ICIJ Member Stories from The Center for Public Integrity

The year in projects from the International Consortium of Investigative Journalists

2012-12-31T06:00:01-05:00

In 2012, ICIJ explored the developing black market for coltan, a mineral used in an array of electronic devices. Reporters in six countries combed government and court records and interviewed mining experts and brokers. The reporters also followed miners as they prospected for coltan in South America’s Amazon, in the border between Venezuela and Colombia, where they face cross-border smugglers and must deal with violent drug traffickers and paramilitaries.

Skin and Bone was an eight-month investigation into the trade of human tissue for medical purposes. Inquiries were conducted across 11 countries and the project was co-researched with National Public Radio and Newsday (USA), the Kiev Post (Ukraine), The Daily Slovakia (Slovakia) and La Voce della Repubblica Ceca (Czech Republic). After publication, RTI Biologics, one of the biggest firms in the global trade in human tissue, suspended its partnership with suppliers in Ukraine, where authorities have carried out multiple investigations over allegations of illegal tissue recovery. The Pentagon and Congress also announced plans for more oversight of contracts with human tissue suppliers.

ICIJ released the third part of its Looting the Seas series, an award-winning project looking at forces that are rapidly emptying the oceans of fish. Working with Le Monde (France), theInternational Herald Tribune, El Mundo (Spain) andTrouw (The Netherlands), ICIJ reporters ranged from New Zealand’s South Island to the top of Norway and from ramshackle wharves in Chile and Peru to carpeted offices in Brussels and Hong Kong. They conducted more than 100 interviews; filed freedom of information requests in the European Union, Peru and the Netherlands; and analyzed more than 100,000 catch and inspection records.

ICIJ ended 2012 with Secrecy for Sale, a multi-year project aiming to strip away the biggest mystery associated with tax havens: the owners of anonymous companies. The first installment was a collaboration with The Guardian and the BBC and focused on Britain -- one of the centers of the offshore industry.

China-based corporate web behind troubled Africa resource deals

Guinea — 2012-01-17T19:17:46-05:00

For centuries, wave after wave of colonists and foreign investors have swept through Africa, looking for profits from the continent’s abundant reserves of oil and prized minerals.

Many instead left records of corruption and broken promises of shared wealth with Africans.

It is against this backdrop that an eager conglomerate has recently been drawing attention and generating headlines throughout Africa. China-Sonangol is part of a global network of companies extracting oil in Angola, buying gold in Zimbabwe, building luxury condominiums in Singapore and developing property in Manhattan. Its executives have met with African heads of state and challenged the global oil and mining giants who’ve been operating on the continent. And China Sonangol ventures have attracted strategic curiosity — some of its deals are the subjects of U.S. State Department cables made public by Wikileaks.

China Sonangol has shown itself to be innovative and well-connected. But as fast as it has risen, it’s also drawn the kind of criticism that plagued previous authors of extractive schemes in Africa. China Sonangol is under scrutiny for unfulfilled promises of public investments and opaque deals with African leaders such as Robert Mugabe in Zimbabwe and Eduardo dos Santos in Angola. There are also questions about the company’s work in Guinea, where a United Nations investigation linked the former military regime headed by Captain Moussa Dadis Camara to the massacre of over 150 protesters in 2009.

Reporters from the Stabile Center for Investigative Journalism at Columbia University spent 11 months investigating the complex network of holding companies and ventures connected to China Sonangol — and the Hong Kong and Chinese executives behind it. The probe uncovered a transnational network of over 60 interlocking companies incorporated in the investor-friendly regimes of Singapore and Hong Kong and offshore finance havens such as Bermuda, the British Virgin Islands and the Cayman Islands.

"This is the new face of competition for natural resources,” said Judith Poultney an analyst at the international corruption watchdog Global Witness, which has looked at China Sonangol and similar resource companies in Africa.

“African elites are using complex offshore structures to cut themselves a personal slice of resource deals with Asian entrepreneurs,” Poultney said. “And like the old scramble for Africa by the West, it is the ordinary African citizen who loses out.”

New business model

China Sonangol is probably the most public face of the private, Hong Kong-registered China International Fund (CIF), which has risen from obscurity to become a leading player in Africa's resource markets, promising over $18 billion of investment in several African countries in the last six years. Through China Sonangol and other affiliated companies, CIF has acquired shares in a dozen oil fields, a diamond mine in Angola and substantial ownership of “development companies” that have won rights to iron ore and bauxite deposits in Guinea.

In just a few years, CIF has parlayed the Angolan deals into a new business model for resource deals in Africa. Partnering with Angolan officials and using ties to Chinese state banks and companies, CIF has convinced officials in other African nations to sign natural-resource deals that in exchange promise big public works projects. They’ve offered to finance roads and railways in exchange for access to mines and oil fields in politically unstable, resource-rich countries — some of them tainted by corruption scandals.

CIF and its affiliated companies ended up with rights to explore, and in some cases exploit, some of Africa’s richest mineral resources. But much of the promised infrastructure has not materialized. Proceeds of those mineral transactions were invested by CIF joint ventures in places far from the reach of African law and the scrutiny of citizens in the affected states.

CIF’s first major foray into Africa was in 2005. A $2.9-billion loan would build infrastructure in oil-rich Angola, which was then emerging from 30 years of civil war. At the time it was a bold proposition for a company barely a year old and with no experience building infrastructure.

CIF pledged to work on three railway projects, build a new international airport and construct over 200,000 units of social housing. But problems soon arose. On June 27, 2007, the U.S. ambassador in Angola, Cynthia Efird, reported to Washington, D.C. that CIF's "miscalculations of operating costs" had left the company "financially strapped," according to a State Department cable released by Wikileaks. CIF had hired subcontractors, Efird wrote, but the Chinese state company contracted to repair the Luanda-Malange railroad had stopped work that year as laborers had not been paid for eight months.

A year later, Dan Mozena, who succeeded Efird as ambassador, wrote in a cable that “work on all three railroad projects came to a halt [in 2007]; and the international airport project stalled in the design stage.” That cable, dated July 13, 2008, reported that the railway projects were later resumed, but were funded, not by CIF but from “new domestic and Chinese financing.”

The airport — meant to be a flagship of CIF’s assistance and projected as the biggest in Africa — remains unfinished. Angolan investigative journalist Rafael Marques de Morais reported last spring that little more than a partial foundation had been built. Contacted by email in Luanda last month, Marques said not much has changed.

Complicated Corporate Structure

CIF and China Sonangol are part of a network of companies incorporated in at least seven countries. At the top of this structure is a Hong Kong company, New Bright International, which was formed in July 2003. Three months later, Beiya International Development was formed: 70 percent owned by New Bright and 30 percent owned by Beiya Industrial Group, a railway construction company based in Harbin, China. Beiya, later renamed the Dayuan International Development Corporation, owns 99 percent of CIF.

CIF’s public face is Lo Fong Hung, currently director of over 60 CIF-linked companies worldwide. She appears to have had little corporate experience prior to CIF. In Hong Kong, she has told friends that she was once the translator for Deng Xiaoping, the Communist Party leader who introduced market reforms to China. In 2004, she appeared on a TV program with Venezuelan President Hugo Chavez, who described her as the daughter of a Chinese general. Her husband, Wang Xiangfei, is a former director of China Everbright Holdings Company Limited, which is part of a state-owned investment conglomerate, the China Everbright Group.

CIF’s representative in Africa, Sam Pa, was head of a Hong Kong company that traded equipment in China. In the late 1990s and early 2000s, he was fighting over a dozen lawsuits brought against him and his companies over unpaid debts. His girlfriend, Veronica Fung, is listed as owner of 70 percent of New Bright International, which owns the controlling shares of CIF. She is also a director of 23 other firms affiliated with CIF.

The state connections of CIF executives and their high-profile meetings with African officials may have given outsiders an impression that the company had official backing from the Chinese government. But that doesn’t seem to be the case. In a January 27, 2009 cable, the U.S. ambassador reported that Bolum Zhang, the Chinese envoy to Angola, had stressed to him that CIF was a “private” company. According to the cable, Zhang also said that CIF “has weak management and poor leadership in Angola, despite its close links to the Angolan presidency.”

In October 2009, the Chinese Ministry of Foreign Affairs released a statement on CIF, saying, “The Chinese government has nothing to do with its business operations, nor does it have knowledge of the specifics.”

Reached by phone in Hong Kong this month, CIF director Wang Xiangfei refused to answer specific questions about the company and its affiliates, saying, “Other countries and CIF's rivals are bullsh***ing about CIF because Angola didn’t sell to them but chose to sell to China.”

Multiple attempts to reach other CIF directors and their lawyers over the phone and through email proved futile. One reporter went to CIF’s Hong Kong offices in July but was turned away. Company lawyers in Hong Kong also refused to help make CIF officers available for interviews. Court records show that Sam Pa has used several aliases, among them Sam King and Ghiu Ka Leung. Calls to the CIF offices in Hong Kong requesting to speak to these people were never returned.

The Angola connection

In 2004, China Sonangol was formed in Hong Kong: 70 percent was owned by CIF's parent company, 30 percent by Sonangol. Its directors include Lo Fong Hung, Veronica Fung and Sonangol’s CEO Manuel Vicente.

From 2005 to 2008, China Sonangol sold at least 15 million barrels of oil a year to a subsidiary of the Chinese-government owned oil company, Sinopec, according to filings in Hong Kong. China Sonangol miscalculated the cost of buying the oil by $20 a barrel and lost money on the sales, according to a 2007 cable sent to Washington, D.C. by ambassador Efird.

But the sales were valuable in other ways: mortgage documents filed in Hong Kong by China Sonangol show that the agreements were used to help secure a $2-billion loan to Sonangol from a consortium of banks. They also show that in 2006, the Bank of China issued loans to CIF and another affiliated company that were secured with China Sonangol’s oil contracts.

And a 2006 mortgage document filed by China Sonangol in Hong Kong describes the following transaction: Sonangol Sinopec International (SSI), a joint venture with a subsidiary of the Chinese state oil company, in 2004 was awarded an Angolan off-shore oil field — known in the business as a “block.” That block was previously owned by Shell. An Indian company was identified as the buyer before Sonangol interceded. In a 2009 cable made public by Wikileaks, the U.S. ambassador in Angola relayed news from his Chinese counterpart that oil from that block was being shipped directly to China.

SSI made headlines two years later amid a record-breaking round of bidding for Angolan oil sites. According to Businessweek, SSI bid $2.2 billion for two sites, outbidding Exxonmobile and BP by hundreds of millions of dollars. Sonangol’s 2011 map of oil blocks, released in June, shows that between them, SSI and China Sonangol have acquired stakes in eight Angolan oil fields. The Economist Intelligence Unit reported that, just in March, China Sonangol purchased 10 to 15 percent share in four oil concessions.

Expanding in Africa

The Angolan connection eased CIF’s subsequent entry into Guinea and later, Madagascar and Zimbabwe.

In 2008, dissident army officers ousted the Guinean government. The new regime was diplomatically isolated and desperate for cash.

Mahmoud Thiam, then Guinea’s mining minister, said CIF approached the junta in March 2009 as a “special friend” who would provide much-needed financial support. Thiam was skeptical. But two weeks later, he said, CIF arranged for Sonangol CEO Manuel Vicente to fly to Conakry, the Guinean capital city, to convince him.

On October 10 that year, Thiam signed a formal agreement he dubbed the “contract of the century,” saying at a press conference that it involved an investment of between $7 billion and $9 billion. But the contract itself did not specify any particular amounts; instead it gave CIF exploration rights in three large areas of Guinea in return for infrastructure projects proposed by the Guinean government but which CIF was not legally obliged to provide. The deal was potentially worth billions of dollars: Guinea has the world’s largest reserves of bauxite and significant deposits of unexploited iron ore.

The signing ceremony came just 12 days after one of the bloodiest events in recent Guinean history. On September 28, the Guinean military opened fire on a peaceful protest against the junta, leaving over 150 dead and over 1,200 injured. Hundreds of women were raped. In response the international community imposed sanctions. In the aftermath, Thiam said, CIF was the only foreign investor willing to negotiate with Guinea.

“There was something seriously wrong,” said Abdoulaye Yero Baldé, current vice-governor of the Guinean Central Bank who was then a part of the country’s political opposition. “The government had just raped women and killed innocent civilians, all investors were going away and yet this group stayed and signed. It’s hard to know what’s truly in it for Guinea in this contract.”

In late 2010, Thiam flew several times to Madagascar with CIF representatives to negotiate with the government, which came to power after a March 2009 coup. He was a friend of the country’s mining minister, and CIF was interested in Madagascar’s Tsimoro oil field, which is estimated to have reserves of almost a billion barrels.

In January, the finance minister announced formation of the Madagascar Development Corporation. Registered in Singapore, the joint venture between the government and CIF was to be given priority in the exploration of oil and minerals.

When China Sonangol and CIF got to Zimbabwe, they used the same template as in Angola and Guinea: they promised to help in the “refurbishment of the country's infrastructure.”

Like elsewhere in Africa where CIF and China Sonangol have cut similar deals, few details about the Zimbabwe agreement have been released. According to a government-run radio station, the deal is supposed to include investments in gold and platinum refining, oil and gas exploration, fuel and housing development. It is unclear how much was actually promised and what CIF would get in return.

Another company, Sino Zim Development, has concessions in Zimbabwe’s controversial Marange fields, where, according to Global Witness, “Zanu PF political and military elite are seeking to capture the country's diamond wealth through a combination of state-sponsored violence and the legally questionable introduction of opaque joint-venture companies.”

Sino Zim Development was registered as a joint venture in June 2009 in Singapore. Its directors include CIF’s Lo Fong Hung and a Zimbabwean named Masima Ignatius Kamba. Singapore records say that Sino-Zim is wholly owned by two companies registered in the British Virgin Islands. Another company also called Sino-Zim Development was registered in Zimbabwe. Lo and Veronica Fung are among its directors.

A Wall Street address and challenges ahead

Cracks have recently appeared in CIF’s corporate structure. Last year, one of its directors, Wu Yang sued several CIF companies, demanding access to their books. In 2004, the Harbin-based Beiya Industrial Group, transferred its shares to Wu. In a court hearing in March, CIF lawyers said that Wu could not see the books because he was a nominee, not the real owner of the shares.

In Guinea, where a new democratically elected government has been in power less than a year, CIF’s future seems uncertain. Last month, Reuters quoted Guinea’s current mining minister as saying that the CIF contract had been overturned. Yet, in a visit to Columbia University shortly afterward, Guinean president Alpha Conde said, “I don’t see how we can overturn the contract when we haven’t examined it yet.”

In Angola, China Sonangol chairman Manuel Vicente is widely expected to become president after next year’s election. But Deborah Brautigam, a professor from The School of International Service at American University and the author of The Dragon’s Gift: The Real Story of China in Africa, says this will not necessarily be a boost for CIF.

“They still have to have money to make deals,” she wrote in an email, but “they don't have a good track record of delivering, even with Vicente and Sonangol behind them. And their record at actually getting productive resource concessions has been very poor, despite all the media hype.”

Amid these doubts China Sonangol’s reach has extended to the heart of the United States’ financial district.

In the early part of the last century, 23 Wall Street in New York was the most famous address in American finance. It was headquarters for the world’s first billion-dollar corporation, JP Morgan & Co. Today China Sonangol is trying to convert the space into a luxury shopping mall.

Through a Delaware company, CS Wall Street, China Sonangol bought the building in 2008. Commercial space at 23 Wall Street is being offered to upscale retailers. In February, prospective clients met over cocktails to view the property. In July, Cushman & Wakefield Inc., a leading real estate firm, was retained to recruit tenants.

Today, three years after China Sonangol bought the property, the building remains empty.

(With reporting in Guinea by Patrick Martin-Menard, in Hong Kong and Guinea by Pei Shan Hoe, and in New York by members of the Stabile class of 2011, Graduate School of Journalism, Columbia University)

Inside the shell: Drugs, arms and tax scams

New Zealand — 2012-01-11T12:56:44-05:00

On December 11, 2009, a former Soviet air force transport plane flying from North Korea to Iran stopped to refuel in Bangkok. The flight listed its cargo as spare parts for oil-drilling equipment. Instead police found 30 tonnes of explosives, rocket-propelled grenades and components for surface-to-air missiles, all being transported in breach of United Nations sanctions.

Three months later in a Miami courtroom, the U.S. Department of Justice revealed the country's largest money-laundering scheme involving billions of dollars from Mexican drug lords.

Then, last April, documents emerged in London concerning Russia's largest tax fraud, an alleged $230 million heist that led to the untimely deaths of four people and threatens to damage the Russian government.

The story behind the three events is many degrees stranger than fiction, but it includes one common element – a number of shell companies associated with 68-year-old Queensland businessman Geoffrey Taylor or members of his family.

Shell companies – that is, corporations with no apparent operations, no apparent employees and no apparent physical assets – are used by those who register them for a range of nefarious activities around the world.

Thanks to loose laws of incorporation in many jurisdictions, it's easy for offenders to remain anonymous. And the entities can often be formed in less than 24 hours using online facilities. It is not just criminals that take advantage. The Tax Justice Network, an international group of individuals opposed to tax havens, estimates that about $11.5 trillion worth of assets are held offshore and are therefore beyond the reach of effective policing. It claims this represents about a third of total global wealth.

Within this context, Taylor has led an astonishing double life. Publicly, he has served as a company director and chairman of sharemarket-listed companies both in Australia and in New Zealand. Privately, his shell company structures are used by those behind them in a vast and covert game of hide-and-seek, through his clients' incorporation of thousands of entities, some of which later became involved in the international movement of oil, guns and money.

And, perhaps most extraordinarily, he seems to have done it without breaching the law.

Taylor states he is now retired; he did not respond to repeated attempts for comment for this article. But he continues to go by several aliases and titles - Professor Geoffrey Taylor, Sir Geoffrey Taylor, Lord Stubbington and as high representative to Vanuatu. In the photo on his personal website his hands remain busy, projecting the cerebral intensity of a dinner-suited trusted elder. It is only by reading on that you get an inkling of his oddball self-confidence. ''Geoff Taylor is well respected as an innovator … He is not afraid of you viewing his personal website, because he has much to be proud of.''

Taylor writes, in the third person, of how in his native Britain he attended grammar school and achieved top-of-the class status, ''which was an indication of things to come.'' He tells of his migration to New Zealand in 1964 and how he studied part-time to gain two degrees and a PhD.

But the degrees he boldly displays are from a discredited internet-based university registered in Delaware. The doctorate is from Southern Pacific University, another net university headed by Geoffrey Taylor himself. By his own admission on the university's website, this is the origin of his professorship.

In 2003, the same year Taylor graduated and shortly before he was appointed as its president, Southern Pacific University was closed by a U.S. court order after it was found to be operating illegally out of Hawaii. It is now based in the tax haven of Saint Kitts and Nevis, the smallest nation in the Americas, and in the tiny Central American tax haven of Belize, and offers degree programs for about $3750 and doctorates for $7500.

Taylor's immersion in and knowledge of the world of tax havens appears to stem from his many years working in Vanuatu, a small, earthquake-prone, tax-haven island in the south Pacific Ocean, about 1750 kilometres from Australia. Taylor operated from the capital, Port Vila, which put in its proper perspective is about the same size as Goulburn.

From 1997 until 2002 Taylor served as vice-president of European Bank, a Vanuatu-based company that was no stranger to controversy. In 1999, U.S. authorities accused the bank of accepting millions of dollars in deposits that turned out to be the proceeds of a massive credit card fraud.

In a separate action, a former director of the bank, Robert Bohn, was later convicted of racketeering in the US for his part in an alleged $100 million lottery scam that included Australians among its victims. Though there is no suggestion Taylor was involved in any illegality, throughout 2000 he was busy offering his services to sharemarket-listed firms in Australia in preparation for his eventual relocation to Southport in Queensland.

“Would you like to add stature and credibility to your company by appointing someone with both an English title and substantial qualifications to your board? Lord Stubbington is available,” reads a letter circulated by Taylor's wife, Priscila Lustre Taylor.

His claimed mark of esteem – Lord of the Manor of Stubbington – is the sort of feudal title that can be bought in Britain, The Sydney Morning Herald reported at the time. Nevertheless, Taylor joined the board of the sharemarket-listed Australian property development firm Sabina Corporation Limited. He served two separate terms as a director, the second in 2006.

The origins of Taylor's knighthood and his diplomatic career as high representative to Vanuatu lie in Hutt River Province, the third place where his university was, until recently, registered. Hutt River, population 30, is little more than a tourist curiosity sprawling over 75 square kilometers of farmland in a remote part of Western Australia.

Forty-one years ago, the owner, a sheep and wheat farmer called Leonard Casley, declared the land independent from the rest of Australia. Since then, Hutt River has issued its own fantasy passports, currency and stamps, featuring portraits of Casley and his wife Shirley. As head of the so-called principality, Casley is known formally as His Majesty Prince Leonard I of Hutt and he bestows knighthoods on loyal subjects, some of whom – like Taylor – claim to act as his diplomatic envoys.

From as early as 2004, Taylor – with the Australian Prudential Regulation Authority monitoring him but unable to detect anything illegal – began promoting Hutt River as Australia's very own tax haven, drafting a set of commercial and banking laws for the make-believe nation. He offered to incorporate international business companies in Hutt River and to sell banking licenses and gambling rights to offshore internet companies that wished to base their virtual casinos, lotteries and sports betting operations there.

“Few people are aware of the existence of HRP Principality, but this independent sovereign state is the size of Honk Kong [sic],” read a press release issued by Taylor's Vanuatu-based GT Group. “Maximum tax for 20 years is fixed at only 100 Euros per annum … Best possible privacy is assured.”

Casley says Taylor has since been stripped of his knighthood, his diplomatic position and his Hutt River citizenship. “There was no one incident at all –just general things that he was doing,” Casley explained. “I don't wish to go into it deeper.”

But until the planeload of arms was intercepted in Bangkok, the joke was firmly on international authorities who, hindered by weak legislation and the problems caused by multiple jurisdictions, failed to take the activities of Taylor seriously.

By then Taylor's name, and the names of family members and associates, began to appear in hundreds and possibly thousands of companies that were formed around the world, mostly centered on tax havens. Their vast empire of directorships spread across Panama, New Zealand, Vanuatu, Britain, Hong Kong, China, Canada, Belize, Samoa, the Cook Islands, and the US, among others.

In many cases, the nominal ownership could be linked back to Taylor's Vanuatu-based GT Group, the origin of whose name can be found in his initials.

“GT Group of Companies is dedicated to providing an extensive range of offshore company services for privacy, legal tax avoidance, asset protection, financial independence and freedom,” it advertised. “Even where there is no legal obligation on you to maintain full accounting records, or have your accounts audited, we find some clients prefer these to add credibility to their activities.”

In Australia, Taylor formed a number of companies, including Fin Net Pty Ltd in 2006. It offered a range of financial services from “highly ethical, skilled and experienced professionals.” One of the founding partners in the Fin Net enterprise was Colin Roderick McAskill. Three years earlier, McAskill had been sentenced to six months' jail in the Melbourne County Court after being charged by the Australian Securities and Investments Commission over several failed ostrich, beef and educational investment schemes that cost investors more than AU$6 million.

Though there is no suggestion of illegality on his part, what Taylor had discovered was the ability of the offshore financial system to deliver almost absolute discretion to his clients, and the inability of law-enforcement agencies to prosecute those who take advantage of that weakness.

The global arms-smuggling network feeds on this frailty, just as it feeds on the cast-off planes and pilots of the former Soviet Union. Adding to the intrigue over the seized flight 4L-AWA in Bangkok was that the Ilyushin-76 transport plane once belonged to a number of notorious international weapons dealers, including Viktor Bout - the so-called ''merchant of death'' and inspiration for the 2005 Hollywood movie Lord of War. The plane's current owner was an entity with headquarters in the United Arab Emirates but operated by Air West Ltd, based in Georgia. Air West had leased the aircraft to a New Zealand firm called SP Trading through a series of bank accounts in Estonia and New York.

SP Trading had been incorporated only months earlier, on July 22, 2009, by Taylor's son, Michael Taylor, and appeared to have no other purpose. Its only shareholder was VicAm (Auckland), which shared an address with SP Trading at a rented Salvation Army-owned building in Auckland.

SP Trading's sole director was a rather naive employee of a Burger King fast-food restaurant, a Chinese national called Lu Zhang.

Lu was the wife of an accountant who worked for the Taylors. She held the position of director in at least 50 other companies, many of them registered to the same Salvation Army-owned building at Level 5, 369 Queen Street, Auckland. She later told New Zealand media she had accepted about NZ$20 (AU$14.80) for each of her many directorships.

It further emerged that VicAm (Auckland) – in which Geoffrey Taylor was the controlling shareholder until September 2009 – was also the sole nominal shareholder for more than 1,000 other companies formed by the Taylor family in New Zealand.

Among these, Sumato Energy Group had appeared from nowhere in late 2008 to win a contract to ship 1 million barrels of Azerbaijani crude oil, worth $75 million. Another New Zealand firm, also with no history of doing such business, won a lucrative public service contract in Romania.

After the plane was seized, the captain and his crew, four Kazakhs and one Belarusian, were arrested and charged. But the men pleaded their innocence and were eventually deported.

The Taylors, too, said they were blameless. In a press release issued in New Zealand by Ian Taylor – another of Geoffrey's sons – he explained GT Group's role was simply to incorporate and to act as a registered agent for SP Trading “at the request of one of our professional clients based in the United Kingdom.” It was not responsible for and had no knowledge of what the company got up to.

As no law was broken, the authorities had no choice but to agree.

There was little they could do, either, when only weeks later the GT Group was linked to the biggest money-laundering operation in US history.

Wachovia Bank – now a subsidiary of the global financial giant Wells Fargo – was fined $160 million for helping to disguise the illegal origins of up to $378 billion for Mexican drug lords.

The penalty was the result of a long U.S. Drug Enforcement Administration investigation that uncovered multimillion-dollar transfers from Mexican currency exchange houses to the Wachovia sub-branch in Miami – money that was used to buy planes for cocaine shipments. Much of the money originated from the Sinaloa cartel, the fiercest protagonists in the Mexican drug war in which more than 28,000 people have been killed since 2007.

Last year police intelligence sources told Fairfax newspapers and the ABC's 7.30 Report that about half the cocaine now entering Australia was being sent from Mexico, and that the Sinaloa cartel was behind many of the shipments.

During the court proceedings it was alleged that four New Zealand firms registered by the GT Group - Keronol Ltd, Melide Ltd, Tormex Ltd, and Dorio (NZ) Ltd - helped launder about AU$40 million of the proceeds using Latvian bank accounts and Wachovia's London branch.

The U.S. investigation provided a suggestion that the Taylor name was linked to an infinitely wider and more complex global network.

The sole director of each of the NZ firms was Stella Port-Louis, who has an address in the Seychelles. She appears as the director of more than 300 other New Zealand companies, many of them registered by one of the Taylors at Queen Street in Auckland.

In 2007, Port-Louis was singled out by President Barack Obama – then a senator – for the way she headed up at least 100 companies in the US state of Wyoming when he warned of ''serious problems confronting law enforcement as a result of minimal company ownership information requirements.''

Though the Taylor family was again found to have broken no laws, the matters drew attention to at least one of their other businesses.

Geoffrey Taylor was the founding chairman – and he and his family were major shareholders – of Sunseeker Energy (Australasia), a solar energy company that traded on the secondary sharemarket in New Zealand. At its height, the company – whose chief executive was McAskill, the Melbourne businessman sentenced to six months' jail in 2003 – was valued at NZ$18 million and it had a number of related entities. They included Sunseeker Energy (Australia) that operated from Melbourne and the Swiss-registered Sunseeker Energy Holding AG that operated out of Hong Kong, but was listed on the Frankfurt stock exchange in 2009 at a purported 1 billion euros.

In April last year, New Zealand authorities cancelled the public listing of Sunseeker Energy (Australasia) for what it described as “repeated infringement of the rules,” its “failure to provide any information to the NZAX market regarding its business or operations” and the firm's “own admission … that it is insolvent.”

Geoffrey Taylor has recently changed his personal website to reflect the claim that he is now retired. The Australian-registered Global Finnet Pty Ltd – a continuation of the original Fin Net – has also posted a notice saying it would soon have new owners.

But the firm that carries Taylor's initials – the GT Group – continues to advertise its wares out of Vanuatu and continues to attract controversy.

The business magazine Barron's reported that in late April documents emerged out of London that linked a shell company called Bristoll Export, registered in New Zealand by GT Group, to a scandal that some commentators claim has the potential to be Russia's Watergate.

It centers on Russia's largest tax fraud, which occurred on Christmas Eve, 2007, when Moscow tax officials approved a same-day refund of $230 million to a gang masquerading as representatives of Hermitage Capital, once the largest portfolio investor in Russia.

The money was funneled through accounts at Citibank, JPMorgan Chase and Credit Suisse via a series of shell companies, one of which was allegedly Bristoll Export.

Four of the six people said by police to have pulled off the fraud are now dead. One had a fatal heart attack. A second fell from his balcony. The third plummeted out of a penthouse window.

The fourth was Sergei Magnitsky, a 37-year-old lawyer for Hermitage Capital who died in prison after he provided evidence that the money had been stolen by a ring of corrupt tax officials, police and career criminals.

But instead of prosecuting those Magnitsky accused, Russia's interior ministry charged him with the crime and exonerated the cops and the tax officials.

The case may have ended there, but Hermitage's London-based chief Bill Browder devoted himself to pursuing those he holds responsible for the original crime and Magnitsky's death. In English and Russian website campaigns, Browder has presented evidence that he says proves the tax heist was an inside job.

The case has become one of the biggest headaches faced by Russia's government because it is said to have the potential implicate many of those in authority. A recent commission, appointed by Russian President Dmitry Medvedev, found that police fabricated charges against Magnitsky.

New Zealand company records show that snuggled up inside Bristoll Export is yet another shell company that can be traced via Panama to an unrelated offshore banking firm in Cyprus operated by a former Russian diplomat.

Further evidence, perhaps, of an even more impenetrable labyrinth.