In the months after the U.S. Treasury Department imposed sanctions on Israeli billionaire Dan Gertler, associates of his made cash deposits and withdrawals totaling over $40 million. The PwC accounting firm, which audited the activity of the Democratic Republic of the Congo (DRC) subsidiary of the Cameroon-based Afriland First Bank, warned of a suspicion that the sanctions were being evaded through the bank, but the bank ignored its comments.
There is evidence of this in another leak from the bank documents, which is now being reported in TheMarker and in a group of worldwide media outlets. The new documents join those revealed in the first “Congo Files” investigation published in TheMarker, Bloomberg News and Le Monde in July 2020.
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American law forbids banking institutions from providing service in American currency to people on the sanctions list. In effect, the U.S. authorities have found ways of imposing the rules on companies and banks that are not incorporated in the United States – as long as an American entity is also involved in the process of receiving the money. According to the legal precedent on the matter, it’s enough for the foreign bank to use a U.S. information system for the sanctions to apply to it.
Gertler claims in response to this report that based on a legal opinion he commissioned, the sanctions do not apply to the dollar activity attributed to his associates in DRC, one reason being that Afriland has no link to the United States. However, in an interview he recently gave to the French radio station RFI, Patrick Kafindo, director of the Afriland branch in the Congolese capital of Kinshasa, admitted that the bank itself believes that the sanctions regime applies to it and claimed that the bank enforced them and froze accounts connected to Gertler. In fact, the bank documents reveal that the accounts of Gertler’s associates, including his wife’s, were quite active, and allegedly took in tens of millions of dollars.
‘A mechanism to bypass sanctions’
Starting in early 2018, weeks after the sanctions were imposed, Gertler’s associates began to visit the bank branch in Kinshasa, and according to the documents, deposited tens of millions of dollars and euros in cash. The bank’s internal auditors, Gardi Koko and Navy Malela, identified this activity as a mechanism for bypassing the sanctions – while violating rules for preventing money laundering. In an interview in Markerweek published Friday they described how sacks were routinely brought into the branch manager’s office, after which there are also records of large deposits in accounts of Gertler’s associates. Due to their whistleblowing, the two received death threats, fled from the DRC and received asylum in Europe.
The person closest to Gertler mentioned in the documents is his wife, Anat. On January 18, 2018, less than a month after the sanctions were imposed on Gertler, a large deposit was made to Anat Gertler’s account in the Kinshasa branch. According to the bank documents, a person described as Julien arrived at the bank with half a million dollars in cash, and converted it to about 405,000 euros, which were deposited into Anat Gertler’s account. Dan Gertler claims that “nobody named Julien deposited money as claimed.”
On that same day, an identical dollar sum was deposited under the name of Alain Mukonda – an employee of Gertler’s listed as a director at some of his companies, including those included on the list of sanctioned entities. Gertler does not deny that Mukonda is one of his close loyalists. In all, between January and July 2018, about $11 million’s worth of cash transactions were recorded under Mukonda’s name.
‘Ties to another firm under sanctions’
The new documents reveal the activity of a Congolese company called Western Financial Services (WFS). The company paid money to lawyers, media consultants and other service providers who worked for Gertler, and received tens of millions of euros in credit from the bank, in spite of remarks by the PwC accountants auditing the bank. The PwC accountants implied that the company’s activity represents a risk of non-enforcement of the sanctions. In addition, in the period after the sanctions were imposed on Gertler, the company’s account received substantial cash deposits – and as the documents indicate, some arrived at the bank in dollars. Gertler insists that the company is not connected to him.
In the summary report for 2018 handed to the bank management, PwC accountants referred to a large loan (relative to the size of the tiny bank) given by the bank to WFS. According to the report “In the context of the examination of compliance with regulation of the Central Bank of the Congo and the law, we note that the bank gave a loan totaling 28.5 million euros in 2018 to a company connected to a sanctioned entity, and that in the account of this related company there were additional activities during 2018.” In spite of the remark, WFS’s credit was increased in 2019 to about 39 million euros.
WFS was established in the DRC in July 2018. A Congolese citizen named Zenon Mukuku was registered as a company director. He was listed in a 2014 report by an organization called the Extractives Industries Transparency Initiative (EITI) as the director of one of Gertler’s mining companies in the country, Orama Properties, which was included on the list of U.S. sanctioned entities from December 2017. That is the first of many links between WFS and Gertler.
Another link relates to a transfer originating with Mukonda and a company whose ownership Gertler does not deny. On July 10, 2018, some 2.169 million euros were transferred from the account of Ventora Global Services to Mukonda. On that very same day, according to the bank records, Mukuku deposited an identical sum in the WFS account. Gertler denies the money originated with Ventura.
On September 4, 2018 a similar incident occurred, this time in the form of a withdrawal from the WFS account. According to the records, Mukuku withdrew 3.25 million euros in cash from the company’s account; and on the same day an identical sum was deposited into the account of a Congolese company named Zahi Abou Sarlu, established by Ashdod contractor Zahi Abou, a business partner of Hannah Gertler, Dan Gertler’s mother.
Even earlier, in July 2018, a transfer of 104,000 euros from WFS to the Israeli company Med Cruises was recorded. According to the record, the money was later returned to the WFS account, perhaps because the transaction was rejected by an Israeli bank or an intermediary bank. Med Cruises’ main business is cruises and vacations, but it also leases private planes. When money transfers from two of Gertler’s companies to Med Cruises came up in the previous investigation, the company responded that it “provides flight and hospitality services to some of Gertler’s companies.”
A similar incident took place when Gertler’s attorney Dori Klagsbald was sent 390,000 euros from WFS in July 2018. In this instance too, the transfer was canceled for some reason, and the money was returned to the WFS account in August.
In July 2018 WFS also paid 200,000 euros to the Congolese firm Adam Consulting Services, which was established a few weeks earlier. Israeli attorney Ophir Menchel is listed as its director. His partner Ron Dror advised Gertler during that period. According to the records, in December 2018 WFS sent 120,000 euros to a company owned by Matthew Fisher of Ra’anana, another of the dozens of attorneys working for Gertler.
Between October 2018 and March 2019, three transfers totaling 20,000 to 26,000 euros each were made to London PR agency Powerscourt, which provides services to Gertler.
Mukuku, the authorized signatory for the account, appears in the documents as a cash courier who brought and withdrew impressive sums of cash, partly in dollars. In all Mukuku is responsible for $6.25 million that flowed into the WFS account in 2018, most of it in cash. The cash was deposited in amounts of $50,000 to $5 million, converted to euros, and then deposited into the WFS account.
Meanwhile, according to the bank records, in many instances millions of euros in cash were removed from the company’s account, converted to dollars and withdrawn by Mukuku. A total of about 7 million euros were withdrawn from the WFS account in cash in 2018, in sums from $200,000 to $3.5 million, and converted to $7.4 million in total. Mukuku’s total activity in dollars is estimated at $13.5 million, of which more than $12 million was in cash.
In addition to the $19 million in cash deposited by Gertler’s associate, Shlomo Abihassira – the son of Gertler’s rabbi, the kabbalist David Abuhatzeira – the cash activity of Getler’s associates totals over $40 million. At this time the sanctions prohibiting the provision of services to Gertler and his businesses in dollars were in effect. According to the testimony of the bank’s internal auditors, a substantial part of the money arrived at the bank in sacks. Gertler denies any business connection with Shlomo Abihassira and claims that the documents testifying to the deposits were falsified.
‘Claims are incorrect’
A representative for Gertler commented: “WFS is not owned by Gertler. In an initial examination that was done beyond the letter of the law with some of the entities mentioned in the article – certain entities that were said to have received money, did not. The claim that on July 10, 2018 money was withdrawn from the Ventora account by Mukonda is totally erroneous. Mukonda was never in the bank. A person named Julien did not deposit money as claimed. The attempt to involve Gertler in matters not related to him, or to attribute illegal activity to him, is libel.”
Ron Dror said: “Your claims are incorrect.”
Med Cruises said: “The details in your petition are incorrect.
There was no response from Afriland First Bank.
There was no response from Zenon Mukuku.
Disclosure: Dan Gertler filed a lawsuit for 9 million shekels against TheMarker after the first “Congo Files” investigation in July. The newspaper stands behind the report.