Top-secret records show New Brunswick, Alberta companies received millions in ‘suspicious’ transfers

Top-secret records from the FinCEN Files investigation show two shadowy companies, one registered in New Brunswick and one in Alberta, received millions in “suspicious” money transfers.A sailor, 39-year-old Oleg Niculescu, died when the Ivan Golubets ship caught fire and later sank off the coast of Mauritania last summer. His family has been seeking compensation, but have been chasing a ghost through Canadian companies. (vitpat68/Twitter)Off the coast of Mauritania in northwest Africa, thick black smoke billowed from a massive fishing trawler, trapping the crew on a vessel operated by a Canadian shell company. It was July 19, 2019, and the Ivan Golubets, an imposing vessel comparable to the size of a soccer field, was fishing in the resource-rich waters of the western Sahara — considered a hot zone for illegal fishing by large trawlers — when tragedy struck.Oleg Niculescu, a 39-year-old married father of two, ran to the engine room to investigate the source of the fire. The burning vessel was evacuated: 59 crew members made it out, but Niculescu was never seen again. “He was a cheerful man who loved life,” Anna Niculescu, Oleg’s wife, told a Ukranian television station through tears. “And in the end, everyone was saved, but he is gone.” Anna Niculescu, Oleg Niculescu’s wife, told a Ukranian TV station that her husband was a cheerful man who loved life. (NTN Ukraine) The trawler burned for two days before sinking about 50 metres into the Atlantic Ocean while being towed by another vessel. Niculescu’s remains are presumed to have sunk with the wreckage, along with evidence that might have explained what the trawler was doing for eight days before the fire, when, according to location data, its tracking system was off. “They say he was burned to death,” Niculescu’s wife said. “But there is no specific information — with a signature or a seal — to confirm that.” In the midst of their tragedy, Niculescu’s family has spent the past year fighting for compensation from the vessel’s operators.  It’s a fight that’s taken them to an unexpected place: Canada, where the company that operated the Ivan Golubets is registered, despite having no actual business activity in this country. Evial Business LP is registered in Calgary, and its website says it processes and sells fish from Mauritania. It has no footprint in Calgary, and Alberta corporate records leave no trace of the true beneficiaries of the company — only nominee directors in the Seychelles, a known tax haven. The Ivan Golubets trawler was operated by a company called Evial Business LP, which is registered in Alberta. The company’s website says it processes and sells fish from Mauritania. (Evial Business LP) “They try to hide under the umbrella of Canada’s good reputation,” said Borys Babin, an Odessa-based lawyer who has been helping Niculescu’s family navigate the courts. The company appears in the FinCEN files, a 16-month-long investigation by the International Consortium of Investigative Journalists (ICIJ), BuzzFeed News and partners. It’s based on top-secret bank reports filed to the U.S. Treasury Department’s intelligence unit, the Financial Crime Enforcement Network, other documents and dozens of interviews. A CBC News/Radio-Canada investigation traced the complex corporate trail and found it extends all the way from Russia to Alberta and New Brunswick, two provinces with little corporate transparency. Along the way, Canadian corporations have become caught in a story that involves allegations of insurance fraud and illegal fishing. It comes amid a global reckoning around corporate transparency and a move to force corporations to reveal who really owns and controls them, called beneficial ownership. But according to some experts, Canada and many of its provinces are moving too slowly. “If you’re a white-collar criminal and wanting to hide money, Canada is the place to go,” said Ontario NDP MP Charlie Angus, who has studied the issue over the years. NDP MP Charlie Angus says Canada is a destination for white-collar criminals looking to hide money, thanks to lax rules. (CBC) “In fact, there’s an expression that’s used internationally that if you want to clean your dirty money, come to Canada. It’s called ‘snow washing.'” Insurance policy took effect hours before vessel sunk Babin believes not only that Niculescu’s death could have been prevented, but also that the sinking of the vessel amounted to fraud. He believes the ship’s operators wanted to sink it in order to collect an insurance payout. A $15 million US insurance policy written by a Russian insurance company took effect mere hours before the Ivan Golubets caught fire, according to a policy reviewed by CBC News/Radio-Canada. It names Evial Business LP, the Calgary company, as one of its beneficiaries. Ukranian lawyer Boris Babin believes insurance fraud was involved in the sinking of the Ivan Golubets ship. (Oleksandr Popenko) “They needed to have it go underwater and sink,” Niculescu’s wife told a Ukranian television station. “How could they not put out the fire? It’s inconceivable there wasn’t some sort of rescue team available to put it out, even if just to find the body. They simply let it all burn out.” The 28-year-old ship and three other vessels were together valued at a total of $16 million US in 2016, according to a Centre for Transport Studies article. That means that the Ivan Golubets on its own would have been worth much less than the $15 million US payout. It’s partly why Dyhia Belhabib also suspects insurance fraud. She is the principal investigator of fisheries for Ecotrust Canada, a Canadian charity that promotes environmental sustainability, and has written a peer-reviewed study on illegal fishing in the waters off western Sahara. “Immediately when you said that the insurance policy was effective the same day that the vessel has sunk, I immediately thought of fraud,” Belhabib said. CBC News/Radio-Canada reached out to Evial Business LP with a list of questions, but did not receive a response. The FinCEN Files Niculescu’s family wrote to Evial Business LP a year ago to ask for compensation, but Babin said they never received a reply. Babin said he Googled Evial Business LP and was surprised to find it is a small company with no presence in Canada, given the money that would be required to operate the big trawler. A reporter who visited Evial Business LP’s address at a Calgary business plaza found no trace of the company or of any fish production. Instead, they found a corporate services company that provides mail forwarding. But the company certainly has money. Documents shared with the ICIJ and other news organizations by BuzzFeed News show that the company was flagged by banks for receiving more than $4 million US through wire transfers that banks deemed suspicious. The suspicious activity reports are not proof of wrongdoing. The FinCEN Files is a 16-month-long investigation by the ICIJ, BuzzFeed News and partners. It’s based on top-secret bank reports filed to the U.S. Treasury Department’s intelligence unit, the Financial Crime Enforcement Network, other documents and dozens of interviews. (ICIJ/BuzzFeed News) They offer a window into how easy it is to manipulate Canada’s corporate registration system. A New Brunswick connection On its website, Oceanic Fisheries N.B. promises “to make your every fish come true!” The company advertises products like smoked and dried fish as well as “delicious caviar, shrimps, crab sticks and sea cabbage.” But despite the initials in its corporate name, there’s no evidence that Oceanic Fisheries N.B. operates in New Brunswick, a province known for its fisheries. Despite the N.B. in its company name and the address on its website, the home page of which is pictured here, there is no evidence that Oceanic Fisheries N.B. operates in New Brunswick’s well-known fisheries industry. (Oceanic Fisheries N.B.) CBC News/Radio-Canada has found that Oceanic Fisheries N.B. is linked to Evial Business LP, according to website records and confidential banking records that tie the two companies together. In 2016, Oceanic Fisheries N.B. and Evial Business LP both received transfers of large sums of money from senders that used the same Swiss bank, according to records in the FinCEN Files. The transfers typically happened within a few days of each other or sometimes even on the same day. For both Evial Business LP and Oceanic Fisheries N.B., the money ultimately landed at the same branch of a bank in Moscow. Again in 2017, both companies had a similar banking footprint. Both received big transfers — more than $640,000 US to Evial Business LP and $1 million US to Oceanic Fisheries N.B. — from the same sender, one day apart. In both cases, the money ended up at a Russian bank branch. Online records show both companies created similar-looking websites using the same registrant within weeks of each other. Both were updated on the exact same day in 2018. Based in Saint John but banking on another continent Despite being based in Canada, neither Oceanic Fisheries N.B. nor Evial Business LP used the Canadian banking system — a red flag for banks, according to records in the FinCEN files. In total, Oceanic Fisheries N.B. was flagged for more than $31 million US in suspicious transfers. WATCH: New Brunswick’s lax corporate registration rules make it easy to conceal company identity: Top-secret bank records show how easy it is to manipulate corporate systems in provinces like New Brunswick. 4:41 In September 2013, Oceanic Fisheries N.B. received two wire transfers, totalling $2.79 million US, at a bank account in Latvia.  “Shell entities can be created and used by individuals and businesses for legitimate purposes,” the suspicious-activity report says. “However, they are a concern for money laundering and financial crimes given that they are easy to form, inexpensive to operate and are structured in a manner designed to conceal the transactional details of the entities.” Records from the FinCEN files indicate that Oceanic Fisheries N.B. is tied to a Latvian company called Baltreids, which does commercial fishing in Mauritania and Morocco.  When the Ivan Golubets caught fire, vessels operated by Baltreids and Oceanic Fisheries N.B. came to the rescue.  The Latvian owner of Baltreids denied having links to Evial Business LP or Oceanic Fisheries N.B. or to engaging in any illegal fishing or money laundering, in response to questions posed by CBC News/Radio-Canada and TV3 in Latvia. Dyhia Belhabib, principal investigator of fisheries with Ecotrust Canada, believes the Ivan Golubets was fishing illegally before it caught fire and sank. (Paul Émile d’Entremont/Radio-Canada) However, Belhabib, the fisheries investigator with Ecotrust, said she is “100 per cent confident” that the Ivan Golubets had “done something shady, at least fishing where they’re not supposed to fish,” before it sank. That’s based on her knowledge of illegal fishing in the region and location tracking data she reviewed for CBC News/Radio-Canada. The data shows the vessel’s tracking system was off for eight days before the fire, something Belhabib found suspicious because ships are supposed to immediately go to the nearest port to fix any technical problems when a tracker stops working. Searching for a shell With no online trace of any real connection to New Brunswick, CBC News/Radio-Canada went on a hunt to find Oceanic Fisheries N.B. On its website, Oceanic Fisheries N.B. claims it was established in the early 2000s and has spent more than 15 years “being engaged in wholesale and retail sales of freshly frozen fish and seafood products as well as self-made fish dishes.”  But New Brunswick corporate records show the company wasn’t established in the province until 2011. Its current director lists an address in South Africa, and there aren’t any Canadian employees or phone numbers listed on its website. In August, a reporter visited the Saint John address that was listed on the company’s website at the time. It matches a UPS store on Rothesay Avenue. The owner of the UPS Store, who bought the franchise within the last year, said she had never heard of Oceanic Fisheries N.B. Nor had the owner of the building. A day later, Oceanic Fisheries N.B. removed the Rothesay Avenue address from its website. Last year, Oceanic Fisheries N.B. changed its address on corporate records to 60 Charlotte St., in Saint John’s uptown.  Oceanic Fisheries N.B. lists its address on corporate records and on its website as 60 Charlotte St. in Saint John, which is also home to a seniors’ apartment complex. (Karissa Donkin/CBC) But when a reporter visited that address, expecting to find Oceanic Fisheries N.B., they hit another dead end. Instead of a fish production operation, there was a corporate services company, Document Searching Services, which collects mail for Oceanic Fisheries N.B. The building is also home to a large seniors’ apartment complex called the Admiral Beatty. Three residents of the complex who spoke to CBC News were surprised to hear that a fish production company would claim to operate out of the same building where they live. “I’d be shocked,” one woman said. Oceanic Fisheries N.B. didn’t respond to a list of questions from CBC News/Radio-Canada. A call from an agent Soon after the visit to Oceanic Fisheries N.B.’s address, a reporter got a call from a man who identified himself as Eugene Pödesberger. He said he was an assistant manager with a company called Fulcrum Office. CBC News/Radio-Canada couldn’t verify the existence of that company, but Pödesberger described it as an “agent service” that represents Oceanic Fisheries N.B. He said he doesn’t know much about Oceanic Fisheries N.B. and what they do. But Pödesberger, who was calling from a Toronto number, knew a lot about why New Brunswick is an appealing locale for international companies that otherwise have no footprint in the province: it offers cheap office space compared to major hubs like Toronto. New Brunswick Green Party MLA Kevin Arseneau would like to see the province adopt more transparent corporate registration rules. (Karissa Donkin/CBC ) The province also doesn’t require directors of corporations to be resident Canadians — as some other provinces do — nor does it require corporations to disclose who holds beneficial ownership. Pödesberger said demand to set up businesses in New Brunswick is “high.” But It’s impossible to say exactly how high it is, since New Brunswick has a closed corporate registry. Closing loopholes It’s a problem that New Brunswick’s government seems to know about. A 2015 provincial government report discussed whether the province should require companies to have at least one director who’s a resident Canadian and whether it “would lessen the potential misuse of a [New Brunswick] corporation being used as part of an international securities scam or fraud.”  But if New Brunswick changed its rules, businesses could just move to another province with lax rules, the report concluded. Across the board, Canada has “really lax” reporting standards for corporations, “which is why international crime loves us,” Angus said. But Angus said New Brunswick has “lower than the lowest of standards.” “This is a place where if you want to evade, say, sanctions with Russia, if you want to hide your dirty money, come to New Brunswick and set up shop,” Angus said. New Brunswick does not require directors of corporations to be resident Canadian. (Karissa Donkin/CBC) When asked about the issue earlier this month, Premier Blaine Higgs indicated a willingness to explore the idea of beneficial ownership. “If we have illegal activity or revenue being hidden or taxes being avoided that are certainly illegal in that sense, then I would want to close those loopholes and I would want to adopt the best practices,” Higgs said. New Brunswick Green Party MLA Kevin Arseneau wants New Brunswick to develop a more transparent corporate registry. He believes the province has a moral obligation to change things. When he learned that Oceanic Fisheries N.B. was operating with New Brunswick’s initials in its name and marketing itself as a New Brunswick company, he was frustrated. “That reputation, using New Brunswick in any way, shape or form that’s misleading, it shouldn’t be tolerated at all,” Arseneau said. “This is our reputation. This is our hard work.” With files from CBC’s Terence McKenna, the ICIJ, BuzzFeed News and TV3 Latvia’s Guna Gleizde
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