As published on maltatoday.com.mt, Friday 18 March, 2022.
A financial trust company was fined €12,500 by the FIAU for failing to submit a suspicious transaction report against its client, a Miami-based Venezuelan businessman with links to tax evasion and Venezuelan money laundering.
Malta’s FIAU reprimanded a trust company for offering registered address services to a company owned by Isaac Moises Sultan Cohen, a Venezuelan businessman with reported ties to politicians and drug traffickers.
The company had been offering their services to Cohen since 2017, up until December last year when it notified the financial services regulator that it will no longer be offering the service to his company Monrey Holding Ltd.
According to the FIAU notice, a compliance review revealed the company had been made aware of an adverse media article in 2017 at the time of client onboarding. But the company claimed it did not have enough information to submit a report because the press reports were based on allegations, with no further developments for several years.
FIAU officials however said the company should have remained vigilant about the relationship it was establishing with Monrey Holdings, while monitoring any similar and suspicious information.
As the compliance review continued, FIAU officials came across more adverse media articles published throughout the business relationship, from November 2020 and August 2021.
“Following these additional two articles, the company had sufficient grounds to suspect that the beneficial owner was not a person of good standing. He could be connected directly or indirectly to ML both through his ties with a former Minister of a non-European country. Furthermore, the BO had failed to pay the relevant tax on $27 million worth of art.”
While the FIAU notice does not refer to the specific media articles, and does not mention Sultan Cohen by name, the two articles in question correspond to publications in the Wall Street Journal and ArmandoInfo that both mention Isaan Sultan Cohen.
According to the Wall Street Journal, Cohen was the art purchaser behind a tax fraud scandal involving Sotheby’s and a company in the British Virgin Islands called Porsal Equities.
In 2020, New York’s attorney general sued Sotheby’s for helping a major collector avoid paying sales tax on $27 million worth of art collected over a five-year period. The collector used an offshore art-buying company – Porsal Equities – to buy artworks tax-free and place them in his New York and Florida homes.
The artworks purchased include a $5.7 million Jean-Michel Basquiat and a $1.4 million Anish Kapoor sculpture.
The Wall Street Journal identified Cohen as the collector behind Porsal, describing him as a Venezuelan shipping executive known for collecting Latin American and contemporary art.
The second media article was part of the Open Lux project coordinated by the OCCRP. ArmandoInfo published the damning exposé, revealing Cohen’s ties to money laundering and corruption. The project revealed Cohen used two offshore companies to venture into luxury real estate, buying up an entire building in Madrid and a two-bedroom penthouse in one of the most exclusive areas of South Florida.
In the Madrid property Cohen purchased, Spanish authorities seized some apartments belonging to former Venezuelan energy deputy minister Nervis Villalobos, who was investigated for using irregular funds to buy the property. In Andorra, police prosecuted Villalobos for moving €124 million through a dozen deposits as part of a corruption scheme involving the Venezuelan state-owned fuel company PDVSA (Petróleos de Venezuela).
Cohen was also reported to have served as a sham director for a company owned by Venezuelan housing minister Diosdado Cabello, who was sanctioned in May 2018 by the United States on accusations of money laundering, embezzlement of state funds, and other corrupt activities.
The FIAU committee pointed all of this out in their administrative notice.
“Yet, despite the level of publicly available information for the Subject Person to have grounds to suspect that money laundering, tax evasion and possible BO concealment had or could have taken place, the Subject Person still failed to submit an SAR or STR to the FIAU.”