One of the world’s biggest data leaks has exposed how an Australian accountant made a fortune keeping his clients’ secrets away from prying eyes.
February is one of the coldest times of year in Moscow, and it was in that frigid month that Australian accountant Graeme Briggs touched down in 2015. He was there for a face-to-face meeting with a client.
Briggs took his seat at the upmarket La Maree seafood restaurant, minutes from the Kremlin, to join Herman Gref.
Gref was chairman of Russia's biggest bank, SberBank, and a close associate of Russian President Vladimir Putin, having once served in his ministry. He needed Briggs's help to protect his vast wealth.
Gref's bank had recently been slapped with international sanctions after Malaysian Airlines flight MH17 was shot down by Russian-backed separatists. While Gref hadn't been personally sanctioned, it still made him a high-risk client, the kind that would scare off most accountancy firms.
But not Graeme Briggs. A gifted accountant, Briggs and his company Asiaciti had made a fortune crafting trusts and financial structures to protect not only their clients' money, but also their secrets.
Briggs has always managed to stay on the right side of the law. But the decision to play Russian roulette would backfire. After a series of suspicious multi-million dollar transactions, those secrets would start spilling out.
A massive leak
Details of the Moscow meeting between Graeme Briggs, a little-known Australian accountant, and a member of Russia's business elite are contained in the "Pandora Papers", one of the largest leaks of financial documents in history.
Since 2019, 11.9 million documents from 14 offshore providers have been leaked to the International Consortium of Investigative Journalists (ICIJ), the collective behind the landmark Panama Papers exposé.
Even by the ICIJ's standards, this is big. If the documents were printed out and stacked up they would be four times taller than Sydney's Centrepoint Tower.
Unlike past leaks, this time an Australian featured prominently. Just under 2 million documents have emerged from inside Asiaciti, the Singapore-based offshore accounting and advisory firm founded and led by Graeme Briggs.
They reveal in intimate detail how Briggs amassed a $62 million fortune, partly by helping high-risk clients keep their private financial dealings out of public view.
"I think [Briggs] is pushing the law as far as you can possibly push it," says the ICIJ's Gerard Ryle. "I don't think he's got any excuse for some of the clients he's taken on."
It's estimated up to a tenth of the world's wealth is parked in offshore tax havens, costing governments hundreds of billions of dollars in lost tax. Some of it is dirty money. The Asiaciti leak provides a rare window into this parallel economy, where the super-rich get richer through a secretive system open only to those who can afford it.
The 'grandfather' of the offshore industry
Graeme Briggs was always brilliant with numbers. The son of a dairy farmer, he went to school in the historic trading hub of Echuca, a small town hugging a lazy bend of the Murray River. To his mates, he was Briggsy.
"He was quite a clever boy, really good on his maths and that," says Graham Peat, a schoolmate from Echuca High School.
"He always wanted to be a millionaire before he's 30."
Briggs began practicing as a chartered accountant at age 23. By 30, he had set up his own firm, Asiaciti. In the 1980s, Asiaciti started opening up shopfronts in small island nations where the tax laws for international business were loose and the confidentiality laws were tight.
Graeme Briggs
Age: 75 years old
Estimated wealth: $62 million
Known assets: $10m in real estate, $4m rare pen collection, $400,000 worth of fine wine
To his clients, Briggs promoted one island nation that others had overlooked: Samoa. In the middle of the Pacific, a new tax haven was emerging, and he was helping it grow.
In one email obtained in the leak, a Samoan regulator described Briggs as the "grandfather" of the offshore industry. In another, Asiaciti bragged that Briggs was responsible for the “setting up of the structure and legislation of the Samoa offshore finance centre”. In other words, he assisted in creating the laws and regulatory framework necessary for the country's industry of offshore banks and trust companies.
This close relationship saw Briggs appointed Samoa's honorary consul in Singapore for 25 years until 2016.
Briggs travelled the world selling Samoa's secrecy and tax laws, billing it as "an alternative to British Virgin Islands and other Caribbean jurisdictions," according to a note following a marketing trip to Switzerland in 1998.
He began to devise and sell new financial products, making full use of the laws he had helped draft. These products took advantage of gaps in Australia's tax laws at the time, allowing high net-worth individuals to effectively pay little or, potentially, no tax on their international earnings.
In the 1990s, Briggs began marketing the schemes and soon found an eager customer — a successful Sydney-based accountant called Vanda Gould.
A client investigated
Inside the barbed wire fence of Long Bay prison in Sydney, Vanda Gould spends his days dodging drug addicts and sex offenders.
"Because of my age, most people think you're a paedophile," he tells the ABC. "Particularly the drug people are very likely to have a swing at you."
Gould, who is in jail for coaching a witness in his tax case, says he still dispenses the odd piece of prison-yard financial advice: "If people ask for my opinion, I give it," he says.
The story of how Gould wound up in prison extends back to a chance encounter with Graeme Briggs at a conference.
"We got chatting, it wasn't a very long chat," Gould recalls. "You wouldn't pick him out of a crowd, he's no sort of body beautiful or something like that. But when you talk to him, he's a genuinely decent sort of human being."
The conversation soon turned to business. Briggs was spruiking a new product, a Samoan superannuation scheme, exempt from tax in both Samoa and Australia. Unlike a normal super fund, the money wasn't locked up until retirement. It could be loaned back at any time.
In a 1993 letter to Gould, Briggs highlighted the loophole making it so lucrative. Despite the fact contributions to the Samoan super fund were "prima facie subject to Australian income tax of 47%", the Australian Tax Office "has no jurisdiction to collect this tax [because] Western Samoa has no taxation treaty with Australia," the Asiaciti memo said.
More from the Pandora Papers
World leaders identified in the documents by the ICIJ and its global partners:
Jordan's King Abdullah II. Bought up to $US100m worth of property through secret offshore companies.
Czech Prime Minister Andrej Babis. Used shell companies to buy a French chateau.
Kenya's President Uhuru Kenyatta. He and his family secretly held offshore assets worth more than $US30m.
The memo from Briggs reassured Gould that the structure would provide "absolute secrecy and confidentially [sic]".
Gould eagerly adopted the scheme and sold it on to his own clients, among them fund managers, investment bankers and family friends. He visited Asiaciti's office in Samoa, which he says "provided all the support staff ... and actually established the super fund".
"They got the lawyers to prepare the deeds, they got every transaction that was entered into, they were integral to those transactions."
Gould was making a lot of money. Then it all started to fall apart. The ATO saw through the way the structures were being used, demanding Gould's customers pay $300 million in tax liabilities and penalties.
The leak reveals that Asiaciti was running a rearguard offensive back in Samoa. In September 2012 a senior Asiaciti manager wrote an "urgent" appeal to the attorney-general of Samoa, urging the government to join the Australian tax case involving Gould's structures.
"If Samoa fails to register some form of protest at this gesture of contempt for its laws, there will be a major loss of confidence in every part of Samoa's international banking industry," the manager wrote.
In 2015, Asiaciti fought against moves to wind up one of the companies that Gould controlled, even after a federal court found Gould's clients owed millions in tax.
"The Australian authorities have not shown themselves to be without error," a senior manager said in a leaked 2015 letter to the Samoan financial regulator. "I respectfully suggest it would be even more detrimental to the industry for Samoa to become known for acting in a precipitate manner on the basis of allegations that are unsubstantiated, or which are ultimately rejected."
These attempts failed. In a civil case, Gould was ultimately found by the federal courts to be controlling several overseas structures, and the tax office issued millions of dollars in tax assessments to Gould's companies and clients.
From prison, Gould, a deeply religious Anglican, continues to insist that he followed the tax laws — and he doesn't blame Asiaciti for what happened, saying he always acted on legal advice.
"Just watch this space," he says. "God will ultimately vindicate me."
The scalper and the Cook Islands
It was March 2010, and in a high-rise suite of the Century building in downtown LA, Ken Lowson surveyed the world below. This was what success looked like.
"The 25th floor of the nicest building in the nicest section of LA," he tells the ABC.
Lowson was a scalper, the self-described "Henry Ford of ticket resale".
"I am considered, let's say, by the world as the biggest, baddest scalper who ever walked the planet," he says.
Lowson's technique was using lightning-fast bots to bulk-buy tickets to popular events. Over more than a decade, he says he traded millions of tickets.
In 2005, U2 apologised to their fans at the Grammys after Lowson's company snatched up most of the front-row seats to their Vertigo Tour. Lowson's company made an estimated $25 million in profit from the business.
Then, one day, armed FBI officers charged into his office.
"They're ordering us around, forcing my employees against the wall," he says. "I got angry and I said, 'What the fuck are you doing? Are you arresting us?' They said, 'We have a warrant. We're the Feds.'"
But Lowson wasn't worried he was about to lose all his cash. Years earlier, after the instinct to protect his wealth had kicked in, he had organised a meeting with his lawyer. And that's how Lowson became a client of Asiaciti.
"I said, look, I want to protect my assets for my children, you know? And then he set up the thing," he says. "I just did what [my lawyer] told me. He recommended a bank in Switzerland and he recommended the Cook Islands."
Stashing cash in a Pacific paradise
The Cook Islands appear like flecks of dust scattered across a world atlas. Famous for their dive sites, these tropical islands also specialise in a key product sold by Asiaciti — "asset protection".
A Cook Islands trust, properly established and maintained, is as secure as a bank safe — a place to park assets beyond the reach of creditors, family members, even government authorities.
There can be perfectly legitimate uses for trusts. But they can also be abused, like in this hypothetical:
This is James. He's always wanted a private jet. But technically, he's bankrupt.
So you might think, no jet for James then, right? Not necessarily.
James has been stashing his cash in a Cook Islands trust. The money he earns legally belongs to the trust, not to him.
If James asks, the trustee will direct the trust to buy the jet. It might even let him use it, say, whenever he wants.
But here's the best part for James. If anyone comes knocking, saying he owes them money, on paper he's still bankrupt. It's the trust that owns the jet.
To get their hands on that asset, James's creditors will have to sue in the Cook Islands, where the laws are skewed to favour the trusts.
Cook Islands trusts can also offer other "asset protection" features, like a "duress clause", which enables the door to snap shut if the beneficiaries are sued or pursued by governments.
"Effectively, it's like putting your money away in a locker and giving the key to someone else," says professor Katy Barnett from the University of Melbourne Law School. "Then someone comes to you and sues you and you say, 'I'm sorry, I can't open that.'"
Asiaciti turned those kinds of protections into a marketing angle. In promotional material slides from as late as 2015 for its Cook Islands trusts, Asiaciti told how two of its former clients jailed over a Ponzi scheme had stashed their money so far out of reach, even the US courts couldn't touch it.
Sitting in a jail cell in California, Ken Lowson's Cook Islands trust with Asiaciti was probably seeming like a very good idea. There was just one problem. He needed US$1.25m in bail money to get out.
While the money was tied up in the Cook Islands trust, it was safe, but now Lowson needed that money to be released and posted as bail. The money was returned to the US and became the subject of a legal dispute involving his estranged wife. Lowson would never see his cash again.
In November 2010, Lowson pleaded guilty to conspiracy to commit wire fraud.
The leaked documents reveal for the first time how Asiaciti found itself facing a lawsuit, with accusations it released the money without a necessary signature. Sensing a threat to its reputation, Asiaciti settled the matter with Lowson's estranged wife under a strict confidentiality deed.
The firm's secrets were safe, for now. But Asiaciti was about to face a much bigger challenge.
Politically exposed persons
It was the morning of December 22, 2017, when a worrying email dropped into the inbox of an Asiaciti manager: "The Monetary Authority of Singapore Act will be conducting an inspection of [Asiaciti] ... [which] will cover [Asiaciti's] framework and controls for anti-money laundering and countering the financing of terrorism," it read.
It was a serious problem. Singapore was where Asiaciti had made its headquarters, and the firm's reputation rested on its ability to conduct business out of the financial hub.
After the Monetary Authority of Singapore (MAS) inspectors entered Asiaciti's head office, they uncovered some large and suspicious transactions. Behind those transactions were some concerning clients.
Offshore accounting firms that specialise in confidentiality, asset protection and low-tax jurisdictions can attract a special kind of client, known in the industry as PEPS — Politically Exposed Persons.
PEPs are mainly politicians, public servants or members of international bodies, but can also include their family and close associates. Because of their position, they come with heightened money laundering risks, and offshore companies need to monitor their activity closely.
Over the years, Asiaciti had amassed a sizable collection of them.
Asiaciti's clients included Eduardo Cunha, a Brazilian politician sentenced to 15 years in prison in 2017 for corruption, tax evasion and money laundering.
And there's businessman Thirukumar Nadesan, a member of the Sri Lankan Prime Minister's family. He's been charged with misappropriating public funds and is yet to stand trial.
Du Shuanghua, a politically connected Chinese billionaire, who in 2010 admitted to paying a $9 million bribe to a Rio Tinto employee, was also an Asiaciti client.
And then there was Nigerian senator Abubakar Atiku Bagudu, who Asiaciti kept on as a client despite allegations he helped former Nigerian president Sani Abacha steal billions of dollars. The FBI is still trying to claw back the money.
Even as allegations about Bagudu's wrongdoing mounted, Asiaciti continued to work with him, because he had never been convicted of a crime. Some of Bagudu's alleged loot was held in trust accounts set up by Asiaciti. In 2014, Asiaciti froze the money to comply with an order obtained by the US.
Last year, the US returned $US311 million in assets looted during the Abacha regime to Nigeria, but is still chasing another $US177 million.
Asiaciti should have been regularly monitoring these high-risk clients to understand why they were setting up offshore structures, but what the MAS inspectors discovered inside Asiaciti Singapore appalled them.
"Monetary Authority of Singapore's inspection detected multiple — and in some cases, systemic — lapses in [Asiaciti's] systems, frameworks and controls," inspectors said in an internal report.
They found in one year, half of Asiaciti's high-risk trust accounts in Singapore were not being adequately monitored. Periodic reviews were not being carried out and even when they were, the recommendations were not followed up.
There had been inadequate probing into unusual transactions and a risk that Asiaciti products could be used as a conduit for illicit funds, no framework for assessing high-risk clients and "no concept" of examining their source of wealth.
As inspectors dug deeper, they began to focus on a group of Russian clients, including one particular PEP — Herman Gref.
The Russian problem
Three years after Briggs met Gref in Moscow, Asiaciti's Russian client was becoming a liability. The inspectors were delving into his affairs, along with other well-connected Russians Asiaciti had on its books.
One other was Kirill Androsov, a former deputy chief of staff in Vladimir Putin's government, now an investment banker with assets including the Chateau Gutsch, an upmarket hotel overlooking the cobalt blue waters of Switzerland's Lake Lucerne.
Gref, Androsov and another Russian businessman were involved in tens of millions of dollars of transactions that flowed through a network of structures set up by Asiaciti. Due diligence checks on them had uncovered rumours of wrongdoing but nothing that had been substantiated.
MAS inspectors were scathing of the way Asiaciti had managed the risks around its Russian clients. They noted that a "series of circular fund flows — including some demonstrating no plausible economic purpose — were allowed to pass through the trust accounts managed by Asiaciti".
At a confidential internal meeting in April 2019 Asiaciti staff discussed the firm's Russian problem. They acknowledged "instances of inconsistencies and transactions that do not make clear economic sense".
Asiaciti closed several accounts associated with Gref.
Androsov told the ABC he still does business with the firm. He categorically denied that any of his commercial dealings are in any way improper or unlawful.
Under new management
In July 2020, MAS fined Asiaciti $1.1 million for the breaches they found in their investigation. At the time Asiaciti released a statement saying it had fully addressed the issues and a "new management team" had enhanced its internal compliance and governance systems.
In a statement to the ABC, Asiaciti said it provided legitimate services to clients around the world. It said regulatory agencies were notified when issues were identified.
"We maintain a strong compliance program and each of our offices have passed third party audits for Anti-Money Laundering & Counter-Financing of Terrorism practices in recent years. However, no compliance program is infallible".
The company says regulations in many countries have changed over time and there have been isolated instances where Asiaciti hasn't kept up with the changes.
But in those cases, the company says it has worked closely with regulatory authorities to address any deficiencies.
"Our work is highly regulated and we are committed to the highest business standards, including ensuring that our operations fully comply with all laws and regulations in the jurisdictions in which we operate," the company said.
These days, Graeme Briggs is retired from running Asiaciti's day-to-day operations, and lives on an expansive vineyard on the Mornington Peninsula.
Like the fortunes of those he managed for years, much of Briggs's wealth is held through a complex offshore company and trust structure.
Listen to the Background Briefing podcast Untouchable Assets, live now.
Credits
- Reporting: Mario Christodoulou, Elise Worthington and Ben Sveen
- Additional research and fact checking: Dunja Karagic, Patrick Begley and Echo Hui
- Artwork, animation and design: Jack Fisher
- Digital production: Matt Henry
