Maldives: How do you launder $1.5 billion?

How do you launder one-and-a-half billion dollars? If it is denominated in $100 bills, it would be the equivalent of 12 fully stacked pallets. Buying property, art and expensive watches does not cut it. So the Maldives president’s closest ministers and aides came up with a plan.

Stealing Paradise, a documentary by Al Jazeera’s Investigative Unit, has shown that the Maldives government “controls all the levers of state” and often uses them for nefarious purposes. This time, they thought they would pull those levers in the service of secretive Asian businessmen representing a boss referred to only as “Mr Hans”.

The plan was remarkably simple. They would charter a plane to fly the money to the Maldives, accompanied by security guards. The guards would hand it over to local soldiers, who would supervise its transfer to a vault. There, it would be counted and verified by Maldives Monetary Authority (MMA) officials. The central bankers would then credit a private company account. Finally, the owners would gradually telegraph-transfer the money back out.

As they did so, the money would appear to be the cleanly earned profits of a tourism investment.

“It’s like something from a James Bond film,” says Robert Palmer, an anti-corruption expert at Global Witness.

In a written response, the Maldives government says there is no evidence in the “Stealing Paradise” report connecting President Yameen or current members of his government to any wrongdoing. 

It notes that the claims already form part of a wider investigation initiated by President Yameen in February 2016. The government has asked Al Jazeera to provide any evidence which may be relevant to this investigation. 

Financial Intelligence?

Palmer points out that such a transaction “raises a huge red flag of money laundering”. However, if the central bank is involved, its Financial Intelligence Unit will look the other way, turning a blind eye to that red flag.

In the Maldives, several sources say that the MMA looked the other way repeatedly as it failed to detect suspicious transactions linked to the theft of nearly $80m of state money. The MMA did not respond to a request for comment.

Details of the giant money-laundering plot appear in data obtained from three of the iPhones of Ahmed Adeeb, the former vice president of the Maldives. He gave his phones to an ally before being arrested. A source passed on the data.

Emails, text and Viber messages lay out how the plan was put in place by several of the president’s men; his personal security officer, his Minister of State at the President’s Office, his Tourism Minister and his nephew, who happened to be Minister of Social Affairs.

Step One – The Cover Story

The first step was to come up with a reason to be “investing” so much money, something to make everything look clean.

“11/08/2014 07:29:22(UTC 0), 960******* (Colonel “Papa” Fayaz)  ? Government is making a cover story of giving us a project develop for that the fund’s will be bought.”  

The chief of the army’s Special Protection Group, Colonel Ahmed “Papa” Fayaz, who was responsible for the security of the president, wrote the message to his co-plotters.

The “cover story” came in the form of a letter from the Tourism Ministry dated September 4, 2014. It outlined three sets of geographical coordinates. The coordinates point to three lagoons a 50-minute speedboat away from the capital.   

[Zoom in to see the billion-dollar islands]

[Zoom in to see the billion-dollar islands]

The letter set out an investment plan – the acquisition of the lagoons for $20m and an investment of up to $1.5bn. It is implausibly large. Resort developments rarely cost more than $100m. The money would pay for three floating golf courses, for example, and when Hilton redeveloped Rangalifinolhu Island to include the world’s first underwater restaurant, they spent only $25m.

Step Two – Company Structure

Step two was to put the company structures in place and open the bank accounts.

The Tourism Minister had written the “cover story” letter to Singaporean Tan Kuan Yew, who represented the supposed investors in the project. He leads a company called Idea V and is also executive chairman of Ufinity, a software firm in Singapore.

Kuan acted as the middleman, led the communication and helped set up the shell companies. He visited the Maldives three times.

21/09/2014 09:02:22(UTC 0), 65******** (Tan Kuan Yew) ?

I happy to meet the president if u think is appropriate.

Kuan replied to the Tourism Ministry just over two weeks later.

“When the physical fund arrives in Maldives, we need support from Maldives Monetary Authority to secure the fund from the aircraft to bank premises for verification, counting and ensure immediate credit to our bank account.”

<a href=”https://assets.documentcloud.org/documents/3085853/LETTER-FROM-TAN-KUAN-YEW-to-AHMED-ADEEB.pdf”>LETTER-FROM-TAN-KUAN-YEW-to-AHMED-ADEEB (PDF)</a> <br /> <a href=”https://assets.documentcloud.org/documents/3085853/LETTER-FROM-TAN-KUAN-YEW-to-AHMED-ADEEB.txt”>LETTER-FROM-TAN-KUAN-YEW-to-AHMED-ADEEB (Text)</a>

Kuan was working with Jude Anand, an executive who visited the Maldives in September 2014. He sent reports of his progress to Indonesian Rosihan Yacub, who was also copied into the communications. Yacub has interests in green energy firms and a number of mines and plantations.

The other Indonesian involved was Abdul Hakam Hadi, who leads Bukit Ibam iron ore mine and an offshore company in Malaysia’s tax haven of Labuan. That is where the other man involved in the deal, Faidzan Hassan, has a company by the name of SitiTrust and Administrator.

Faidzan Hassan

Hassan studied accounting and spun the web of companies through which the money would pass. He is the executive director of KIC Oil and Gas, which runs terminals in Malaysia, and managing director of Leoco Oil. Company records show that his wife is also a registered director of Leoco.

The mogul lives in the largest of a series of plush houses in a gated compound in one of the smartest suburbs of Kuala Lumpur. It has a two-acre, Japanese-style garden that backs on to a nature reserve.

For the Maldives project, Faidzan would use his Labuan-registered trust company, SitiTrust and Administrator. It is the parent company of a local subsidiary in the Maldives by the same name, to which the money would be transferred from the central bank.

Al Jazeera caught up with Faidzan in a luxury mall in Kuala Lumpur and asked, “Do you help people launder money?”

“My God, how can you even say that? Say it to my face! How can you even say that?” Faidzan denied the allegations. “I’ve been in this business for 35 years, okay. At this age I don’t need to do that.”

“How many pallets?”

However, shortly before Faidzan made his denial, he had met  our undercover reporter, who told him he represented wealthy clients with political connections who wanted absolute secrecy.

Finance professionals are taught to be very wary of secretive, politically exposed people dealing in large amounts of hard currency, but Faidzan was not worried. “Some of it’s in cash,” the reporter said. “I know that might be an issue.”

“No,” came the reply. “We can do that … How many pallets do you have? Three hundred? Five hundred?”

“Much as they say money is dirty,” says Faidzan, “I don’t deal with arms and drugs. That’s it. So long as they don’t sell arms, my conscience is clear.”

Faidzan is an expert in guaranteeing secrecy as well, boasting that he had hidden the identity of one of his most high-profile clients behind seven shell companies. “Even at the end of it,” he says, “the identity of the owner is actually a foundation in my name that goes nowhere. It’s actually a Panama foundation.”

“In normal circumstances I’ve gone up to three to four, which is enough protection actually.”

Having guaranteed privacy and made it clear we could clean cash, he explained his method. Like the Maldives plot, he would launder the money through a central bank in the region. “It’ll come to a country in Asia. That’s all I can say for now. We have an arrangement with the central bank and everything else … it’s not about the know-how. It’s the know-who!”

It appears Faidzan is very well connected. He told our reporter that he got out of stockbroking in 1997 when the then Finance Minister of Malaysia warned him of the upcoming economic crisis of the Tiger Economies. He is also photographed on Facebook with the President of Madagascar, and was of course in touch with the people at the top of the Maldives government.

There is no suggestion that the Madagascar president, Hery Rajaonarimampianina, was in any way involved with the plot.

Step Three – Clearing the way with the central bank

From: From: 65******** Tan Kuan Yew

Timestamp: 13/09/2014 07:12:48(UTC 0)

Source App: Viber

Gentleman, I still 3 things. 1. Letter from MMA, for which I have sent a a draft to fayaz, pls give me that ASAP, if possible by tomorrow. 2. Confirm a date after which u can accept the cargo, meaning after this date the MMA is able to handle the 64 mil usd first shipment, that include verification n counting, and logistics as appropriate. 3. Pls also informed the bank of Maldives. after account is credited, 10 mil usd will be TT to Sg or HK, the balance will stay in Maldives to be used as loan or projects unless of course if I can’t find suitable usage after 6 month, the money will be TT out. Basically, every deal is like that, pls also get advice from central bank about the capacity on a monthly basis. Thanks!

Tan Kuan Yew was keen to put the plan into action, but he needed an approval letter from the central bank, called the MMA, to clear the way. He was frustrated by the slow progress.

21/09/2014 08:41:41(UTC 0), +65******** (Tan Kuan Yew) ? I did a report to rosihan, he is comfortable with details in Maldives. We can confirm our schedule to ship cargo by next week. I think no need a meeting with president until after transaction. More important to have letter and for u to confirm when u are ready to receive cargo. If time permit, we can meet again just to make sure everything is ok

The letter did not come.

From: From: +65******** Tan Kuan Yew

Timestamp: 01/10/2014 03:07:45(UTC 0)

Source App: Viber

Body:

Gentleman, I have been waiting for the letter since last thurs? Can we resolve the issue and get the letter issued today? If there are issues, pls be upfront about it. Thanks!

Tourism Minister, Ahmed Adeeb, tried to force the issue.

From: 960******* Col. Papa Fayaz, Army Special Protection Group

Timestamp: 08/09/2014 16:10:44(UTC 0)

Source App: Viber

Sir what should we do now … about this we can’t bring the fund’s if the bank is not ready

—————————–

From: Tourism Minister, Ahmed Adeeb

Timestamp: 08/09/2014 16:19:10(UTC 0)

Source App: Viber

We will make them ready

But Adeeb could not make them ready and the MMA letter never came. Adeeb contacted the Central Bank Governor and attempted to get her to clear the way for the cash.

11/07/2014 11:03:38(UTC 0), 960*******

(MMA Governor Azeema Adam)

Is that 60 million in cash?

11/07/2014 11:06:11(UTC 0),

Tourism Minister, Ahmed Adeeb

Hahaha Jihad called

11/07/2014 11:06:41(UTC 0), 960*******

(MMA Governor Azeema Adam)

Yes. Not a good thing

11/07/2014 11:07:49(UTC 0), ?

Tourism Minister, Ahmed Adeeb

It’s all flight capital ppl want to move here , mostly since Indonesian elections, lot of offshore oil trade money

11/07/2014 11:08:07(UTC 0), 960*******

(MMA Governor Azeema Adam)

MMA AML policy wouldnt allow cash.

11/07/2014 11:09:52(UTC 0), 960******* (MMA Governor Azeema Adam)

If they can provide the details of source of funds and the legitimacy of earning that then only can at a bank.

11/07/2014 11:10:13(UTC 0),

Tourism Minister, Ahmed Adeeb

They can give all that proof

11/07/2014 11:10:44(UTC 0), 960*******

(MMA Governor Azeema Adam)

Some hv to be there to make sure our financial sector is clean

11/07/2014 11:11:50(UTC 0), ?

Tourism Minister, Ahmed Adeeb

I agree but we need to develop as well, at the moment we are at a very crucial financial position

11/07/2014 11:12:13(UTC 0), 960*******

(MMA Governor Azeema Adam)

If they can provide all the evidence can find a way.

Having failed to get the MMA to issue a letter, the Finance Ministry appeared to step in and a letter emerged in December with the same wording Tan Kuan Yew had suggested.

<a href=”https://assets.documentcloud.org/documents/3085852/LETTER-FROM-FINANCE-MINISTER-to-ROSIHAN-YACUB.pdf”>LETTER-FROM-FINANCE-MINISTER-to-ROSIHAN-YACUB (PDF) <br> href=”https://assets.documentcloud.org/documents/3085852/LETTER-FROM-FINANCE-MINISTER-to-ROSIHAN-YACUB.txt”>LETTER-FROM-FINANCE-MINISTER-to-ROSIHAN-YACUB (Text)</a>

Step four – Arrange the logistics

When you have the money, the cover story, the company structure and the government approvals, it is time to make the final arrangements.

In January 2015, Tan Kuan Yew flew back to Male, this time with the mysterious “Mr Hans”. Faidzan and Hakam Abdul Hadi joined them, landing at 21.45 on a flight from Kuala Lumpur.

Then it was time for lunch with Tourism Minister Adeeb, who would soon be vice president and later imprisoned, and the Finance Minister Abdulla Jihad, who would soon replace Adeeb as vice president.

“We will like to discuss and hopefully finalise our first transaction,” wrote Tan Kuan Yew. “We could look at possible financial institution licences, duty free project etc.,” he added.

By March, it appeared that they were ready. Tan Kuan Yew sent a new email, this time listing the details of a charter flight from Sharjah in the United Arab Emirates, to the Iranian capital Tehran and then to Maldives.

A source has told us that the cash was coming from Iran. Faidzan Hassan’s Facebook account also shows he visited the country at this time, posting a series of photos of him standing in snow. He wrote the caption, ‘Why go to Tehran when just outside the city looks like this at the end of winter just before Spring?”

Robert Palmer, the anti-corruption expert, said: “I haven’t seen an example of this amount of cash that you laundered through a central bank before. You often have cases where you have corrupt governments and they can use their central banks as piggy banks to take out money, but this amount and in physical cash I think is quite unusual.”

But that is where the story ends. Because after March 2015 the emails and the text messages end. Did the money come in? We may never know.

Did the Maldives government plot to bring in vast amounts of cash with the help of reclusive businessmen from across Asia? It certainly looks that way.

The Maldives government failed to respond to a request for comment at the time this article was written. Tan Kuan Yew, Abdul Hakam Hadi, Faidzan Hassan and Rosihan Yacub deny any wrongdoing and say no money was moved.