Belvedere: WSJ exposes Cosgrove link to US’s most wanted financial criminal

The family of Navinder Sarao leave the High Court in London, Britain May 20, 2015. Navinder Sarao remains in custody after his appeal to have his bail conditions relaxed was turned down at the High Court. Sarao was arrested by British police on a U.S. extradition warrant a month ago after being charged with wire fraud, commodities fraud, and market manipulation by the U.S. Justice Department. REUTERS/Sophie Wedgwood
The family of Navinder Sarao leave the High Court in London, Britain May 20, 2015. Navinder Sarao remains in custody after his appeal to have his bail conditions relaxed was turned down at the High Court. Sarao was arrested by British police on a U.S. extradition warrant a month ago after being charged with wire fraud, commodities fraud, and market manipulation by the U.S. Justice Department. REUTERS/Sophie Wedgwood

By Alec Hogg 

The Belvedere kingpins, South African-based Cobus Kellermann and David Cosgrove, have received another big smack with an expose’ in today’s Wall Street Journal. It details close links between the duo’s Mauritius operation and the US’s most wanted financial criminal.

The newspaper today published an article exposing ties between Belvedere and jailed British-based trader Navinder Singh Sarao. The trader, who made at least $40m by using technology to distort markets and manipulate asset prices, is fighting extradition to the US. He is behind bars as the Americans have frozen Sarao’s global assets, making it impossible for him to meet £5m (R97m) bail set by the British courts.

According to the WSJ, Sarao has been connected to Belvedere since his fund was registered in Mauritius on 19 July 2010.

A spokesman for Cosgrove told the New York-based newspaper that after expressing his desire to raise fresh funds from investors, Sarao was put in touch with Belvedere through a mutual acquaintance Nigel Green, owner of high pressure global financial sales group DeVere.

DeVere turned on Belvedere earlier this year when alleging Cosgrove and Kellermann were running a giant Ponzi scheme into which $50m invested for its clients had been lost (R50m of which was by South Africans.)

David Marchant’s OffshoreAlert, the investigative website specializing in offshore financial centres which in March exposed Belvedere as a “massive criminal enterprise” says DeVere gave it helpful information and documentation. The really damning proof came in a detailed affidavit and 1 500 pages of documentary proof, by the senior investigator of the Guernsey Financial Services Commission.

On Sarao’s Belvedere connection, the WSJ’s Margot Patrick writes that after the British trader was put in touch with Cosgrove “the NAV Sarao Milking Markets Fund (GBP) was soon registered in Mauritius as part of Cosgrove’s financial network. The stuccoed Hounslow, England home (below) where Sarao traded US and European stock futures became a new outpost in a growing empire of funds overseen by Cosgrove.”

Television crews wait outside the address where Nav Sarao Futures Limited is registered, in Hounslow, west London April 22, 2015. The small suburban house in the flight path of London's Heathrow airport gave no clue to neighbours that it was headquarters of a man accused of earning millions through fraud, and helping cause a trillion dollar "flash crash" on U.S. stock markets. REUTERS/Eddie Keogh
Television crews wait outside the address where Nav Sarao Futures Limited is registered, in Hounslow, west London April 22, 2015. The small suburban house in the flight path of London’s Heathrow airport gave no clue to neighbours that it was headquarters of a man accused of earning millions through fraud, and helping cause a trillion dollar “flash crash” on U.S. stock markets. REUTERS/Eddie Keogh

The newspaper adds: “The intersection of the two men’s paths casts a light on a murky offshore marketplace connecting unsophisticated investors with lightly-regulated offshore funds.

“Funds established through companies controlled by Cosgrove and his SA business partner Jacobus Kellermann raised hundreds of millions of dollars from retirees and expatriates living in Asia, South America and the Middle East, usually via financial advisors who collected big commissions to steer clients into the funds.”

The WSJ tells its readers that Cosgrove and Kellermann’s Mauritius-based Belvedere Management provided back office services to the network. Also “related companies owned by the two men also helped to manage some of the funds’ investments which ranged from pools of other funds to European penny stocks, exotic hardwoods plantations and rare earth metals.”

It adds: “After complaints from some fund investors over losses, authorities in at least five countries suspended or took enforcement action against funds linked to Cosgrove and his group this year. All of the Mauritius and Guernsey funds were taken over by regulators.” Regulators in these countries are continuing their investigations into Belvedere.

Belvedere kingpin David Cosgrove - now linked to US's Most Wanted, Navinder Singh Sarao
Belvedere kingpin David Cosgrove – now linked to US’s Most Wanted, Navinder Singh Sarao

Sarao’s relationship with Belvedere through its Mauritius operations is described by the WSJ a “white labeling” exercise which enables new or unproven investment managers to bypass regulatory oversight. It says this has been a major growth area for offshore financial centres in recent years.

In South Africa, Kellermann’s Clarus Group operated eight co-branded “white labeled” unit trusts in an identical manner through FirstRand-owned MetCI.

For more of the comprehensive Biznews coverage of the Belvedere story, click here:

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