Saturday, September 9, 2017

1MDB money laundering scheme that NZ Shewan Inquiry missed is now subject of FBI investigation-FBI fears for safety of witnesses

by Ganesh Sahathevan

Potential witnesses to the multi-billion dollar scandal at 1Malaysia Development Berhad (1MDB) are afraid to speak with U.S. investigators as they fear for their safety, the Federal Bureau of Investigation says.

Individuals otherwise willing to provide information on the case have also told investigators that they were afraid that they would “place the safety and security of both themselves and their families at serious risk”, according to a declaration in the filing by FBI agent special agent Robert Heuchling.

The agent said identifying witnesses could result in intimidation or threaten their safety, citing Malaysian news reports of local officials and politicians who have been arrested for purportedly disclosing information linked to 1MDB.

The agent cited Malaysian press reports from Aug 30 that said the driver of former Malaysian Attorney-General Abdul Gani Patail was shot in public as a possible warning against assisting the U.S government in the case.

Abdul Gani had led investigations on 1MDB until he was replaced in 2015.

See also 

Ex-AG of Malaysia's driver shot; coincides with FBI warning that the lives of 1MDB related witnesses may be in danger

DEC24 2016
How did New Zealand's Shewan inquiry miss the Low family's 1MDB theft? 

by Ganesh Sahathevan

John Shewan
John Shewan is a tax and accounting veteran. Photo: SUPPLIED

In April 2016 the Government Of New Zealand apparently reacting to the Panama Papers expose,ordered an inquiry into its foreign trust regime.The inquiry was led by John Shewan (photo above) who submitted his report in June.Commenting on his work he said:

"There has been no direct evidence of illicit funds being hidden in New Zealand foreign trusts, or of tax abuse".

He arrived at this conclusion despite the fact that the billions stolen from Malaysia's 1MDB were hidden using a NZ trust.

In July 2016 the US Department of Justice filed its asset seizure writs against various assets worth USD 1 billion alleged to have been the acquired with funds stolen or otherwise misappropriated from 1MDB, by among others, Joh Low. It has since been revealed that the assets are held via trusts in New Zealand and the Cayman Islands, in which Joh Low and members of his family are beneficiaries. 

The US DOJ has described the 1MDB matter as the largest case of money laundering it has ever encountered. While its writs were filed in July,after the Shewan inquiry was submitted, Jho Low's theft was reported widely in Western and Asian media  since early 2015,and on an ongoing basis. By late 2015 the 1MDB theft was under investigation by regulatory authorities in the UK, US,Switzerland, Singapore and Hong Kong. It is hard to imagine that New Zealand authorities were unaware of the matter. Shewan's conclusion,that
"there has been no direct evidence of illicit funds being hidden in New Zealand foreign trusts", is perplexing. 


Who is John Shewan?

11:48 am on 12 April 2016 
The government has appointed a veteran of the accounting and audit sector, John Shewan, to conduct an independent inquiry to check whether the rules covering New Zealand-based overseas trusts are fit for purpose or need improving.
The terms of reference include reviewing foreign trusts' disclosure rules on record-keeping, enforcement and the exchange of information with other tax jurisdictions, and Mr Shewan is to report back by June 30.

Who is John Shewan?
He graduated from Victoria University of Wellington with an honours degree in accountancy and started as a junior lecturer at the university in 1976.
The following year he joined leading accounting and audit firm Price Waterhouse (later to become Price Waterhouse Coopers or PwC).
He became one of the firm's leading tax practitioners, becoming a partner in 1984, and chairman of the New Zealand firm from 2003 to 2012, when he retired.
In mid-2012 he was appointed an adjunct professor of accountancy at Victoria University.

What is his government background ?

He has been appointed by Labour and National-led governments to official bodies looking into tax.
In 1988 he was appointed to the Tax Education Office, a position he held for nine years.
In 2009 he was appointed to the Tax Working Group, which was charged to advise the government on the broad design of the tax system. It said the tax system was broken and needed a significant revamp, including a land tax, closing of loopholes, a higher sales tax but lower income tax.

What is his link with business?

Since he left PwC, Mr Shewan has picked up several company directorships.
He is currently chair of the board of the manager of the Fonterra Shareholders' Fund.
He is also a director of Yealands Wines, the New Zealand branch of the China Construction Bank and Munich Reinsurance Australia.
He is an established commentator on tax and policy matters, and has been involved also in a number of high-profile tax cases.
He advised Westpac Bank in a dispute with the Inland Revenue Department (IRD) over the taxation of specialised funding structures. The bank, along with three other major Australian-owned banks, settled the cased by paying IRD $2.2 billion.
Mr Shewan was also an expert witness in a case involving two Christchurch surgeons, who paid themselves low salaries to minimise their tax bills after the top tax rate was raised in 2000. The courts set aside his evidence because it commented on legal issues outside of its scope.

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