THE AGIP CASE

The AGIP affair is a murky affair, but it sheds a good deal of light on the involvement of accountancy firms in money laundering. At least two of the people connected with it have died under mysterious circumstances. Yves Coulon (the lawyer middleman) was murdered in 1991. Ian Griffin felt that no regulator wanted to know the `truth' and he feared for his life. His body was found with a noose around his neck on 8th July 1998. Barry Jackson and Ian Griffin offered 20,000 pages of evidence to a number of regulatory bodies, but none took up their offer. We urged various Trade and Industry Ministers to write to Jackson and Griffin and invite them to submit any evidence that they wish to the DTI, but none have made this request and discharged their moral, ethical and administrative responsibilities. The Ministers have not explained why they have been unwilling to write a simple letter to request evidence. There does not appear to be any political will to investigate the involvement of accountants in money laundering.

AGIP had claimed to have suffered from massive frauds. Yet it did not bring `criminal' proceedings. It brought a `civil' case under the law of trust. It did not seek to recover the whole amount of which it claimed to have been defrauded of. It only sought to recover $518,822.92 (the Baker Oil money) on the grounds that this was all Jackson could afford to repay. AGIP won the High Court case and Jackson & Co. were required to repay (original sum plus interest) around $700,000 even though the monies had passed through various bank accounts and eventually reached Sophie Ben Hassine. After the High Court judgement, Jackson & Co. went out of business as the firm was unable to obtain sufficient professional indemnity cover. Having secured the High Court victory, AGIP did not collect the monies. It assigned the debt to C.T. Bowring (an insurance company and former professional liability insurer of Jackson & Co.), but Jackson & Co. refused to pay and sought a fresh court hearing in the Isle of Man so that additional evidence could be put on the public record. This hearing was not secured. No monies have been paid to C.T. Bowring either.

The laundered proceeds passed through shell-companies which can easily be formed for issued share capital of just one pound. Many of these nominee companies never traded and after receiving a few transfers of money were promptly liquidated. The monies were then transferred to other companies to obscure the trail of the transactions. Euro-Arabian and Kinz, through whom some of the laundered proceeds passed, probably never engaged in any commercial trading. Leonard Curtis (an insolvency firm) partner, Philip Monjack, was nominated liquidator of Euro-Arabian on 13 May 1985. In a circular dated 24 May 1990, he advised creditors of Euro Arabian Jewellery Limited that "the main asset of this company was a debt due from a French subsidiary, Kinz Joaillier". The letter is accompanied by a Liquidator's Account of Receipts and Payments from 13 May 1985 to May 1990. It shows total realizations i.e. cash at bank of £357.94 and disbursements of £357.94. No other assets existed. Kinz was placed into receivership on 17th July 1985 and then into liquidation on 17th March 1986. The French liquidators informed Philip Monjack that "there will be no funds available for the unsecured creditors, and accordingly there can be no distribution to the creditors of Euro Arabian Jewellery Ltd" (a circular dated 24 May 1990, from Philip Monjack to the creditors of Euro Arabian Jewellery).

Our correspondence with the regulatory apparatus revealed that the Metropolitan Police, the Attorney General and the Serious Fraud Office all had some knowledge about the AGIP affair and the possible involvement of accountants in the alleged illicit transfer of monies as far back as 1985. None presented their findings to the public or the High Court. Nor did they publish any reports either before or after the court case. The role of any other accountancy firm has not been investigated. When urged to investigate the allegations of money laundering which formed part of a High Court judgement, each of the regulators deemed it to be a matter for some other body. When the ICAEW eventually produced a (unpublished) report on the matter that allegedly found no hard evidence of misconduct, the other regulators were able to point to its conclusion, and legitimise their own inaction by referring to something which the ICAEW had never sent to either Mr. Jackson or Mr. Griffin.

Despite the very public concerns about the involvement of accountants in money laundering, the ICAEW report remains unpublished and therefore unavailable for public or Parliamentary scrutiny. From what we have seen, the report is totally inadequate. Anyone subscribing to conspiracy theories may well come to conclude that the regulators were keen to ensure that some aspects of the affair never saw the light of the day. The responsibility for the oversight of the accountancy industry rests with the Department of Trade and Industry (DTI), but it has no independence from the accountancy industry. The DTI faces numerous conflicts of interests, especially as it simultaneously acts as the sponsor, protector, defender, investigator and prosecutor of the industry. The public good has been the inevitable casualty. We are not aware of any evidence which shows that the DTI took any steps to investigate the allegations of money laundering involving accountants, or non-accountants.

One possible interpretation of the AGIP affair is that every assessment made by each regulator at every stage - from the first revelations in 1985, the judgement in the High Court to the ICAEW report - was entirely in accordance with an acceptable code of conduct. Jackson & Co. may have been judged to have knowingly facilitated money laundering. In contrast, the activities of other accounting firms associated with the AGIP amounted to no more than very marginal involvement or minor incompetence which did not merit further investigation. If this interpretation is accepted, then fundamental questions still need to be asked about how the regulators operationalise and interpret the law. Mr Jackson and Mr Griffin were extraordinarily naive if they did not realise that they were engaged, on behalf of their client, in laundering money. By the judge's own account, Jackson & Co. 'probably took over an establishment arrangement', yet regulatory action and the process of law had not been applied to other parties.

Another interpretation is that those associated with the AGIP case were effectively protected from criticism by the reluctance of regulators to act. At a time when the UK government has been actively using major accountancy firms to restructure the state through privatisation of industry (e.g. accountants valuing assets and reporting on the privatisation prospectuses of gas, electricity, water and other industries), management of the public sector (e.g. accounting and auditing based regulations to control schools, hospitals, universities and local authorities) and redesign the tax collection system (e.g. the introduction of income tax self-assessment), it was reluctant to do anything which might openly undermine the carefully constructed myth that accountants are somehow totally trustworthy and honest. Seemingly, the UK state was more concerned about managing the `local' politically convenient situations rather than the public concerns about money laundering.

The AGIP case study provides further evidence of a close (but complex) relationship between the UK state, accountancy trade associations and major accountancy firms (Mitchell et al, 1994; Sikka and Willmott, 1995). It is likely that regulators will continue to express concerns about the increasing involvement of accountants in laundering money. In response to anxieties about money laundering and the reputation of the City, the government will produce new legislation. Yet the state's continuing reliance upon forms of self-regulation and accountancy firms²⁶ for advancing political projects (e.g. privatisation) makes it unlikely that any strenuous effort will be made to investigate the involvement of major firms in money laundering. The negative signals sent by the inaction of the regulators are most likely to result in an increased involvement of accountants in money laundering. As the NCIS data shows (see chapter 2), accountants are least likely to report money laundering transactions to regulators. The have little to fear from their trade associations who also act as their regulators. These bodies themselves do not owe a `duty of care' to any individual citizen. In their capacity as auditors, accountants do not owe a `duty of care' to any individual stakeholder either. Successive governments have granted accountants statutory monopolies (e.g. external audits, insolvency) without the imposition of any public responsibility and accountability.

Поиск по сайту: