Jeffrey Galmond

Jeffrey Peter Galmond is a Danish Supreme Court lawyer and businessman. He is the owner of the law firm J. P. Galmond & Co. He owned large portions of the holding companies that owned the Russian mobile telecommunications operator Megafon. One of these portions was contested. Galmond had been accused of not being the true owner of the Russian assets, but of acting as a front to Russian minister of telecommunications Leonid Reiman. These claims were vigorously denied by Galmond.

Involvement with Leonid Reiman

With headquarters in Copenhagen and offices in Hamburg, J.P. Galmond & Company established a presence in telecommunication, finance, and company law in Russia in 1989 and a representation office in St Petersburg in 1992 and in Moscow in 2000.[1] In the early 1990s, Galmond met Leonid Reiman in Leningrad (St Petersburg), who was an executive with the Leningrad City Telephone Network (LGTS) that was renamed the St. Petersburg City Telephone Network (PTS) in 1993.[2][3] Galmond later became Reiman's attorney.[2] In 1994, Reiman collected numerous joint ventures of telecoms owned by his state-controlled employer into OAO Telecominvest (TCI) (Russian: ОАО "Телекоминвест")[lower-alpha 1] in which his employer had a 95% share and Galmond the rest.[2][lower-alpha 2] In 1995, the non-Galmond held share was owned through First National Holding SA from Luxembourg by Germany's Commerzbank with a 51% share and by Reiman's employer and another state-controlled company with a 49% share.[2][6] Then, First National Holding's share grew to 85%.[2] OAO Telecominvest's main asset was a 45% stake in North-West GSM which became the core of Megafon.[8] In 2001, after Commerzbank through its First National Holding SA ended its share of Telecominvest, Galmond had several companies including IPOC International Growth Fund which was established in 2000 in Bermuda and Lapal Ltd., Albany Invest Ltd., and Mercury Import Ltd. in the British Virgin Islands (BVI) acquire the telecom holdings of Commerzbank's former interests.[6][9][10][11][12][13] IPOC International Growth Fund was formed as a mutual fund, however, there were no investment from shareholders owning a stake in it: The only income IPOC received was from its subsidiaries.

IPOC International Growth Fund

IPOC International Growth Fund, which controls several Russian telecoms, was competing against Alfa Group for control of a large share in Megafon.[14][15][16][17] Both IPOC and Alfa Group used numerous 1929 Holding Company Schemes with shell companies in the British Virgin Islands, Luxembourg, Cyprus, Cayman Islands, and Delaware.[18]

Galmond's disputed 25% share in Megafon was held by Leonid Rozhetskin's LV Finance, a company which sold its share on 5 August 2003 for $200 million through several shell companies to Altimo a subsidiary of Alfa Group, the company fronted by Russian oligarch Mikhail Fridman.[6][19][20][21][22] But, Galmond had an agreement to purchase LV Finance's 25% share in MegaFon already in 2001.[23] Alfa Group was at the centre of many disputes involving disputed ownership of telecommunications operations. These companies included Norwegian Telenor, Swedish-Finnish TeliaSonera, Turkey's Turkcell and others. IPOC International Growth Fund even launched a RICO suit in the United States against Alfa Group and its associates.[19][20][21][24][25][26]

Early 2004 while Leonid Reiman was Deputy Minister of Transport and Communications, Gossvyaznadzor (Russian: Госсвязьнадзор) stated that it is unclear how taxes are paid by VimpelCom OJSC and Impulse Design Bureau OJSC, which is a wholly owned subsidiary of VimpelCom.[27][28] Reiman suggested that the two merge.[27][28] While the courts came to a decision, however, Megafon greatly increase its market share in the key Moscow region as VimpelCom was held back from expanding into that region.[29] At the time, Alfa has a significant share in Vimpel.[23][25]

In Geneva, the International Chamber of Commerce arbitration tribunal ruled that IPOC International Growth Fund had legal right to the 25% share in MegaFon and that Alfa Grouup did not have a genuine and proper commercial transaction when it tried to obtain the stake.[30] During the proceedings, Kroll, a private investigations firm, had surveilled the chairman of the Geneva panel.[30]

In March 2004 on a tip from Alfa Group that IPOC International Growth Fund was involved in money laundering activities, Paula Cox, the Bermuda Minister of Finance, hired KPMG to independently investigate the IPOC International Growth Fund and eleven other associated companies for any improper activities.[6][17]

On 9 March 2005, TeliaSonera, TeleComInvest, and IPOC International Growth Fund signed a shareholders' agreement in which they would actively pursue MegaFon's public listing.[31]

From the spring to October of 2005, Richard Burt's Due Diligence[lower-alpha 3] performed Project Yucca for BGR[lower-alpha 4] in which the auditing firm KPMG was infiltrated for Alfa Group's benefit by Due Diligence in order to obtain information about KPMG's audit of the IPOC International Growth Fund.[22][lower-alpha 5] Later, the Bermuda government accused the IPOC International Growth Fund, which is associated with Bermuda and BVI registered owners of Russian telecoms, of money laundering and also accused Due Diligence of impersonating secret service personnel.[15][16]

Author Eamon Javers in his book "Broker, Trader, lawyer, Spy", describes the infiltration by Alfa Group's agents into the KPMG investigation and the attempt to influence and manipulate the result of the investigation.[34][35]

In November 2005, The Financial Times reported that Jeffrey Galmond established through court documents that Leonid Reiman is the sole beneficiary of the Fiduciare Commerce Trust which indirectly controls OAO Telecominvest.[4][29][36]

In 2006, the beneficial owner of IPOC International Growth Fund was found to be Leonid Reiman according to a Zurich ruling by the International Chamber of Commerce.[6][14][37][38][39][40]

In February 2007, Galmond was accused by the Bermuda Minister of Finance, Paula Cox of minor infringements of local business requirements. She asked the supreme court to wind up IPOC International Growth Fund, a company owned by Galmond, along with several other companies associated with Galmond.[2] Galmond and IPOC worked to solve the issue. One step taken was for IPOC to fund a report by KPMG into its operations. KPMG's report, which cost its client(s) US$13 million, found no evidence that Galmond was not the beneficial owner of the MegaFon stake, or Alfa's claim that money going into IPOC funds was the proceeds of money laundering.

In April 2007 Finance Minister Paula Cox instructed the Registrar of Companies to file the petition to wind-up IPOC International Growth Fund and eight related companies. The move was aimed at protecting Bermuda's reputation as a jurisdiction.[6] Bermuda also received around $22.5 million as its share of $45 million confiscated on 1 May 2008 from IPOC International Growth Fund in a criminal prosecution in the British Virgin Islands, where three IPOC-owned companies were domiciled.[6]

In July 2007, Altimo, which is owned by Mikhail Fridman's Alfa Group, won in its dispute with the IPOC International Growth Fund and received ownership of the 25.1% stake in MegaFon which was formerly owned by LV Finance.[41][42] Both Altimo and IPOC International Growth Fund jointly decided to "end all court actions and end legal claims against each other."[22][43][44] At that time, IPOC through its holdings in TeleComInvest held a 39.3% share of MegaFon and Alfa Group through Altimo held a 25.1% stake in MegaFon.[42]

Other work

Galmond has also worked as a lawyer for companies associated with Jón Ásgeir Jóhannesson's Icelandic conglomerate Baugur Group.[45][46]

In June 1993, Björgólfur Guðmundsson, Björgólfur Thor Björgólfsson and Magnús Þorsteinsson were among Galmond's first clients when Galmond was their attorney beginning with the establishment of their bottling company Baltic Bottling Plant in Saint Petersburg which was sold to Pepsi for 4 billion DKK in 1997.[45][46]

In April 2012 the Prosecutor in the German city of Frankfurt withdrew charges against Galmond and four former employees of Commerzbank AG of money laundering. The investigations of the German prosecutor had lasted for 7 years.[47]

Danish tabloid newspaper BT, on its front page of 24 December 2012, claimed that Galmond had committed tax evasion and fraud with the IPOC shares. On 15 January 2014, as a result of a libel case instigated by Galmond against the tabloid BT, BT publicly withdrew its accusations. As a result of a plea-bargain, BT paid compensation of DKK 100,000 to Galmond and the cost of the libel case.[48]

Galmond today lives in Switzerland. He had sold all of the assets in IPOC International Growth Fund after its liquidation in 2008.

Notes
  1. Lyudmila Putina represented OAO Telecominvest from 1998-1999 in Moscow after her husband the former deputy mayor of St Petersburg Vladimir Putin moved from St Petersburg to Moscow in 1997 and later became the Director of the successor to the KGB, the Federal Security Service in July 1998.[4][5][6][7]
  2. The St Petersburg Telephone Network (PTS) (Russian: "Петербургской телефонной сетью" (ПТС)) and the St. Petersburg Long-distance International Telephone (St. Petersburg MMT) (Russian: "Санкт-Петербургским междугородным международным телефоном" (СПб ММТ)) combined their assets to form OAO Telecominvest in 1994.[5]
  3. Due Diligence was founded in 2000 by Richard Burt, Lord Powell of Bayswater and others in Washington, D.C., as a private intelligence and risk-assessment and management firm.[32] Diligence Europe was headed by Michael Howard.[32]
  4. Founded by Haley Barbour, BGR was hired by Alfa Group through its telecom subsidiary.[15][16][33]
  5. During Project Yucca, the shareholders of Due Diligence were CEO Nick Day who was a former British agent and a co-founder of Due Diligence, the Chairman of Due Diligence Richard Burt, the Exxel Group which is a Buenos Aires private equity firm, and Edward Mathias from The Carlyle Group which is a private equity company from Washington D.C.[15][16]

References
  1. "J.P. Galmond & Company: Profile". galmond.com. Archived from the original on 17 March 2007. Retrieved 17 March 2020.
  2. Anonymous (2014). "Leonid Reiman and Jeffrey Galmond / IPOC Case. Control Number #91". Stolen Asset Recovery Initiative (StAR) of the World Bank and United Nations Office on Drugs and Crime (UNODC). Archived from the original on 21 April 2014. Retrieved 16 March 2020.
  3. Anonymous. "Entities used". Stolen Asset Recovery Initiative (StAR) of the World Bank and United Nations Office on Drugs and Crime (UNODC). Retrieved 16 March 2020.
  4. Хассель, Флориан (Hassel, Florian) (26 July 2005). "Телекоминвест" загадывает загадки [Telecominvest puzzles]. Inopressa (in Russian). Archived from the original on 2 November 2006. Retrieved 17 March 2020.
  5. Людмила Путина действительно работала в компании, подозреваемой в отмывании денег. Москва мешает расследованию [Lyudmila Putin really worked for a company suspected of money laundering. Moscow interferes with the investigation]. NewsRu.com. 28 July 2005. Retrieved 17 March 2020.
  6. Kent, Jonathan (9 May 2008). "The rise and fall of IPOC". Royal Gazette. Archived from the original on 7 August 2019. Retrieved 16 March 2020.
  7. Walters, Greg; Belton, Catherine (26 July 2005). "Russia at Heart of German Probe". The Moscow Times. Archived from the original on 14 August 2007. Retrieved 17 March 2020.
  8. The Wall Street Journal: близкий друг Путина причастен к скандалу с отмыванием денег [The Wall Street Journal: Putin's close friend involved in money laundering scandal]. NewsRu.com (in Russian). 2 December 2005. Retrieved 17 March 2020.
  9. "IPOC International Growth Fund: About Us". ipocfund.com (in Russian). Archived from the original on 9 May 2007. Retrieved 17 March 2020.
  10. Simpson, Glenn R.; Crawford, David; White, Gregory L. (25 July 2005). "Germany: Commerzbank is at center of probe: Prosecutors Ask if Bank Misstated Role in Transfer Of Russian Telecom Assets". CorpWatch. Archived from the original on 3 December 2005. Retrieved 16 March 2020.
  11. "IPOC pleads guilty in BVI – $45m set to be confiscated". Royal Gazette. 1 May 2008. Retrieved 17 March 2020.
  12. "European Commission to investigate TeliaSonera deals in Russia". Helsingin Sanomat. 2006. Archived from the original on 10 June 2012. Retrieved 17 March 2020.
  13. "IPOC International Growth Fund: About Us. Welcome". ipocfund.com. Archived from the original on 9 May 2007. Retrieved 17 March 2020.
  14. Anonymous (24 May 2012). "IPOC International Growth Fund beneficial owner". Stolen Asset Recovery Initiative (StAR) of the World Bank and United Nations Office on Drugs and Crime (UNODC). Retrieved 16 March 2020.
  15. Javers, Eamon (25 February 2007). "Spies, Lies & KPMG: An inside look at how the accounting giant was infiltrated by private intelligence firm Diligence". Bloomberg. Archived from the original on 4 July 2017. Retrieved 16 March 2020.
  16. Hotten, Russell (22 June 2008). "BP antagonist has Altimo ambitions". The Telegraph. Archived from the original on 11 November 2012. Retrieved 16 March 2020.
  17. "Dane battles for Russian mobile company". Copenhagen Post. 28 October 2004. Archived from the original on 27 September 2007. Retrieved 17 March 2020.
  18. Elkjær, Bo; Pimonov, Vladimir; Mynderup, John (30 October 2006). "Sådan slipper de for skatten" [This is how they get rid of the tax]. Ekstra Bladet (in Danish). Archived from the original on 27 April 2017. Retrieved 2 February 2021.
  19. "Russian Billionaire's Alfa Group Sued In Federal Court". Forbes. 9 June 2006. Retrieved 16 March 2020.
  20. "US: Russian Oligarch Fridman, Corporation Sued for Racketeering, Fraud That Used U.S. Banks and Exchanges". CorpWatch. PR Newswire. 9 June 2006. Retrieved 16 March 2020.
  21. "RICO suit – Alfa Group Accused of Bribing to Buy MegaFon". Kommersant. 13 June 2006. Archived from the original on 30 September 2007. Retrieved 17 March 2020.
  22. Knapp, Michael C.; Knapp, Carol A. (January–June 2016). "Duplicity and Diligence: An Ethical Forensic Case Study of International Espionage" (PDF). Journal of Forensic and Investigative Accounting. pp. 272–283. Retrieved 16 March 2020.
  23. Walsh, Conal (6 December 2003). "Western investors worry as Russian writs fly: The rights of foreign shareholders are at stake in a Moscow courtroom in a case that can only get nastier - and more entertaining". The Guardian. Retrieved 18 March 2020.
  24. "RICO documents from IPOC's filing" (PDF). ipocfund.com. Archived from the original (PDF) on 8 October 2007. Retrieved 17 March 2020.
  25. "US: Russian Oligarch Fridman, Corporation Sued for Racketeering, Fraud That Used U.S. Banks and Exchanges". CorpWatch. 9 June 2006. Retrieved 18 March 2020 – via PR Newswire.
  26. FTR (9 June 2006). "Russian Oligarch Fridman, Corporation Sued for Racketeering, Fraud That Used U.S. Banks and Exchanges". PR Newswire. Retrieved 18 March 2020.
  27. Л.Рейман знает решение "проблемы "Вымпелкома"" [L. Reiman knows the solution to the "problem "VimpelCom""]. Vedomosti (in Russian). 20 April 2004. Retrieved 17 March 2020.
  28. Рейман знает, как решить проблему "Вымпелкома" [Reiman knows how to solve the problem of VimpelCom]. RIA Novosti (in Russian). 20 April 2004. Retrieved 17 March 2020.
  29. Это не реформируется [It is not reformed]. Gazeta.Ru (in Russian). 11 November 2004. Retrieved 17 March 2020.
  30. Walsh, Conal (4 September 2004). "The acceptable face of Russian capitalism? Against the odds, a Danish lawyer has challenged the oligarchs and is now ranked among the country's most successful investors". The Guardian. Retrieved 18 March 2020.
  31. Press release (9 March 2005). "MegaFon Shareholders Unite Behind Shareholders' Agreement: TeliaSonera, TelecomInvest ("TCI") and IPOC International Growth Fund Limited ("IPOC"), the main shareholders in Russian mobile operator MegaFon, today announce the signing of an agreement intended to strengthen their relationship and clarify the governance and operations of MegaFon". Telia website. Retrieved 18 March 2020.
  32. Vina, Gonzalo (19 June 2006). "Shakers: Former Tory leader to head risk firm". International Herald Tribune. Archived from the original on 2 December 2008. Retrieved 16 March 2020.
  33. Charles, B. (22 March 2007). "Alfa Group's Arsenal to Fight Rivals in Kiev and Moscow". intelligenceonline.com. Archived from the original on 19 March 2020. Retrieved 18 March 2020 – via Alfa’s Worldwide Network of Consultants.
  34. Leonard, Devin (6 March 2010). "The Corporate Side of Snooping". The New York Times. Retrieved 17 March 2020.
  35. Javers 2010.
  36. Jack, Andrew (8 November 2004). "RUSSIA: Minister faces telecoms accusation". CorpWatch. Retrieved 18 March 2020.
  37. "Russian Minister Laundered Millions in Finland?". Finrosforum. 2013. Retrieved 16 March 2020.
  38. "KRP tutki venäläisministerin rahavirtoja Suomessa" [KRP investigated the Russian Minister's cash flows in Finland]. Helsingin Sanomat (in Finnish). 11 October 2013. Retrieved 16 March 2020.
  39. Sajari, Petri (11 October 2013). "Krp tutki venäläisministerin rahavirtoja Suomessa: Suuri rahanpesuepäily alkoi entisen venäläisministerin epäillystä rikoksesta" [KRP investigated the Russian Minister's cash flows in Finland: A major suspicion of money laundering began with a suspected crime by a former Russian minister]. Helsingin Sanomat (in Finnish). Retrieved 16 March 2020.
  40. "Albany Invest, IPOC International Growth Fund, Saarijärvi". Suomi 24 (in Finnish). 11 October 2013. Retrieved 16 March 2020.
  41. "Interview With Altimo CEO, Alexey Reznikovich". Cision. Barcelona. 12 February 2008. Archived from the original on 29 June 2018. Retrieved 18 March 2020 – via Dow Jones Newswires.
  42. Middleton, James (30 July 2007). "Altimo vs. Ipoc: it's all over". telecom.com. Retrieved 18 March 2020.
  43. Buckley, L. (30 July 2007). "The Rise and Fall of IPOC". Financial Times.
  44. "Russia's Altimo says MegaFon dispute resolved". Reuters. 30 November 2007. Retrieved 18 March 2020.
  45. "Diskret dansk advokat milliardær: Den omstridte danske advokat i Rusland, J.P. Galmond, har - midt i gigantstrid - solgt russisk internetfirma for næsten en mia. kr" [Discreet Danish lawyer billionaire: The controversial Danish lawyer in Russia, JP Galmond, has - in the midst of giant strife - sold Russian internet company for almost a billion. kr.]. Berlingske (in Danish). 23 June 2005. Archived from the original on 18 March 2020. Retrieved 18 March 2020.
  46. Прибыловский, Владимир (Pribylovsky, Vladimir); Морарь, Наталья (Morar, Natalia); Барабанов, Илья (Barabanov, Ilya); Альбац, Евгения (Albats, Evgenia) (20 October 2008). "От Питера до Рейкьявика: Чьи деньги спасают в Исландии" [From Peter to Reykjavik: Whose money is being saved in Iceland]. The New Times (in Russian). Archived from the original on 20 October 2008. Retrieved 2 February 2021.
  47. "Germans Drop Charges in Russian Telecom Minister Case". RIA Novosti. 13 August 2013. Archived from the original on 13 August 2013. Retrieved 17 March 2020.
  48. Beha Pedersen, Troels (17 January 2014). "BT taber sag til topadvokat". BT (in Danish). Archived from the original on 20 January 2014. Retrieved 16 March 2020.

Books
  • Javers, Eamon (9 February 2010). Broker, Trader, Lawyer, Spy: The Secret World of Corporate Espionage. Harper Business. ISBN 978-0061697203.
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