Accounting firm Deloitte allegedly fabricated corporate documents to assist Roman Abramovich in concealing assets of at least 10 billion dollars and to avoid paying substantial taxes, reveals the Bureau of Investigative Journalism.
The analysis of the leaked documents shows that high-ranking employees of Deloitte, and subsequently of Meritservus, a company spun off from Deloitte, would have routinely falsified documents for the oligarch, for over a decade. Journalists have identified over 1,000 “backdated” documents, meaning having a false prior date, sometimes up to five years in the past.
Thus, a false documentary trail of contracts, payment orders and correspondence for over 100 companies was created. Deloitte then allegedly approved the accounts of many of these as being “correct and faithful”, relying in some cases even on documents to whose fabrication it had contributed.
According to the investigation, the practice was part of the services offered to the oligarch by the Cyprus branch of Deloitte. This would have allowed Abramovich to keep his wealth hidden from authorities and avoid tens of millions of dollars in taxes. A leading expert said it was a case of “simple and blatant” tax evasion.
The backdatings identified by journalists took place between 1999 and 2013. It is not known whether the practice continued after this date.
The revelations are part of a joint investigation by the Bureau of Investigative Journalism and the BBC Panorama program, alongside The Guardian and the Organized Crime and Corruption Reporting Project (OCCRP). The investigation was conducted as part of the “Cyprus Confidential” project, coordinated by the International Consortium of Investigative Journalists (ICIJ) and Paper Trail Media, based on data initially provided by the American non-profit organization Distributed Denial of Secrets.
The conclusions raise questions not only about the ability of the very wealthy to hide their wealth and avoid paying what they owe, but also about the role that major consulting firms play in this process.
Deloitte Cyprus conveyed that it cannot comment on details, as it no longer has access to correspondence “from over 20 years ago”. The firm added: “Deloitte Cyprus operates in accordance with applicable legislation.”
Deloitte operates as a network of independent firms around the world, each office being responsible only for its own activity. There is no evidence of the involvement of any other Deloitte entities outside of the Cyprus subsidiary.
Andrew Mitchell KC, a leading lawyer in the field of financial crime, who analyzed the conclusions, said: “The conclusion is that there are professionals willing to push and break the rules of their profession and, therefore, the law. And it seems they stop at nothing when it comes to creating documents.”
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