypt had been hacked and the brothers had been the victim of theft. He was reported as saying that Raees and Ameer Cajee would cooperate with any future inquiries by the authorities.
By Euan Ward and Kate Lyons, The Guardian, 15 July 2021
Read more at The Guardian
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