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The France Offshore case: Nadav Bensoussan, king of tax evasion

Nadav Bensoussan, the man at the heart of the tax evasion system set up by France Offshore. Here, during his trial in February 2017.

In the early 2000s, this financial company offered its customers, mostly small business owners, to invest their money abroad to avoid tax in France. Between 200 million and 700 million euros would thus have been laundered in Latvia.

Back on this case on the occasion of the appeal trial of the Latvian bank which opens Monday, February 8, in Paris, for laundering of tax fraud.

It's a sprawling business. Judged at first instance in 2017, the France Offshore file will be examined again by the courts from Monday, February 8, at the Paris TGI, during the appeal trial of the Latvian bank Rietumu accused of harboring the laundered funds. This case resulted in one of the largest tax evasion lawsuits. And it has become emblematic of white collar delinquency.

It all starts with a man, Nadav Bensoussan. In the early 2000s, this former banker set up a vast system of tax evasion. Its target: small fortunes. You no longer need to be a millionaire or the boss of a CAC 40 company to invest your money in tax havens. The businessman promises everyone access to the best “tax optimization” methods. For 2 to 500 euros, he offers customers of his company, called France Offshore, to open a public limited company in a country with advantageous taxation, Latvia. It is aimed primarily at small business owners, liberal professions and craftsmen. And he assures that everything is legal.

Large-scale fraud

The formula appeals to all those who are looking for the right plan to pay less tax in France. Among them is a hairdresser, an osteopath, computer companies, but also financial criminals. The investigation will indeed reveal the links of France Offshore with illegal activities of carbon tax fraud and VAT scams. “In the 2000s, it was not so easy to create a company abroad. Internet was not so developed. We had to go to Switzerland, it was expensive. Nadav Bensoussan has completely democratized the system by industrializing the process,” explains Mabrouk Sassi, tax lawyer.

Thanks to various financial arrangements relating to tax evasion (false invoices, purchasing centers or fictitious subsidiaries, etc.), France Offshore's customers relocated part of their turnover. “Everyone has the right to establish a company abroad. The constraint is the substance, that is to say that on site, there must be premises and employees.

We can therefore invoice the services that are provided from there. France Offshore's customers only had one mailbox and some used this fictitious company to invoice“, decrypts Maître Sassi. Once the money was deposited in the bank, customers could collect their money anonymously using business bank cards.

The King of Offshore

Far from cultivating discretion, the charismatic boss of France Offshore multiplies media appearances to promote his company. In 2011, for example, Nadav Bensoussan did not hesitate to stage himself for a report on France 5. We see him working in his offices in Riga, Latvia, then going himself to file his clients' files at Rietumu bank.

Nadav Bensoussan, the man at the heart of the tax evasion system set up by France Offshore. Here, during his trial in February 2017.
Nadav Bensoussan, the man at the heart of the tax evasion system set up by France Offshore. Here, during his trial in February 2017.

"Everything is in accordance with the law," he told the journalist who asked him about the legality of his business. This reassuring and offensive communication is also deployed with great fanfare on the Internet. Once the customer has been harpooned, he is invited to the Paris offices of France Offshore, located in the very chic 16th arrondissement.

How not to trust this well-established company? “I was trying my hand at trading on the Internet and I came across France Offshore. A meeting has been set in Paris. They presented well. They assured me that it was a totally legal tax arrangement. In their offices, they were very convincing, I couldn't refuse. It was when I saw that the bank was in an Eastern country that I began to be wary“, testifies one of France Offshore's customers on RTL in 2013. For nearly ten years, the Nadav Bensoussan's business will continue with this appearance of legality.

But, the one the press dubs “the king of offshore”, does not take long to attract the attention of the tax authorities. In 2008, a first search by the National Directorate of Tax Investigations (DNEF) took place in the premises of France Offshore to seize the files of its customers. The investigation accelerated in December 2011 when a judicial inquiry was opened after a complaint filed by the tax authorities. A year later, it's the end of France Offshore. Nadav Bensoussan and several of his employees are indicted for laundering tax evasion in an organized gang.

The French company is dragging down its main partner abroad: the Latvian bank Rietumu, which hosts the laundered funds. As for customers, many said they were deceived. A difficult argument for the tax authorities to hear. All were heavily straightened. “These are emblematic trials for the prosecution and for the tax authorities. It is a question of showing banks, intermediaries and taxpayers that they cannot create companies abroad and defraud with impunity”, underlines Mr. Sassi.

"It's complicated to think that they could not know"

In February 2017, the France Offshore trial opened before the Paris Criminal Court. In all, 13 people appear: Nadav Bensoussan, employees and lawyers of France Offshore as well as two representatives of Reitumu. Nearly 700 accounts had been opened in the Latvian bank. As for the total amount of money laundered, the judges retained the sum of 203 million euros. However, the fraud could be on a whole different scale.

Some estimates reach 700 million euros. During the hearing, the main accused denies having been aware of the illegality of his activity. He would have argued that “the creation of offshore companies is not illegal” and that he “had no knowledge of the illegal actions of certain clients“, reports Vanity Fair.

The Latvian bank also pleads good faith and denies knowing the origin of the funds paid via France Offshore. “It's complicated to think that they could not know“, remarks Master Sassi.

80 million euros fine

At the end of the trial, Nadav Bensoussan was sentenced to five years in prison, three of which were suspended, and a fine of three million euros for tax evasion, laundering of tax evasion, association of criminals, fraud in an organized gang and concealed work. He is not appealing the decision, unlike the bank, which is fined 80 million euros, the equivalent of its annual profit for 2016. Two of its managers are given suspended prison sentences: four years for its director, Alexander Pankov, and one year for its representative in France, Sergejs Scuka. "We have the impression that the court wanted to pick the pockets of the bank and make an example," said Rietumu's lawyer, Patrick Klugman, after the verdict. Contacted, he did not respond to our requests. For this second trial, "the debate should focus on the amount of the financial penalty", analyzes Maître Sassi.

Since the revelation of the fraud organized by France Offshore, the bank claims to have strengthened its account verification procedures. As for Nadav Bensoussan, “he is done with this case“, tells us his lawyer Serge Kiersenbaum. However, he is now suspected of having continued his activities via a new company: Fidusuisse. This business would have continued after 2017, even though his conviction in the France Offshore case prohibited him from exercising in management and financial advice.

Indicted in this case in January 2020, he was placed in detention at the Prison de la Santé. After a few days in prison, he was released and placed under judicial supervision. The last trial in the France Offshore case will therefore perhaps not mark the end of Nadav Bensoussan's troubles.

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