The Public Prosecuter v Mogens Amdi Petersen

 

 

Chief Constable in Holstebro
The Public Prosecutor for Serious Economic Crime, Denmark

 

As presented to extradition proceedings in the USA, 2002. Mogens Amdi Petersen was extradited from USA to Denmark in 2002. The trial of Petersen and seven others began in Aarhus, Denmark, in March 2003, and a verdict will be published on 31st August 2006.

Executive summary: Police claim that Tvind ‘humanitarian' and ‘environmental' projects in 55 countries are covertly linked to a network of brass-plate companies, tax-free trusts and offshore companies, through which money is laundered to the Teachers Group ‘treasury'. They allege the system is covertly controlled by Amdi Petersen, Kirsten Larsen and a handful of senior members of the Teachers Group who constitute an economic ‘inner circle.' The money has been used for property and investments unrelated to charitable work.

In cases they investigated, police cite evidence that Petersen and Larsen invented research projects, environmental and humanitarian projects, in order to launder money through brass plate companies and non-existent charities to the Teachers Group, where it was spent on luxury flats in Miami, commercial plantations in Malaysia and Brazil, and other investments. In 2001, police were still investigating similar alleged fraud involving Humana, UFF and TCE.

 

Summary of the case

1.  The charges

Charges in the case relate to embezzlement and tax fraud of DKK 186m (£17.3m or $18.8m at 2004 rates of exchange).

 

2.  Summary

The key body in this case is The Humanitarian Foundation (The Foundation for the Support of Humanitarian Purposes, the Promotion of Research, and the Protection of the Natural Environment) (founded 1987). This was a Tvind body approved under Danish law as tax-exempt charity. Contributors to the fund were all Teachers Group members who together paid approximately DKK 70 m (£8.5 million) into the Foundation, and from 1987-2000 it received tax exemption of DKK 100m (£9.2 million).

 

In 2001 police raided eight properties in Denmark, and confiscated 70 computers, mostly encrypted. No one would reveal the passwords – except one. Material was recovered from the computers, and seven people have since been charged with fraud and false statements in connection with the Foundation.

 

The basic police case is that the the Foundation was not independently overseen by trustees but directly controlled by the Tvind inner circle, led by Amdi Petersen.  No money was spent on the environment, instead it was used for commercial purposes and their own benefit, false tax claims were made, and organisations were invented to apply for funds, that were really created by Petersen and his cronies.

 

3.  Background – the Teachers Group (Lærergruppen)

 

3.1 The Teachers Group

An organisation present in more than 55 countries, established in the 1970s on principles of collective economy, collective time and collective distribution. There is a short discussion on the history and ideals of the TG.

In 1992-2001 there was a significant expansion of the TG. There is a list of assets held by the TG in 1992:

 

Schools in Denmark

Schools abroad

Plantations and properties helf by the University of the Seven Seas

Shops and wholesalers

Factories

UFF Humana / USAgain /DAPP

Plantations, farms and sawmills

Other enterprises and foundations

262 ‘TG projects'

 

3.2 Income of the TG

In 1970-80, the Teacher's Group's income was mainly from Danish government and Teachers salaries. By 1992-93, the Teachers Group had expanded to include income from:

 

Wages

Container leasing

Ship leasing

Clothes sales

Shoe factory in Morocco

Fruit trade

Humanitarian Foundation and IFAS and La Societe Verte

Property leasing

Property sales

Farm and plantation income

Making containers

 

In 1992, Petersen decided to create a ‘TG treasury' via a network of bank accounts. In a letter dated 1995 he declared the objective was to ensure the funds in the Teachers Group treasury “are placed so that at any time they are available to us, that they are never available to others, that they are protected from theft, taxation and prying by unauthorised persons, that the joint ownership is ensured” and to “lay down a twisted access path with only ourselves as compass holders.”

 

Other senior members of the Teachers Group assisted in laying down this economy. Steen Byrner was central to the TG economy from 1987-1992. In 1995, the key people were Kirsten Larsen, Anne Hansen, Else Jensen, Birgitte Krohn, Svend Soerensen and Joep Nagel.

Police estimate The Tvind Group's assets in 2001 as several hundred million pounds in cash, properties, ships etc, with US property assets of £11.1m, Danish property assets of £25m and foreign plantations owned by the University of the Seven Seas worth £3.5m. In 1995 the Tvind Group had a turnover of more than £100 million.

 

3.3 The Tvind management

While often described as democratic and informal, with decisions jointly made by members of the Teachers Group, Tvind is in fact a strictly hierarchical organisation with clear lines of command.

There are five hierarchical levels

(names are given for the period 1987-1992)

 

The top level: Mogens Amdi Petersen and Kirsten Larsen are the top management of the Tvind group. It is impossible – except from a few cases – to separate these two persons, who usually sign jointly with the signature “KLAP”. Also, Amdi Petersen uses other designations for the group management such as “Our Office” or “The Passing of the Year”.

 

The second level: “TG Economy” is the management level just below Amdi Petersen and Kirsten Larsen. (In the period 1987-92 Kim Bonde Andersen and Steen Byrner, and in 1992-2001, Ruth Sejeroe-Olsen and Marlene Gunst, assisted by Anne Hansen and others)

 

The third level: Individual main formation holders, such as Head of Schools in Denmark, Head of the Federation, head of TG Commercial Activities, etc.

 

The fourth level: Operational managers, eg school heads, collection centre heads, shop managers, plantation managers, etc.

The fifth level: Individual members of the Teachers Group.

 

Alongside is a parallel, informal power structure based on official membership of the boards of a small cluster of central trusts and companies. Amdi Petersen, the real leader of Tvind, has not been formally elected to the management of any company or foundation, but exerts influence by the position of Kirsten Larsen and other trusted TG members in these trusts/companies.

 

Overall management is in two key Jersey-based trusts: The Hobbhouse Trust and The Farmers Trust

 

Operational control is in three key Guernsey-based companies: Fairbank Ltd, Cooper Investments Ltd, and Lyle Enterprises Ltd (since merged to become Fairbank, Cooper and Lyle)

In the period under review all these trusts and companies were nominally in the control of the same six members of the Teachers Group.

 

3.4 The Humanitarian Foundation

This is one of a number of initiatives run by Tvind. It is considered a ‘fourth level' Tvind foundation, whose chair and board members were all members of the Teachers Group.  However police believe the Humanitarian Foundation was actually directly managed by Amdi Petersen and Kirsten Larsen, through the representatives of the TG Economy

Foundation board members did nothing without the consent of ‘KLAP' and TG Economy.

 

3.5 Grants made by the Humanitarian Foundation

In the period 1987-99, the Foundation ‘gave away' DKK 70 million (£6.5 million) to “charitable causes”. The recipients were all various other Tvind bodies (there follows a long list of supposed projects funded by the Foundation):

 

IFAS, the Institute for Scientific Research and Applied Sciences -   for ‘research'

La Societé Verte    -   for ‘nature protection'

LSV/L'Energie Eternelle   -   for ‘nature protection'

DSI Estate (a Tvind trust)

The Tvind School Association

DAPP Zimbabwe

DAPP Zambia

The Federation UFF/Humana    -   for ‘humanitarian purposes'

The Necessary Teacher Training College

 

Police investigated three of the donations, together worth £4 million (DKK 45 m). They found that in projects investigated by the police, allocations to public interest purposes have in no case been made, but that the defendants have attempted to conceal this. They give three representative examples, together worth DKK 45m (£4m)

 

4.  “Promotion of research”  -  IFAS 1987-1992

 

4.1 Grants to IFAS

Between1987-1992 the Humanitarian Fund gave tax-deductible grants of DKK 20million (£1.8 million) to a body called the Institute for Scientific Research and Applied Sciences, for ‘research' into various areas.

 

4.2 About IFAS

The IFAS (Institute for Scientific Research and Applied Sciences) was founded in 1987 by four people with Danish names, with a very long-winded and meaningless statement of aims. Its original board, all named, were entirely members of the Teachers Group including several quite senior members.

 

Police claim it was Tvind front organisation for money laundering purposes. “The investigation has shown that IFAS is a front organisation established and in reality managed by the defendant Amdi Petersen that does not carry out any research projects, and which is established solely for the purpose of regularizing payments to “research purposes”.

 

Nominally, an independent research bureau receiving grants from the Tvind Humanitarian Foundation, it was actually managed by Amdi Petersen, with no research projects, intended only to 'regularise payments'  -  in other words, money laundering. There was no research and no real employees. There were no outgoings because the 'employees' were TG members or volunteers (who receive no salary). Payments in ‘expenses' were to the upkeep of the ship The Return of Marco Polo  -  a owned by Tvind through the Cayman Islands company B&B Shipping.

 

Nobody was a qualified 'researcher'. According to board member Anne Sophie Pederson, the board of IFAS  took instructions from Amdi Petersen. Hans la Cour said Petersen 'invented the whole idea of IFAs, including name, logo, objects clause, and its connection with the Foundation'.

 

4.3   The Voice of the Third World

This was one of the IFAS “projects” that received funding from the Humanitarian Foundation – there is a list of several more, many apparently concerned with farming.

 

(a) Application and grant

A company called All Europe Satellite Television Ltd (London) applied for a £837,000 research grant from IFAS in August 1988.  The grant was approved the very next day, according to one witness, ‘because they knew the people'. A few days later, IFAS applied for funding from the Humanitarian Foundation to cover the grant to the project.  Again, this was approved the very next day. The money was to be spent on leasing a ship, operations, material, admin, and wages.

All Europe Satellite TV was a Tvind company whose directors were all members of the Teachers Group. (Police regard this as a ‘brass plate' company.) A second company based in Norway, One World Channel AS, was also run by TG members. Over the next few months the Teachers Group established a TV channel called ‘One World Channel', based on board a ship in the Pacific, that broadcast programmes via a French satellite.   A few programmes were made on board the ship The Return of Marco Polo.

When the police investigated, Tvind at first said the documents on this project were ‘burned', but they later turned up in Poul Joergensen's safe.

 

(b) The police investigation

The money wasn't spent on research.  It was spent on propaganda. “The investigation has shown that no form of ‘research' was carried out in connection with the establishment or operation of “One World Channel”…”

There was no scientific project description, no list of scientists, and no published research results.

According to witness Hans la Cour, who was the production manager on board the Return of Marco Polo, he whole thing was decided by Amdi Petersen.  The aim of the project  was not “research”\of any kind,  but to promote the TG and Tvind.   Another purpose was to find plantations in the Pacific that could be bought using Teachers Group money.

 

(c) How was the money actually used?

Under cover of the project, money was creamed off to other Teachers Group companies in the USA, Cayman Islands and so on.   For example, the project billed for wages of about £400,000, which were never actually paid  -  all the Teachers Group members worked for no salary. In fact, the money was sent as ‘wages and consultants fees' to a Tvind company in Florida, John F Parsons Inc.

Similarly, money spent on leasing the boat actually went into the Tvind treasury.  The ship the Return of Marco Polo was in fact owned by a Cayman Islands company, B & B Shipping, set up by Steen Byrner and another TG member.  The project paid £241,000 in monthly leases of £4,650 a month to B & B Shipping.

 

5. “Support of the environment” - La Societe Verte and L'Energie Eternelle

 

5.1 Allocations to La Societe Verte and L'Energie Eternelle (1992-98)

Applications for tax-free grants were made to the Humanitarian Foundation by two French ‘environmental charities', La Societe Verte and L'Energie Eternelle for ‘nature protection' in Malaysia, Tahiti and Brazil, totaling about £4 million.

 

5.2 La Societe Verte and L'Energie Eternelle

La Societe Verte was founded in 1992 by Steen Byrner “to assist in the protection of the environment”. In 1993 its work was taken over by L'Energie Eternelle. Police say these are “front organisations, founded by the defendants, without any independent management, no office premises (except for a PO box address), no employees, no independent activities, and no real tasks.”

They were actually directly controlled by Petersen and the TG Economy, but the connection between Tvind and the companies was ‘camouflaged'.

 

5.3  How the money was actually spent

 

(A)  In Malaysia – the supposed Sabah ‘nature conservancy'

A Malaysian company, South China Sea Farming Snd Bhd, applied to La Societe Verte for a grant of $2.5m for an “environmental and research project” in Sabah, Malaysia.  Three weeks later authorisation for the grant was received from the Humanitarian Foundation.

Police say South China Sea Farming was actually a commercial company run by Tvind. In fact, much of the money was spent on buying a sawmill and plantation in Malaysia, through other local companies.  Profits from the sawmill and from selling wood were passed to the Teachers Group treasury. There was no evidence of any money being spent on ‘nature preservation'.  

In addition, much of the grant money was passed to further Tvind companies under various budget heads.  The allegation is that the money went to the Teachers Group to be spent on items that had nothing to do with nature preservation. Two Hong Kong Tvind companies were paid for ‘consultancy' and ‘project management'. About $440,000 was spent on buying apartments in the Sterling, Miami, for the use of senior Tvind Teachers, and about $25,000 went into Kirsten Larsen's personal American Express account in Sun Bank, Miami.

 

(B) In Tahiti  -  the supposed ‘biogas' project

In 1990 La Societe Verte applied for a grant of £234,000 from the Humanitarian Foundation  to support a ‘biogas plant' in Tahiti.    A local farmer, a Mr Stein, was said to have asked for the grant to solve the pollution problem on his pig and poultry farm.    The money was to build a biogas plant – Mr Stein would be employed to build it.

By 1994 around £600,000 had been granted to the biogas plant. Much of the money was paid to La Societe Verte bank accounts in Paris and Miami.

The police found that Mr Stein was a personal friend of Amdi Petersen, who had visited Tahiti and met him during a round the world trip some years previously, in 1968. According to witness statements it was  Petersen who convinced Stein to build the plant. The plant was built but never became operational. Eventually, in 1998, La Societe Verte sold Stein the plant for a payment of $10.

Most of the documentation and accounts for the project appear to have been created some time after the events.  However, police claim the financial side of the project was run directly from Denmark by Amdi Petersen and Kirsten Larsen. Much of the La Societe Verte money was never used to build the plant. Instead, it was passed to other Tvind companies such as John F Parsons (USA), Kirchheiner Bros (UK), for the use of the Teachers Group.

 

(C) In Brazil – the Fazenda Jatoba plantation

In 1992, La Societe Verte applied to the Humanitarian Foundation for a grant of $2.6 million for ‘a unique nature protection project' in the Brazilian rain forest. It said a large plantation had been sold by Shell, to new owners who wanted to cooperate in a nature conservation programme. As well as a nature programme, there were plans to build a sustainable ‘biomass power station'

In fact, police say, La Societe Verte did not declare that the plantation was being bought from Shell by Tvind, through a Brazilian company called Floresta Atlantica Ltda and a whole series of other Teachers Group companies in the Cayman Islands, Guernsey and Jersey – with the backing of major Teachers Group trusts. The purchase was directly controlled by Amdi Petersen.

Police say the plantation was a commercial enterprise and the biomass power station was not viable. “The purpose of the purchase seems to be that Amdi Petersen wanted to establish a commercial plantation with a self-sustaining Tvind community on the estate.”  The plantation would pay for itself and contribute to the TG Economy through the sale of wood through a Teachers Group company called One World Enterprise, selling wood to China.

As well as money from the Foundation, funds to buy the Fazenda Jatoba came from other parts of the Teachers Group treasury and a number of other Tvind companies and associations, including UFF/Humana.

After the purchase there was money left over, which was spent on various ‘expenses' that had nothing to do with nature conservation, including property and farming companies controlled by Kirsten Larsen in the Cayman Islands, and on ‘mortgage repayments'.

 

6.  ‘Humanitarian purposes' 1977-2000 - UFF, Humana and TCE

This was still being investigated by Danish police in 2001.

However police say some money was directed from the Humanitarian Foundation to subsidise UFF/Humana projects. “The defendant Mogens Amdi Petersen and the management of the TG Economy seemingly dictate to the Foundation board these grants, which to a certain, as yet unclarified extent, are triggered by fictitious applications.”

Used clothes:  Police say UFF and Humana make ‘substantial contributions' to the Teachers Group Treasury and that “trade in second hand clothes is not in the nature of a humanitarian effort, but that the trade takes place on a commercial basis direct to the Teachers Group treasury.”

TCE Aids projects: The investigation has also shown that police are investigating irregularities in the Aids projects. Emails and memos are quoted that suggest that large sums have been passed between the Humanitarian Fund, Humana/UFF and Amdi Petersen/Kirsten Larsen on various pretexts that involved ‘support for the fight against Aids in Africa'.

 

7.  Conclusion

Quote: “In all instances this case summary cites numerous pieces of evidence that in a large number of cases the defendants have prepared fictitious applications in order to conceal…that the funds of the Foundation are not spent within the legal area, and that the formal board of management of the Foundation does not make decisions concerning the application of the funds of the Foundation. On the contrary, the Foundation is managed by the defendant Amdi Petersen.

“Consequently the prosecutor also finds that there is probable cause to suspect that the defendants are guilty of embezzlement of the Foundation…..”