Hidden fees were paid to offshore companies by duo whose actions bring reputation of London’s financial centre ‘into disrepute’.
Two former bankers have been sentenced to jail for a total of 11 years for their role in a multimillion pound fraud in which a Libyan sovereign wealth fund was defrauded after hidden fees were paid to offshore companies.
Frederic Marino, 56, a fund manager and former star trader at JPMorgan, was on Monday sentenced to seven years and six months in prison after he was found guilty of conspiracy to commit fraud by abuse of position last December by a jury at Southwark Crown Court.
Yoshika Ohmura, 47, a former Julius Baer banker, who was also found guilty of conspiracy to commit fraud by abuse of position of trust at the same trial, was given a prison sentence of three years and six months.
Judge Tony Baumgartner, who heard both men had now absconded from the UK, sentenced the two in their absence and issued warrants for their arrest.
Aurelien Bessot, 47, a former financier with Rabobank, who attended court on Monday, had pleaded guilty to fraud by abuse of position of trust in 2020. He was sentenced to 15 months imprisonment suspended for two years. Southwark Crown Court heard that Marino, who did not attend last year’s trial and is now living in Paris, and Bessot were co-directors of a company called FM Capital Partners, which was set up in 2009.
This was responsible for investing £822mn funds of the Libya Africa Investment Portfolio, a sovereign wealth fund set up shortly before the Arab spring and the fall of Libyan dictator Muammar Gaddafi. However, instead of optimising the investments, Marino and Bessot, with the help of Swiss banker Ohmura, placed investments to maximise their own rewards.
They collected undeclared fees for investments made on behalf of the Libyan wealth fund, to the detriment of the fund between 2009 and 2014. The money from these fraudulent actions was then laundered through a series of offshore shell companies. Judge Baumgartner said Marino had played a “leading role” in the fraud and was a “greedy, corrupt and manipulative man” who would have “continued offending” had he not been caught out”.
Marino had devised a scheme to unlawfully line his own pockets thinking he could get away with it and his actions had deprived the Libyan people, the judge said.
Bessot was given a suspended sentence after the court heard that he had assisted prosecutors and was “deeply remorseful” and had paid back $2.8mn — more than the money he owed.
Judge Baumgartner said that London remained a leading financial centre and such offending brought its reputation “into disrepute”. He also criticised the use of offshore vehicles in the fraud, which he said were “an impenetrable cloak to obtain illegitimate advantage” and added that “use of these has to stop”.
Prosecutors said after Monday’s hearing that the total losses to the fund caused by the men were upwards of $10mn plus €1.36mn. Marino’s actions caused losses to the fund of $8.45mn, the court heard. The criminal sentencing comes five years after FM Capital Partners won a separate civil lawsuit in the High Court against Marino and Ohmura.
Ex-JPMorgan Fugitive Gets Jail Sentence in Libya Fund Fraud
- Three ex-bankers sentenced by judge in long-running case
- Men found guilty of defrauding Libyan sovereign wealth fund
A former JPMorgan Chase & Co. banker who’s now on the run was sentenced to 7 1/2 years in jail for his role in a multimillion-pound fraud against the Libyan government.
Frederic Marino, 56, was found guilty in December of fraud by abuse of position of trust from 2009 to 2014. Marino wasn’t present for his sentencing on Monday at Southwark Crown Court and an arrest warrant was already issued last year after he failed to show up for his eight-week jury trial.
Marino helped set up asset management company FM Capital Partners Ltd. to manage money invested from the Libya Africa Investment Portfolio and had collected undeclared finder fees for variety of investments. Marino was previously a head of JPMorgan’s alternative investment emerging market group.
He is a “greedy, corrupt and manipulative man,” and “would have gone on to continue offending” if he’d not been caught out, Judge Tony Baumgartner said during the hearing. The total value of the fraud was $10 million plus over €1 million, the prosecution lawyers said afterwards.
Yoshiki Ohmura, 47, a former Julius Baer banker, stood trial alongside Marino and was found guilty by the jury. The judge sentenced him to 3 1/2 years in prison for the same offense at the hearing. A warrant was put out for his arrest after he failed to attend the sentencing, with the judge previously granting him bail for personal family reasons.
Earlier civil court claims against the pair had alleged that Marino used the money to live a lavish lifestyle, allegedly racking up expenses on a company credit card for a helicopter ride, clothes and restaurant bills. He also spent more than £100,000 ($112,600) at the five-star Lanesborough Hotel.
Ohmura’s role in the scheme was to act as a mediator to FMCP. Marino arranged for fees from the funds to be paid through offshore companies while Ohmura assisted him through a company, which channeled the “secret profits” after taking a cut.
Lawyers for Marino and Ohmura didn’t immediately respond to a request for comment.
“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 revenues,” Andrew West, a specialist prosecutor at the CPS, said in a statement.
A third banker, Aurelien Bessot, 47, a director of FM Capital Partners, who wasn’t part of the trial but was on the indictment, had already pleaded guilty. He was given a 15-month custodial sentence, suspended by 2 years, meaning he will avoid jail time.
Bessot declined to comment outside of the court.
Financiers sentenced to 11 years for defrauding Libya fund – UK court
A former JPMorgan investment manager and an ex-Julius Baer banker were sentenced to a total of 11 years by a London court on Monday for defrauding a Libyan sovereign wealth fund out of millions of dollars.
Frederic Marino, 56, and Yoshiki Ohmura, 47, were sentenced in their absence at London’s Southwark Crown Court for one count of conspiracy to commit fraud by abuse of a position of trust in relation to the Libya Africa Investment Portfolio (LAP).
Marino, formerly head of JPMorgan’s alternative investment emerging market group, was sentenced to seven-and-a-half years in prison. He had pleaded not guilty but was convicted after a trial, which he did not attend.
Judge Tony Baumgartner said that Marino – as chief executive officer of FM Capital Partners (FMCP), which prosecutors said managed around $800 million for the LAP – had “targeted the collective wealth of the Libyan people”.
The judge described Marino as “a greedy, corrupt and manipulative man who thought very little, if nothing, of how your offending might affect others … and who would have gone on to continue offending had you not been caught out”.
Ohmura – ex-global head of structured investments at Julius Baer company Global Asset Management, who helped dishonestly extract investment fees from LAP – was sentenced to three-and-a-half years.
He did not appear at his sentencing and Baumgartner, who issued a warrant for his arrest on Monday, said Ohmura’s failure to attend showed his “lack of remorse”.
The judge had previously issued a warrant for Marino’s arrest in October after he failed to appear at his trial.
Marino’s business partner at FMCP, 47-year-old Aurelien Bessot, who pleaded guilty almost two years before the trial began, was sentenced to 15 months’ imprisonment, suspended for two years. He declined to comment after the hearing.
Baumgartner said Bessot had cooperated with the prosecution, offered to give evidence against his co-defendants and was “truly remorseful”.
Prosecutors said after the hearing that the total value of the conspiracy was over $11 million, in U.S. dollars and euros.