Published On: Thu, Jul 3rd, 2014

Turks and Caicos corruption under investigation in Czech Republic

mario-hoffmann-istrokapital-cropPRAGUE, Czech Republic - Anti-corruption police in the Czech Republic have launched an investigation into the suspected involvement of executives of the Czech/Slovak J&T financial group and local politicians in bribery and corruption in the Turks and Caicos Islands (TCI).

Police reportedly suspect billionaire financier Mario Hoffmann, who figured prominently in the 2008/2009 commission of inquiry into government corruption in the TCI, J&T co-founders Ivan Jakabovič and Patrik Tkáč, partner Peter Korbačka and former TCI premier Michael Misick of bribery and money laundering.

Hoffmann allegedly bribed Misick and other TCI government officials to secure favourable treatment in relation to a $600 million luxury golf resort on the small island of Salt Cay, which the J&T Bank arranged, the Lidové noviny newspaper reported.

Orchestrated by Michael Misick, the TCI government granted to Hoffman’s company the land on which the resort and golf course was to be built, on a 99-year lease at a nominal or peppercorn rent. In August 2006, Salt Cay Golf Club was set up as the company that would own and operate the golf club. Fifty percent of the shares in this company were held by Hoffmann’s Cyprus-based holding company and the other 50 percent was given to a holding company of which Michael Misick’s brother, Chalmers ‘Chal’ Misick, was the owner.

The transaction was allegedly concluded at a meeting between Misick and J&T Bank officials in Prague in 2005, which Hoffmann organised.

According to detectives, Hoffmann and J&T Bank representatives tried to cover up the fraud, Lidové noviny stated.

The businessmen deny any wrongdoing.

In April 2012, Hoffmann, said to be one of the richest men in the Czech Republic, sold his majority stake in Poštova Banka to J&T for approximately 900 million euros (US$1.23 billion).

According to written submissions to the UK Parliament’s Foreign Affairs Committee, as well as to the US Senate’s Foreign Affairs Select Committee, Hoffman and his associates are "gangster capitalists" from the era of privatization of the economies of the old Soviet bloc. Hoffman also owns and operates a holding company/bank called Istrokapital, which has been described as a conduit for “Russian money” and a “front for money laundering”.

J&T is a Central European investment group founded in 1993 in Slovakia, which invests mainly in financial services, energy, real estate, health care, media and sports.

Its banking and financial services interests include ownership of J&T Bank and Trust in Barbados, whose CEO was at one time Ali Mudeen, who is currently implicated in a $4 million theft from an account in the Cayman Islands.

In July 2012, after years of claims and counterclaims, the TCI government settled all legal claims and proceedings with Hoffmann and the Salt Cay development.

Although the terms of the settlement remain confidential, Hoffmann and the development companies transferred all the lands on Salt Cay which they owned or leased back to the government, totalling some 1,506 acres; Hoffmann and the development companies made a contribution to the government’s legal costs; Hoffmann surrendered his TCI Belongership; and neither Hoffmann nor the development companies admitted any wrongdoing or civil or criminal liability.

During the commission of inquiry hearings in 2009, it was revealed that Michael Misick and former minister of natural resources, McAllister Hanchell, had been issued with ‘Black’ American Express cards drawn on the Czech bank of which Hoffman was a principal. These cards were reported to have unrestricted spending limits.

Also, in 2007, J&T Bank lent US$6 million to Michael Misick and his then wife LisaRaye McCoy, secured by Chalmers Misick’s 50 percent interest in the government-facilitated Salt Cay development that was given to him by Hoffman. The loan has never been repaid.

By Caribbean News Now contributor

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