9

Jersey

Q: Did you ever instruct the partners of Touche Ross on the island of Jersey that they should accept instructions from Jurg Bollag?

A: I don’t remember Touche Ross’s name at all.

Alan Bond, Federal Court, May 1994¹

In early November 1993, without telling Bond or his lawyers, Bob Ramsay flew into Jersey’s small island airport to examine two partners of Touche Ross on oath, along with the office manager who had looked after the Bond files.

The grilling was to be conducted in secret before the Royal Court of Jersey, which had compelled the three individuals to give evidence. The court had also ordered Touche Ross and the Allied Irish Banks in St Helier to surrender all their files on a string of companies and trusts that Ramsay believed to be connected to Bond.

It looked certain to be a thrilling few days, not least because Touche Ross’s archive had coughed up a letter dated and signed by Alan Bond, that had been sent in February 1987 to the partners of Touche Ross, telling them to accept instructions from four people in relation to his affairs. One of these, predictably, was Jurg Bollag.

This absolutely crucial document appeared to be the smoking gun that could lead to Bond’s conviction for perjury and for hiding assets from creditors. For Bond had not only denied having any contact with offshore advisers, but had also denied having assets overseas, and had admitted to only one old bank account in London. And Ramsay was now about to gather volumes of evidence that he was lying on all three counts.

Ramsay had asked Bond in a letter on 11 September 1992: ‘Have you had any dealings or contacts with solicitors, accountants or financial or other advisers in Jersey?’. To which Bond had replied in a letter of 5 November 1992: ‘Not to the best of my knowledge in relation to my personal affairs’.

But the evidence that he had was overwhelming.²

The February 1987 letter showed that Alan Bond had in fact told Touche Ross to accept instructions regarding his affairs from his son John Bond, his personal solicitor Harry Lodge, his managing director at Dallhold, Robert Pearce, and his all too generous friend Jurg Bollag.

Geoffrey Davies, the Touche Ross partner who looked after Bond’s offshore companies from 1979 to 1985, had only met Alan once, at Jersey airport, when he had touched down briefly to inspect the accounts of a trust company that had been set up for him. And John Hatton-Edge, for his part, might not have met Alan at all had he not bumped into him in the lift at Bond Corporation in Perth.

But despite their lack of direct contact, neither had the slightest doubt that Alan Bond was their client, and a very substantial one at that. In fact, reading between the lines, it seemed likely that Bond was the biggest client that Touche Ross Jersey looked after.

As to Jurg Bollag’s role, they gave a variety of answers that all said roughly the same thing, which was that Bollag acted as Alan’s front man. It was pretty ridiculous, of course, to suggest that he had bought all his houses, horses and paintings just to give to Bond. But here at last was first-hand confirmation that Bollag was merely managing Alan’s millions.

Hatton-Edge described the Swiss banker variously as Bond’s personal adviser, Bond’s financial adviser and Bond’s financial planner, emphasising that he did not regard Jurg Bollag as a man of substantial wealth in his own right. ‘So,’ Hatton-Edge was asked, ‘did Mr Bollag control Mr Bond’s personal affairs?’ To which Hatton-Edge replied: ‘Certainly the ones that we were involved in’.

Geoffrey Davies confirmed this account of Bollag’s role on oath:

A:	I think he generally managed his offshore affairs, advised Mr Bond on certain things and carried out the wishes of Mr Bond, perhaps for his family.
Q:	So in relation to Touche Ross, did he control Mr Bond’s personal affairs as you saw it?
A:	Yes, I think that’s very true.3

Davies was also asked:

Q:	Would it be fair to say, Mr Davies, that you saw Mr Bollag as Mr Bond’s alter ego?
A:	Yes, probably. Yes.4

But it was clear that Bollag was not the only person to have fulfilled this role, because the Jersey companies had been set up long before Bollag had even arrived on the scene.

Touche Ross’s files contained an earlier letter of instruction from Bond, written on 26 May 1982 on notepaper headed with Bond’s name, that was once again signed by Alan himself. On this occasion, it was telling the accounting firm to accept instructions from Robert Ashley Pearce, the managing director of Dallhold, concerning ‘any matters associated with me’. Davies recalled that Touche Ross had asked Bond to provide both of these letters so that they had formal instructions on file, as any professional lawyer or accountant likes to do.

Robert Pearce had visited Jersey three to four times a year to talk about Alan’s affairs, either to get reports on what Touche Ross had done or to give new instructions, and he had been just as active as Bollag in running Alan’s offshore finances. Hatton-Edge said he had met him a dozen times, usually in Jersey or London.

Then in late 1986, Bollag had taken over from Pearce. According to Davies:

Sometime in 1986 George Bollag was introduced to us as an adviser to the client and someone who would be taking over the client’s affairs from us … Early in 1987 we received a letter from Alan Bond requesting us to act on instructions from four people who included George Bollag. After that date instructions were normally received from George Bollag.⁵

Davies first met Bollag in January 1987 in London, where he briefed the new boy about the Bond companies and trusts that he was taking over and about the assets that each owned. Pearce attended this meeting too and accompanied Bollag to Jersey on several occasions thereafter.

Davies felt that Bollag had a more personal connection to Bond and his family than Pearce had done, and that the Swiss had ultimately taken far greater control. In fact, soon after Bollag arrived, the Jersey companies were moved lock, stock and barrel to Zug, and Bollag took over the running of most of the companies himself. Davies believed the explanation was that:

Alan Bond wanted a dedicated person to look after his affairs and George Bollag was known to him as a banker who had many connections … I believe that this was the prime reason why Alan Bond’s affairs were moved to Switzerland.⁶

Until this happened in 1987, however, Bond’s Jersey empire comprised around a dozen companies or trusts, most of which were registered in Panama, and had bearer shares that were held in a safe at Touche Ross’s office. Sometimes these were accompanied by a formal declaration of trust to say who owned them. Other times they were just slipped into an envelope with the name of the owner scrawled upon it. In either case, Touche Ross always wanted to be quite clear.

But despite all this high-level secrecy, even an outsider would have been able to crack the naming code, at least to see that certain of these entities had a common origin. For the companies were typically created in twos or threes, with the company holding the assets normally owned by a trust which also had a trustee company to look after it.

And one of the endearing features of Touche Ross’s naming policy was that Bond’s companies were christened in pairs. Thus, the trustee for the Liberian company Kirk Holdings was a Panamanian outfit called The Enterprise—both names being drawn from Star Trek.

Similarly, Juno Equities was owned by the Jupiter Trust, both named after Roman Gods who were man and wife. Pegasus Investments, meanwhile, was owned by the Icarus Trust and, as any classical scholar could tell you, both these names were from Greek mythology—Pegasus being a winged horse, and Icarus the boy who stuck wings to his feet with wax, then perished when he flew too near the sun.

Among this plethora of companies, one seemed to have bankrolled most of the others, paying their fees and expenses, and lending them money. And this was the same one through which Bollag had bought the horses for Alan Bond’s daughter Susanne and paintings to hang on Alan’s walls.

Kirk Holdings had been set up in July 1984 and had flourished in Jersey for about three years. At its zenith, it had held five accounts in various currencies at the Allied Irish Banks in St Helier, through which millions of dollars of Bond’s money had flowed.

Kirk was described by the Touche Ross partners as ‘a large account’ and a company with ‘a great deal of money’. And certainly the funds rolled in and out of Kirk’s bank accounts in early 1987 in quite astonishing amounts.

Without having access to all the documents, it’s impossible to be precise about how much the company was really worth, but in a seven-month period from late 1986 to mid-1987, more than $30 million flowed into the company’s accounts and $42 million flowed out again. As to who this money belonged to, Geoffrey Davies told the Royal Court of Jersey on oath: ‘I do know that Kirk, as far as I am concerned, was for the ultimate benefit of Mr Bond and his family’.⁷

John Hatton-Edge, who took over the running of Kirk in 1986, agreed: ‘I believed it was for the benefit of Mr Bond and other beneficiaries, probably in his family’.⁸

This company, remember, was not a huge multinational like Bond Corporation but a slice of Alan Bond’s personal fortune that had not been declared to his trustee in bankruptcy. Yet the cash came and went in multi-million-dollar chunks, that were sometimes as big as $10 million. Typically, the money arrived via a network of British, American and Swiss banks. But where it had come from before that and where it went to afterwards was for the most part a mystery.⁹

On some occasions there were no banking documents to even hint at where the cash had originated. A letter from Kirk to the Allied Irish Banks in August 1986, for example, referred to a new sterling call account that had been opened to accommodate £5.285 million ‘recently transferred to our account’, but there were no clues to explain which bank or country it had come from. And it would probably have been a fruitless task for investigators to attempt to find out.

It is a feature of the international banking system that money can be sent round the world in a matter of hours, and done in such a way that the trail is impossible to follow. Most banks use something called the SWIFT system, which identifies the bank sending the money and the person ordering the transfer, but does not specify the account that it came from or where the money started its journey. So if cash is channelled through two or three different banks, it’s a nightmare to track it back to its source, especially if any of the countries it passes through has strict banking secrecy laws.¹⁰

John Broome, who ran Australia’s National Crime Authority until September 1999, knows a fair bit about money laundering, and believes that it’s a snack to get money out of the country and hide it, even with laws that require banks to report big movements of cash. The world financial system, says Broome, is set up to handle huge international transactions with ease, and it’s simply a matter of using these transactions to shunt money across the globe. You can, for example, buy shares in one place and sell them in another, then wash the proceeds through a couple of banks, and a couple of companies to rub out the traces. And the chances of being caught or having the money recovered are infinitesimal.¹¹

Bond Corporation and Dallhold had no shortage of large international deals in which hundreds of millions of dollars were sent around the world. And it would not have been hard for bits to have fallen off on the way. No auditor or investigator could ever have followed all the trails or sifted through the hundreds of thousands of documents that accompanied this frenetic activity.¹²

And even when documents were examined it was often impossible to make head or tail of them. One celebrated money-go-round that Bob Ramsay investigated involved a Touche Ross company called Calpex which had been used in March 1987 to channel $4.5 million, or US$2.8 million, from Kirk Holdings in Jersey, via Dallhold in Australia, to Bollag’s company Crasujo in Switzerland—which was the company apparently named after Bond’s children.

This movement of money had been recorded by Calpex as a loan to Dallhold, and by Dallhold as a loan to Alan Bond.¹³ But a year later, more than twice that amount of money, or $10 million, had been sent back to Jersey by Dallhold.

Now, what was suspicious about this was that Dallhold’s records cast doubt on whether Dallhold had ever received any cash to repay, so it was conceivable that the entire transaction was simply a way of sending a large amount of money offshore by repaying a phantom loan. Ramsay’s QC Francis Douglas put precisely this allegation to Bond in May 1994 in his public examination.

But the truth was that none of the investigators really knew what had happened. Nor could they find the $10 million, which was paid into an account at the Allied Irish Banks in London, set up especially to receive it, whence it disappeared into thin air.

It was usually a bit easier to see what had happened to money that had been despatched from Kirk’s accounts in Jersey, because the bank had kept requisition slips indicating what most of the payments were for. And these showed the usual roll call of horses, paintings, diamonds, shares and the like.¹⁴ But a large chunk of money had also gone to an account at the Arbuthnot Latham Bank in London, held in the name of Alan Bond, c/o Jurg Bollag. And this had also disappeared.

This Bond account had received US$2.75 million from Kirk in December 1986, along with specific instructions to the Jersey bank that: ‘no mention of Kirk Holdings is made on the transfer’. Bond would be asked by Francis Douglas QC for Ramsay in May 1994 what he had done with this money, which was in an account that he had definitely not declared to his bankruptcy trustee. And Bond simply replied that he had no idea.

Douglas:	No idea? You receive US$2.75 million into your personal account and you’ve no idea what you did with it?
Bond:	No, I couldn’t tell you the ins and outs of the accounts …
Douglas:	So you’ve no idea what you did with that money?
Bond:	No, I don’t.15

Other lumps of up to $5 million, which had been paid by Kirk into banks in the Channel Islands, could not be traced. But Kirk’s millions had gone to fund other companies in the network, such as Juno Equities, which was used in 1992 to pay Bond’s $600,000 legal bills.

Juno Equities’ main claim to fame before that point was that it had bought a £500,000 London apartment in which Diana Bliss had lived for four years without paying rent, rates or maintenance. It was a nice apartment too, just off the Fulham Road, in a block of solid redbrick maisonettes called Evelyn Gardens. And as Bliss admitted, she was very ‘fortunate’ to get it for nix.

So how had Diana come by this incredible stroke of luck if Juno Equities had nothing to do with Alan? Her explanation, which she gave on oath to Ramsay’s lawyer Karen Coleman in June 1994, was that she had met Jurg Bollag several years before and had become friends with him. In 1987, on deciding to move to London to pursue her career in the theatre, she had told him of her plans. And lo and behold, he had replied that he was about to buy an apartment himself and needed someone to live in it.

Jurg’s generosity, Diana claimed, had absolutely nothing to do with Alan. In fact, she was certain that she had not even told Alan she was looking for a place. Nor had it ever occurred to her that the sumptuous apartment might belong to him.

Now Diana was the daughter of a Methodist minister and had doubtless been told how important it was not to tell lies. But she was hard-pressed to explain truthfully why Bollag would let her have such a valuable flat for free.

She assured Karen Coleman that her tenancy had been just a temporary ad hoc arrangement until Bollag was ready to sell the apartment. But documents from Touche Ross’s files showed that she had a sub-lease, which essentially gave her a rent-free tenancy for life. Shades of Susanne Bond and Upp Hall.

Diana swore that she had neither seen nor signed this lease. She also swore that she had agreed to pay all ongoing costs like rates, maintenance and service charges. But, aside from the fact that Bollag could have commanded a small fortune by letting the apartment to someone else, documents from Touche Ross again suggested that this was untrue. Rate notices had been sent to her but had then been paid by Juno Equities in Jersey, on Bollag’s instructions.

This she was completely at a loss to explain.

Q:	You did tell us earlier that you definitely paid the rates.
A:	I made a mistake … I can’t recall this. I’m confused as to what I paid.16

More documents from Touche Ross showed that Juno Equities had picked up at least three bills from the company that maintained the property, and had paid the service charges levied by the real estate agent. In fact, Miss Bliss was unable at the examination to provide evidence of any expenses that she had paid herself.

But she was able to reveal that she and her good friend Jurg had a mutual interest in theatre. And just as his love of horses had caused him to buy showjumpers for Susanne Bond, so he had been happy to put up £50,000 for Diana’s first London theatre production, Big Game, losing roughly half of his, or perhaps Alan’s, money in the process.

Diana’s tale of the free £500,000 apartment was yet another chapter in the preposterous saga of Bollag’s beneficence. But once again the facts suggested that this money really belonged to Alan. For Juno Equities had been lent the funds to buy the apartment by Alan’s Kirk Holdings, and had never been asked to pay interest.¹⁷

In fact, Kirk had made other interest-free loans to Juno at around this time, which added up to more than £2 million. These were never repaid, even though Juno clearly continued to have plenty of money. This again suggested that Juno and Kirk belonged to the same person, which was Alan Bond.

Bond was asked many times about Kirk Holdings in his bankruptcy examination in May 1994, and on each occasion he claimed to know nothing about it:

Douglas:	I would suggest to you it was a company which you used frequently during the 1980s as a means of acquiring investments, painting, jewellery and other items of that nature.
Bond:	I don’t recall the name of Kirk Holdings in the 1980s or 70s or whenever you assert that the company was formed.
Douglas:	It just strikes no bell at all.
Bond:	No, I’m afraid it doesn’t.18

Shortly after Evelyn Gardens was purchased in 1987, almost all Bond’s Jersey companies were closed down and money was shipped off to Switzerland by the bushel. In the space of seven months, some $5.5 million was transferred from Kirk’s Jersey accounts direct to the Zuger Kantonal Bank in Zug. Alan’s account at Arbuthnot Latham in London saw $750,000 fleeing to Switzerland two years later. And Zug now took over from Jersey as the money centre. When Upp Hall was bought in July 1987 by a new Bollag company, Lindsey Trading Properties, the funds were despatched from a numbered account at the Zuger Kantonal Bank, as were the funds that later kept Susanne Bond in pheasant eggs.

The company records at Touche Ross were also moved out of Jersey as the Bond empire there was shut down and tidied up. It was obviously pointless to leave a paper trail there when investigators might come knocking. But Juno and its records did stay in St Helier, along with a company called Engetal Properties, which still owned a valuable asset in England.

The Bonds’ house at 14 Selwood Place, Chelsea, which by the 1990s was worth around $1.5 million, had been bought in August 1982 and lived in by various family members during the 1980s. Susanne and her husband Armand had perched there for five months in 1987, and John Bond had lived there for three years with his wife Gemma, while working for a merchant bank in London.¹⁹ Alan had also stayed there with Tracey Tyler on the occasions when they had visited London together, and had been holed up there just before his bankruptcy.

Alan maintained that the house belonged to Bollag, who let the Bonds live there rent-free (which seemed to be a common story), and in March 1992 he even issued a press release to deny that he owned it. But, if this was possibly true by 1992, it certainly hadn’t always been so, because the house had been bought some four years before Bollag had started managing Bond’s money and a year before Alan and Jurg had ever met.

What’s more, there was a stack of documentary and oral evidence to suggest that Bond had owned the house himself. Eileen’s personal assistant, Sue Park, certainly had no illusions and had written to a firm of solicitors to say that it was one of Alan’s houses. Susanne Bond also had no doubts. During her divorce battle in 1988, when she had been so careful to say that her horses belonged to Bollag, she had sworn an affidavit describing Selwood Place as ‘a home owned by my family’. And she clearly knew the house well enough to be sure, because she had signed the affidavit as she sat in the front room.²⁰

The paper trail for Selwood Place also led inexorably to Alan Bond, despite his protestations to the contrary. Land registry documents showed the house had been bought by Engetal Properties, operated by Touche Ross in Jersey, whose partners gave sworn evidence that the company belonged to Bond. Engetal’s nominal owner was a Panamanian company called Pegasus Investments, which in turn was owned by the Icarus Trust. And it was clear that this had also been established for Bond.

The legal fiction of the Icarus Trust, as set out in a twenty-six-page deed unearthed from Touche Ross’s files, was that the assets had been settled by a Jersey resident called John Charles Sauvary, and could now be distributed to anyone under the sun. But this was just a pretence. Sauvary was a front man acting for Touche Ross and the assets were certainly not his, as he reminded trustees in his ‘Letter of Wishes’ in January 1983:

I confirm that it is not intended that I or my family should obtain any benefit from the Settlement, and that it is intended that it should be principally for the benefit of Alan Bond … and his family.²¹

Sauvary’s letter also instructed the trustees to consult a man called Harry Lodge about any investment or distribution decisions. And this was even more intriguing. For more than twenty years, Harry Lodge had acted as Alan Bond’s personal solicitor, in which capacity he had drafted his wills and held power of attorney to execute documents, until Bond was made bankrupt in 1992.

But even more to the point, until 1989 he had been the senior partner at Parker & Parker, Perth’s biggest law firm, who were still acting for Bond in the 1990s. Yet this firm was now helping Bond deny the existence of the very offshore empire that Lodge had helped set up.

What’s more, they were accepting a large part of their fees from Swiss bank accounts controlled by Jurg Bollag, who had run Bond’s offshore finances for several years.

To put it mildly, Parker & Parker had a major ethical problem.

But Harry Lodge had an even bigger problem, because in July 1993 he had been examined on oath in Perth by a lawyer acting for Bob Ramsay and had tried his damnedest to deny knowing anything about Bond’s financial affairs, and in particular about Jersey.