Apr 1, 2017

Brazil probes fraud by alleged cult using proof US officials dismissed

Matt Smith
Reveal
March 28, 2017

A reputed Danish cult with connections to charities that have received millions of dollars in U.S. foreign aid is now the target of a Brazilian money laundering investigation.

Brazilian prosecutors are building their case in part on Danish evidence that long has been available to U.S. officials – evidence that indicates that the network of organizations is overseen by Interpol fugitives.

A judge in Brazil ruled Jan. 23 that prosecutors could pursue money laundering charges against three members of the Teachers Group who prosecutors allege had key roles in associated businesses and a charity there.

Danish prosecutors consider the Teachers Group, known there as Tvind, a criminal organization that operates a global charity network as a scheme to steal anti-poverty funds.

“Our intelligence and financial units have tracked it, and yes, the money – at least the money that came to Brazil – can be tracked to Tvind, the Teachers Group,” Brazilian prosecutor André Batista Neves said in an interview with Reveal from The Center for Investigative Reporting. “This group is qualified as an organized criminal group.”

U.S. foreign aid officials have been aware of those allegations for more than a decade but have dismissed them, allocating more than $160 million to organizations that the FBI as well as the Danes have linked to global fraud. Yet in document after document, the U.S. Department of Agriculture and Agency for International Development continued to portray Teachers Group-linked charities as U.S. government partners in fighting African starvation, illiteracy and disease.

U.S. foreign aid officials have declined to comment on whether they have taken any measures to limit funding since Reveal published and aired its investigation of the Teachers Group last year. In recent months, the British government, UNICEF and UNESCO have cut or suspended funding to one of these interlinked organizations.

Reveal reported that Mogens Amdi Petersen, the founder and leader of the Teachers Group, years ago fled fraud charges in Denmark connected with allegations that he was behind fake charities in at least 43 countries. Since 2013, Petersen and four Teachers Group associates have been listed by Interpol as among the world’s most wanted fugitives.

The new Brazilian case involves allegations of illicit bank transfers from a Geneva-based U.S. foreign aid subcontractor called the Federation for Associations connected to the International Humana People to People Movement, or FAIHPP, to an organization called Humana People to People Brazil.

Brazilian prosecutors say both FAIHPP and Humana are part of the Teachers Group.

Over more than a decade, the USDA has allocated $133 million to a nonprofit, Planet Aid, for work in Malawi and Mozambique. Planet Aid subcontracts with FAIHPP and has paid it millions of foreign aid dollars. Planet Aid’s latest public filings show its chairman is Mikael Norling, who was also a founding director of FAIHPP. Norling has been an associate of Petersen’s for decades, according to Danish books, newspaper articles and government records.

Reveal provided questions and asked to interview representatives of Planet Aid and Humana People to People. Planet Aid declined an interview, stating, “Planet Aid has not engaged in any illegal or illicit activities.” Planet Aid sued Reveal and two of its reporters in August, alleging a conspiracy to interfere with business relationships. Reveal is contesting the lawsuit and believes it is without merit.

The Brazilian government investigation involves the country’s federal anti-money laundering agency, central bank, tax authority and public prosecutor’s office. It draws on Danish investigations involving 5 million pages of documents seized during 2001 police raids on multiple Teachers Group facilities in Denmark.

For Brazil’s anti-money laundering agency, 2010 bank transfers from FAIHPP to Brazil raised alarms.

In 2015, Brazilian prosecutors obtained international bank transfer data in pursuit of allegations of money laundering involving the Teachers Group network. Delays followed legal challenges from defendants Per Ehlert Knudsen, Lars Jensen and Paulus Gerardus van Dun – Teachers Group members who had been involved in land holding companies and the aid organization Humana People to People Brazil. Prosecutors had uncovered nearly $270,000 in suspicious transfers to Humana People to People Brazil, according to a charging document.

“We have an agency that says, ‘Look, this is the same group. We have reason to believe that this practice of money laundering has happened,’ ” Batista Neves said.

The Brazilian government alleges that between April 1 and Sept. 30, 2010, FAHIPP made a series of bank transfers prosecutors say were designed to escape detection. Prosecutors used the Portuguese term for “pulverized” to describe a series of small transfers, routed through separate banks, which it said were aimed at moving FAIHPP money to its Brazilian affiliate.

A Brazilian judge in January declined a request by attorneys for the three defendants to dismiss money laundering charges and told prosecutors that they could pursue an investigation.

In a 2011 financial statement to USAID, Planet Aid describes sending $742,424 to Humana People to People Brazil in 2008 and 2009. There is no detail on what these funds were used for beyond “Establishment and start of Child Aid Brazil.”

In its 2010 annual report, Planet Aid described sending $391,000 to Brazil for “Child Aid/community development.” The report did not specify who or what organization received the money.

Two years earlier, in a 2008 annual report submitted to USAID, Planet Aid had stated that “Ecuador, Belize and Brazil have joined a long list of countries where the Child Aid program is strengthening poor communities.”

Ecuador, Belize and Brazil also are the sites of the Teachers Group’s main private agriculture businesses, held by offshore subsidiaries of Fairbank Cooper & Lyle Ltd., a Petersen-linked holding company for the Teachers Group’s global properties, according to Danish prosecutors.

Batista Neves said his office used Danish investigative documents to help build a case involving what the case identifies as Teachers Group-related companies registered in the English Channel islands of Jersey and Guernsey and in Brazil. The documents said Brazilian timber plantation Fazenda Jatobá was owned by subsidiaries of the Jersey company Fairbank Cooper & Lyle.

“This web of companies served a single purpose: To hide the origin, nature and ownership of funds with criminal origin, which had been sent to Brazil by the transnational organization called ‘Tvind,’ ” Batista Neves’ charging document said.

FAIHPP founder and Planet Aid chairman Norling had served as an official representative in 1989 and 1990 of a Jersey-based Fairbank Cooper & Lyle subsidiary – Argyll Smith & Co. – according to separate documents obtained by Reveal. Danish prosecutors alleged that Petersen oversaw Fairbank Cooper & Lyle.

According to Knud Haargaard, who led the Danish government’s investigation, Norling during the early 2000s also had authority over projects such as the Fazenda Jatobá plantation.

“When we investigated Tvind, Mikael Norling was head of the Teachers Group’s companies and projects in Northern and Southern America. We’re talking about the ‘Jatoba’ project, Banana production in Belize, clothing collection in USA and much more,” Haargaard said in an email.

Batista Neves said his investigation produced information about bank transfers involving the same organization Haargaard probed during the 1990s and 2000s.

“This money comes to Brazil from these tax havens, and the communication that our financial intelligence unit has received says that the money flowing out of this tax haven came from the Teachers Group,” Batista Neves said.

From the documents Danish investigators seized in 2001, Brazilian prosecutors say they determined that the Teachers Group was using charities as a cover to move money around the world, $25 million of which was used to buy Fazenda Jatobá, the Brazilian charging document said.

A now-defunct web page for Fairbank Cooper & Lyle said the company controlled more than 227,000 acres of Brazilian land under the timber plantation’s holding company, Floresta Jatobá, as of March 2005.

According to the Brazilian prosecutors, Fazenda Jatobá was one of several Teachers Group operations in Brazil, including a company called Big River Melons that was valued in 2007 at about $13 million.

In 2006, Brazilian government records showed Petersen and his girlfriend, Kirsten Larsen, sought visas under the auspices of Big River Melons. Danish prosecutors previously had said in court documents that Brazil was among the countries to which Petersen considered fleeing as he was sought by Danish authorities.

Danish court records contain a Dec. 20, 2000, letter to Petersen and Larsen from associates Marlene Gunst and Ruth Olsen. Like Petersen, Larsen and Gunst were Interpol fugitives as of this month.

The letter was addressed to “KLAP,” the Teachers Group abbreviation for the names of the organization’s royal couple, Larsen and Petersen. Gunst and Olsen requested approval for a plan to place certain Petersen followers on the boards of companies holding property in Brazil. And the memo discusses the possibility of obtaining a visa for Petersen by naming him an employee of Fairbank Cooper & Lyle.

“In order to obtain a residence permit in Brazil, one must partly be on the board, and you must be able to prove any link with the parent Bahia Farming Ltd.,” the 2000 letter says. “KL (Kirsten Larsen) has this connection in order already, because she has been employed by Fairbank, Cooper & Lyle for a long time, and we could also employ AP (Amdi Petersen), if we were to use this option.”

Petersen was spotted in June 2016 by a Danish television crew at a lavish compound on Mexico’s Pacific Coast. Mexican records showed Fairbank Cooper & Lyle as an owner of that property, too, and authorities have not extradited Petersen.

Brazilian prosecutors also are investigating a series of suspicious transfers to Teachers Group-controlled Brazilian companies involving nearly $17 million in proceeds from the partial sale of Fazenda Jatobá land in 2007.

“It is very probable that this money is a continuation of the money laundering that they have done before,” Batista Neves said.

Whistleblowers repeatedly have alerted U.S. foreign aid agencies to Planet Aid’s links to the Teachers Group. But audit reports and internal government emails indicate those agencies are ill equipped to root out, or even identify, fraud.

A highly critical 2011 USAID report cited a sanitation education project by FAIHPP’s Zambia affiliate in which students were barely able to understand instructions to wash their hands after going to the bathroom. It was an example of failed oversight of U.S.-funded aid contractors all over the world, wrote the report’s author, Thomas Dichter. In addition to USDA grants, USAID has granted more than $29 million to FAIHPP affiliates in Zimbabwe, Mozambique, Zambia, Congo and Angola.

U.S. officials typically fail to ask even the most basic questions of grant recipients, and Dichter wonders if that is because “Missions are staffed with people with little experience in technical areas; and/or with little understanding of development itself,” he wrote following a two-year global investigation. “Are they not being asked because bureaucratic imperatives get in the way of such questions?”

Reveal traveled to Malawi in 2015 to visit sites of agricultural projects run by Planet Aid’s contractor there, Development Aid from People to People, or DAPP. The FBI and Danish prosecutors say DAPP also is part of the Teachers Group. Reveal found farmers on projects touted by the organization remained impoverished, struggling to feed their families.

Current and former employees of DAPP told Reveal that foreign aid grant money was routed offshore through FAIHPP via suspicious expenses for expert consulting.

In August, after the BBC in collaboration with Reveal reported that DAPP was secretly run by the Teachers Group, Britain – which had provided about $7 million in funds to DAPP – suspended ties and launched its own inquiry. UNICEF, which had given $920,000, did the same.

https://www.revealnews.org/article/brazil-probes-fraud-by-alleged-cult-using-proof-us-officials-dismissed/

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