Trial of PEP from Equatorial Guinea for money laundering in France; are Canada’s PEPs from Gabon next?

By Christine Duhaime | January 4th, 2017

Equatorial Guinea trial

Teodorin Obiang, the son of the President of Equatorial Guinea, is being prosecuted in France for allegedly laundering the proceeds of corruption in France. Mr. Obiang is also the Vice-President of Equatorial Guinea and is a politically exposed person. His trial is scheduled for June 2017.

He is accused of bringing $105 million into France using the financial system – money allegedly plundered from the country from oil sales, and using it to buy palatial Parisian properties and exotic cars. At the time he imported $105 million into France, his salary was $80,000 per year. His first lawyer, Olivier Metzner, was murdered and was found floating in the sea near Boëdic island in Gulf of Morbihan.

The President of Equatorial Guinea was the subject of a US Senate review on the use of lawyers for laundering proceeds of crime by politically exposed persons. Pursuant to that Report, Mr. Obiang hired US lawyers to set up companies for the purposes of laundering $100 million into the US through law firm trust accounts. Funds were used in the US for lavish expenses, such as a house in Malibu and a private jet, and to attend parties at the Playboy Mansion.

The Obiang family assets keep being seized around the world pursuant to this case, including a 76-metre luxury $100 million yacht seized just before Christmas in the Netherlands at the request of a Swiss Court.

Canadian connection to French & Swiss investigations & trials

The case is interesting for Canada because it mirrors a similar set of circumstances involving the leader of Gabon and his family, who are part of the same investigation in France looking at Obiang’s family for the movement of alleged ill gotten gains to the West through banks. The leader of Gabon was El Hadj Omar Bongo Ondimba, who is now deceased. His wife and daughter, Marie-Yva Astier and Yamilee Bongo-Astier, respectively, were granted Canadian citizenship. They are both politically exposed persons in Canada, and subject to enhanced scrutiny and verification of the source of their wealth by entities that report to FINTRAC.

The US Senate Report, described above, also dealt with the Bongo family and it found that the daughter opened several bank accounts in the US and made large cash deposits for the Bongo family members.  She also purchased vehicles at the request of her father.

In 2007, she asked the Commerce Bank in New York City to help her count money she had in her safety deposit box because she had too much –  all toll, she had $1 million in the safety deposit box in $100 bills wrapped in plastic. When questioned by the Bank, she said that the funds came from cash her father had brought into the US and given her. The bank reported that because she produced a Canadian passport and did not say who she was, they did not tie her to the President of Gabon or suspect she was a PEP. The US Senate found that her mother, Marie-Yva Astier, sent her additional money from Canada. The Bongos have ruled Gabon for 50 years. The Canadian, Ms. Bongo-Astier, is the sister of the current ruler of Gabon.

The French Courts ordered the seizure of assets of the Bongo family in April of 2016 while the investigation continues, including a villa in Nice, a mansion in Paris and several commercial properties. Ms. Bongo-Astier is said to be part of a family dispute over the division of the estate of the former leader, including hundreds of millions of dollars parked in Monaco. Canada agreed with the G20 to enforce the “denial of safe haven” movement, which is relevant here to the extent proceeds of corruption may have landed in Canada.

As a beneficiary of the vast estate of the former leader of Gabon, and of multiple corporations in Gabon, her net worth is said to be in the hundreds of millions of dollars, although she never seems to appear on lists of Canada’s richest people.

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