11 witnesses who did not appear for the trial in Switzerland, the attempt to distance himself from ownership and involvement in the activities of the BSGR mining group in Guinea, the rigid line of defense that denied knowledge and familiarity with those involved or money transfers, and allegations of persecution by billionaire George Soros did not help.
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Three criminal court judges in Geneva convicted Israeli businessman Benny Steinmetz, 65, over the weekend of bribing and defrauding banks of more than $ 10 million. This is in order to take over during 2006 the largest iron ore mines in the world in Simando, Guinea, worth $ 5 billion. Rights held by BSGR’s competitor – Rio Tinto.
The judges imposed on Steinmetz, who was charged in Switzerland with living in Geneva during the period relevant to the events and at the same time holding French citizenship, a severe sentence of 5 years in prison. He was also fined 50 million francs (about 180 million shekels), which is in fact the forfeiture of assets in Swiss banks.
Steinmetz announced that he would appeal the decision to a higher court in Geneva, which is equivalent to an Israeli district court. Until the end of the proceedings, many more months are expected, so that at this point Steinmetz will be able to conduct the follow-up trials when he is in his magnificent villa in the prestigious town of Arsuf.
Not just an “adviser” or “ambassador”
This is a dramatic sentence. On a personal level, one of the wealthiest businessmen in Israel and around the world was sent to prison for five years for serious corruption offenses. The best lawyers did not benefit at this stage, and the large amount of money invested in the process. But beyond the human story, the message conveyed by the Swiss court is that the Steinmetz system has collapsed. The businessman made sure to distance himself for years from any incident affecting his companies, through a chain of companies and private funds, and the use of international laws, which allowed him to hide behind them. There has not been a single time that his emissaries have failed to emphasize in responses to the media that the giant company that embraces the world, bearing the initials of his name, does not own it.
This distance was supposed to achieve two goals. The first is aggressive tax planning that allows zero tax payment in Israel. The second is that on Judgment Day they will not be able to link Steinmetz to dubious contracts in third world countries. While the first goal was achieved, the tax planning was more successful than expected – as was clear, for example, from a report by Maalot 13 years ago, in which it became clear that BSGR paid almost no taxes in Israel – the second goal failed miserably.
The court in Geneva did not buy Steinmetz’s I did not know, I did not hear, it is not me. Steinmetz is not just a “consultant” or “ambassador” in one of the largest BSGR mining groups in the world, as he testified at trial. Is the real thing. “Steinmetz met with the heads of state and ministers, he was present at all important negotiations of the group, he was very involved in the strategy, the business model, the financial aspects, and he was knowledgeable and involved in conflicts,” Steinmetz wrote of his sentence in Guinea’s mining contracts. “He has decision-making authority and he takes on the role of acting director.” Steinmetz’s claim that it controls BSGR is in fact a ballad fund incorporated as a foreign trust that Steinmetz only benefited from seems like a pale attempt to hide reality. Also the fact that all the companies in the mining and diamond mining and diamond group at BSGR, as well as the aircraft and yacht used by Steinmetz, registered under the group companies in various tax havens around the world, did not do the job.
Strengthening the position of the Israel Police
In Israel, Steinmetz’s connection is mainly known for the bonds of the former stock exchange-producing real estate company Scorpio, as well as its holdings in the Millennium Tower in Tel Aviv. Properties with a total value of NIS 113 million, together with his villa in Arsuf, valued at NIS 160 million, were exposed as part of the Israeli police investigation against him. But the police in Israel also do not believe that Steinmetz’s property value is less than NIS 300 million. “Steinmetz holds assets in trust and chain and is not registered as their owner,” the police previously wrote to the court, as part of a request to freeze assets for future forfeiture.
The Swiss verdict strengthens the position of the police in Israel at this very point. It was determined that Steinmetz was involved in BSGR board meetings, was present at meetings surrounding the Guinea deal and payment confirmations. In other words, he used the company in what is commonly defined in Israel as “owner custom”, and the registration in the names of others is only formal. This may also serve as good evidence for the Israeli Tax Authority, which is waging a long-standing struggle with Steinmetz to tax him on income in foreign trusts.
According to the indictment in which he was convicted, the result of a nearly 6-year investigation by the Geneva prosecution, Steinmetz transferred the bribe money between 2006 and 2011 to Madi Torre, the fourth wife of former Guinean president Lansa Conte, who died. This is done through a series of straw men and straw companies, and with the aim of influencing the government to transfer the rights of Mario Tinto to BSGR. The contract was disguised in fictitious consulting contracts, with the person who served according to the verdict as a “camouflage screen” between Tora and BSGR, a Pantler company owned by the French businessman Frederick Salinis, and the Israeli businessmen Michael Noy and Avi Lev-Ran.
The lawsuit in Switzerland was able to chart the transfer routes of $ 8.6 million through a string of banks around the world. These came out of BSGR accounts, went through Pantler and other accounts related to Salinis, Noy or Lev-Ran, and landed in the accounts of Tora or her associates. Some of the funds were set aside for cash. At the same time, an additional $ 2 million was transferred to Tora or her associates according to the evidence in cash and envelopes, some through BSGR President Asher Avidan.
Benny Steinmetz Photo: Bloomberg
In order to disguise the financial expenses with the banks, Israeli businessman Ofer Krazner, Ukraine’s honorary ambassador to Israel, was also used according to the sentence. The latter, for example, signed a fictitious consulting contract with a company of strategic advisor Tal Zilberstein, in the amount of $ 750,000, in order to justify spending the money with the banks. The funds continued, according to the indictment, from a company of Krasner, who was in fact only a straw man, to Silins and from there to Torre. The Israelis mentioned in the indictment in Switzerland – Avidan, Noy, Lev-Ran and Zilberstein – were questioned as suspects in Israel by the National Fraud Investigation Unit (JHA) for bribery, fraud and money laundering offenses, in a parallel investigation in Israel in the case. Avidan, Noy, Lev-Ran, as well as Krazner, were summoned to testify at a trial in Switzerland but did not attend. At least for Noy and Krazner, it was stated that it was due to “medical circumstances.”
The sentencing of the panel of judges in Geneva, headed by President Alexandra Bana, was reported by independent journalist Anice Faber, who covered the trial from the courtroom in Geneva for a number of media outlets, including Calcalist. “At the beginning of 2005, Frederick Silins and Roi Oron (former president of BSGR, TG and AP) were the first to lay the groundwork. An analysis of their correspondence illustrates the initial intentions, and this is Simando, so since 2005 BSGR has aimed to take over Bloc 1 and “2 of the Rio Tinto mining company in Guinea. That was the destination.”
“From a strategic board meeting (of BSGR) on the island of Guernsey at the end of August 2007,” the verdict reads, “it appears that Steinmetz was aware of all of the group’s projects. According to the business model, there was talk of leaving the project (of Rio Tinto) before BSGR’s start there.” “, Because it is a very high-risk activity, even though BSGR’s strategy was to diversify and develop businesses in less risky countries. Steinmetz noted that BSGR’s strengths lie in the industry and the political establishment.”
The judges dived into the evidence – correspondence, testimonies and transfers of funds to Tora and her associates. They emphasized the match between Mamadi Tora’s payment requests and the amounts actually paid, based on the accounting records found in Michael Noy’s home. This is $ 5.5 million in this case.
One of Steinmetz’s legal claims was that Tora was not the wife of the President of Guinea at all – but a mistress – and therefore was not a public servant and could not be bribed. Steinmetz also claimed in his testimony that he had seen Tora only once in his life. According to his testimony at the trial it was during a meeting with former President Lansana Conte. “In the shade of the Baobab Tree of the Palace of Nations in Conakry, the capital of Guinea,” Steinmetz chanted. “I was told that among the women, in the back, in the yard, was Conte’s mistress, Madi Torre,” he added. “It was the only time I saw her, but I never spoke to her.” The court rejected the claim. He treated Tora as Lansana Conte’s fourth wife and not his mistress.
The vision of gold
According to the verdict, the contact person with Tora was Silins, the former controlling owner of Pantler, which was used according to the Swiss indictment as a conduit for the transfer of bribe money. One of the prosecution’s golden evidence was a tape of his conversation with Tora. This is a secret recording that Tora made under the direction of FBI investigators at a cafe at Jacksonville Florida Airport in 2013. Silins came to the meeting with the aim of convincing Tora to destroy the contracts he signed with her, promised her more money and said the instructions “come from above”. The recording ended with the words “Get up, put your hands behind your back”.
Cillins was convicted in a U.S. plea deal in an attempt to disrupt a major jury investigation, and was sentenced to two years in prison. He was deported from the U.S. after being released. In Switzerland he has now recorded another conviction, and was sentenced to an additional 3.5 years in prison and a fine of 5.5 million Swiss francs.
Another person who took part in the bribery mechanism was the Belgian citizen Sandra Marloni Hormans, a former senior member of the BSGR mining group who was in charge of the operational side of the money transfers. Hormans, who was sentenced to two years probation and a fine of 50,000 Swiss francs, set up, according to the verdict, the company structure needed for the corrupt deals. Another Israeli named Yosef Tchelet, it was written, took care to blur all traces in the accounts. “Hormans could not help but be aware of the secret role of Yosef Tchelet,” the sentence read.
The move was successful. BSGR has received mining permits in one of the richest regions of the world in iron ore, with an investment of $ 160 million, plus the payment “under the table” to Tora who pulled the strings in Guinea. All this without the company then having the means to implement the project – so the verdict. “Guinea did not benefit from the project, but Steinmetz benefited from it,” the judges signed the verdict.
Steinmetz’s spokesman said: “The verdict is completely contrary to international law, it is not final and as such I will appeal it immediately. The decision does not reflect the things revealed during the six days of hearings: there is no agreement or act of corruption. In this case there are only witnesses who lied And bribe, witnesses who paid them for a lie, who did not respond to their summons to court and could not be questioned in a cross-examination.I condemn and protest a decade of manipulations and lies, an investigation conducted in violation of the rights of defense by the Scottish prosecutor.I also condemn the actions and influence of “George Soros, who is acting in a corrupt manner and I refused his attempt to blackmail me. I am determined to continue to prove my innocence and remain firm and completely sure that justice will be served.”