Angola’s Sovereign Wealth Fund Tainted by Bank Fraud Schemes
A shocking court ruling in Jersey has exposed a network of corrupt financial dealings involving a team of accountants and economists who ignored glaring warning signs of possible corruption and embezzlement while providing services to an investment management company with ties to the government of Angola.
Corrupt Financial Dealings Exposed
LGL Trustees Ltd, a firm based in Jersey, was fined over $835,000 for breaching anti-money laundering laws. The firm pleaded guilty in December 2022. Between 2010 and 2016, LGL pocketed over $1 million in fees providing services connected to the management of Angola’s sovereign wealth fund.
Red Flags Ignored
Despite “colossal” fees paid to Jean-Claude Bastos de Morais, reluctance from banks to deal with him, and concerns over a prior conviction, LGL “effectively opened the gateway to possible money-laundering” in accepting the work. Bastos is a close friend of José Filomeno “Zénu” dos Santos, who was appointed by his father, then president of Angola, to manage the country’s sovereign wealth fund.
Prior Conviction and Red Flags
The court ruling reveals that LGL ignored numerous red flags, including:
- Huge fees paid to Bastos
- Concerns over his prior conviction
- Reluctance from banks to deal with him
Despite these warnings, the firm continued to do business with him, ultimately accepting an almost $1 million payment from Standard Bank.
Employee Testimony
A former LGL employee testified in court that her supervisor overruled her recommendation to reject Bastos’ business, despite negative publicity surrounding his dealings. The employee said:
“It seemed that nothing would dissuade the directors from accepting and maintaining this business, despite the negative publicity.”
Implications for Angola’s Sovereign Wealth Fund
The ruling has raised concerns about the lack of enforcement in other jurisdictions where Quantum Global, the company at the center of the scandal, operated. Jersey-based financial expert Beale warns that Mauritius, another tax haven where Quantum Global conducted business, needs to take a harder stance on combating corruption.
“Mauritius hasn’t shown the same level of enforcement as Jersey,” Beale said. “My message to Mauritius is don’t paint over the cracks.”
Scandal Raises Questions about Transparency and Accountability
The scandal has far-reaching implications for Angola’s sovereign wealth fund and raises questions about the country’s commitment to transparency and accountability.
- How will Angola address the lack of enforcement in its own jurisdiction?
- Will other countries follow Jersey’s lead in cracking down on corrupt financial dealings?