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Title Tvind - Humana's Hot Money

Fact File: Humana s Hot Money By Michael Durham Humana People-to-People claims to be a charity, but is really part of a hugely profitable offshore corporation. Its sister humanitarian initiatives, Planet Aid, Gaia and U SAgain, are part of the same 'hot money' network. Here's the story: It all started as a dream of a more equal world. But by the 1980s the trail of hot money was already under way. The first offshore account was in Grand Cayman. In around 1983, a small group of Danish nationals arrived on the Caribbean island, 150 miles south of Cuba, weighted down with cash. They were seen carrying suitcases of dollars into a local bank, on a tax haven island already notorious for illegal hot money . Within months, there was enough cash to buy a farm and a luxury beachside villa, with a swimming pool, a fleet of Mercedes cars parked outside, and boats at anchor in the bay. Who were these wealthy Danes? Where did the money come from? They were not in business in fact they were self-styled left-wing revolutionaries. They were among the founders of an educational movement with global ambitions which has since become Humana People-to-People. The small group included left-wing activist Amdi Petersen, who had recently resigned from the Danish Tvind schools collective, his girlfriend Kirsten Larsen, and Henning Bjornlund, their young chief accountant . Back in Europe, they controlled a small but growing suite of humanitarian initiatives schools, a teacher training college, a charity that collected money and sent volunteers to work camps in the Third World all supposedly run by a collective with a few hundred supporters, and financed by donations. The money the Danish travellers brought to Grand Cayman can only have come from one source the private, tax-free trust funds where the collective kept its money. The young idealists called their collective The Teachers Group , and it was supposed to be democratically administered by the members themselves. But the reality was very different. The people really running the show were a small, self-selected Humana People-to-People inner circle including the Danes spending so lavishly on property, cars and boats. To this day, many of the same Danes who arrived laden with cash in Grand Cayman in 1983 remain in control of the Teachers Group, and are still firmly associated with Humana People to People. They stand accused of exploiting their own supporters, charities and the developing world. And several of them are wanted by police. Land grab Unknown to their supporters and financial backers back in Europe, the small inner circle living in Grand Cayman then set out on a huge shopping expedition. Between 1983 and the mid-1990s they spent millions of pounds of the Teachers Group s and Humana People-to-People s humanitarian funds on land and property. They laid the foundations of a commercial empire, beginning in the Caribbean. It is an empire that endures today. At the direction of Henning Bjornlund, they bought mango, banana and citrus plantations in Grand Cayman, St Lucia, St Vincent and Belize. Money for the purchases was transferred secretly from Europe through offshore accounts in Jersey and Guernsey. Many of these accounts today form the backbone of a covert modern agribusiness. Soon, the Teachers Group extended into Central America, buying land in Ecuador, El Salvador, Honduras, Venezuela and Brazil. In 1996, a Danish newspaper reported they owned 24 plantations worth far more than £30 million. The offshore companies used in Grand Cayman, Jersey, Guernsey, the Isle of Man, Belize, the British Virgin Isles, Netherlands Antilles and in the City of London are mostly still there, and today own and manage a big portfolio of Humana s property and agricultural businesses : FCL Ltd, Argyll Smith, Caribbean Farming, Tropical Produce, Bahia Farming, Atlantic Farming. A ranch in Brazil police prosecute The biggest prize of all was Fazenda Jatobà, a 92,000 hectare agricultural estate in Brazil bought secretly by the Humana People-to-People inner circle from Shell for $12 million in 1994. The circumstances of this purchase were studied by police investigating alleged money laundering in 2000-2001. The police reported that the property had been bought through a trail of offshore nominee accounts and fake charities (including two with accommodation addresses in the Champs Elysee in Paris), using money diverted from a humanitarian fund . One of the participants is today a senior manager at Humana s US charity, Planet Aid. Since 2001, the purchase of Fazenda Jatobà has been at the heart of a criminal fraud case against Amdi Petersen and members of his inner circle , which is still on-going. Today Fazenda Jatobà is still owned by the Teachers Group and is run in close association with Humana People-to-People, as a commercial plantation exporting wood, fruit and vegetables to Europe, China and the United States. The offshore maze gets bigger Meanwhile, back in Europe, the inner circle began to look for ever more inventive ways to exploit its covert offshore network. Dozens more nominee companies were opened in Jersey, Guernsey, the Isle of Man and Hong Kong. Amdi Petersen was quoted as declaring he wanted to create a financial maze so complex no outsider would ever understand it. The Teachers Group opened scores more schools, charities and philanthropic initiatives Humana charities all over Europe, DAPP in the Third World, Planet Aid and Gaia in the USA, U SAgain (not a charity, but a commercial company that has been widely accused of misleading the public with charity messaging), special schools and more private colleges. But behind every apparent humanitarian endeavour, there is almost always a chain of businesses finally leading to an offshore company, used to milk profits away from the charity sector, out of the sight of charity regulators, governments, and the general public. In early examples, Humana in Britain started paying large fees to a Jersey-registered company, Goliath Services, to provide the wooden boxes it used to collect clothes from the public. But Goliath was not an independent firm. It was a nominee company owned by the Teachers Group which charged Humana whatever it could get away with. Although Goliath has long closed, we have evidence to suggest the organisation is playing the same trick through subsidiary companies in China and Hong Kong. In 1988, the Teachers Group gave $5 million to a Jersey offshore company called Talata, to buy property. In the same year the Dutch branch of Humana transferred $75,000 to firms in the Caribbean. By 1990, a Swedish firm of accountants estimated that the Humana People-to-People group was so good at exploiting tax havens that only two per cent of the money it raised ever went outside the Teachers Group organisation to independent charitable work. All the rest, it kept. But the stakes were about to get much bigger. Schools pay rent offshore In around 1984, as the inner circle was enjoying the pool-side lifestyle on Grand Cayman, the Teachers Group opened a small school at Buxton, in Norfolk, eastern Britain. It was a special school for troubled adolescents, financed by English local authorities which paid £700 a week for each boarding pupil. It was one of several special schools opened by the Teachers Group another was at Winestead, near Hull run by volunteers and untrained collective members. Red House School was a charity and exempt from tax. But in the mid-1990s, the UK Charity Commission became suspicious and started an investigation. They uncovered a financial relationship between both schools and a Jersey-registered company, Argyll Smith & Co, together with a raft of unorthodox financial practises. In 1998, the Charity Commission closed both schools down. The schools in Norfolk and Hull were paying rent to the Jersey-registered company and at much inflated rates. Argyll Smith is a Teachers Group offshore nominee company. At the same time, staff at the two schools all members of the TG collective were being paid large salaries, but were not being allowed to keep the money it was transferred back to the inner circle s accounts. Very little of what local authorities paid was going towards upkeep of the school or paying for staff, but was disappearing into foreign bank accounts. Argyll Smith remains to this day a registered Jersey company operated by the TG, and owns many of buildings run by or associated with Humana People-to-People in Britain, the United States, South Africa and Mexico. Argyll Smith itself is a subsidiary of a key Teachers Group Jersey-registered property companies, FCL Ltd. Humana used clothes charities and transfer pricing Humana People-to-People has also long used offshore nominee companies to strip profits out of its humanitarian used-clothes charities. We know this because of details passed by an informant, corroborated by official information in the Netherlands. The system the Teachers Group has employed is known as transfer pricing , a commonly used money laundering technique. In a transfer pricing scheme, a business uses a chain of linked companies in different countries to manipulate prices and profits and avoid tax, so that very little profit is posted in a high-tax country, but large profits are made in a low-tax country or offshore tax haven. Between 1990 and 2000, the Teachers Group used a company in Amsterdam, Textile Transformation EC Trading, and nominee companies in Gibraltar and Eastern Europe to launder profits from all the Humana People-to-People charities all over Europe. We know this because of a written deposition by a whistle-blower describing many irregularities and illegal acts. In this case, transfer pricing meant the charities that actually collected the clothes made very little money, while the real profits were made by Teachers Group commercial businesses further down the chain in Poland or offshore in Gibraltar or Jersey. These profits didn t go to charities at all. Textile Transformation EC Trading went broke and filed for bankruptcy in 2000, while police in the Netherlands and Hungary searched for the directors. Today, Humana charities in Europe appear to sell their clothes to a TG company in Bulgaria, while in the United States the charity Planet Aid has a similar commercial arrangement with a Teachers Group broker, Garson and Shaw leading us to suspect that transfer pricing is still going on. Humana and the Charity Commission in Britain Humana People-to-People is currently banned by the Charity Commission in Britain. Nevertheless, the Humana inner circle has succeeded in opening two quasi- charitable used clothes collection businesses, a registered charity, and a clothes business linked to an association in Switzerland. All act in exactly the same way as the banned Humana. The companies are Planet Aid UK Ltd and Green World Recycling Ltd. The registered charity is DAPP UK. The Swiss association that collects in the UK is the Gaia-Movement Trust. None of these has ever been investigated by the media or the authorities. In addition Humana in the UK runs a foundation importing African sculpture from Zimbabwe, Friends Forever, and a handful of property and agricultural businesses registered at Companies House. Humana UK was put into receivership by the Charity Commission in 1998, following an investigation in which Charity Commission investigators found evidence of financial fraud. Money laundering from Africa Since the mid-1980s, Humana People-to-People has had deep interests in Africa. It runs many schools, volunteer programmes, AIDS education schemes, farming centres and projects for street children. DAPP charities are in at least ten African countries The Teachers Group also has commercial interests, including clothes shops, foodstuffs, and forestry. In theory, money raised by Humana People-to-People, plus unsold donated clothes, are sent to Africa and used to finance DAPP projects. But in 2000, a young woman named Britta Junge came forward to blow the whistle on Humana-DAPP finances. For a few years previously, she had been a trusted Humana and DAPP project leader in Angola, with responsibility for local finances. She disclosed that in 1995, part of her job had been to repatriate to Europe up to �30,000 a week of surplus hard currency from DAPP in Angola to Denmark. Much of the money was in humanitarian donations by US oil companies. She smuggled the cash in dollar bills on occasional flights back to Europe, and gave it to a Danish member of the inner circle in Copenhagen. She never knew what it was used for. Junge told police, and her story was one of the reasons Danish police opened a fraud enquiry into the Teachers Group in 2001, leading to a criminal case which is still on-going. Property deals in the USA Money creamed off into offshore nominee accounts through bogus companies, inflated rents, transfer pricing schemes and smuggled in suitcases but what was all this hijacked wealth actually used for? After the big agricultural land purchases, the inner circle clearly set its sights on comforts closer to home. In 1991, after being recognised, Amdi Petersen sold up the Cayman Islands villa. The same year, the Teachers Group inner circle bought a $7 million luxury penthouse apartment near Miami. Again, it was bought covertly, using money transfers through nominee companies in the Cayman Islands, Hong Kong, Jersey, Guernsey and the USA. For the next ten years, Petersen, Larsen and selected members of their inner circle, lived secretly at 5302 Fisher Island Drive, on a luxury private billionaire s island in the company of playboy businessmen, reclusive movie stars, drug smugglers and oligarchs. They enjoyed the pleasures of golf club membership and private beaches. A second apartment in the same complex was bought later. Berthed not far away was a $6 million ocean-going yacht, the Butterfly McQueen. The apartments were in use until US police arrested Petersen on fraud charges in 2002. The Fisher Island homes were not the only luxury apartments bought using money laundered into the USA. Around the same time, Humana s free-spending inner circle used a different set of offshore nominee accounts to buy 12 other luxury condominiums in the La Gorce Palace and The Sterling apartment buildings in Miami. One of the witnesses to that deal is today a senior Teachers Group fund-raiser, raising millions of dollars for Humana People-to-People initiatives in China. In 2008, Humana People-to-People opened a $10 million luxury retreat in the Mexican desert near Ensanada, Baja California. The sealed complex is protected by armed guards and only accessible to Teachers Group members and staff. Nobody knows how this complex has been financed. The Swiss bank connection All the Humana People-to-People charities belong to a Swiss association, the Federation for Associations Humana. This charges each of the member charities huge sums in enrolment and administration fees up to 15 per cent of income. There are at least two other associations linked to the Humana financial system in Switzerland, staffed by members of the Humana inner circle . Trial for fraud In 2002 Amdi Petersen was extradited to Denmark and put on trial with other members of the inner circle for fraud. The trial was not conclusive in 2006 one defendant, Sten Byrner, pleaded guilty on minor counts, the rest were acquitted. The Danish public prosecutor announced an appeal, but before legal papers could be served all but one of the defendants escaped abroad. In a subsequent trial, the remaining defendant, Poul Joergensen, was found guilty and sentenced to a prison term of two and a half years for fraud. Amdi Petersen and four other senior members of his inner circle are today wanted by Danish police and by Interpol to answer charges of fraud in their native Denmark. Where are they now? Amdi Petersen and other members of the Humana People-to-People inner circle sought by police are thought to be living in the $10 million complex near Ensanada, Mexico, and travel regularly to Zimbabwe, where Humana People-to-People has its African headquarters. Petersen may travel on a Zimbabwean diplomatic passport. The Teachers Group today Humana People-to-People and the Teachers Group run schools, colleges, charities and used-clothes collection schemes in 26 Western countries, and development projects , education and volunteering programmes in 16 Third World countries. The Teachers Group owns property and agricultural estates in at least ten developing countries, and factories, forestry concessions, timber, import-export and trading companies in China, India, Malaysia and the USA. Its charity and commercial arms are tied together in a network of more than 50 active offshore and nominee companies. The total assets of the group have recently been estimated by police at around $860 million. Five senior members of the Teachers Group are currently wanted by Danish police and Interpol for alleged fraud. Since 2001, no official attempt has been made to investigate the current web of charities, or to explore Teachers Group s finances, organisation, membership, structure or political significance. The Teachers Group is now moving strongly into South America, Eastern Europe, and China. Tvind Alert Please circulate this fact file as widely as possible, especially to any contacts in the development aid world, aid charities, journalists and the media. Post it on Facebook, Twitter and LinkedIn. Copyright is waived. The original article is online here