Mystery Company Ties Accused Temple Raiders to Art World Elite
Where in the world is Pantheon Worldwide? Not even its own bank can say.
Oleg Tinkov is a self-made Russian billionaire with a penchant for private jets and luxury homes around the globe that bear his name, just like the online bank he founded.
For years, Tinkov flaunted this lavish lifestyle on social media. In February, his family flew a $58-million plane between three countries in one day while celebrating his son Roman’s 17th birthday, according to his Instagram posts. When Roman was just 10 years old, he posed for an Instagram photo while cutting a ribbon on the staircase of Tinkov’s first jet, worth $28 million. “Roma bought a toy,” the caption read.
That year, in 2013, Tinkov told U.S. authorities that his net worth was $300,000. He was renouncing his naturalized U.S. citizenship and was required to declare his assets in the process. But prosecutors alleged that his shares in Tinkoff Bank alone were worth over $1 billion. He is now fighting extradition from his home in London to face tax fraud charges in the United States.
While Tinkov has been accused of tax fraud in the U.S., he’s been able to save millions legally in a European tax haven.
In the Isle of Man, a British crown dependency in the Irish Sea, Tinkov established an opaque jet leasing structure that enabled him to avoid tax payments on three private jets reportedly worth around $114 million. He effectively leased the jets to himself through anonymous offshore companies, thereby qualifying for tax exemptions that would not apply if he had simply purchased the planes.
Tinkov’s scheme was first made public in 2017 with the publication of the Paradise Papers, a leak of documents from a legal services company called Appleby that helped wealthy clients stash their assets offshore.
In 2018, the European Commission called for the UK to clamp down on what it called “abusive tax practices in the Isle of Man,” after a BBC investigation found that authorities there refunded more than 790 million pounds to 231 aircraft leasing companies that had imported jets between 2011 and 2017. The UK launched an inquiry, but concluded that there was “no evidence of aircraft VAT [value-added tax] avoidance in the Isle of Man.” A separate European Commission investigation is ongoing.
Now, a fresh leak of bank documents from a branch of the Cayman National bank on the Isle of Man demonstrates weak compliance reviews and reveals exactly how these complex corporate structures worked. The new documents also show that Tinkov wasn’t the only one: At least 12 other jet owners used similar schemes, enabling them to reduce their tax bills.
Since October 2011, almost 300 applications to the island’s customs authority for a total exemption from VAT for importing a plane have been given the green light, according to data released through Freedom of Information requests. An analysis by Global Witness found this saved the owners almost one billion pounds — equivalent to the Isle of Man government’s entire budget for 2020.
The loss of these potential revenues is offset by a flourishing financial services industry that tax havens such as the Isle of Man rely on to fuel their economies. The bank documents also expose the role of financial service providers — bankers, accountants, and corporate service firms — in facilitating such schemes.
Tinkov did not respond to questions from reporters.
In November 2019, the transparency collective Distributed Denial of Secrets published two caches of customer data from Cayman National Bank (Isle of Man) Limited, a subsidiary of Cayman National Corporation Ltd. based in the British Crown dependency of the Isle of Man. The bank — referred to here as Cayman National — confirmed it had been hacked, and a known hacker named Phineas Fisher claimed responsibility.
Because Cayman National specializes in private wealth management and operates in an offshore jurisdiction, OCCRP decided to make the now publicly available data searchable on its Aleph database, allowing professional journalists to identify stories in the public interest.
The hacked data included virtual computer images from a variety of systems operated by the bank, including those designed for customer management, databases, email servers, website management, and systems for anti-money laundering compliance reviews of customers and transactions.
According to his self-published autobiography, “I’m Just Like Anyone Else,” Tinkov was born in Siberia in 1967, the son of a coal miner and a seamstress. After a string of retail and food and drink ventures in the 1990s and early 2000s, he founded Tinkoff Bank, an online bank that now has more than seven million customers. In its latest ranking of billionaires, Forbes listed Tinkov as one of Russia’s richest businessmen.
While the U.S. indictment focused on a corporate trail that led to the British Virgin Islands, it was the Isle of Man that he used to shelter his private jets.
Stark Ltd, his jet leasing company, opened a bank account with the local branch of Cayman National in 2014.
Tinkov appeared in the Paradise Papers leak in 2017 as a client of corporate services provider Appleby, now renamed Estera. Le Monde reported at the time that the businessman used Stark Ltd to buy private jets from the French manufacturer Dassault and didn’t pay a penny of VAT in France. The jets were instead imported, through Stark, into the Isle of Man, where Tinkov demanded an immediate refund from the tax authorities because the planes would be leased out.
The structure used by Tinkov worked as follows: Isle of Man-registered Stark Ltd bought the jets, but rather than using them itself, the company leased them to a separate BVI firm, Moonfield Trading Inc., which was also ultimately owned by Tinkov.
By operating as a leasing company, Stark could claim an exemption on the VAT that would otherwise be due at import, according to reporting by Global Witness.
The UK’s HM Treasury found no evidence of tax avoidance in the Isle of Man in its 2019 review, recommending only more stringent checks by IOM authorities to ensure the planes’ VAT status continued to be appropriate after registration.
The inquiry cited allegations made in reports following the Paradise Papers leak that some aircraft had been used for leisure, without incurring VAT.
Notably, after he was arrested for tax fraud, Tinkov deleted from his Instagram images of jet-setting with his family around Europe in the plane that on paper was being used for business.
The head of communications for the Isle of Man Cabinet Office said via email that the island’s government “will not tolerate anyone that seeks to avoid paying tax.” The government has “worked with HMRC in implementing the recommendations in the review, undertaking an extensive exercise on gathering information, and developing a suitable approach to post VAT registration assurance activity,” the spokesperson added.
The scheme depended on a circular financial arrangement that saw the two companies shift funds between their offshore bank accounts. First, Moonfield loaned Stark the money to buy the aircraft. The jets were then leased back to Moonfield for Tinkov’s use. Moonfield then made regular payments to Stark for the use of the jets — funds that were almost immediately returned to Moonfield in repayment of the original loan. In effect, Tinkov was paying himself to use his own jets under a leasing arrangement that enabled him to avoid paying the VAT.
The leaked bank documents show how Stark received $9.4 million in regular “advanced rental payments” from Moonfield between July 2014 and February 2018. The payments were sent straight back to Moonfield as loan repayments. The average gap between Stark receiving a payment and sending back the balance was just a week.
There’s some indication that U.S. authorities who were investigating Tinkov for tax fraud looked into the ownership of the planes as well. Among the bank’s hacked files was a cache of evidence prepared for an appearance by a Cayman National employee at the Isle of Man Courts of Justice in June 2018. An official summons included in the folder refers to “a criminal investigation that is being carried on in Ireland,” but an accompanying email describes the information as “evidence sought by the US Department of Justice,” including information relating to Tinkov’s jets.
Even as he fights extradition to the U.S., where he faces serious tax fraud charges, Tinkov has recently launched his latest venture: a luxury superyacht-for-charter business with apparent links to companies in another European tax haven that are owned by Moonfield.
The “La Datcha Tinkoff Collection” offers wealthy holiday-makers an opportunity to rent Tinkov’s luxury homes and yachts around the world. “Work hard, play harder. This is my philosophy for life,” Tinkov writes in an introduction to the collection.
La Datcha is a 252-foot icebreaker and expedition superyacht designed to explore the Arctic and Antarctic regions. It’s equipped with two helicopters and a submarine, and can accommodate 12 guests on six decks. The ship, which reportedly cost over US$100 million to build, can be chartered for 740,000 euros (about $870,000) per week. A notable detail was posted on the website of Edminston, a superyacht broker which markets the vessel, in July 2019: “NOT FOR SALE OR CHARTER TO US RESIDENTS IN US WATERS.” The statement was posted during the U.S. investigation into Tinkov's assets.
La Datcha’s ownership is unknown, though two shipping companies called La Datcha Marine Limited and La Datcha Yachting Limited were established in Malta in 2016. Both companies are owned by Moonfield, the company involved in Tinkov’s jet leasing scheme. According to Yacht Harbour, Tinkov plans to spend 20 weeks per year aboard the giant yacht.
Cayman National’s internal emails show that, after the Paradise Papers revelations, the bank’s compliance department became concerned about the Stark account, even though it had access to the loan documents underpinning the arrangement for more than two years.
Taking another look at their client — whom the bank had previously flagged as a “High Risk Customer” and “High Profile Individual,” labels that should have subjected him to extra scrutiny — compliance officers then became worried that Estera, the firm that administered Moonfield, appeared to be “skirting around” concerns about Tinkov.
In one email, a Cayman National employee pointed out the circularity of the structure: “The funds coming into Stark Limited’s account are from Moonfield Trading Inc’s account at Tinkoff Bank in Russia,” the employee wrote. “The funds received are being paid out within a matter of days to an another [sic] account in the name of Moonfield Trading Inc at ABLV Bank in Latvia.”
In another internal email, Cayman National’s banking director wrote that the structure was “effectively a ‘pass through’ account.”
In February 2018, Cayman National filed a disclosure with the Financial Intelligence Unit in the Isle of Man, citing the territory’s Proceeds of Crime Act of 2008. The bank noted that Moonfield’s accounts were outside Estera’s control and that Cayman National didn’t feel they had “full knowledge of the underlying source of the funds being received into Stark Limited’s account.”
In the disclosure, the bank also expressed concern that Tinkov’s name had appeared on the so-called “Kremlin List,” a list of oligarchs and state officials perceived to be close to Vladimir Putin that was published by the U.S. Treasury Department a month earlier.
But alleged links between Tinkov and Putin were first published more than two years earlier, when the businessman was interviewed by the Financial Times in December 2015. The newspaper reported that the oligarch “casually mentioned Vladimir Putin by name more than a dozen times, boasting of his relationship with the president.”
Cayman National’s subsequent review of the Stark account in June 2016 appeared to overlook this reporting. In a check-box that asked the employee to conduct a Google review, a compliance employee wrote “nothing adverse.” Photocopies of the Google search results attached to the review indicate that the Financial Times article was detected but unopened.
There were other red flags that could have been detected during the compliance review process. Moonfield, from whose Russian bank account Stark received the regular lease payments, also had an account with Latvia’s ABLV bank, to which Stark’s regular loan repayments were sent. As early as 2012, ABLV had been implicated in possible money laundering and this information was publically available.
The bank cited their concerns in the 2018 disclosure to Isle of Man authorities, noting that they don’t know “what is happening with the funds once they reach the Latvian ‘Moonfield’ account.”
A month later, U.S. authorities declared ABLV an “institution of primary money laundering concern,” prompting ABLV to announce its own voluntary liquidation.
A spokesperson for Cayman National said, “The bank operates an active risk review programme and has in recent years exited legacy clients where there is a heightened Anti-Money Laundering (AML) risk and there are further cases under review.”
Jets registered on the Isle of Man can travel throughout the EU without being subject to customs checks, an attractive perk for the owners of over 1,000 jets registered on the tiny island since it created its private aircraft register in 2007.
“It’s simply not fair that some individuals and companies can get away with not paying the correct amount of VAT on products like yachts and aircraft,” said Pierre Moscovici, a former European Commissioner for Economic and Financial Affairs, Taxation and Customs. “Favorable tax treatment for private boats and aircraft is clearly at odds with our commonly agreed tax rules,” he added.
An internal presentation given at the 2011 Isle of Man Aviation Conference by a senior Ernst & Young VAT consultant set out the key features of the island’s tax regime, which it labelled “user friendly” and “pro business.” The two examples the consultant gave describe scenarios in which Isle of Man-registered companies are established in order to purchase a jet which is then used for business purposes by a parent company — a similar scheme to the one used by Tinkov.
Ernst & Young said it would not comment on individual client matters as a matter of policy, but that neither Tinkov nor Stark Limited had been a client of the firm for several years. The accounting firm added: “All our tax advice, whether in relation to planning or compliance, is based on our knowledge of tax law and practice at the time and providing transparency to tax authorities.”
Documents from Cayman National show that Tinkov wasn’t the bank’s only client to take advantage of the island’s financial services industry in this way. Twelve of the bank’s other clients were also jet owners, and the evidence suggests that they used similar corporate structures to reduce or even eliminate VAT bills, making such schemes a common practice.
Like all tax havens, the Isle of Man’s economy is intimately bound up with the interests of the financial and corporate services sector. Regulatory authorities in tax havens often present themselves as permissive and “pro-business,” tailoring themselves to the needs of the financial services sector’s wealthy clients while retaining close links with the key firms operating in their jurisdictions.
Open source research conducted by Global Witness analyzed a number of case studies, including that of Brian Johnson, the Isle of Man’s director of Civil Aviation between 2006 and 2011. Johnson’s most notable achievement was the founding of the island’s jet register. Following his stint in government, he joined Appleby as a director, enabling the firm to give both legal and technical advice to jet-owning clients, particularly in the Isle of Man.
Johnson did not respond to questions from reporters.
There are other examples of a cozy relationship between regulators and the financial services sector in the Isle of Man. For example, the most senior official responsible for VAT on the Isle of Man is the head of Customs and Excise Division, the island’s customs agency. Revenue collected by the agency makes up almost half of the island’s total income each year, so it’s no surprise that, when an advertisement for the role was posted in 2018, experience in the field of indirect tax was listed as a desirable quality.
The winning candidate had experience on both sides of the fence. Sandra Skuszka joined IOMCE with experience in previous roles as head of VAT at KPMG Isle of Man and head of indirect tax at KPMG Islands Group, a network of branches covering some of the world’s most infamous tax havens and secrecy jurisdictions, including the Cayman Islands and the British Virgin Islands. It would be Skuszka’s second stint at the IOMCE, where she trained before joining KPMG in 2007.
Luckily for KPMG, the accounting firm had another IOMCE alumnus, Paul Cawley, on hand to fill Skuszka’s vacated role. And Skuszka hasn’t hesitated to keep in contact with her former colleagues. A photograph from 2019 shows her at the 50th birthday party of Micky Swindale, CEO of KPMG Islands Group and former chair of the island’s chamber of commerce.
As well as providing key staff to the Isle of Man government, KPMG also has an official role as the government’s independent auditor. The company even has an ex-employee in the Tynwald, the island’s parliament: House of Keys speaker Juan Watterson, who worked as an accountant for the firm before being elected.
KPMG confirmed their role as auditor for the Isle of Man government accounts “for a number of years,” and details about the employees mentioned, but declined to comment more generally on the importation of jets.
While there is no suggestion that any official or company employee has acted improperly, deep connections between the financial industry and regulators can weaken the ability of official bodies to hold the private sector to account. Even the UK Treasury, in its otherwise light-touch review of Isle of Man VAT practices, sounded a note of caution:
“Many advisors claimed that they were able to access an expedited service from IOMCE and had strong working relationships with Isle of Man staff,” Treasury officials wrote. “While this is likely to be marketing activity and not amount to a material risk, IOMCE should be aware of these claims and adjust its compliance activity if necessary.”
In February, Tinkov was arrested in London on the U.S. tax fraud charges. He was released after posting 20 million pounds in bail.
According to a court report in the Daily Express, his bail conditions confine him to a flat near Holland Park in west London between the hours of 7 p.m. and 7 a.m., and he must stay within the greater London area at all times.
If extradited and convicted on the U.S. charges, he faces up to six years in prison.
The share price of his bank’s parent company, TCS, plummeted from a high of more than $26 on February 11 to less than $11 at the start of March, when the indictment was unsealed. In public statements, the company has sought to distance itself from its controversial founder, who stepped down from the Tinkoff Bank board in early April.
“I don’t know anything about Oleg’s tax affairs,” Tinkoff Bank CEO Oliver Hughes told Russian business daily Vedomosti. “I’m just not in the loop.”
Tinkov also appears to have begun sanitizing his links to the company. An Instagram post from February 6, showing Tinkoff Bank executives Alexander Emeshev and Artem Yamanov, has since been deleted. In April, Tinkov stepped down as chairman of the bank’s board, citing his health.
More recent social media posts show Tinkov in a hospital, undergoing treatments for leukemia, a diagnosis he made public the day after his indictment was unsealed. He has also announced plans to use some of his fortune toward building up Russia’s bone marrow donor registry.
“Every life is priceless,” Tinkov said in a post accompanying a video of himself receiving bone marrow.
The hearing on Tinkov’s case at Westminster Magistrates’ Court has been postponed due to his treatments, currently scheduled for September 25, according to Russian news agency TASS.
McClatchy in the U.S. contributed reporting.
Where in the world is Pantheon Worldwide? Not even its own bank can say.
Leaked documents show bank regulators filed reports but did little to stop financial abuse