Just a short walk across Merrion Square from Leinster House is an empty office which is the registered address of more than 800 Irish limited partnerships, most of which are controlled by people from former soviet republics such as Russia, Ukraine and Uzbekistan.
Leaked documents show that Office 29, Clifton House, on Lower Fitzwilliam Street, Dublin 2, is linked to a controversial London-based company services business that operates under a number of names including Las International.
“They rent an office here, but there is nobody here at the moment,” the receptionist in the lobby said when The Irish Times visited Clifton House and asked for Las International.
“They operate under a number of different names,” she said. “Las Fiduciary, Las International and Company Advice.”
Las Fiduciary is an Irish company incorporated in 2013 with its registered address at Clifton House. Its shareholders are Ineta Utinane (41) and Alisa Iurchenko (31), who are both Latvian nationals who live in England.
Both woman are also associated with Las International and Company Advice, of 5 Percy Street, London.
British-Russian accountant Elena Yael Dovzhik (44) owns Las International, and Utinane is a former minority shareholder.
According to Graham Barrow, an expert in the use of limited partnerships (LPs), Las International is one of the top five company service providers involved in registering UK LPs that have opaque ownership structures.
The service providers have been instrumental in the registration of a huge number of English and Scottish LPs, the partners of which tend to be proxies based in offshore locations such as Belize and the Seychelles.
Obscured identities
The net result of the way the partnerships are structured is that the identity of the people who actually control them is completely obscured, according to Barrow.
“There is a reason why people want that level of secrecy. It doesn’t necessarily follow that it is a criminal reason, but it is suspicious. You can’t get away from that. It is not the way most people conduct business, is it?”
In response to controversy in 2019 about a Scottish LP they registered, Las International issued a statement saying it was a registered company formations and office address provider in the UK that had over the years filed more than 10,000 formation applications to UK Companies House on behalf of business clients.
“We are not involved in the business activities of the companies that purchased our services,” it said.
The Irish Times is not suggesting that applying for the registration of limited partnerships with proxy or offshore partners is illegal, or that the formation service companies involved have knowledge of the subsequent use made of such partnerships by those who control them.
One of the uses made by the type of LPs registered by Las International and others, according to Barrow, is to open accounts in the western banking system, though usually not in the UK.
Scottish LPs are also used to hold assets, and the use of UK LPs in public contracts in some former Soviet republics can be of such a scale that they affect those countries’ foreign direct investment statistics.
Because of political controversy over recent years about English and Scottish LPs, it may be the case that operators are shifting business to Ireland, Barrow said.
“People like me keep writing about the UK ones. Maybe they are thinking we can get a bit more privacy in Ireland,” he said.
There are currently 3,217 limited partnerships registered in Ireland, according to the Department of Enterprise, Trade and Employment.
Four of the top-six registered addresses for Irish LPs are essentially post office box addresses in this jurisdiction, The Irish Times has established.
Empty office
The empty office in Clifton House is by far the most popular such address, being home to 813, or approximately a quarter, of all registered Irish LPs.
The next most popular address is that of a franchise mail box address business in Cork city, which is the registered address for 87 Irish LPs.
The owner of the Mail Boxes Etc outlet said the address, Office 115, Commerce House, 14 Washington Street West, Cork, is being used by persons unknown without his permission.
There are 36 Irish LPs registered to an office in a business park in Celbridge, Co Kildare, that is also the registered address of the Irish branch of a business in Birmingham involved in setting up limited partnerships with obscure ownership structures.
An empty building that changed hands earlier this year, 33 Bachelors Walk, Dublin 1, is the registered address for 34 Irish LPs.
An entity called Global Advisors, which also operates out of Edinburgh, formerly used this address when registering Irish LPs.
Ben Cowdock, an investigator with Transparency International in the UK, has studied the use of UK LPs in international crime.
“The nature of the businesses they are enabling include weapons being run to sanctioned states, to money being stolen from government accounts and being taken away from the people. They are being used to facilitate serious crime that happens all around the world.”
“The continued use of SLPs in money-laundering, corruption and organised crime, has tarnished Scotland’s reputation as a safe and clean place to do business,” said Cowdock.
The ownership of limited partnerships in Ireland is even more obscure than is the case with their UK counterparts.
Irish LPs do not have to file financial accounts, as English LPs have to, and do not have to identify the entities or persons that control them, as Scottish LPs have to.
The Irish Times has been able to shed more light on Irish LPs because it has access to a huge cache of leaked documents from offshore service providers in the Seychelles and elsewhere, who in turn provide services to businesses such as Las International.
The leaked documents were made available as part of a project, the Pandora Papers, organised by the International Consortium of Investigative Journalists (ICIJ).
The project involves the ICIJ and 149 media partners, including The Irish Times, the BBC, Süddeutsche Zeitung, the Australian Financial Review, Asahi Shimbun in Japan, and the Washington Post in the US.
Leaked documents
The leaked documents show that most of the Irish LPs with their registered address at Clifton House use proxy partners in secrecy jurisdictions.
Because they are structured in this way, the identity of the people who really control them is not disclosed to the Companies Registration Office in Dublin when the LPs are being registered.
Many of the proxy partners of the partnerships at Clifton House are provided by Alpha Consulting Ltd, a major offshore services provider based in the Seychelles.
Alpha managing director Victoria Valkovskaya told the ICIJ that the firm has had approved customer due-diligence and anti-money-laundering procedures in place since it started business in 2008.
Las Fiduciary acted as a tax agent for some partnerships based at Clifton House, and corresponded with the Revenue Commissioners, the leaked documents show.
The London-based business has had a substantial two-way relationship with Alpha Consulting since at least June 2011, the leaked files indicate.
They also show Alpha charging law firms in Moscow for services provided via Las International, including the use of the Fitzwilliam Street address.
The Irish LPs at Clifton House tend to have no internet presence and it is not possible in most instances to establish what their activities are.
One of the names that features in the Pandora Papers in respect of an Irish LP is that of Aleksandr Isaev, a Russian national who is the subject of a US arrest warrant for his alleged part in an international online ad fraud scheme known as 3ve.2.
The leaked files show Isaev was the owner of Adcamp LP, with an address at Clifton House.
However, the documents do not show what purpose, if any, Isaev ever made of the Irish entity, which has no internet presence.
Adcamp was registered in 2017, and was declared ceased in 2019 at the request of Las Fiduciary.
The 3ve.2 scheme involved huge numbers of hacked computers being used to generate fake “views” for online ads, the US courts have been told.
Fake views
Tens of millions of dollars in revenue paid out by advertising firms for the fake views was lodged to bank accounts in Switzerland and elsewhere, with millions of dollars being lodged to accounts in the name of Scottish LPs, according to the US evidence.
Three of the main named Scottish LPs identified to the courts were registered at the request of Las International.
The Irish Times asked Las International to comment on the fact that LPs to which it had provided services had been involved in the alleged laundering of money from the 3ve.2 scheme.
In an email response, Iurchenko said that when providing company formation and mail-forwarding services to new clients, know-your-client (KYC) information is collected as required under anti-money-laundering regulations.
“Our clients only declare to us their international business activities for newly incorporated companies, before their bank accounts are opened and their trading activities start.
“Despite very strict KYC measures in place, unfortunately there’s only so much we can do.”
The Dutch investigations and research website Bellingcat released a report in 2017 in which it said that Las International had registered 1,632 Scottish LPs between 2015 and 2017, of which 85.9 per cent had partners that were located in “secrecy jurisdictions”.
The Pandora Papers include a January 2020 email from Iurchenko to Utinane and Natalja Bolshakova (also of Las International) saying that the UK government had unveiled new measures to tackle money-laundering linked to the abuse of Scottish LPs, including “more stringent checks on those registering a limited partnership”.
“In this regard, and also following the most recent AML [anti-money laundering] inspection by our regulator, we have decided to suspend registrations of new Scottish partnerships.
“Unfortunately, the provision of such services directly affects our business’s image and our reputation.”
Iurchenko told The Irish Times that “as demand for our services for Irish limited partnerships increased over recent years, we decided to terminate our services for this type of company due to the lack of their transparency in public records and potential risks for our internal AMLR [anti-money-laundering] compliance.”
The Pandora Papers show LPs continuing to be registered at Office 29 Clifton House up to March of last year, which approximates to the date of the most recent of the documents from Alpha Consulting contained in the leaked files.
Irish limited partnerships: What are they and what is the problem?
Irish limited partnerships are entities provided for under the 1907 Limited Partnership Act that allow people invest in a business venture while limiting their exposure to the size of their investment.
Classically they were used in ventures such as farms where the farm owner, the general partner, could have the benefit of an investment in the farm by a limited partner, with the latter knowing that the risk he or she was taking was limited to the amount of money they were putting into the farming venture.
These days limited partnerships play a huge role in the venture capital sector, where investors can put money into funds that have a particular purpose, knowing that the risk they are taking is limited.
The structure is also used in property investments, stallion syndicates, and family investment structures.
Limited partnerships are not taxed because any profits that arise from the business they are engaged in are (theoretically) taxed at the partner level. The profits flow through the partnership, so to speak.
The problem that has arisen, firstly in the UK and now apparently in this jurisdiction too, is that the use of proxy partners and partners based in offshore or secrecy jurisdictions, can bring about a situation where you have a legal entity registered in a first-world economy which is untaxed, and the ownership of which is totally obscure.
You end up with a de-facto offshore entity, with an address in Dublin, Cork, London or Edinburgh.
Because of this, the UK government has over recent years introduced some reforms, and is continuing to examine the possibility of further changes to its regime, while being careful not to do any harm to its venture capital sector.
In this jurisdiction the Department of Enterprise, Trade and Employment sought submissions in 2019 on reforming the 1907 law. The heads of a Bill are currently in preparation.
