Accused fraudster on the run
The quest for justice for victims of a sophisticated transnational fraud has taken a significant step forward with an arrest warrant issued in Switzerland.
Assets worth $8.3 million seized in Switzerland and the Bahamas are set to be distributed.
An arrest warrant for alleged fraud and money laundering has been issued by Swiss authorities against Western Gulf Advisory's principal, Ahsan Ali Syed.
Albany-based lawyer and private investigator Mark van Leewarden, of Warden Consulting, secured freezing orders over the Credit Suisse accounts in Zurich and the Bahamas in April 2011, shortly after concerns over the legitimacy of WGA were made public.
Leewarden said that 20 accounts containing 3.5 million Swiss francs (NZ$4.5m) were subject to the freeze order, and an apartment valued at 3m Swiss francs had also been made available for victims by Swiss prosecutors.
He said this represented a potential distribution to victims of 30 cents in the dollar: "It's a good hit mate, a good result."
Questions about developments in the case posed to WGA went unanswered.
From early 2010, WGA ran a sophisticated public relations campaign in Australasia, claiming to have billions to invest in the region and to have struck loan deals with local businesses totalling hundreds of millions of dollars.
None of these publicly-trumpeted deals ever eventuated despite victims forwarding millions of dollars to WGA accounts in Switzerland and Bahrain in fees, typically 1.5 per cent of the loan amount sought.
During this period, Syed travelled on a private jet with a team of bodyguards and advisers. The jet was later seized by creditors, and staff have complained about unpaid wages.
Syed gained international prominence in early 2011 after buying the Spanish La Liga football team Racing Santander and promising to bail out Wellington developer and Phoenix owner Terry Serepisos with a US$100m (NZ$115m) loan.
Shortly after Leewarden obtained his freezing order, reports surfaced from Spain that Racing Santander players and staff were going unpaid.
Syed vanished from Spain shortly after and Racing Santander shed players, was relegated and then declared bankrupt.
Serepisos' promised loan never eventuated either, and he was bankrupted in September 2011.
Leewarden said he had secured access to the criminal complaint file in Switzerland that detailed 24 victims had paid a total of $23m to WGA's Credit Suisse accounts.
He said he was now representing 16 of these victims in a bid to release the $8.3m.
Leewarden was unwilling to reveal the identity of his clients, but said they came from New Zealand, Australia, Ireland, Italy, Brazil and the United States.
He is known to represent former NZ Mint owner Gary McNabb. Other New Zealanders known to have paid money to WGA include Serepisos and failed dairy farmer Allan Crafar.
International victims include prominent Sydney developer Keith Johnson and collapsed Irish family business McCabe Builders.
Leewarden said that while he had secured assets belonging to Syed, he had been unable to locate the man himself.
Inquiries have suggested Syed has been recently based in Bahrain, where WGA still has an opulent office, and Syed's name appears on company records for a newly-open juice shop.
Leewarden said he had deployed an undercover operative to Bahrain but had been unable to find Syed, and two addresses for the businessman provided to Swiss authorities had proved to be false.
"We also now suspect Ali is operating under an alias and potentially may no longer be in Bahrain," he said.
"Intelligence sources indicate he's potentially in the United Kingdom."
Syed's unsuccessful bid to buy Premier League team Blackburn Rovers foundered when it was revealed he had a string of unpaid rent and tax bills in Britain dating back to 2001.
Leewarden also suggested Syed had powerful friends.
Earlier reports of Syed's frauds, including a much smaller loan scam in his native India, showed the development of a con man.
"This is the classic situation of someone who gets fortified by cutting their teeth - they start small, and get bigger and bigger," he said.
While Leewarden expressed confidence that a first distribution to victims could be made before Christmas and he intended flying to Switzerland in the next fortnight to facilitate the process, in-fighting between rival victims' groups raised the prospects of ugly delays.
John Carter, a Sydney business who has maintained a website chronicling WGA's alleged misdeeds since early 2011, said he and lawyer Andy Bryce represented about a dozen Australian victims who had advanced A$14m (NZ$15.1m) to WGA accounts in Switzerland.
Carter said his group had rebuffed Leewarden over concerns his fees were too high, providing documents showing Leewarden was claiming 10 per cent of all funds recovered and $300 an hour, and were planning their own trip to Switzerland in early August to argue their case.
"There will be no first-in best-dressed," Carter said.
"We want to make sure there's an equitable distribution for all victims."
Leewarden said Carter's claims - both in terms of his fees and the number of victims he represented - were wrong and their action could see the distribution process caught in gridlock.
He said the fees he charged were reasonable, given the risks and expense involved in chasing transnational frauds, and it was only due to his actions in April 2011 that investors had the opportunity to get any money back.
"If it wasn't frozen it would have been all gone by now," he said.
"My fear is that a splinter group will complicate and delay the return of funds to investors."
THE STORY SO FAR
2001 - Ahsan Ali Syed leaves his native Hyderabad under a cloud. Local newspapers report allegations of fraud, including a small-scale loan-fees scam.
2001 - Syed lives in Britain where he racks up a number of unpaid rent and council tax bills.
2008 - Syed launches Western Gulf Advisory in Bahrain, claiming more than $1 billion in assets. The company's accounts included an audit report from BDO that is later withdrawn.
Early 2010 - WGA launches sophisticated public relations campaign in offering refinancing deals to distressed business people but charging up-front fees of 1.5 per cent of the loan amount sought.
October 2010 - WGA attempts to buy football club Blackburn Rovers are rebuffed. It is later revealed the Premier League's integrity unit had vetoed the deal due to credibility concerns.
January 2011 - WGA and Syed arrive in Spain to finalise the purchase of La Liga team Racing Santander.
February 2011 - Wellington businessman Terry Serepisos, facing increasing claims from creditors, publicly announces WGA will bail out his property empire and save the Wellington Phoenix.
April 2011 - New Zealand investigator Mark van Leewarden, acting on behalf of businessman Gary McNabb, secures a freeze of WGA accounts held with Credit Suisse, alleging fraud. Criminal file opened by Swiss authorities into WGA and Syed.
July 2011 - Following reports of Racing Santander players and staff going unpaid, and a dispute between a former shareholder and Syed, Racing Santander files for bankruptcy.
September 2011 - Promised WGA loan to Serepisos fails to materialise and the developer is declared bankrupt.
December 2011 - Sydney developer Keith Johnson secures US$3.6m judgment in Bahraini courts against WGA.
July 2014 - Arrest warrant issued for Syed by Swiss authorities. Leewarden says frozen assets worth $8.3m held by Swiss prosecutors has been made available for distribution to victims.