Nujoma, Mafia link in Panama Papers
Leaked documents reveal how the son of convicted Italian mafioso, Vito Roberto Palazzolo, and the son of his best friend, Count Riccardo Agusta, teamed up to sustain Palazzolo’s illicit businesses through offshore firms using a former German banker.
The leak of data from Panama-based law firm Mossack Fonseca, obtained by German newspaper Süddeutsche Zeitung and the International Consortium of Investigative Journalists, also reveals details about the connections between the Italians and businessman Zacky Nujoma, the youngest son of Namibia’s founding president, Sam Nujoma.
Despite Palazzolo, the kingpin financier of Sicilian mafia the Cosa Nostra Costa, being in prison, the mafia empire continues to flourish, thanks to Mossack Fonseca’s help in shielding the syndicate’s companies from Namibian, Italian and South African state authorities by using shell companies in the British Virgin Islands.
Data from Mossack Fonseca shows how the Palazzolo family registered a number of companies in the British Virgin Islands.
With the help of Wolf-Peter Berthold, a German banker based in Hong Kong, the Palazzolos appear to have used these firms to pass the family business from one generation to the next.
Berthold is the primary link between the Palazzolo family and Mossack Fonseca through Berthold’s Bahamas-based company Deutsche Investment Corporation, co-owned by Palazzolo’s son, Peter Von Palace Kolbatschenko.
Documents show that the Palazzolos used Berthold’s company to open at least seven companies in the British Virgin Islands: Diamond Ocean Enterprises Limited, Deutsche Investments Consultants (Asia) Limited, Benway International Limited, Gold Enterprises Limited, Goldfield International Limited, Silver Group Limited and Natural Earth International Limited.
Banker Berthold established the investment firm Deutsche Investment Corporation in 1996 in the Bahamas, and registered it in Hong Kong.
Berthold, who has been based in Hong Kong since 1977, appears to be a former employee of Deutsche Bank, though there is no evidence of a connection between Deutsche Bank and the Deutsche Investment Corporation.
Until recently, Berthold’s company incorporated a number of offshore firms in the British Virgin Islands through Mossack Fonseca. Berthold did not respond to requests for an interview.
The use of tax havens such as the British Virgin Islands enables companies – or criminals camouflaged by corporate structures – to conceal financial activities and identities using banking secrecy, nominees who aren’t beneficiaries and tax havens’ non-disclosure legislation.
One of these entities, Diamond Ocean, was set up in February 2005 and is listed as a consulting company that provided expertise to a diamond manufacturer and polisher based in Namibia.
Mossack Fonseca records list Deutsche Investment Consultants (Asia) as a director of Diamond Ocean. The company’s shareholders include Kolbatschenko, Berthold and Giovanni Agusta, son of Riccardo Agusta. And, according to Italian investigators, the Agusta family also plays a key role in maintaining the Palazzolo family’s financial interests in Africa.
The Agustas are an aristocratic Italian family linked to Munich and South Africa, famous for having created helicopter design and manufacturing company Agusta Spa, sold to Westland in 2000 (the company was later named Agusta Westland).
In the 1980s Count Riccardo Agusta moved to South Africa where he raised his sons and established a close friendship Palazzolo. Both were involved in managing South African businesses, including prestigious vineyards and wineries.
Paolo Piccinelli, who headed the Italian military police unit that caught Palazzolo in Thailand, alleged that the mafioso “sold his South African properties to Count Agusta to avoid having them confiscated.”
Documents from Mossack Fonseca identify Agusta Enterprises Holding Company Limited as one of the entities managed by the law firm’s client Deutsche Investment Corporation (Asia), the central company in the Berthold-Palazzolo alliance.
Zacky Nujoma Connection
A previous transnational investigation by the Investigative Reporting Project Italy and the African Network of Centres for Investigative Reporting revealed the connection between Palazzolo’s Diamond Ocean and Zacky Nujoma, the son of Namibia’s founding president.
In 2007, Nujoma was quoted as dismissing Palazzolo’s organised crime links as “an old CIA story”, but later claimed not to have known about Palazzolo’s past when interacting with him. “Then I did not know him; now things have changed,” he said.
They had not been business partners, but “merely friends”, according to Nujoma. However, Palazzolo and Nujoma’s company, Nu Diamonds, is one of less than a dozen De Beers’ sightholders – authorised bulk purchasers of rough diamonds in Namibia.
Nu Diamonds is also linked to a pair of other Namibian companies controlled by Diamond Ocean. In 2005, Nujoma acquired two off-the-shelf companies in Namibia, Avila Investments and Marbella Investments.
Shortly after Avila and Marbella obtained licences to buy and cut diamonds in Namibia, 90% of the shared capital was transferred to Diamond Ocean.
Palazzolo’s son, Kolbatschenko, already a shareholder of Diamond Ocean, was appointed a director of Avila. Avila and Marbella have since been dissolved.
The leak reveals another link between Palazzolo and Nujoma. Natural Earth, another company registered by Deutsche Investment Corporation (Asia), surfaces in a deal involving Nujoma, whose political connections were key for securing an significant uranium deal in Namibia.
In 2006, Nujoma established Ancash Investments (Pty) Limited, a black empowerment firm. Soon after, Ancash obtained seven exclusive uranium prospecting licenses from Namibia’s mines and energy ministry. Then, in September 2006, Palazzolo advanced Ancash $10 million in “financial assistance” to support mineral exploration rights.
Following the loan from Palazzolo, Canadian uranium exploration and development company Forsys Metals Corp announced its intention to partner with Ancash on uranium mining contracts. In its announcement, Forsys declared that Ancash possessed “strong international connections with Natural Earth International Ltd, a member of Deutsche Investment Corporation (Asia) Ltd based in Hong Kong.”
Nujoma has since refused to discuss his business dealings with Palazzolo. “There is nothing to hide there, but write what you want,” he told The Namibian, and said that the newspaper was enquiring about “old stuff”.
“Interests of Organised Crime Cannot be Excluded”
In August 2015, emails exchanged by Mossack Fonseca’s compliance department outlined gaps in its due diligence requirements for the companies connected to Palazzolo.
These included disclosures related to the source of funds and residence and reference letters for Diamond Ocean.
Kolbatschenko’s identity as a shareholder of the company was placed on alert due to his familial connection to Palazzolo.
Palazzolo had not yet been arrested when these offshore companies were established by Berthold. Palazzolo is currently in jail under an Italian law that allows prison regulations to be suspended for inmates convicted of organised crimes involving the mafia.
It appears that before his incarceration, Palazzolo effectively handed over the reigns of his empire to Kolbatschenko.
Mossack Fonesca’s compliance department cited a LexisNexis dossier and concluded that the “interests of organised crime cannot be excluded.”
Emails from September 2015 record Diamond Ocean’s response to Mossack Fonseca’s enquiries about the alleged mafia link as saying: “We want to let the company [Diamond Ocean] lapse as it has been dormant for many years. It does not hold any assets, and we have no intention to use it in the future.”
Diamond Ocean was closed down as requested, which means any valuable assets related to Namibian diamonds had most likely already been shifted to another shell entity.
The documents show that the rest of Palazzolo’s companies associated with Mossack Fonseca, including the “holding” structure Deutsche Investment Corporation (Asia), are still active and run by Berthold and Kolbatschenko.
It is not clear whether Berthold and Palazzolo were acquainted, but they were both employed by Deutsche Bank during the early years of their careers.
Palazzolo’s banking career began at the age of 20 at Deutsche Bank’s Hamburg office in Germany. Soon after, he became a private banker and a very capable “financial adviser” for the Sicilian mafia.