Three city fund managers have been jailed for a total of almost 12 years after conducting a "calculated and opportunistic" fraud resulting in $8.45 million losses to the Libyan Sovereign Wealth Fund.
A seven-year investigation by the UK's National Crime Agency discovered the complex fraud being conducted by fund managers Frederic Marino, Yoshika Ohmura and Aurelien Bessot.
Over a number of years, the men worked together to defraud a hedge fund and sovereign wealth fund that belonged to the Libyan people.
In 2009, French nationals Marino and Bessot set up an investment company, FM Capital Partners, based in Knightsbridge, London, which was responsible for investing the funds of a sovereign wealth fund established by the Libyan government.
Instead of optimising the investments, Marino and Bessot, with the help of Ohmura, placed investments so as to maximise their own rewards, to the detriment of the fund.
Prosecutor Andrew West, of the Crown Prosecution Service, described the men as "greedy and selfish".
“These three fraudsters were calculating and opportunistic in committing offences that left the people of Libya out of pocket by approximately $8.45 million for purely selfish and greedy purposes to fund their lavish lifestyles," he said.
“They showed a complete disregard for the important position they held to make investments work for their clients who were looking to diversify away from solely oil revenue.
“We would like to thank the hard work and dedication of the NCA in their diligent and determined investigation. The CPS is committed to working with criminal justice partners to combat large-scale financial fraud."
Marino, 56, was found guilty of fraud by abuse of position of trust and sentenced to seven years and six months, Ohmura, 47, was convicted of fraud by abuse of position of trust and sentenced to three years and six months, Bessot, 47, pleaded guilty to the same charge and was sentenced to 15 months imprisonment, suspended for two years.
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 Libya’s oil revenue reserves and to diversify the sources of national income away from oil.
The defendants were tasked with making investments on behalf of its Libya Africa Investment Portfolio.
However, an NCA investigation found that these investments were structured through Swiss investment banker Ohmura, generating finder fees that were under declared and laundered through a series of shell companies set up in the Seychelles and the Cayman Islands by the defendants.
Between 2009 and 2014, the three men caused LAIP to lose $8.45 million.
Concerns were originally raised 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.
An independent auditor conducted a thorough investigation, including the seizure and analysis of around five million company records, and produced a 350-page report.
While being formally interviewed by the auditors, Marino walked out of the meeting and fled to Norway.
The NCA then began its investigation, involving numerous jurisdictions for witnesses and evidence, in particular Libya, Switzerland, the UAE, Monaco and Guernsey.
Marina and Ohmura were found guilty of conspiracy to commit fraud by abuse of position at Southwark Crown Court in December.
Bessot pleaded guilty to one count of fraud by abuse of position of trust before the start of the trial.
“This has been an extremely complex investigation with multi-jurisdictional challenges," Richard Harrison, Branch Commander of the NCA, said.
"These sentences send a clear message to anyone in the financial sector about the consequences of abusing their position.
"The NCA is committed to tackling fraud and those who abuse the UK’s financial centre to facilitate their crimes.”
