Making Millions Through Trade Secrets — Finance Uncovered

Scottish shells

After years of intense negotiation, LAS was forced to adapt its strategy in 2017. The future of its thriving office in Edinburgh, Scotland was suddenly put in jeopardy when the UK government announced tougher transparency rules designed to curb an explosion of Scottish limited companies. (SLP).

The new rules targeted SLPs after investigative journalists from The Herald newspaper, OCCRP, the BBC’s File on Four radio show revealed how some Scottish front companies were linked to international money laundering scandals.

Prior to the crackdown, in 2015 and 2016, LAS and other start-up agencies created record numbers of SLPs as demand for this type of front company skyrocketed.

At the height of the SLP boom, no agency was doing more to meet growing demand than LAS. Bellingcat, the research collective, later found that LAS created more than 1,600 partnerships in Scotland between 2015 and 2017.

But after new transparency rules were applied to Scottish partnerships, LAS’ business in Edinburgh quickly declined and its offices in the city were closed in 2020.

A leaked LAS email to a client, written in Russian, explained: “Unfortunately, this type of SLP company has often been used for fraudulent activity, attracting the attention of… UK authorities and the international press.

“For this reason and also due to the last AML inspection by the regulator…LAS has decided to suspend the registration and maintenance of Scottish partnerships.”

The email comes from a leak of almost 12 million documents from the offshore secrecy industry, known as the Pandora Papers. It was obtained by the International Consortium of Investigative Journalists.

LAS Express

LAS operations elsewhere in the UK were also changing. In 2018, the agency moved from its headquarters to an elegant Georgian townhouse in Fitzrovia, London. The website, las-international.com, has been removed and replaced with a clean site, renamed “LAS Express”.

At the same time, hundreds of businesses that LAS had registered at the old Fitzrovia address were moved to a nearby office above a Mexican burrito restaurant, where their administration was taken over by a new company in within the LAS empire called Company Advice LTD.

Company Advice has continued LAS’s company formation activities in the UK until 2021, Dovzhik and Utinane told Finance Uncovered.

“But in 2021, LAS and all associated companies ceased to offer locally regulated services related to business formation in the UK, added.

According to records held at Companies House, however, more than 800 active companies remained registered at the office above the Mexican restaurant at the end of March this year, many of them formed and administered by offshore companies associated with the LAS agency. Since then, new companies have been added every week.

In recent months, companies have been set up at this address with sole director-shareholders living in war-torn eastern Ukraine, Kazakhstan, Latvia and Cyprus. The most recent company set up for a Russian shareholder-manager was incorporated just six days before Vladimir Putin began the invasion of Ukraine.

When asked who set up these new businesses after LAS stopped offering company formation services in the UK, Dovzhik told Finance Uncovered that she didn’t know. She noted that some of LAS’ past customers may have used the address above the Mexican restaurant without realizing that LAS was no longer in business there. “We have different types of corporate clients and some…generally do everything [Companies House] deposits themselves, without our involvement.

Of the older companies registered at the same address — also still active, according to Companies House records — Dovzhik said many of those companies would soon be declared dissolved as documents were updated.

Meanwhile, a few businesses may continue to appear as “active” businesses for much longer, even though, in truth, they were abandoned by their ultimate owners some time ago, she said.

According to an analysis by Finance Uncovered and the BBC, before ceasing operations in the UK, LAS registered 244 PELs above the Mexican restaurant on behalf of its clients, of which 181 were still active at the end of March this year.

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