Some Companies barely exist.. in reality.
With a website claiming more than 200 employees and an office in a business complex in the middle of Singapore, Ask Trading — “a trading and investment company focusing on the Russia/CIS market” — might appear to be a thriving midsize business. But actually it’s a mirage. Under even the slightest scrutiny, it starts to disappear. That office, BuzzFeed News discovered during a visit, is just a few sparsely populated cubicles. The company’s current website is only one page, and photographs on it were lifted from published materials about other firms. And public records show Ask was not doing what it claimed to do.
Yet between 2001 and 2016, it managed to move at least $671 million in transactions through Deutsche Bank, JPMorgan Chase, and Bank of New York Mellon, from sources no one at those banks ascertained, for purposes it never revealed. Shell companies like Ask Trading keep a low profile, but they play an outsize role in the dark economy, the trillions of dollars of dirty money that course through Western banks in full view of government regulators. As documented in the FinCEN Files, thousands of secret government documents that BuzzFeed News shared with the International Consortium of Investigative Journalists and more than 100 news organizations around the globe, these so-called shell companies can be a conduit for terrorist networks, narcotraffickers, and crime syndicates to launder the proceeds of their illegal activity. The money goes into an account at a prestigious international bank, and when it emerges, cleansed of any taint, just a few more clicks can move it from one country to another to fund more mayhem and misery.
By law, banks are supposed to be on the lookout for transactions that bear hallmarks of money laundering or other financial misconduct, then report their concerns to the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN. Such reports can support investigations and intelligence gathering — but by themselves they are not evidence of a crime. Banks have broad discretion to end their relationship with the customers whose accounts they find suspicious. But in the FinCEN Files they rarely do. Dozens of banks around the globe opened their doors to Ask and the network of companies connected to it. Bankers documented their concerns, but still went on to process nearly a billion dollars’ worth of their transactions. And not just any transactions. According to government documents, Ask used the banks to send $4 million to a United Arab Emirates–based company for what it said were construction materials. The US government later said the company was part of an organization financing drug cartels and terrorist organizations such as the Taliban. Ask received $17 million from a money laundering ring manipulating international stock trades.
The story of how a venture as elusive as Ask could gain access to some of the world’s most powerful financial institutions is the story of how the entire elaborate system of safeguards fails, over and over again. It’s the story of banks that don’t ask too many questions about the money flowing through their accounts. And of a government oversight structure that lets banks profit off even the most suspicious transaction as long as they file the proper paperwork.
It’s also a detective story.
BuzzFeed News decided to see if we could do what was apparently too great a challenge for huge international banks: figure out what the Ask network is and who’s behind it. That could have been all the information needed to stop these suspicious transactions, if anyone were so inclined.
Banks are supposed to make sure they know their customers. The requirements are a lot lower when a customer, like Ask, comes through what’s known as a correspondent bank — a smaller, local bank that partners with a big institution in order to gain global reach. The big institution may rely on outdated or shoddy information. That’s how Deutsche Bank came to believe that Ask Trading’s networks were run by a man named Yeo Tiam Chye, records show. Anyone who checked the public database in which all Singapore’s corporations must register could have seen that in June 2014, the director of the company was changed to a man named Heng Boon Liang. A little digging shows that Heng, who goes by Daniel, lives in Yishun — a residential area in the northeast of Singapore — and on LinkedIn says he works for a shipping logistics company. On his Facebook page, he has shared photos of his time spent golfing and umpiring softball games. The internet has few traces of anyone else working at Ask Trading. The only person clearly associated with the company online is its original founder, a Russian-born entrepreneur named Maxim Glazov. On social media, he and Heng have shared photos of their activities together throughout the years, such as attending a mixed martial arts competition in 2016.
Glazov has tried to hype Ask Trading’s success to promote other ventures. On F6S, a website for startup founders, there’s a section titled Amazing Things Maxim’s Made: “A group of companies in logistics and trade finance in Singapore with $800M combined yearly turnover.”
It’s unclear exactly how bank officers conducted their due diligence. But if they had checked the various addresses they had on file for Ask, they would have found locations unlikely to be headquarters for a company moving hundreds of millions of dollars’ worth of goods around the globe. One address was Glazov’s apartment. Two others were offices registered to Yeo, who goes by Henry, and who turns out to be the person who filed the government paperwork for the companies. Without digging even this deep, banks still were aware that something seemed fishy about Ask. Suspicious activity reports, or SARs, filed by BNY Mellon, flagged hundreds of millions of dollars in transactions — in particular, 50 payments totaling $27 million, from a Russian company called LLC Inter-Trade. Every one of those 50 payments referenced a single invoice for fluorescent lamps and included improbably neat round-dollar amounts — amounts that would almost never show up in actual invoices for products that are valued down to the last penny. In addition, a SAR noted that the payments were “frequently sent on consecutive days or only a few days apart,” rather than on regularly scheduled billing intervals, or the kind of time frame in which a company might plausibly need to reorder huge numbers of lights. One SAR also noted that “$27.1 million over a 3 month time span seems like an excessive amount to pay for fluorescent lamps.”
Further research led the analyst at BNY Mellon to remark that “Ask Trading is also [a] shell entity” — a company set up with no assets to speak of and no transparency about the business it is conducting — “whose website was created only to make it appear legitimate.”
By John Templon, Jason Leopold, Anthony Cormier, Tom Warren, Jeremy Singer-Vine, Scott Pham, Richard Holmes, Tanya Kozyreva and Emma Loop, BuzzFeed News, 23 September 2020