Finance managers jailed for defrauding Libyan wealth fund of 10 million dollars
Two fund managers have been jailed for a total of 11 years after committing a large-scale fraud amounting to more than 10 million US dollars which resulted in the loss of money meant for the people of Libya.
Frederic Marino, 56, and Yoshika Ohmura, 47, of were convicted of fraud by abuse of position of trust in December last year.
Aurelien Bessot, 47, pleaded guilty to the same charge before the trial and was spared jail. He was given a 15-month prison sentence suspended for two years.
The defendants had abused their various positions by committing fraud whilst managing the Libya Africa Investment Portfolio (LAP), a sovereign wealth fund established by the Libyan government for its people amounting to around 800 million dollars (£665 million), the court heard.
According to prosecutor Julian Christopher KC, between 2009 and 2014, the three men caused the LAP to lose 10.2 million dollars (£8.5 million) and 1.36 million euro (£1.2 million).
Marino was sentenced on the basis that he caused a loss of 8.45 million dollars, Bessot 7.88 million dollars and 1.36 million euro and Ohmura 6.70 million dollars.
Some of these amounts overlapped.
Andrew West, of the Crown Prosecution Service (CPS), said the three fraudsters committed the offences for “purely selfish and greedy purposes” to “fund their lavish lifestyles”.
Bessot was the only defendant in attendance at Southwark Crown Court on Monday for the sentencing and sobbed in the dock after he heard he would avoid immediate custody.
Jonathan Barnard KC, defending Bessot, said his client “couldn't be more sorry” and has been “in a prison of his own making”.
The court heard he also paid back 2.8 million dollars to victims, around half a million dollars more than he personally gained, in the settlement of a law suit in 2016.
Judge Tony Baumgartner accepted that Bessot was “truly remorseful” and that he had not been primarily driven by personal financial gain.
Marino was jailed for seven years and six months and Ohmura imprisoned for three years and six months. Neither of them attended the hearing and warrants for their arrests have been executed.
The judge concluded that Marino played the leading role.
The 56-year-old did not attend the trial or the sentencing and it is believed he is still “at liberty” in Paris.
Sentencing him in his absence, the judge said: “You are in my judgment a greedy, corrupt and manipulative man who thought very little if nothing of how your offending might affect others including Mr Bessot and Mr Ohmura and who would have gone on continuing offending had you not been caught out when you were.”
Judge Baumgartner added: “LAP represented the sovereign wealth of the people of Libya who had lived for many years under the Gaddafi regime.
“You targeted the collective wealth of the Libyan people as a group.”
In 2009, Marino and Bessot, also of Paris, set up an investment company, FM Capital Partners (FMCP) based in Knightsbridge, London, which was responsible for investing funds from the LAP.
Both men, with the help of Swiss banker Ohmura – formerly employed at bank Julius Baer, secretly arranged for a proportion of the funds to be paid to themselves via an offshore company, the court heard.
Ohmura subsequently set up his own company to act as an intermediary through which the secret profits were paid to Marino and Bessot's offshore company after he took a cut.
The investments led to additional fees being paid to an offshore company which the prosecutor said ended up in the personal pockets of the three defendants.
Marino and Bessot worked together at Rabobank in London in the early 2000s. By 2009, Bessot was working for the Bank of America Merrill Lynch and Marino worked for JP Morgan.
According to the National Crime Agency (NCA), concerns were originally discovered in 2014, after the Libyan revolution, when the Libyan Board members of FMCP instigated a full investigation into the management and investment of their funds.
The agency said that while being formally interviewed by the auditors, Marino walked out and fled to Norway, triggering an NCA investigation.
According to the CPS, the Libyan Investment Authority was established in 2006 by the Libyan government to manage the Libyan Sovereign Wealth Fund in order to protect and develop the value of the country's oil revenue reserves and to diversify the sources of national income away from oil.
Mr Barnard said that Marino was the leader behind the fraud.
He told the court that his client, Bessot, did not think there was going to be any criminality involved in FMCP when he joined as a director.
“They were directors in name but the man running this show was Marino,” Mr Barnard said. “This was Marino's baby. He devised it, he was the architect for it, he was the ringmaster.”
Adrian Waterman KC, defending Ohmura, said Marino “benefitted the most” and was the “most culpable”.
Judge Baumgartner said he was “sure” that Ohmura knew “exactly what was happening in the payment of secret commissions”.
Mathew Sherratt KC, defending Marino, argued that the fraud would not have had a “high impact” on the people of Libya in the context of “hundreds of millions of pounds” being “taken” from them by the Gaddafi regime.
All three defendants have been disqualified from acting as a director of any company. Marino was disqualified for 12 years and Bessot and Ohmura for five years each.