Please ensure that this transfer is made through London and make no mention of Kirk Holdings or Jersey.
Instruction to Allied Irish Banks, St Helier, to transfer money to ‘Jane’ account at Zuger Kantonal Bank, Switzerland, October 19871
There was one big problem with the treasure chest that Bob Ramsay had discovered in Jersey, and that was that the money was no longer there. Not to mention the fact that by November 1993 the trail to Switzerland was six years old.
In a world where millions can be switched from country to country in a matter of hours, the $42 million that had moved out of Kirk’s Jersey bank accounts in 1987 could have been scattered to a hundred different places since then. And there were precious few physical assets for Ramsay to put his hands on. Most of Susanne’s horses had been sold; Kirk’s valuable paintings had been spirited out of Perth to an unknown destination; Upp Hall was being fought over by the liquidator of Dallhold; Di Bliss’s apartment had been turned into cash in 1992; and the house in Selwood Place had been sold in mid-1993 for £600,000, which had disappeared into the ether.2
So, despite their triumph in Jersey, Bob Ramsay and his team of asset tracers, led by Karen Coleman from the big Sydney law firm Mallesons, were still a long way from recovering any money for the creditors.
The obvious next step, of course, was to contact the banks in Switzerland, because a lot of money that had left Jersey had gone to Zug. But as Ramsay had already discovered, getting them to help was a great deal harder than getting cooperation from banks in the UK or Jersey. In fact, it was a complete nightmare.
Ramsay had originally sought their assistance back in May 1992, only six weeks after being appointed. On discovering that $800,000 had been wired from accounts in Zug and Davos to pay Alan’s legal fees, he had written to the two Swiss banks involved, asking them for details of all accounts they held for Bond, and telling them to freeze all funds so they couldn’t be moved.
Credit Suisse in Davos, which had sent $200,000 to Perth in October 1991 on behalf of Alan’s American stockbroker friend Robert Quinn, wrote back almost by return of post to tell him that they did not recognise foreign bankruptcies in Switzerland, and would not disclose any details of their clients’ affairs even if they did.
The Zuger Kantonal Bank, which had sent $600,000 on behalf of Bollag’s Juno Equities in April 1992, gave him equally short shrift, telling him to come back when he had a court order.
It’s worth saying that Bond’s bankruptcy might have taken a very different course if the Swiss banks had agreed to help at this stage, because the trail was still fresh and money was still there. It’s also worth noting that British or American banks would probably have been happy to help. But the Swiss seemed to be shocked that he had even thought it worth asking.
In any case, it was abundantly clear that they would neither reveal details of the accounts nor hand over money, so in September 1992, Ramsay set about getting a court order to compel them. And here he discovered that getting the Swiss courts to assist in a civil action, as opposed to a criminal prosecution, was almost impossible too.
The first stage in this arcane legal process was an application to the Federal Court of Australia to issue confidential Letters of Request to the Swiss courts asking for assistance. Affidavits were duly sworn, detailing Bollag’s many and varied acts of generosity and recounting the tale of how the Swiss banks had refused to help. And soon afterwards, the letters were zipping off to Europe via Australia’s diplomatic bag, in conditions of great secrecy so that Bond did not find out.
Within weeks, the British courts, whom Ramsay had also approached, were signalling that they were happy to cooperate, and by May 1993 the Jersey court had fallen in line. But the Swiss proved to be much more reluctant. In theory, they were willing to assist foreign legal actions, but in practice, as Ramsay now discovered, they were really only prepared to help the police, and even then it took ages for anything to happen.
By November 1993, a year had passed, but the Swiss request had still come to nought. And since Ramsay was in Jersey, which was only a couple of hours by plane from Zurich, he decided to make a direct approach. Fresh from learning about Bond’s offshore empire, he now had a wealth of evidence to convince the Zuger Kantonal Bank that Jurg Bollag had indeed been laundering money for Bond.
So when he got into the manager’s office at the Zuger Kantonal Bank, which was one of the ugliest buildings in that pretty town, he was able to demonstrate that Bond’s Jersey company Kirk Holdings had transferred several million dollars to accounts at the bank that could actually be identified. One of these was numbered 00-700-843-00 and held in the name of Treuhand Konto Trust Account, while a second was numbered 00-736-488-01 and code-named ‘Jane’—crucially, this latter account was the one that Bollag had used in 1991 to fork out £373,000 for expenses at Upp Hall—so the circle of money going from Bond in Jersey to Bollag in Switzerland, and back to Bond appeared to be complete. This ‘Jane’ account had received only a small amount of money from Jersey in 1987, but the bank had been instructed to send it through London and to make sure that no mention of Kirk Holdings or Jersey was made on the transfer.3
Ramsay’s evidence was arguably sufficient reason for the Zuger Kantonal Bank to break its client’s confidence, and he was hopeful that they would allow him access to the vaults, if only to gather documents that would show where the money had gone next. But the manager was still unmoved by what Ramsay and his Swiss lawyer, Dr Bernhard Vischer, laid out before him, even when he was shown the multi-million-dollar deals that Bollag had done for Bond, and was led through tax records, which showed that either Bollag had been lying to the Swiss tax authorities or the money belonged to someone else.
His only reaction was to tell his unwelcome visitors that Jurg Bollag was one of his bank’s valued customers, a Swiss national, and was innocent until proved guilty. Once again, he advised Ramsay that if he wanted any information about the bank’s clients he would need to produce a Swiss court order. Whereupon he showed them both the door.
Ramsay was annoyed to be given such a frosty reception, but he could hardly have been surprised, because secrecy is the rock on which the entire Swiss banking system is founded. And it is why at the beginning of the new millennium the country has almost three thousand billion dollars on deposit, or roughly half the world’s privately managed assets. It is also why Switzerland still serves as a safe haven for corrupt dictators, drug runners and corporate crooks.
Today, the official Swiss Government line is that such people are neither welcome nor entirely secure. But it still remains a criminal offence, punishable by a hefty prison sentence, to disclose details of a customer’s identity or banking transactions. And this restriction applies to both present and past bank employees, who essentially must carry their secrets to the grave.
Even now, the only legal excuse for bankers, lawyers or money managers like Bollag to break the code of secrecy is if they have evidence that the client has engaged in criminal activity. And some still take the view that they have no need to blow the whistle unless the courts convict their client or order them to tell all.4
In the early 1990s, before anti-money-laundering laws were introduced, it was still possible for a Swiss bank manager not to know who his real clients were. Until July 1991 one could open a Swiss bank account using the notorious Form B, and have a fiduciary or lawyer like Bollag act as a front man, without telling the bank who really owned the funds. But since 1991, this supra-security level has not been available, and Swiss banks have been required by law to know whose money is in their vaults. So when Bob Ramsay was sitting in the manager’s office at the Zuger Kantonal Bank, there would unquestionably have been a piece of paper in the bank’s files or a record on the system that revealed who Bollag was acting for.5
Ramsay’s problem, however, was that he had very little chance of getting hold of the evidence if the bank refused to give it to him. Breaking into the records by hacking into the bank’s computer system was certainly not an option, even if Ramsay wanted to consider it, because Swiss bank security was unbreakable. To get past the first level, which merely got you in the front door, you needed an ID and a password from an authorised bank employee. To get past the second level into the private account database, you needed an ID and a password from someone at branch manager level. And to get to level three, where you could access individual account details, you needed the ID and password for the exact person in the bank responsible for the individual or company you were after. Even if you could find out who that was, and bribe, force or blackmail them to help, you would almost certainly be caught by the twenty-four-hour security that monitored entry into these areas. In other words, it wasn’t worth thinking about.6
But there was one line of attack that seemed to offer possibilities, and that was for Ramsay to pose as Bond or, to be more precise, to get Bond to order Bollag and the Swiss banks to return all documents and assets to him. Ramsay certainly had the power to force Bond to do this for, in Australia at least, he now controlled Bond’s assets and was Bond for most legal purposes. As he put it, somewhat indelicately, he could now do anything on Bond’s behalf except sleep with his wife.
So, a month after being shown the door in Zurich, Ramsay drafted a letter from Bond to Bollag which the Federal Court ordered Alan to sign. This instructed his friend Jurg to hand over all assets, monies and documents he was holding on Bond’s behalf, and to give Ramsay a complete history of anything that he had previously held for Bond, including its current whereabouts. Further to that, Bollag was instructed to hand over all details of trusts, companies and bank accounts, along with details of any sub-contractors Bollag might have engaged to hold assets for him on trust for Bond. And even that wasn’t the end of it.
The letter also told Bollag to order all banks with accounts of which he was a signatory to hand over details of any transactions relating to Bond’s affairs. Finally, it instructed Bollag himself to meet Ramsay’s representative in Switzerland before 31 December 1993.
Sadly, however, this clever idea fared no better than any of the others. Bollag merely wrote back some six weeks after the deadline had passed to say that he was forbidden by paragraph 271 of the Swiss penal code from disclosing any such information, adding that Ramsay’s Swiss lawyer was not allowed to act for a foreign trustee in bankruptcy. Of course, he added, he would comply with the request if he was forced to do so by a Swiss court. But in the meantime, Ramsay could go fry.
A similar letter from Bond to the Zuger Kantonal Bank, ordering them to divvy up all documents and money, was returned to sender. Ramsay subsequently sent along a lawyer to argue the case, but his pleadings fell on deaf ears.
So by January 1994, it was once again back to first base and the tricky task of persuading the Swiss courts to order the banks to cooperate. And here things were still looking grim.
By this stage of the 1990s it was perfectly possible in theory for Swiss banks to be compelled by a local court to supply details of their clients’ business, provided that evidence could be shown of money laundering, insider trading, fraud or criminal activity. Even more theoretically, it was also possible to get a court order via a civil suit that had originated overseas. But it was devilishly difficult to provide sufficient evidence to convince a Swiss court to take such exceptional action, and it was bound to be enormously expensive, because Switzerland has a different legal code to the one that Anglo-Saxon countries use, a different language, and a different attitude towards a rich person’s right to privacy.
At the very least, the banks would be likely to oppose the action by fighting against any court order and then appealing; and at some point Bond and Bollag would inevitably be asked to join the fray. So at best it would be a long, hard, bruising battle that would take several years to fight.
There was, however, another course of action open to Ramsay. He could begin proceedings against Bollag in the Swiss courts, on the basis that Bollag was controlling assets to which Ramsay, as Bond’s trustee in bankruptcy, was entitled. This would aim at securing a declaration from the Swiss courts that the assets should be returned. And in early 1994, this was the way that Ramsay decided to go, with some hope at this stage that it might succeed.
In the meantime, though, there was the exciting prospect of being able to question Bond on oath about the evidence obtained in Jersey. Alan had, after all, denied in letters to Ramsay that he had bank accounts offshore, even though there were four at Arbuthnot Latham in London, five in Jersey that belonged to Kirk Holdings, and at least one in Zug that appeared to have inherited his money. He had also denied having assets overseas, yet had clearly owned companies in the mid-1980s that contained many millions of dollars. And finally, he had denied ‘to the best of my knowledge’, as he put it, having ever instructed lawyers, accountants or other advisers outside Australia. Yet he had instructed Touche Ross in 1982 to take instructions from Robert Pearce about his affairs, and in 1987 to accept directions from Bollag, Pearce, John Bond and Harry Lodge.
Bond was still blissfully ignorant of what the investigators had dug up in Jersey, because everyone involved in the process had been sworn to secrecy. So if they could ever get him on the stand, it looked like providing hours of fun. Ramsay’s power to examine Bond was backed by the sanction of twelve months in prison for anyone who withheld information or lied on oath. So it was hard to see how Bond could avoid telling the truth.
But it never paid to think you had Alan beaten. He was determined to avoid answering questions at all costs. And in the meantime, he had a friend who was doing his utmost to create a diversion.