UK Court Sentences Former Bankers for Defrauding Libyan Wealth Fund

The Southwark Crown Court in London sentenced three former bankers for stealing a total of US$8.45 million from a fund belonging to the people of Libya they were entrusted to manage.

Crown Court LondonSouthwark Crown Court in London. (Photo: Jorge Franganillo, Flickr, License)The trio included the fund’s managers, Frederick Marino and Aurelien Bessot, and Swiss banker Yoshiki Ohmura, who helped them facilitate the fraud.

Marino, who had been found guilty of fraud by abuse of position of trust, was sentenced on Monday to seven years and six months in prison.

Ohmura, facing the same indictment, received a prison sentence of three years and six months.

Both had absconded from the country and were sentenced in absentia, with warrants issued for their arrest.

Bessot, who had collaborated with the prosecutors and showed remorse for his actions, was handed a sentence of 15 months suspended for two years. He previously paid back $2.8 million – more than what he owed.

The fraud started in 2009 when Marino and Bessot set up an investment company, FM Capital Partners, registered in London, to manage £822 million, the equivalent of around $986 million, belonging to the Libya Africa Investment Portfolio (LAIP).

LAIP, comprising holdings in a number of companies across Africa, is a part of the Libyan Investment Authority, a sovereign wealth fund set up in 2006 to manage Libya’s oil revenue surplus and estimated to be worth $71 billion.

With Ohmura’s assistance, Marino and Bessot were generating underdeclared finder fees for investments made on behalf of the Libyan fund, which were paid to a series of shell companies in the Seychelles and the Cayman Islands that were controlled by the two managers.

“They showed a complete disregard for the important position they held to make investments work for their clients who were looking to diversify away from solely oil revenues,” said Andrew West, a Specialist Prosecutor at the Crown Prosecution Service. West added that this was done for “purely selfish and greedy purposes to fund their lavish lifestyles.”

Since the fall of the Gaddafi regime in 2011, the Libyan Investment Authority, which under Gaddafi also served as a tool for distributing patronage, has faced a fierce fight for control of the incorporated assets. A part of the structure has been subjected to the U.N. asset freeze.