The Spanish Land Registry has confirmed that a company owned by María Angeles Muñoz and husband Lars Broberg, Crasel Panoramica S.L.,  took out an Equity Release mortgage loan with Nordea Bank S.A., based in Centro Plaza, Marbella.

We cannot confirm whether Lars or María Angeles are keen golfers, the prototypical victims of Jesper Hertz, Nordea Representation Office Manager, but what we do know is that the property was purchased in 2001 (after which dubious share transfers took place) and the mortgage loan was signed in 2010 (maturing in 2020), and that Nordea Bank S.A. has accurately explained in a promotional brochure, no longer available online since 15 days before the interim hearing in a case against them -for misleading publicity-, how to go about the business of cheating the Spanish Tax Office.

It is suspected that they took out the Nordea flagship ‘international wealth and tax planning’ product , the Capital Managed Plan (CPM).

The question is thereby one: victims or accomplices of a tax fraud scheme?

If the former, they should report the bank to the authorities and if not, they are accomplices of a potential tax fraud situation.

It was a matter of time before someone high up in the banking sector was sent down.

Kaupthing bosses have the dishonour of being the first -surely not the last- top bankers to go to prison for defrauding their company, their clients, their country and presumably too, the Tax Office.

But whilst this case may not be directly connected to Equity Release, it is clear that if someone at the bank came up with the brilliant idea of giving out a massive loan to a Middle East-based wealthy Arab to buy stock from the company, why not give smallish loans to owners of Spanish unencumbered property to invest, for instance, with Lex Life, the company Landsbanki owned?

At ERVA, we wish to thank N.M. Rothschild & Sons. Yes, we are sincerely grateful for allowing our members full access to ‘live’ advertising I (and II) that, introduced in a timely manner as evidence in Court, will dramatically increase the chances of succeeding in declaring the CreditSelect Series 4 sham mortage void.

The advertising, which is being used as the core evidence in support of the victims’ claims that they were ripped off by the Guernsey-based bank, does not talk about investments (and needs not) but it does, an extensively so, about Inheritance Tax mitigation benefits that would come as a result of their ‘specially designed’ CreditSelect Series loans.

The advertising also confirms that Rothschild sells this product “through a handful of selected IFAs”, even if now they claim that the IFAs were selected by their customers.

The only advantage for Rothschild is that they are being tried in Spain, where they can lie as much as they wish!

Tax-mitigation fan Mr. Claus Jorgensen, Nordea S.A. Managing Director, had no qualms about giving precise indications on how to reduce Spanish Inheritance Tax by reducing the value of a Spanish property with a Luxembourg mortgage.

In a letter that has arrived in our offices, Mr. Jorgensen confirmed to the Luxembourg regulator, the Commission de Surveillance, that it is better to have a mortgage than to not have one, and suggests that the Spanish Tax Authorities have confirmed the legality of the set up.

We now know that this is not true.

Working closely with Jesper Hertz, the ‘larger than life’ (literally too) Nordea representative in Spain commissioned with exposing the dangers of Spanish Inheritance Tax to trusting property owners in Spain, Mr. Jorgensen has managed to give out over 44 million Euros worth of tax-evading mortgages in Marbella alone, inducing customers to defraud the Spanish Tax Office by -potentially- 15 million Euros. 

Are the Luxembourg banking authorities going to turn a blind eye -again- to this obvious crime? They have had this letter since july 2010…can you not hear the clock ticking Mr. Juncker?

ERVA has received a summary of the  interrogation of the Danske Bank staff members from an undisclosed source.

Morten Runo Waaben said that he was just the investor and came into the bank in 2006, at a later stage.

Acting lawyers were not too keen on his side of the story because he was merely the investment manager, and was not involved in the signing up of the claimant. However, his version of how the investment was conducted grossly differs from the truth; he stated that it was Euan Armstrong who instructed how the spread of the investments should be allocated and that in fact, against his own advice, Euan wanted a higher risk approach.

Morten also said that he was aware that Euan was an ‘avid’ investor, with substantial experience.

Henrik Hjerrild Hansen went on to deny any involvement in the sale stating that although he had signing the product at the Notary Public, it was all done via Luxembourg. When lawyers confronted him on his knowledge of what he was really signing at the Notary Office, he said he was aware it was a mortgage loan but little else.

In respect of his involvement with the Danske Office in Spain, he said that his role was merely that of general information to the public about the bank and its services, without providing advice. This is hardly consistent with the their own publicity:

When lawyers asked him about Spanish tax matters, he said he had little clue about this as that was not his role or remit, and again referred the matter to Luxembourg. Lawyers strongly confronted this statement appealing to his own LinkedIn profile, which he has now removed, where he seems ‘the’ expert in Private Banking with Danske, after 40 years of service for this entity.

Finally, the lawyer for the bank, Ole Stenersen, was quite a funny chap although could not help stop lying. In his words, he was no tax expert and could not answer anything about the Capital Assurance Product. He denied knowledge of this set up and referred it to ‘someone else’ within bank. Surprisingly, when his counsel starting asking questions about this same matter, he suddenly had the answers in respect to whether a mortgage loan for tax purposes refers not to the mortgage itself, but to the loan and how it gets invested.

He also gave inconsistent answers about the KPMG letter citing just one paragraph of it whilst, barefacedly, denied the other (one where KPMG states that they never authorized the tax benefits of the product).

ERVA is now hoping that other victims of these thieves will wish to join the case; in connection to this.

It is our determination to impede Danske Bank get away with this and we are truly hoping that this matter will go to trial.

We will not finish this post without mentioning a new participant soon to be exposed, Mr. Soren Glente.

Mr. Andrew Duff, Member of the European Parliament, has written to the European Commissioner for Taxation and Customs Union, Audit and Anti-Fraud explaining the so-called Spanish Equity Release Scheme (SERS) sold by a number of banks.

In his letter he indicates that a number of banks and investment companies may have allegedly cheated hundreds of retired owners of Spanish property with a tax-defrauding financial product.

Will the European Commission finally step in, take the time to read the deceiptful promotional literature offered by top-tier banks and make a recommendation to the relevant authorities to take action?

Early this week, ERVA had lunch with a Malaga-based lawyer. The professional (cannot be named), who has taken a serious interest in the Equity Release scam, discussed with ERVA members prior investigations into the dealings of the husband of Mrs. Angeles Muñoz, Lars Broberg, notably how a company owned by both benefited from a political decision: the modification of the boundary-line separating the municipalities of between Benahavis and Marbella.

As a result of this wheeling and dealing, the couple ended up dramatically increasing the value of their land.

Now you may ask what does this have to do with Equity Release and Nordea Bank S.A.?

Answers in a follow up post!

The Spanish Land Registry has confirmed that a company owned by María Angeles Muñoz and husband Lars Broberg, Crasel Panoramica S.L.,  took out an Equity Release mortgage loan with Nordea Bank S.A., based in Centro Plaza, Marbella.

The mortgage loan capital was €3,100,000 against a property -used as collateral- valued at over 4,5 million Euros.

We cannot confirm whether Lars or María Angeles are keen golfers, the prototypical victims of Jesper Hertz, Nordea Representation Office Manager, but what we do know is that the property was purchased in 2001 (after which dubious share transfers took place), the mortgage loan signed in 2010 (maturing in 2020).

We also know that Nordea Bank S.A. has accurately explained, in a promotional brochure no longer available online since 15 days before the interim hearing in a case against them -for misleading publicity-  (although cached by Google without Nordea IT ‘expert’ expecting it), how to go about the business of cheating the Spanish Tax Office.

These are some of the conclusions that must have convinced the Mayoress to buy this product:

Today’s investor is more likely to have amassed a fortune through personal effort.

 

This booklet has been devised as a basic guide for this new breed of investor and in particular for investors affected by Spanish tax and inheritance legislation.

 

Failure to take sufficient action of Spanish Inheritance Tax (which may be as high as 34%, or even above 80% in certain situations) in the wealth-planning process, may lead to an unexpected and financially unpleasant surprise for the heirs.

 

Fortunately, there are ways of mitigating both the wealth tax and the inheritance tax at the same time, one of which is to take up a mortgage.

 

Borrowers may take up a mortgage loan either at the time of the purchase of a Spanish property or after having owned the property for some time.

 

Clients appreciate our Nordic values -integrity, transparency, honesty, trust, impartiality…- : they differentiate us from our competitors.

 

It is suspected that they took out the Nordea flagship ‘international wealth and tax planning’ product , the Capital Managed Plan (CPM).

The Spanish Tax Office warned against using this product to reduce Wealth Tax and more significantly, Inheritance Tax.

The question is thereby one: victims or accomplices of a tax fraud scheme?

If the former, they should report the bank to the authorities and where not, we must conclude that they are suspects of a potential tax fraud situation.

The Mayoress of Marbella has written to the newspapers that published the discovery of an Equity Release contract. In her missive she formally responds to the allegations that the contract was used, as per Nordea Bank S.A. precise indications, to avoid paying taxes and confirms that this is not true and that never intended to pursue such aim.

The recitification can be read in the following link:

http://www.elplural.com/2014/03/05/la-alcaldesa-de-marbella-asegura-que-paga-sus-impuestos-y-niega-haber-contratado-productos-financieros-para-defraudar/

OMM, or Offshore Money Managers, has been living very well for far too long on the back of a lie: that it is registered to conduct investment business.

But they are not, and dishonest Mr. Colin McCready knows it far too well in spite of which he has managed to get away with his insurance broker “DGT license” -which he is fully credited with having allowing him to sell car/house/life insurance policies- to conduct investment business, which he holds no license for.

That said, Mr. McCready has also been an exceptionally efficient tax-evading Equity Release travelling salesman (Jyske Bank, Landsbanki…), and that has placed him in the spotlight. Unfortunately for him, he has left a trail of incriminating obnoxious publicity that is causing anguish to countless pensioners.

According to the law under which he is regulated, the following needs to be observed:

Insurance brokers will provide truthful and sufficient information in the promotion, offer and subscription of insurance contracts and, in general, in all its advisory activities.

In the next posts we will publish part of Offshore Money Managers publicity to see if it at all, it does in fact comply with the above.

When we say that ERVA has first-hand evidence on how Danske Bank International S.A. -based in Luxembourg- sold their diabolical Capital Assurance Equity Relase we are not referring to the fraudulent promotional literature, even if such documentation openly admits to offering a tax evasion product.

Actually, first-hand information means rather from the horses mouth, or more appropriately from Mr. Glente’s mouth, who openly confirms in a telephone recording how the product was sold.

In the conversation, Mr. Glente confirms the following:

1. The product was ‘for sure’ loss making at low risk but that the inheritance tax benefits outweighed such losses (16’).
2. Many of clients were not aware that the product was going to run at a loss, that it was in negative equity, “which it actually was” in his words, without taking risks (19′).
3. The product is currently the best ‘tax avoidance’ product in Spain, and that it has been confirmed by several top firms, PWC included (33’)
4. Danske Bank International S.A. sold the product in Spain to optimize the situation for Inheritance Tax, and that was the only real benefit.

The couple settled out of Court at a loss of circa €400,000, not before an apology was extracted from them.

Listen to this revealing conversation here, after obtaining clearance from a law firm. 

(the last 2 minutes of conversation relate to a recording between the owner of the tape and Danske’s lawyer in Fuengirola).

ERVA can announce that the claim against SL MORTGAGE FUNDING N 1 LIMITED and THE PREMIER GROUP (ISLE OF MAN) LIMITED -on behalf of 14 claimants- will be filed on Friday 4th of April 2014.

The claim is based on the following grounds:

• Neither company were regulated to operate in Spain. The company SL MORTGAGE FUNDING N 1 LIMITED actually admitted this was the case as if to avoid the application of Spanish mandatory provisions by attempting, in the opinion of the acting lawyers, to equate the validity of this undertaking to a type of “limitation of liability clause”.
• Both companies openly admitted that the main purpose of the product, sold with the name “SITIRS” (Spanish Inheritance Tax and Income Release Scheme or Spanish Investment Transfer and Income Release Scheme), was to reduce or mitigate Spanish Inheritance Taxes.
• Both companies confirmed that they had received the ‘blessing’ of top law firms, ERNST & YOUNG and URIA & MENENDEZ, none of which will admit to this.
• Both companies concocted a plan to have the products signed in Bilbao through local ‘friendly’ lawyers, Rocco Caira and Javier Bicarregui, both paid generously to sanction a bogus transaction made possible by the teaming up of a group of unscrupulous financial operators.
• Neither company allowed customers the slightest bit of information that explained the real predatory nature of the investments where the mortgage loans were invested. This was a natural consequence of not having offered the obligatory prospectus, under Spanish laws.
• Both companies shared directors, a clear indication of their togertheness in the devising of this illegal scheme.

Nordea Bank Luxembourg has been reported nationally for helping the Mayoress of Marbella, Maria Angeles Muñoz, avoid Spanish Inheritance Taxes.

According to Interviu weekly Nordea Bank S.A., operating from the tax haven of Grand Duchy of Luxembourg and through an office in Marbella, sold a tax evasion mortgage to Ms. Muñoz.

This story was originally published by ERVA when it detected that a company owned by the Marbella Mayor and her husband, Crasel Panoramica S.L., had taken out an Equity Release in 2010.

Nordea Bank S.A. has been publicly accused of cheating customers by making them believe that their product is a legal vehicle to avoid IHT, when such a possibility is tantamount to tax fraud.

Mr. Klaus “Monster” Pedersen has been requested to attend an interrogation at the Courts in Fuengirola in relation to his role in devising, approving and selling a tax evasion Equity Release Product.

Mr. Pedersen is the Managing Director of Danske Bank International S.A. and ultimately responsible for selling mortgages in Spain on the pretext that they would alleviate the burden of Spanish Inheritance Taxes. He is accused by a number of expats of fraudulent publicity.

Deutsche Bank will have to repay over 3 million Euros to 49 customers who invested, through this bank, inLehman Brothers, Landsbanki and Kaupthing toxic financial products.

In spite of an earlier dismissal of the claim by a Court of First Instance, the Madrid Appeal Court considers that the bank failed in its statutory duties towards their clients: diligence, loyalty and clear information on their products.

According to the ruling, Deutsche Bank failed to explain not only the nature and characteristics of high risk products, such as the “preference shares”  but also, the financial and economical risks of the underlying investments.

The deciding Magistrates stressed that the investors were looking for profitability but shied away from capital losses, adding that there profile was not typical of ‘people gambling away in a roulette hard-earned money saved over a long time.’

The Mercantile Courts in Malaga have made a request for lawyers -acting for claimants over the misselling of CreditSelect loans as a means to avoid IHT- to provide a Spanish address for notification purposes.

It is the case that NM Rothschild & Sons, commonly known as Rothschild according to Wikipedia, has a website that boasts offices all over the world, including Madrid and Barcelona.

Should the Court accept any of the above addresses service of process will be duly carried out and Rothschild will have 20 days to respond to the allegations that their company, in their capacity as lenders, a specifically envisaged, designed, marketed and sold a product, the Credit Select Loan Series 4, to defraud the Spanish Taxman.

We must remember that Rothschild has vehemently denied ever providing any type of financial/investment advice. Quite so, the claim has nothing to do with this but with the fact that, in their own words, with the “Rothschild mortgage inheritance taxes would be reduced from a whopping 81,6% to nil”: no more and yet no less.

Rothschild need to be aware that advertising a service or a product is a serious matter because, as you would expect, the public reacts to such offer and acts on it. More so when people rely on Rothschild core principles.

This is exactly what happened with the Credit Select Series 4 Loan: Rothschild, or all companies, offered it as a legal means to avoid crippling Spanish IHT and people bought, because they trusted them.

Now we know different, but so do they…

(image of Peter Hardy)

It has been revealed that Surrenda Link Mortgage Holding Limited, now SLM Group, gave 40 million Euros in Spanish tax evading mortgage loans.

The firm Blake Lapthorn assisted Surrenda-link Mortgage Holding Limited, a mortgage originator, in obtaining a €40 million ring-fenced Spanish asset funding facility.

For its part, Pinsent Masons, a London based banking team, advised Via Capital Limited, in its capacity as arranger of a €40 million secured loan facility to finance a pool of ‘cash release’ mortgages originated by Surrenda-link Mortgage Holdings Limited.

SLM then employed local IFAs, such as Hamiltons (pictured), to peddle this toxic waste in the Spanish Costas.

Nothing new under the sun save for the exceptionally high size of the lending.

The Malaga Mercantile Court 1 Bis, with date of the 7th of May (received by actign lawyers on the 5th June) has formally accepted the claim, its jurisdiction on the matter and service of process on the Spanish addresses provided for N.M. Rothschild & Sons.

Defendant Rothschild could do one of the following now:

• Accept service of process, appoint lawyers and defend the claim.
• Attempt to refuse service of process in any of their 2 addresses in Spain (Madrid and Barcelona), demanding the Court to service in their Guernsey offices.

This conversation was taped by the son of a Danske Bank International S.A. victim, and Soren Glente, at the time one of the bosses in charge of selling the Capital Assurance. The conversation had already been postedin this site but now, we have the most relevant parts in writing.

In the recording Mr. Glente, a classic Luxembourg-based Danish banker, has a rare fit of honesty and sings like a canary: 

Minute 15:00 onwards

S.B.: How would you describe the risks of this product?

Soren Glente: Well ehhh depending on how aggressive the client would like to be then, I mean if you did it only for the purpose of optimize your tax situation. Then the risk is quite small, it will cost you something each year, I mean the difference between what you paid and the interests of the loan and what you could achieve on interests of the       and if these were place cautionally  the income from the assets would be less than what you paid on the loan, and that would be the price of …

S.B.: and was that made clear to the client?

Soren Glente: oh yes sure, for the

S.B.: so the income from the loans, sorry the income from the assets and investment would never cover the loan? Ehh?

Soren Glente: no , if you wanted to have a very cautious investment profile, then you couldn’t you couldn’t have , the income couldn’t achieve the cost of the loan, no. if you wanted to to achieve that on the loan , then you had to be take some kind of risk, like buying more risky assets

S.B.: so it was really ehh

Soren Glente: and so on and so on

S.B.: so in order to be low risk it was loss making

Soren Glente: yes, that’s for sure

S.B.: and loss it was going to accumulate every year

Soren Glente: yes, not by much, but yes, it would, it would accumulate each year because you would be ehh, you would be able to get an income from, let’s say your deposit or your short term bonds which would be ehh, the income would be less than what you paying interests on the loan, so therefore it would accumulate each year, yes it would

S.B.: do you think my clients understood that?

Soren Glente: yes they did, because I explained that to them, when I had meetings with them, I explained them , because I was, when I spoke  with clients ehh or with your parents ehh, they were, in the beginning the investments was very conservative  placed by me in an agreement with them, and then each year they could see that the capital actually degrees value, that the assets couldn’t provide income which would pay the interests of the loan, so therefore they came to me actually and ask whether I, we should consider changing the assets to more risky assets, in order to achieve a higher income, so I had a long dialog with your clients, ohh with your parents  about that, because I had to tell them that if they wanted that, the risk would increase and as far as  I remember we agreed to take a small portions of your parents’ assets and place them in a slightly risky assets, in order to at least break even, that is as far as I remember, but you could see, but you should be able to see that on the notes or… so that’s what happened. So  I remember I had a dialog with your clients, with your parents  in the bank sometime

S.B.: mmm mmm

Soren Glente: but we are going many years back now

S.B.: right, well I think that they did not understand it, I don’t think that they understood that from the beginning when they signed up to this contract, that this was going to run it to loss, if it was going to be lowerer QQ  

Soren Glente: no, you might be right. That they didn’t because, you might be right that they didn’t understand that

S.B.: mmm there were…

Soren Glente:  many many clients on the costa del sol didn’t understand that you can’t just, you can’t you can’t just automatically make money out of the negative equity, which it actually was, without taking risks and that has been the case for many many unfortunate clients down there that they are they have placed assets on too risky assets too risky assets like equities and things that were having a loan on both the house and the assets

S.B.: did you know the others, do you know,   how many other clients did you have like my parents?

Soren Glente: several

Up to minute 20:00

 

Minute 32:50 onwards

S.B.: and do you still sell this Company insurance scheme product?

Soren Glente: yes, by all means if people they are wanting to tax optimize their situation then that is one of the best schemes you can sell in.it really is

S.B.: but there is dispute about whether it does actually protect against Spanish inheritance tax, not everyone says, not everyone says it protects

Soren Glente: yes, but I have got a legal opinion saying differently

S.B.: from who, may I ask who from?

Soren Glente: it was from several other companies Price Waterhouse Coopers in Spain in Madrid, we have a legal opinion from these guys

Minute 34:03

Soren Glente: Yo have to do it right to have it to work, but it does work, you just have to know that the reason for doing this is not to release your equity from the property to in order to buy a new car or whatever you want to, the reason for doing this is to optimize your situation for wealth tax and yeah mainly inheritance tax, wealth tax was also an issue, but it is a lesser issue today

Lawyers acting for Landsbanki victims are due to file a misleading publicity case against Landsbanki Luxembourg S.A., Lex Life and Pensions S.A. and Offshore Money Managers Correduría de Seguros S.L.

The case is based on the extensive fraudulent publicity that all three entities issued when offering the product known as ‘SITRA’ (Spanish Inheritance Tax Reduction Scheme), ‘Capital Insurance’ or ‘Equity Release‘.

According to the documentation that lawyers hold, the following has been established:

• The product was devised as a means to reduce, or eliminate completetely, Spanish IHT. We now know this is not only untrue, as it proposes customers to defraud the Spanish Tax Office.
• The product was also designed to potentially produce an income, it being the difference between the return on the invested asset, minus charges and expenses, and the cost of servicing the loan. This was just one possibility, the other more likely one being total loss.
• The advertising stresses prominently the benefits of the product but omits the risks involved -or if at all features these in small print- namely the loss of the property and further. 

Landsbanki was extremely successful in attracting new customers by using its main feature: reduction of Spanish Inheritance Tax. Lex Life & Pensions did too.

And Lex Life & Pensions used the name top Spanish firm Cuatrecasas to push sales, by admitting the following:

this product has been ellaborated in conjunction with top law firm Cuatrecasas

Lawyers are awaiting a formal response to a letter sent to Cuatrecasas but we can anticipate the response: “we deny any involvement and do not want to know anything about this product”

The case is to be filed with Courts in Malaga and will focus on the defendants’ advertising.

As for the role of OMM, its responsibility is two-fold:

• Active participation in the promotion and marketing of the product, generously remunerated with an introduction commission and further, by receiving regular trail commissions (as is the case with Jyske bank too).
• Attribution of joint responsibility to any media outlet used to promote and market a particular product or service (rulings by Madrid Appeal Court rulings 17/6/2008 and 30/9/2009).

A case for misleading publicity narrows down the scope of the dispute as it confines the Judge to rule on whether the advertising is/isn’t misleading, without giving any room for further interpretation (i.e. namely misselling: whether customers could and should have sought further advice, whether they were savvy investors or suitable for the product, whether it was a high risk speculative product known to the public etc.).

OMM has declined to come forward to assist claimants, ignoring letters from lawyers inviting them to participate in this case as witnesses, and yet their fraudulent advertising is still today available to the public.