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DEATH OF AN INVESTIGATOR: The Suicide of Stephen Mumbo

On Friday, 12 October 2018, Stephen Mumbo jumped from the 17th floor of the PwC office building in Westlands, Nairobi. Piecing his last moments alive reveals a trail of work-related stress and a man who was broken long before he fell to his death. By DAVID ODONGO and MORRIS KIRUGA

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DEATH OF AN INVESTIGATOR: The Suicide of Stephen Mumbo
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Dark Friday

As he was leaving for work, Stephen Mumbo closed the door to his apartment. It was still dark outside, but he had to be at work early enough to finish a report and prepare for a meeting. In one hand he carried the lunchbox his wife, Roselyne, packed for him every night. In the other, he held his car keys.

A quiet, shy bespectacled man with a balding head and a nerdy aura, he was always polite to a fault. He was also a workaholic, rarely seen anywhere else but at his office desk. But this morning, as he left the apartment, got to the parking lot, and into his maroon Mitsubishi Lancer, registration plate KAS 843M, something else was on his mind.

He was tired, but that fatigue would have to wait. He had barely seen Roselyne and their infant daughter in the preceding two months as he had been busy undoing one of the biggest corporate messes in Kenyan history. It was his brief, but for most of the previous decade and a half, such assignments had been his life.

To anyone watching, nothing was outwardly unusual about Mumbo that cold Friday morning.

From his apartment building, the 9-storey Pangani Palace Apartments off Muthaiga roundabout, he joined the early morning rush hour traffic. Although Nairobi wakes up early to beat the city’s infamous traffic jams, it took him less than 30 minutes to reach his office in Westlands. The sun rose on the horizon and with it, the city. It would be the last time he would take that route.

As he took a gentle left turn off Waiyaki Way to the paved driveway of the twin Delta Towers, the headquarters of his employer, Stephen Mumbo was already a man on edge. But his permanent calm demeanor, which had only failed him on rare occasions, hid the turmoil beneath.

Mumbo waved at the guards as they let him through the barrier. He drove to his parking slot, reverse-parked into it, and walked to the lift. Once in, he pressed the 12 button and waited. When the doors opened, he got off and walked to his office.

Mumbo used his access card to enter the office a few seconds before 6:15 a.m. Even that early on a Friday morning, he was not the first person at the Pricewaterhouse Coopers (PwC) Kenya office. At least four of his colleagues were already at their desks, typing up reports, trying to meet deadlines and preparing for meetings.

Mumbo removed his suit jacket and draped it over his seat. On any other day, he would only wear it again if he had a meeting or if it got cold. He sat at his desk, which was a neatly arranged table with no personal items. It was where he spent days and nights working on assignments, and where, this fateful morning, he would sit one last time. On his mind was a report he had been toiling on for the previous two weeks that was due that morning. But there were many other things troubling him.

Mumbo used his access card to enter the office a few seconds before 6:15a.m. Even that early on a Friday morning, he was not the first person at the Pricewaterhouse Coopers (PwC) Kenya office. At least four of his colleagues were already at their desks, typing up reports, trying to meet deadlines and preparing for meetings.

Six weeks before that morning, UBA Bank had placed ARM Cement, a listed manufacturing company, under PwC’s management over massive debt. The company had been suspended from the Nairobi Stock Exchange (NSE) as its shareholders reeled in disclosures of hidden debts and other forms of corporate malfeasance. While for outsiders it was a story of yet another typical Kenyan company, for Stephen Mumbo it was a direct challenge.

As the Assistant Manager of Executory and Forensic Investigations, the complexities of understanding the company’s true position, and then figuring out ways to solve the mess, fell directly on his desk – and he was just the man for the job. He was not only reliable, he was also driven. In a profession that demands brilliance, he could be considered a proper nerd. Besides, he had worked for PwC for nearly a decade and a half and had proven his skills countless times. If there was a complexity you couldn’t untangle, on just about any project, Stephen Mumbo was the man to ask.

He’d spent 18-hour work days working on the ARM proposal, which was not unusual for him or anyone who worked at PwC. What was specifically different was that Mumbo was a perfectionist par excellence. Grammar was important to him; a comma out of place would unnerve him, and more than once he had chosen to file reports late rather than table them with errors. He approached his work, as one colleague put it, like the civil engineer he had been trained to be. One centimetre off, and the whole structure risks collapse. That perfectionism meant he spent hours and days labouring on not just getting the right proposals on paper, but also on making sure that the language in the reports was clear and concise. It made him irreplaceable, but at the same time, it meant that he could not be promoted.

Sometime between 7:30am and 7:40am, Mumbo asked a colleague whether there was any free meeting room on the 17th floor. There wasn’t, she told him. Despite having this information, he still went upstairs, hoping that the administrator there could find him one. He needed it for a meeting, which was scheduled for 9am, but he also had other things on his mind.

The only thing that might have caught anyone’s attention was that he wasn’t wearing his spectacles, which was rare. His eyes were red, but for a man in his profession, that was considered just another day at the office. It was also not unusual for him to go upstairs hours before a meeting. Since he had left his jacket draped on his chair, everyone assumed he was coming back.

On the 17th floor, Mumbo tried several rooms. He found someone talking on her phone in one of them. She asked him if he had booked the room. He said no, and closed the door. That woman was probably the last person to see him alive.

When he got to Kilimanjaro 2 meeting room, he found it empty. He closed the door behind him. He was physically alone, but no one will ever truly know what kind of torment he was going through.  He walked across the room’s polished floors, passing the black and yellow chairs, probably tapping his fingers on the grey top mahogany table. Then he placed his Lenovo laptop on the table, walked to the window, and climbed outside. From there, he could see the Westlands rush hour traffic below him. He could see Waiyaki Way, and even the stretch he had turned into two hours earlier to get into his office, as well as the Westlands matatu stage on the other side of the road. There was the luxury car dealership at the end of the complex, and the parking lot between it and his building. But maybe he didn’t notice any of this as he steadied himself on the ledge.

Then he jumped.

To anyone watching from outside, the fall lasted the blink of an eye. One second Stephen Mumbo was standing on the ledge of the window, and the next he was on the balcony of the 2nd floor, fifteen floors down. It must have looked macabre, the sight of a man falling to his death against the backdrop of Delta Towers’ imposing façade. To the employees at SBM Bank, on whose second-floor window ledge Mumbo died, it sounded like a sudden thud.

Many things drove his choice of the 17th floor, including the fact that it was mostly empty at that time of day, and that from that high up, he was unlikely to survive the fall. Later images from witnesses in the buildings across show four first responders around his lifeless body dressed in a light blue shirt and black suit pants. There wasn’t much anyone could do at that point, and he was pronounced dead immediately after he was taken to the hospital.

Inside PwC Kenya, the immediate members of his team were told to go home or wait if they needed to see a counsellor. Someone retrieved Mumbo’s Lenovo laptop from the meeting room, and from it the report he had spent his last two months alive working on. Everyone else was ordered back to their assignments, even while Mumbo’s body still lay on a ledge below.

***

As the news of Stephen Mumbo’s fall broke in the capital city, people speculated on whether he had jumped or he had been pushed. On Twitter, people wondered whether there had been foul play; some connected the dots from Mumbo’s sensitive work as a forensic investigator to his fall. There are no cameras in the corridors outside the boardroom, only on the staircases.  That blind spot would make it hard for investigators to determine if anyone had joined him in the room.

Others focused on the suicide angle; many wondered why a 41-year-old man with a well-paying job would choose to end his life. Some suggested domestic issues had driven Mumbo to his death; one strangely detailed tweet suggested infidelity. But the public speculation ignored the probability that only Stephen Mumbo knew what Stephen Mumbo was going through. In the absence of a suicide note in any form – none has been found – piecing back the last few years of his life is probably the only way to understand why he killed himself.

As the news of Stephen Mumbo’s fall broke in the capital city, people speculated on whether he had jumped or he had been pushed. On Twitter, people wondered whether there had been foul play; some connected the dots from Mumbo’s sensitive work as a forensic investigator to his fall.

By the time he died, Stephen Mumbo was one of only three employees who had been at PwC Kenya for more than 13 years. He’d only had one job outside PwC (as a design engineer between March 2003 and April 2004) before joining the accounting firm. The only other company he had worked for was a small Malawian smallholder farmer’s company where he had done a brief consultancy in 2016. PwC was, by all accounts, more home to him than his apartment was. The job fit his personality as it required a meticulous, borderline obsessive mind.

Mumbo was, by many accounts, a good boss and an effective team leader who avoided office politics. In a profession where kindness is rare, he was overly compassionate and helpful. Sometimes, according to several people who worked with him over the years, he would volunteer to help on a project and eventually take a leadership role. But he was the kind of colleague who took on team projects and then credited everyone else. According to at least one insider, the kind of work Stephen Mumbo was handling on ARM Cement was probably work that should have been handled by a team of six.

Mumbo’s perfectionism and thoroughness also made him irreplaceable. Most of the people who eventually became his bosses owed some of their success to him. He trained them, as he did many other people, but they passed him in rank because he was not assertive. In a meeting room, he would point out flaws in plans in a heartbeat, but recoil when asked how to change them. Instead, he would draft his thoughts and offer them to someone else to present.

But he enjoyed the work itself. The constant mental challenge must have been a thrill at the beginning of his career, but it slowly chipped away at his mental health.

By October 2018, he couldn’t take it anymore. “They [PwC] plied him with so much work, and he wasn’t the type to say no, so he did it anyway. He was always very well groomed, but always tired,” said a relative.

The firm

By the time Pricewaterhouse Coopers bought part of Delta Towers in late 2012 for Sh4.4 billion in a joint deal with the University of Nairobi, it was already one of the biggest auditing firms in the world. The company was founded in 1998 through a merger between Coopers & Lybrand and Price Waterhouse, and rebranded to PwC in September 2010. By then, it was present in 158 countries and 743 locations, battling it out with three other audit firms, Deloitte, EY, and KPMG. PwC had over 236,000 people in its ranks, among them a quiet Kenyan nerd called Stephen Mumbo.

The PwC Tower, one of the two towers that make up Delta Towers, became PwC’s new home from early 2013. It was a remarkable investment by a company partially owned by Indian billionaire Mukesh Ambani. PwC Kenya settled for Wing B of the 20-storey twin towers, occupying half and renting out the other half. Upper Hill, its former home, was losing its lustre as new buildings came up without the infrastructure to support them. Now, in the newest building on the corner of Waiyaki Way and Ring Road Westlands, its employees were spoilt for choice on where to live. Location was important because many of them would work long hours, driving to and from work while the city slept.

As an employer, PwC Kenya consistently ranks as one of the best places to work in Nairobi. Entry-level graduate trainees earn an average monthly salary of Sh120,000, and its partners, according to Kenya Revenue Authority (KRA), are some high-net-worth individuals with gross annual incomes of between Sh350 million and Sh1 billion.

For the ARM job, PwC charged Sh65.6 million for the first three months, in addition to Sh7.9 million for preparatory work. While the PwC partners appointed to do the job were Muniu Thoithi and George Weru, the actual legwork went to a quiet nerd on the 12th floor called Stephen Mumbo. Thoithi and Weru would earn Sh43,000 per hour, while associate directors would earn Sh37,800, senior managers Sh30,000, and project managers Sh25,000 per hour. As a manager, Mumbo’s pay most likely fell in the two lower ranks. But to earn his keep, he would have to spend hours on end poring through reports, preparing his own recommendations, and presenting them to his bosses and the client.

By the time Mumbo got to his desk at 6:15am on Friday, 12th October, he had had less than three hours of sleep. He had gone home at 1am the previous night. He fell asleep fast, but he was clearly distressed, according to several close family members. He kept tossing and turning and woke up before daylight to get back on the grind.

Multiple conversations with past and current employees of PwC Kenya paint the picture of a firm with little space for work-life balance. Long hours and mind-breaking work are the norm, and most employees, like Stephen Mumbo, tend to live close to Delta Towers to ease the commute to work. The employee turnover rate is understandably high, as the work environment becomes more unbearable as one ages and begins seeking a better work-life balance.

Describing his experience at PwC, one employee said, “Deadlines have to be met and bonuses have to be earned. Your health is your problem. If you can’t handle the pressure, quit.” Another termed PwC’s work culture as “ruthless”, adding that even “having a baby is frowned upon.” Lunch breaks, several employees said, are not exactly an option: “Nobody goes for a long leisurely lunch at PwC. Many people eat at their desks.” The average work day, said several employees, is 14 hours. If you are on a project, it’s not unusual to work 18-hour days.

Under Kenyan law, normal working hours are between 45 hours and 52 hours a week for day employees and 60 hours for night employees. The law also provides for at least one rest day a week. At 14-18 hours a day, Stephen Mumbo and his colleagues were clocking between 84 hours to 126 hours a week, twice the legal limit. While the law also provides for overtime, the overriding element is that it be properly compensated, and not result in overworking, which impairs sleep patterns and increases the risk of stress, depression, and lower immunity. Overwork has been associated with heart problems, and among low-income workers, with an increased risk of type 2 diabetes. People who overwork tend to lead unhealthy lifestyles, having less time to exercise, eat. They also tend to smoke or drink more.

Describing his experience at PwC, one employee said, “Deadlines have to be met and bonuses have to be earned. Your health is your problem. If you can’t handle the pressure, quit.” Another termed PwC’s work culture as “ruthless”, adding that even “having a baby is frowned upon.”

Stephen Mumbo seemed to have navigated many of the physical challenges of overworking for almost a decade and a half. He was in good health, didn’t smoke, and barely drank alcohol. But the mental strain was showing.

All the interviewees for this story did not want to be named for fear of retribution for breaking company policy. In more than one case, there were also descriptions of the kind of retribution they might face, down to being put on track to be fired. More often than not, the interviewees still within PwC Tower outlined their basic exit plans and described Mumbo’s death as the latest in a series of wake-up calls.

For those who choose to stay, like Stephen Mumbo, the back-breaking work eventually leads to burnout. There was at least one other breakdown at the office in 2017, and several employees whispered about people self-harming or using drugs to cope with the pressure. For Stephen Mumbo, years of such pressure had finally taken their toll.

***

Mumbo’s distress on that last night was not the only time he had shown signs of work-related stress and depression. In the years before his death, he had had at least three visible episodes of burnout and mental distress at work. In 2015, he had a breakdown in the office and walked out on his boss. He was away from the office for a month. Meanwhile, work was still piling up; Shah Karuturi, the Kenyan subsidiary of the world’s biggest producer of cut roses, was placed under administration sometime during his break. This project was on his desk when he got back.

Then, in mid-2017, a colleague recalls, Mumbo fell asleep in the middle of a presentation with a client. “He was totally burned out, but his bosses simply told him to go to another boardroom and sleep for 45 minutes and then get back to work,” remembered the colleague. Such was life for him, going from one burnout to the next.

The third instance was perhaps the most significant in piecing together Stephen Mumbo’s last years alive. It happened years before he finally took his life, and linked back to the pillars in his adult life.

Then, in mid-2017, a colleague recalls, Mumbo fell asleep in the middle of a presentation with a client. “He was totally burned out, but his bosses simply told him to go to another board room and sleep for 45 minutes and then get back to work,” remembered the colleague. Such was life for him, going from one burnout to the next.

Run to the finish

Mumbo’s village in Kisumu, Nyamasaria, is a hot, dry, humid area. The land is infertile because its black cotton soil sucks the life out of any cash crop. Only weeds, euphorbia, and coarse grass are stubborn enough to grow on the land.

It was in this unforgiving terrain that Stephen Henry Mumbo was born to Arthur Waore Mumbo, an administrator at KEMRI, and Abigael Waore, a teacher at Nyamasaria Primary School in 1977. Mumbo was the last-born in a family of five.

Arthur Waore died in 1992, the year before Stephen joined St. Paul’s Amukura. The young teen moved to Alupe, Busia, to live under the care of his uncle, Mzee Obura, a doctor who still works for KEMRI. All accounts of Stephen Mumbo then match the man he would become: quiet, studious, and driven. According to his cousin, Fred Obura, Mumbo was more than just a brother. They were best friends and even went to the same high school.

In the 1990s, St. Paul’s Amukura, founded by Catholic priest Father Louis Okidoi in 1962, was an academic giant in what is now Busia County. The school motto, Cursum Consumavi, is Latin for “Run to the Finish.” When Stephen Mumbo was a student there, between 1993 and 1996, he lived in Nehru dormitory, named after the charismatic Indian leader.

In his teens, Stephen Mumbo walked awkwardly and avoided conversation. Several fellow alumni of St. Paul’s describe Mumbo’s shyness with fascination. Mumbo was, one says, the guy who wanted the key to the library when everyone else was chasing girls and dates. Odeo Sirari, a KTN news editor, was in Form One when Mumbo was in his final year. “As a new student, it was easy for me to notice Mumbo because he looked so serious, a total book worm,” recalls Sirari.

Another schoolmate, Caleb Etyang, who was a year ahead of Mumbo, says Mumbo would never be found on the school Isuzu bus, christened Kisisiata 3, which served the school between 1990 and 1999, and was driven by a gentle old man the boys fondly called Boyo. “He wasn’t a guy to go for sports or drama outings, he was much more at home in the school and in the library.” In his first two years at the school, he was the class prefect. In his last two years, he was the library prefect.

Mumbo topped the class of 1996 at the school, his only disappointment being that he hadn’t beaten the record of Adiema Aura, a renowned educationist who attended the school in the 80s. He’d only failed to overthrow Aura because he didn’t do well in Kiswahili; he scored an A-minus in the subject.

From St. Paul’s, he made his way to JKUAT, where he would spend the next few years training to become a civil engineer. Engineering offered the challenges a nerd like him yearned for, with its tenets of approaching problems and challenges with a tenacity that combined knowledge, skills and experience. After graduating, he did an accounting course and then took a brief engineering gig. Then he joined PwC Kenya, where he would spend the rest of his life, save for two unpaid sabbaticals.

Throughout this life, Mumbo relied mostly on his mother, Abigael, for emotional support. He had his siblings as well, as well as his adopted ones who were in fact, his cousins. But it was Abigael who represented the most profound influence on her shy young son’s life before and after school.

Then, on 3rd June 2008, Abigael Waore died.

Figure 1: Kenya Gazette notice of 31 October 2008

 

Multiple accounts point to a marked change in Mumbo’s life, work, and demeanor after his mum died. He simply couldn’t work anymore; he took a one-year unpaid sabbatical before going back to work. At some point, either then or after, Mumbo also mounted a massive portrait of his mother in his bedroom. Her face was the last thing he saw before he slept and the first thing he saw when he woke up.

 

Colleagues say that whenever he was not shy, he would talk about his mum a lot. After she died, he mostly talked about his wife Roselyne. They had been married for seven years but had spent a considerable time apart as Roselyne focused on a project in Kisumu and Mumbo toiled at PwC Tower. On days when they were together, his lunch box was the source of envy, as colleagues listened to him go on and on about his wife’s cooking. On any day, even when out of the country on assignment, he would speak to her on the phone for at least an hour.

In the three months before his tragic fall, he also talked about his daughter. The couple had tried to have a baby for several years before finally settling on adoption to grow their family. The toddler was a new addition, and a happy one at that. Mumbo often talked about his daughter, but also said how he didn’t get enough time to be with her.

The patterns

Mumbo’s suicide was not the first time a PwC employee had died after jumping from a floor in a PwC office. In April 2016, a 23-year-old employee of the PwC headquarters in London had jumped to his death from PwC’s ten-storey office building. His decision was attributed to a secret gambling habit, which he had begged his parents not to inform PwC about. He died on a walkway outside the office.

In another case, in May 2012, a 46-year old man jumped off the eighth floor of the PwC building in Largo, the third largest city in Pinellas County, Florida. In 2015, a director at PwC in the UAE, Jumana, was found dead in an apparent suicide pact with her sister, Soraya Saiti, at the base of a building under construction in Amman, Jordan. Then in August 2017, a PwC director named Werner Haupfleisch died by suicide in his home in Royldene, South Africa.

While none of these deaths were directly linked to PwC’s organisational culture, there have been other related deaths. In 2011, for example, Angela Pan, an auditor at the Shanghai PwC office, died ten days after first showing flu-like symptoms. Although her death was attributed to viral encephalitis, social media users of Sina Weibo speculated that she had been “worked to death”, Sometime before her death, Pan sent an update on Sina Weibo that said, “I can accept overtime. I can also accept out-of-town business trips. But on learning a young worker died from fatigue at KP (KPMG), I feel something has broken my bottom line to endure.” She had only worked for the company for six months, after graduating from Shanghai Jiao Tong University.

Faith Atsango, a psychologist, says that work-related stress should be classified as a safety hazard. “People in high pressure jobs are prone to have mental breakdowns,” she adds, “and such incidents should be treated as physical health and safety issues at work.” Atsango says that similar to how factories provide safety gear, stressful work environments should find ways to help employees cope, and ease burnout. Many of these are included in the Occupational Safety and Health Act, which also safeguards employees from “mental strain”.

Faith Atsango, a psychologist, says that work-related stress should be classified as a safety hazard. “People in high pressure jobs are prone to have mental breakdowns,” she adds, “and such incidents should be treated as physical health and safety issues at work.”

Despite these safeguards, high unemployment and weak enforcement of labour laws mean that work-related stress is not properly addressed. Mental health is still largely a taboo topic, despite an increasing number of deaths directly connected to it.

Part of the stigma attached to mental health is gender-related; statistics show that more than 70 per cent of the suicide-related deaths in 2017 were of males.  Two days after Mumbo’s death, another man jumped into a borehole in Matisi Estate, Kitale. Five months before that, another man had jumped off the 8th floor of the 15-storey NSSF building in Mombasa.

There are numerous reasons for the gender disparity, most of them revolving around the social silence on depression and other mental health issues among men. Even worse, the stresses of living and working in a fast-paced urban centre pile up.  The stresses include underemployment, overwork, length of the commute to work, and stagnant pay levels in a struggling economy.

A 1982 study on the subject showed that while the population in Nairobi grew by 7.5 per cent between 1975 and 1979, the rate of suicides grew by 300 per cent. The study also found a pattern in the months with the highest suicide rates; suicides tend to occur in the months of January to March, April to June, and October to December. There have been other studies focusing on at-risk groups, such as university students, but there is barely any substantive research on work-related stress and depression.

Then there’s the law. Instead of the law taking a pragmatic approach to the reasons why people take their own lives, it treats suicide as a crime. Attempted suicide is a misdemeanour punishable by two years’ imprisonment or fines, or both. This means that if Stephen Mumbo had survived his fall, which was unlikely, he would have promptly been arrested and thrown before a judge. That legal perspective and the social stigma also mean that suicide goes largely unacknowledged as the social issue it is.

Despite the legal and social hurdles, there have been some attempts to provide psychological wellness for several at-risk groups. In October, the same month Stephen Mumbo died, the National Police Service created a new department to assess the psychological wellness of officers. There had been at least five reported suicides of police officers in the preceding months. A few months later, the education ministry raised the alarm on an increasing number of death by suicide among university students.

In corporate workplaces such as PwC Kenya, the inclusion of psychological wellness has been at best abstract. PwC Global has made several public commitments to facilitate mental health awareness within its ranks. PwC UK, for example, has a “Green Light to Talk Day” and hired Beth Taylor as its new mental health leader in January 2016. PwC Malaysia has a “FitPwC” programme that combines physical and mental wellbeing. PwC Kenya does not have any such programme, and several employees described recent events, such as a meeting where management sought ideas on how to improve the work environment, as window-dressing.

As a consulting firm, PwC has published several reports on workplace stress. In 2017, PwC UK published a report on tackling workplace stress with technology. Three years before that, PwC Australia published a report titled “Creating a mentally healthy workplace.” The irony of such reports, according to a former long-term employee of PwC, is that they were most likely prepared by people who were themselves working in a mentally unhealthy environment. 

The aftermath

A few hours after Mumbo’s death, Peter Ngahu, PwC’s regional and country senior partner, held a press conference where he said, “It’s difficult to keep track of what each and every person is doing.” He refused to answer the question about whether Mumbo had been alone in the meeting room before he fell to his death. His response was: “He may have had a meeting, but he’s not here to answer the question.”

After that, Ngahu and Mumbo’s bosses, Muniu Thoithi and George Weru, declined any more media interviews into the death. Both Ngahu and Thoithi didn’t pick calls or answer text messages about the company’s work culture and measures they would institute to help employees deal with work-related stress. Reached for comment, George Weru declined, saying “No, no, no, I would not wish to say anything about this issue. The boss, Ngahu, issued a press statement and held a press conference on the matter last Friday.”

 

PwC Press Release

PwC Press Release

At PwC Tower, life continued almost as if nothing significant had happened there on October 12th. If Mumbo’s death had been “a big blow” to PwC Kenya, as Ngahu termed it in his press release, then it didn’t show. There was counselling for a few of the staff members in Mumbo’s team, but then everyone went back to work even before his body was removed from the scene.

The ARM project, his last, continued unabated, as did the entire firm. Eleven days after he stepped off the ledge of the 17th floor meeting room, ARM’s creditors approved an extension of PwC’s mandate to September 2019. It will be going on to this next phase without one of its ablest minds. In a meeting on October 22nd, the creditors also gave PwC permission to implement several options to revive the company. These, most likely sourced from Mumbo’s work, include getting a strategic investor and selling off some of the company’s key assets. It is unclear whether he had been the one who discovered that for years, ARM Cement had been treating a loan to its Tanzanian subsidiary as a performing loan while Maweni had been defaulting for years.

At PwC Tower, life continued almost as if nothing significant had happened there on October 12th. If Mumbo’s death had been “a big blow” to PwC Kenya, as Ngahu termed it in his press release, then it didn’t show. There was counselling for a few of the staff members in Mumbo’s team, but then everyone went back to work even before his body was removed from the scene.

***

Even before the shock of his sudden death waned, Mumbo’s friends and family organised meetings and fundraisers. At Tumaini Meeting Chambers behind Kencom House, they planned a farewell to a man who had seemed like he had it all. Many of his colleagues could not make it to the meetings because they were working. Instead, they sent cash donations and condolences.

On Friday, 26th October 2018, exactly two weeks after Mumbo had ended his life, they left in a convoy from Montezuma Funeral Home and drove to Mumbo’s home in Nyamasaria. The next day, at 9 am, they sat as the priest prayed, and then watched in grief as the casket bearing Mumbo’s body was slowly lowered into the grave. It was heartbreaking, a tragedy by any measure. A man who, after living off his brilliance, had ended up back in the unforgiving soil where he had first seen the world. For Roselyne and their daughter, it was the beginning of a life without Mumbo, who was at the time the sole breadwinner in the household.

On the 2nd floor ledge at Delta Towers, where Mumbo breathed his last, the dent his body left is still prominent, a stark reminder of his tragic end. In the parking lot, his Mitsubishi Lancer sat untouched for months, parked in the same spot where he left it.

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David Odongo (@DavidOdongo) is a journalist and writer while Maurice Kiruga (@MorrisKiruga) is a blogger and writer, both based in Nairobi, Kenya.

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Black Votes Don’t Matter: The Shrinking Civic Space of African Immigrants in the US

It is a difficult time to be an immigrant in the US. For those of African descent, theirs is a rare combination of challenges, not only in becoming part of a new nation but also in carrying the baggage that comes with being black in America.

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Black Votes Don’t Matter: The Shrinking Civic Space of African Immigrants in the US
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The United States of America has excelled in projecting an extraordinary image of itself as a free nation with a thriving democracy, where anyone can come and work their way towards a better life through civic participation. However, what the past few years in particular have peeled away betrays a somewhat different truth: that voting in the United States is hard and getting steadily more so. And there’s one group of people who face a particular set of difficulties when seeking to cast their ballot: African immigrants.

Some historic context is needed regarding voting issues within the US. First and foremost, there is a historic precedent of voter suppression in the US that is unequaled within the modern Western world. Much of the targeting of such efforts has directly affected African Americans and people of colour. After slavery was abolished, states would go to incredible lengths to suppress the black vote, including implementing taxes on voting, forcing black people to produce extraneous forms of personal and family identification and making would-be black voters pass vaguely worded and lengthy “literacy tests” in order to cast their ballot. These systems, a part of the infamous Jim Crow laws, were struck down as illegal in 1965 when the country passed the Voting Rights Act.

In the years that followed, those who sought to seek the vote sought out ways to circumvent the law and keep the voter turnout low. Since the latter half of the 20th century, high voter turnout translated to a more liberal result. Take, for example, that a Republican presidential candidate has won the popular vote once since 1988 (George W. Bush in 2004). In the cases of the victories of Donald J. Trump in 2016 and George W. Bush, they skated to victory through the electoral college; a system that traces its roots to suppress the popular vote.

When looking at US politics, it isn’t as much a matter of high voter turnout as it is who comprise the voters that are showing up to vote. The most telling demographic, the group with the highest disparity of aligning with Democrats over Republicans, is African Americans. Hillary Clinton carried the black vote by an 80 point margin – 88 per cent to 8 per cent over Trump in the 2016 election. This margin, coupled with the United States becoming more, not less, diverse has left those seeking to suppress the vote scrambling for answers.

In 2013, efforts to suppress voters gained a major boost when the US Supreme Court overturned section 4(b) of the Voting Rights Act, which outlined that states and districts that had previously been involved in voting discrimination needed pre-clearance of the validity of their electoral processes. The conservative judges ruled this as unconstitutional, that the section “punished” states for past mistakes, not for possible future successes. Justice Ruth Bader Ginsberg dissented strongly, stating that “throwing out preclearance when it has worked and is continuing to work to stop discriminatory changes is like throwing away your umbrella in a rainstorm because you are not getting wet.”

The Voting Rights Act had been brought before court in the wake of a series of issues across the US, primarily having to do with controversial voting ID laws, reports of voter suppression and other forms of disenfranchisement. In a theme that runs across America’s election process, the black community was disproportionately affected.

This brings the issue to focus on African immigrants in the United States. The issue of immigration in the United States has currently brought the federal government to a shutdown for over a month. There is constant rhetoric from the Trump administration targeting illegal immigrants as a major obstacle to the security and economic future of the United States. The issues of building a border wall with Mexico and continuing to provide guaranteed safeties (such as the Deferred Action for Childhood Arrivals programme, which offers protections to the children of illegal immigrants into the US) are being used as bargaining chips at the government level.

A difficult time

It is a difficult time to be an immigrant in the US. For those of African descent, theirs is a rare combination of challenges, not only in becoming part of a new nation, but also in carrying the baggage that comes with being black in America.

African immigrants in the US are a small but rapidly rising group. The increase has been marked since 1970, especially amongst sub-Saharan Africans. According to the Pew Research Center, the number of African-born individuals heading to the US increased nearly 250 per cent between 2000 and 2015, from 881,000 up to 2,060,000. Africans are also the fastest growing demographic among black immigrants, increasing by 137 per cent between 2000 and 2013.

It is a difficult time to be an immigrant in the US. For those of African descent, theirs is a rare combination of challenges, not only in becoming part of a new nation, but also in carrying the baggage that comes with being black in America.

In the US, a major aspect of any voting rights issue is where in the US you’re living. Different states hold different standards, different regulations and varying requirements. When examining how voting standards impacts African immigrants, there needs to be a brief examination of where African immigrants live.

The five states with the highest African immigrant population are California, New York, Texas, Maryland and Virginia. Cities such as Atlanta, Georgia and Minneapolis also have high numbers of such migrants. This is where context becomes even more important; California and New York are known as more immigrant-friendly destinations, and their major metropolitan areas are regarded as “sanctuary cities” for illegal immigrants. New York and Minnesota don’t require a photo ID whereas California may require one for a first-time voter (newly-naturalised US citizens are always first-time voters). Maryland holds a similar policy.

Texas, Virginia and Georgia, on the other hand, are a different matter entirely. Virginia requires a valid photo ID in order for an individual to vote in person. Texas and Georgia are both mired in controversy over the stringent regulations put in place regarding the standards for voter IDs. The state of Texas is currently mired in litigation over the voter ID laws, with opponents arguing that it disproportionately impacts minorities.

In Georgia, where over 70,000 African immigrants reside in the Atlanta metropolitan area, the man who was presiding as the Secretary of State (the office which controls the conducting of elections, a possible conflict of interest) won narrowly and controversially over Stacey Abrams, who would have been the first black woman elected to be a state governor in the US. Abrams repeatedly made claims that there was voter interference, particularly amongst black precincts, where electronic voting was in disarray and reports of voter suppression were rampant. These claims had much of their basis in and around Atlanta, Georgia.

Why does voter ID matter and how does it affect Africans living in America? For starters, the path to US citizenship (which is needed to vote in America) is extremely arduous, long and difficult. The paperwork hoops to jump through are staggering. On average, it takes an immigrant a minimum of five years of continuous residency to become a naturalised US citizen. In cases that need further legal counsel, it can take even longer as the legal side of American immigration courts have become steadily more choked and congested in the new millennium.

Why does voter ID matter and how does it affect Africans living in America? For starters, the path to US citizenship (which is needed to vote in America) is extremely arduous, long and difficult.

For immigrants, the issues surrounding voter ID can often be much murkier. For instance, immigrants can gain driver’s licenses within the United States, which is one of the key forms of identification needed in states with more stringent regulations. This doesn’t mean that immigrants have the appropriate information explained to them regarding the IDs being obtained. The African Advocacy Network of California notes that although driver’s licenses are applied for successfully by immigrants who aren’t naturalised, the fact that they are still unable to vote due to their status isn’t explained to them. This can lead to immigrants attempting to vote, unknowingly engaging in an illegal act of fraud. The penalties for such fraud in the US are harsh. Both illegal and legal immigrants can face deportation if found to be involved in fraudulent voting. Cases of actual voter fraud involving illegal immigrants are incredibly rare, but that doesn’t stop Trump from repeatedly claiming that Hillary Clinton won the popular vote because of millions of “illegals” somehow managing to cast ballots.

Illegal immigrants in Trump’s America

The Obama administration was noted for its strict approach to illegal immigration, deporting hundreds of thousands between 2009 and 2017. That same administration, however, did focus on expanding a programme called the H1-B visa, which encouraged workers from outside of the United States to enter the country to work. Many prominent corporations, including Amazon, Google and Microsoft, heavily leaned on the programme as it eased the transition for professionals to gain a foothold in the US workforce. In addition, the H1-B programme made the path to a Green Card visa (an initial step towards US citizenship) markedly smoother, encouraging immigrants to engage in the process of becoming a citizen.

The Trump administration, on the other hand, has taken a significantly different approach. The current White House passed an executive order titled “Buy American, Hire American” that directly encourages American companies to hire only the most skilled workers from outside of the United States. This will have a long-term impact on the number of H-1B applicants who can head down the path of gaining citizenship.

The Obama administration had an unfortunate track record of harshness regarding immigration, including reopening and examining case files of naturalised citizens (immigrants who gained their citizenship in the US). The Trump White House has, of course, seized on this idea and expanded it. Under this administration, the U.S. Citizenship and Immigration Service (U.S.C.I.S.) has created a new task force to look into cases and possibly “denaturalise” citizens for often muddied reasons, such as making a clerical mistake on a form. In essence, this leaves millions of naturalised United States citizens’ status at the discretion of officials appointed under the Trump administration, one noted for its blatantly anti-immigrant rhetoric.

A prominent path to Green Card visas for African immigrants is the Diversity Lottery programme, which grants visas to citizens from all over the world. Given the administration’s track record, it comes as little surprise that the White House has looked repeatedly into cutting the programme entirely. As egregious as this is, perhaps the repeated ransom holding of the so-called “dreamers” (children of illegal immigrants born in the United States and granted legal protections) is even more insidious. Trump has made a repeated talking point of ending protections for the dreamers, even going so far as to offer continued protection as a bargaining chip for $5.7 billion of funding for a border wall in January of this year.

The Obama administration had an unfortunate track record of harshness regarding immigration, including reopening and examining case files of naturalised citizens (immigrants who gained their citizenship in the US). The Trump White House has, of course, seized on this idea and expanded it.

So how does this apply to African immigrants, specifically? The numbers indicate that immigrants from sub-Saharan Africa are the fastest growing group, and that the vast majority of this immigration has occurred after 1960. This translates into African immigrants having less of an established civic network than other immigrant groups in the US.

Less civic engagement

Less network means less community engagement and less protection for Africans now calling the US their home. This, in turn, translates into issues surrounding social integration facing Africans in America. Those in questionable status are likely to eschew anything to do with getting on the record, including engaging in civic discourse. One example saw the city of San Francisco engaging with members of the African immigrant community to get involved with the local school board elections, despite many holding illegal immigrant status. Illegal immigrants worry about what will happen to their information and whether it will end up in the hands of Immigration and Customs Enforcement (ICE).

This is compounded by the constant shifting and swirling of regulations surrounding immigration within the US. Frankly put, in America, thing currently seem extremely uncertain. Those who would have gained the path to citizenship by being granted immigration visas are suddenly on the outside looking in. Immigrants from Libya, Sudan and Somalia (the three African nations affected under the Trump administration’s travel ban targeting Muslim-majority nations) are suddenly unsure of their status.

Noticeably, despite all of his talk of walls and increased military presence, Trump has not issued a travel ban to a Latin American country. The current administration is seemingly preoccupied with all things immigration, how to stop it, how to grandstand from it, how to flex political muscle by stopping it. In fact, in 2017, despite overall numbers of deportations falling, ICE deported a record number of African immigrants, more than double of the total from 2016. There were reported instances of poor treatment and abuse of deportees by ICE agents. While the numbers are comparatively small, increases in deportation can push African immigrant communities even farther outside of the democratic process. What was the number one country for African immigrant deportations from the US? Somalia.

Less network means less community engagement and less protection for Africans now calling the US their home. This, in turn, translates into issues surrounding social integration facing Africans in America. Those in questionable status are likely to eschew anything to do with getting on the record, including engaging in civic discourse.

Ilhan Omar, herself a Somali immigrant to the US, is now a first-term Congresswoman from Minneapolis, Minnesota. Her election is an indication of a potential future of US politics: that African immigrants can find a voice in politics, in part due to the rallying of their communities. She’s become an outspoken advocate for the Somali community in Minnesota while continually deriding the Trump administration’s anti-immigration policies.

Since her election, Omar has been a frequent target of scathing criticism from the conservative media and the Republican Party, who have even claimed that some of her pro-Palestine comments are blatantly anti-Semitic. While her election to the US Congress is historically significant (she’s the first African-born refugee in the history of the United States Congress), Omar is still just one member of Congress, one voice for an ever-growing population that seems ever-more targeted by executive orders of the Trump administration. Think of it this way: Omar wouldn’t be able to enter the US under the travel ban of Muslim majority countries passed down by Trump.

In essence, this message to newcomers to the US is: DON’T BOTHER GETTING ENGAGED BECAUSE THE CONSEQUENCES COULD OUTWEIGH YOUR EFFORTS. To those emigrating to the US from Africa, this messaging can appear even more insidious, as Adoubou Traore (who himself emigrated from the Ivory Coast), the director of the African Advocacy Network in San Francisco outlines: “Many Africans have inherent doubts about the legitimacy of elections, they’re a headache, their experience makes them not believe that their voices matter. When there is no guarantee that their information won’t be subject to being exploited, from their view: what’s the point?” There isn’t much that would prevent them from holding such views in America. It becomes a community question of why organise if doing so can only lead to more headache?

With issues surrounding racism against black people in America being dissected and moved further towards prominence in national dialogue, it would, at least on the surface, seem as though the communities of African Americans would provide a steady ally for Africans adjusting to life in America. Unfortunately, this is often not the case. There is a noted divide between Africans and black Americans, one that many coming to the US find difficult to bridge. Some of this gap is historically entrenched, some of it is due to the truly lacking breadth of coverage in the US education system regarding African history and culture. The awkward truth is: Africa as a topic in the US is regarded as a monolithic punch line to a bad joke, and is hardly rendered an after-thought in terms of democratic engagement.

In terms of vulnerability to less-than-democratic interests, there are myriad of groups in the United States that could use additional legal and outreach protections. Practically anywhere in America that can’t be categorised as white and suburban finds itself victim to voter suppression efforts. In the US context, the black community is systematically targeted the most.

Laws are seemingly rolled out in force yearly in dozens of states, implementing further restrictions and using scare tactics, lies and intimidation to influence local and national elections with a conservative slant.

The unavoidable truth is that Africans in the US find themselves at an ugly modern crossroads: the centuries of subversive efforts to reduce the so-called “urban” vote at a crossroads with the modern iteration of all-American xenophobic fervour. Though growing fast in population, the democratic influence has not kept stride.

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Death in Vienna: The Death of Erich Rebasso

In the last days of 2008, Erich Rebasso, an Austrian lawyer, sent a letter to the main Vienna headquarters of the Federal Criminal Police, the country’s top law enforcement agency. Its purpose was unusual — the father of four young children was blowing the whistle on himself.

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In the last days of 2008, Erich Rebasso, an Austrian lawyer, sent a letter to the main Vienna headquarters of the Federal Criminal Police, the country’s top law enforcement agency.

Its purpose was unusual — the father of four young children was blowing the whistle on himself.

“I deeply regret having been used for criminal purposes and I am willing to submit the matter to the required criminal review,” Rebasso’s five-page confession concluded.

But it had all come apart. Rebasso admitted he had been used to launder tens of millions of dollars. He explained that, for over a year, he had been accepting payments from Russian criminals and had sent the funds to other bank accounts at their instruction. Then 45, Rebasso specialized in advising Russian clients on how to do business in the West. He had an excellent reputation as a fast, reliable, and discreet partner, and he spoke Russian fluently.

As it turns out, those criminals were using companies that were part of the Troika Laundromat. The massive financial scheme revealed in OCCRP’s latest Laundromat investigation had been put together by Troika Dialog, then Russia’s largest private investment bank. Some of the accounts Rebasso wired to belonged to two of the system’s core offshore companies: Industrial Trade Corp. and Nixford Capital Corp.

Between December 2006 and February 2008, Rebasso used 150 individual transactions to send almost US$ 96 million to laundromat accounts at Ukio Bankas, a Lithuanian bank.

Many of the reasons specified for the transfers made little sense for a law firm. Along with trades involving “fruits and vegetables,” “consumer goods,” and “electronic goods,” Rebasso is even listed as buying “frozen herring” from companies with Ukio bank accounts. More likely, the description was a red herring aimed at Ukio’s compliance department.

Rebasso’s own Austrian bank accounts were held at Raiffeisenlandesbank Niederösterreich-Wien (RLB). Though the bank investigated his large transfers, it appeared to take no further action for two years — at which point it finally pressed him to stop.

The massive financial scheme revealed in OCCRP’s latest Laundromat investigation had been put together by Troika Dialog, then Russia’s largest private investment bank

Rebasso’s confessional letter had little effect. While police looked into the matter, it was two years later when they informed him that they had stopped the proceedings because they believed any potential crime had happened outside their jurisdiction and been committed by foreigners.

Two years after that, Rebasso was dead.

The Sheremetyevo Fraud

According to his statement, Rebasso’s involvement in the money laundering scheme began on a visit to Moscow in November 2006 where he was introduced to Viatcheslav Dremin, a Russian businessman. Dremin told him that he provided financial services to Russians who needed to transfer funds abroad. But the official system for sending money across borders was very bureaucratic, he said, and he needed to speed up the process. He wanted Rebasso to act as his trustee in Vienna to help him move the money faster.

The lawyer accepted. Soon, two Vienna bank accounts belonging to his Austrian company, Schulhof Investigation (later renamed Sostegno), began receiving large sums from companies Dremin represented, along with instructions on where to send them. In every instance, he received his directions via an anonymized email address.

Rebasso worked on behalf of three insurance companies registered in Dagestan, a troubled North Caucasus republic within the Russian Federation.

At least some of the money appeared to be of criminal origin.

One of the companies Dremin represented, National Insurance, was directed by Russian businessman Maxim Vedenin. In 2011, Vedenin would be sentenced to 19 years in prison for robbery and the murders of two prostitutes.

Prior to that, Vedenin’s company had received money from a widely-known fraudulent scheme involving fuel at Moscow’s Sheremetyevo airport that OCCRP uncovered in 2012.

Between 2003 and 2008, Moscow’s busiest airport bought fuel through a long chain of intermediaries that grossly inflated its cost. According to court documents, phantom companies earned at least $200 million in unnecessary markups in 2006 and 2007 alone. The Russian government lost more than 1 billion rubles ($40 million) in tax revenue from the scheme. The higher fuel costs also meant higher airplane ticket prices for the travelling public.

A portion of the money generated by the scheme was laundered through the Troika Laundromat. Vedenin’s company, National Insurance, received some of the proceeds, and then sent them on to Rebasso’s company.

The Austrian lawyer then sent the funds into the Troika Laundromat, using it as a money laundering system. Over the same period, between December 2006 and March 2007, he sent $19.4 million to the accounts of Nixford and Industrial Trade Corp. To justify the transfers to the bank, he provided false invoices indicating he had bought “consumer goods” from the Troika Laundromat companies, or was simply paying “for bills.”

All but one of Dremin’s companies have been dissolved, and he couldn’t be reached for comment.

Raiffeisen Looks In

Despite Rebasso’s efforts to mask his money transfers as legitimate trade deals, his own bank began to investigate the financial activity in the spring of 2007.

On March 15, Rebasso’s office received a letter from his bank’s legal department inquiring about a “sharp increase in transaction amounts” on one of his accounts. The bank wanted to know on whose behalf Rebasso was acting.

A few days later, Rebasso responded in a letter, explaining that he was handling “foreign payments” for three Russian insurance companies. He also provided their names, their information from the Russian commercial register, and evidence of his business relationship with them.

The bank appears to have been satisfied with Rebasso’s explanation, because afterward, his transfers continued.

(A representative of RLB said the bank could not comment on its clients and that it had complied with all anti-money-laundering obligations.)

A Last Client

In mid-2007, Rebasso’s statement to police says, Alfis Mirgunov, one of the Russian partners in his arrangement with Dremin, got in touch. Mirgunov planned to start his own financial enterprise and wanted Rebasso to open bank accounts in Austria on his behalf. Once again, the lawyer agreed.

He opened three new RLB accounts for his company, Schulhof, to handle the anticipated load. The accounts were denominated in U.S. dollars, euros, and Russian rubles and soon, more money started to pour in. Once again, Rebasso received his instructions from an anonymous e-mail address, this time identified only by a sequence of digits.

In mid-2007, Rebasso’s statement to police says, Alfis Mirgunov, one of the Russian partners in his arrangement with Dremin, got in touch. Mirgunov planned to start his own financial enterprise and wanted Rebasso to open bank accounts in Austria on his behalf. Once again, the lawyer agreed.

Over two months near the beginning of 2008, Rebasso wired $68.3 million in 106 individual transfers to a bank account owned by Vantrel Invest Ltd., a New Zealand–registered shelf company.

Vantrel doesn’t appear to be a Troika Laundromat company; rather it is an intermediary that sent millions on to the Laundromat. (Vantrel’s bank account was held at Ukio Bankas, where many Laundromat companies held their accounts.) Documents related to the transactions said they were to buy mobile phones, though this explanation is almost certainly another fiction.

In his confessional letter, Rebasso told the Austrian police that he stopped working for the Russians in 2008. It isn’t known how much money he took for his services.

“I ended this activity at the end of February,” he wrote. “Among other reasons, primarily because the scope overwhelmed my control options.”

His hesitation appeared to be only part of the truth.

In fact, that month, Rebasso’s Austrian bank, RLB, had had enough. His transactions had apparently triggered another serious review, and senior executives told Rebasso he would need his own banking license to continue such large transfers.

The Finlist Fraud

Though he had stopped working with his Russian partners, Rebasso’s troubles were just beginning. He appeared to have become an unwitting facilitator of a fraudulent investment scheme.

According to his letter, in June 2008, Rebasso started receiving emailed complaints from ordinary Russians who said their savings had been stolen.

Rebasso described the correspondents as “rather simple-minded, not very wealthy people who were baited with internet ads.”

Apparently, the victims of the scheme had been offered what appeared to be lucrative investment opportunities through a platform called Finlist Forex Found. Then, without Rebasso’s knowledge, they were instructed to send their money to the accounts of his Austrian company, Sostegno.

Rebasso said the Russian fraudsters provided the investors with fake documents bearing his forged signature (some of these were shared with him by the angry correspondents). When the money arrived in his accounts, Rebasso sent it on without being aware of its origins.

Now the victims were furious, demanding repayment of money he had already sent on to the Laundromat.

Rebasso said the Russian fraudsters provided the investors with fake documents bearing his forged signature (some of these were shared with him by the angry correspondents). When the money arrived in his accounts, Rebasso sent it on without being aware of its origins

Rebasso got in touch with Mirgunov and asked what was happening. The Russian told him he would fix the problem and reimburse anyone who had lost money. But he never did, and by the end of the year, Rebasso sent his letter to the Federal Criminal police.

The Beginning of the End

The police forwarded the case to the public prosecutor’s office in Vienna. Nothing appeared to happen. On Dec. 3, 2010, two years after his complaint, Rebasso was notified that police had ended their case. It had been dismissed because the public prosecutor decided the case was outside Austrian jurisdiction. “Foreign acts of foreigners,” the statement read.

Rebasso’s own story was nearing its end.

In late July 2012, as he walked from his office to his Mercedes SUV in an underground parking lot, he was ambushed by two men. His car was later found empty in a different location, and shortly after his disappearance, his family received a demand: The kidnappers wanted a 435,000–euro ransom. After no deal was reached, Rebasso’s body was found three weeks later in a forest near Vienna. Austrian authorities concluded that he had been suffocated, probably while he was taken into a headlock.

Soon afterward, two former Moscow police officers were arrested and charged in connection with the ransom demand — but not for Rebasso’s kidnapping and murder. They were sentenced to eight and nine years in prison, respectively.

It’s still unclear who ordered Rebasso’s murder and why, though media and police speculated that victims of the investment fraud had hired the officers to recover the money.

More than six years later, the exact circumstances of Rebasso’s death are still unclear.

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The Troika Laundromat: How Vast Offshore Network Moved Billions With Help From Major Russian Bank

The Laundromat wasn’t just a money laundering system. It was also a hidden investment vehicle, a slush fund, a tax evasion scheme, and much more.

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The Troika Laundromat: How Vast Offshore Network Moved Billions With Help From Major Russian Bank
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At first blush, Ruben Vardanyan and Armen Ustyan have nothing in common beyond their Armenian roots.

Vardanyan is a wealthy Russian banker who once led Troika Dialog, the country’s largest private investment bank. He’s spoken at the World Economic Forum in Davos and spent tens of millions of dollars on philanthropic projects in his native Armenia. Ustyan is a seasonal construction worker who shares a chilly apartment with his wife and parents in northern Armenia when he isn’t renovating flats in Moscow.

Ustyan’s name and a copy of his passport appear in the bank documents for an offshore shell company that played a role in Troika’s system. The company was one of at least 75 that formed the complex financial web, which functioned from 2006 to early 2013. Over that period, Troika enabled the flow of US$ 4.6 billion into the system and directed the flow of $4.8 billion out. Among the counterparties on these transactions were major Western banks such as Citigroup Inc., Raiffeisen, and Deutsche Bank. The dozens of companies in the system also generated $8.8 billion of internal transactions to obscure the origin of the cash.But Ustyan’s signatures on documents he says he’s never seen draw a direct line to Troika — and to a financial Laundromat that shuffled billions of dollars through offshore companies on behalf of the bank’s clients, many of whom were members of Russia’s elite. The system enabled people to channel money out of Russia, sidestep restrictions in place at the time, hide their assets abroad, and launder money. It also supplied cash to Russian President Vladimir Putin’s friends and powerful oligarchs, and enabled criminals to mask the illicit origins of their cash.

(Citigroup didn’t respond to a request for comment on this story; Raiffeisen declined to comment, citing client confidentiality; and Deutsche Bank said it had “limited access” to information about Troika client transactions and couldn’t comment on specific businesses for legal reasons.)

At the time, Vardanyan was Troika’s president, chief executive officer, and principal partner. He enjoyed a reputation as a Western-friendly representative of Russian capitalism, known for working to improve the country’s business environment and for co-founding the Moscow School of Management Skolko

As with the previous Laundromats, many of the large transactions were made on the back of fictitious trade deals. The bogus deals were invoiced variously as “goods,” “food goods,” “metal goods,” “bills,” and “auto parts.” All the invoices included in the leak were signed by proxies and sent from Troika.ru email addresses. Meanwhile, employees at Troika were setting up the opaque financial system — dubbed here the Troika Laundromat because of its resemblance to previous money laundering schemes uncovered by OCCRP.

This portrait of the operation emerges from a trove of leaked banking transactions and other documents obtained by OCCRP and the Lithuanian news site 15min.lt, and shared with 21 media partners.

As a whole, the data set includes over 1.3 million banking transactions from 238,000 companies and people, as well as thousands of emails, contracts, and company registration forms. This analysis of Troika’s network is based on a subset of the data.

In an interview, Vardanyan said his bank did nothing wrong and that it acted as other investment banks did at the time. He stressed that he couldn’t have known about every deal his enormous bank facilitated for its clients. Reporters found no evidence that he was ever investigated or accused of any wrongdoing by authorities. His signature was found on only one document in the entire scheme, in which he gives a loan to a Troika Laundromat company.

Vardanyan described the system as a private wealth management service.

Referring to the constellation of offshore companies that comprised the Laundromat, he said: “Those are technical service companies of Troika Dialog clients, among them, mine.”

“It could be called a ‘multi-family office,’” he said. “A similar practice still exists at foreign banks. Most of their clients work through international companies. I repeat: We always acted according to the rules of the world financial market of that time … Obviously, rules change, but measuring a market in the past by today’s laws is like applying modern compliance standards to the time of the Great Depression. You’ll agree that this distorts the true situation.”

Asked about the fictitious trade deals, Vardanyan said Troika Dialog’s revenue topped 2 trillion rubles from 2006–2010 ($63–85 billion, depending on currency fluctuations) and that he “couldn’t possibly know about all the deals in a company of this size.”

Though such practices were considered business as usual in Russia at the time, specialists note that systems like the Troika Laundromat can have serious repercussions.

The schemes stunt national economic development, undermine human security, and diminish the quality of life for people left behind, said Louise Shelley, director and founder of George Mason University’s Terrorism, Transnational Crime, and Corruption Center and author of the book “Dark Commerce.”

“Money laundering countries, particularly in the developing world, are losing enormous amounts of capital that are needed for infrastructure development, education, health, [and] the development of new businesses, of entrepreneurship,” Shelley said. “With this much money lying overseas, you can do all sorts of malicious things. You can interfere in electoral processes. You can help pay for fake news.”

Criminal Services

The Laundromat wasn’t just a money laundering system. It was also a hidden investment vehicle, a slush fund, a tax evasion scheme, and much more.

Troika’s clients also used it to buy properties in Great Britain, Spain, and Montenegro; to acquire luxury yachts and artwork; to pay for medical services and World Cup tickets; to cover tuition at prestigious Western schools for their children, and even to make donations to churches.

In addition, the Troika Laundromat enabled organized criminal groups and fraudsters to launder the proceeds of their crimes. OCCRP and partners have identified several high-level frauds perpetrated in Russia that used Laundromat companies to hide the origins of their money.

Troika’s clients also used it to buy properties in Great Britain, Spain, and Montenegro; to acquire luxury yachts and artwork; to pay for medical services and World Cup tickets; to cover tuition at prestigious Western schools for their children, and even to make donations to churches.

One of these schemes, known as the Sheremetyevo Airport fuel fraud, took place from 2003 to 2008 and artificially inflated aviation fuel prices while depriving the Russian state of more than $40 million in tax revenue. The scheme led to a hike in plane ticket prices. More than $27 million was sent by companies involved in the fraud to Troika Laundromat accounts. Vardanyan has not been implicated in the scheme and said he had no knowledge of it. In 2010, two years after the fraud ended, Troika Dialog began consulting for the airport along with Credit Suisse.

A second significant criminal inquiry tied to the Laundromat, from which $17 million ended up in the system, involves a tax avoidance scheme allegedly perpetrated by several Russian insurance companies. A man named Sergei Tikhomirov was accused of concluding false service contracts with the insurers as a pretext for having them send him large sums of money, which his accusers say he cycled through several accounts before depositing it abroad or cashing in. A portion of the money ended up in the Laundromat. (Tikhomirov did not respond to phone calls seeking comment.)

Roldugin didn’t respond to an email requesting comment, and Vardanyan said that he knew of the cellist, but was not aware that he had any business dealings with Troika.In a third case, at least $69 million went to companies associated with Sergei Roldugin, a Russian cellist and one of Putin’s best friends, who became famous after his vast unexplained wealth was revealed by OCCRP, the International Consortium of Investigative Journalists, and other media partners in the Panama Papers project. Some of the money that Roldugin’s companies received from the Laundromat originated in a massive Russian tax fraud exposed by Sergei Magnitsky, a Russian lawyer who died in jail after revealing it.

The Troika Laundromat enabled organized criminal groups and fraudsters to launder the proceeds of their crimes. OCCRP and partners have identified several high-level frauds perpetrated in Russia that used Laundromat companies to hide the origins of their money.

Companies involved in the fraud exposed by Magnitsky moved more than $130 million through the Troika Laundromat. In fact, hundreds of millions of dollars went into and out of the Laundromat for unknown purposes.

Vardanyan said he was not aware of any of these transactions.

“Understand, I’m no angel,” he said. “In Russia, you have three paths: Be a revolutionary, leave the country, or be a conformist. So I’m a conformist. But I have my own internal restraints: I never participated in loans-for-shares schemes, I never worked with criminals, I’m not a member of any political party. That’s why, even in the ’90s, I went around with no security guards. … I’m trying to preserve myself and my principles.”

Vardanyan and his family were among those who received money from the Laundromat. More than $3.2 million was used to pay for his American Express card, went to accounts belonging to his wife and family, and paid school fees for his three children in Great Britain.

Asked about these sums, Vardanyan said the offshore companies Troika created serviced his own companies in addition to the bank’s clients.

Troika as Capstone

The Troika Laundromat is unique among the Laundromats that have been uncovered in recent years in that it was created by a prestigious financial institution.

Like all investment banks, Troika handled stock and bond issuance, initial public offerings, and acted as an underwriting agent. It also had a strong relationship with the local office of Citibank Inc., with up to 20 percent of Troika’s new investors coming via the American behemoth. That made New York-based Citibank Troika’s biggest “external agent,” according to a 2006 interview with Troika co-founder Pavel Teplukhin. (Citibank didn’t respond to requests for comment.)Established in the early 1990s, Troika Dialog became Russia’s largest private investment bank. It operated under Vardanyan’s leadership until 2012, when it was purchased by Sberbank, the nation’s largest state-owned lender.

The Troika Laundromat is unique among the Laundromats that have been uncovered in recent years in that it was created by a prestigious financial institution.

Other major international banks, including Credit Suisse and Standard Bank Group, did significant business with Troika as well.

Starting in 2006, Troika employees began putting together the pieces of the Troika Laundromat.

Four essential elements are needed to build a functioning Laundromat: a bank with low anti-money laundering compliance standards; a maze of secretive offshore companies to hold accounts at the bank; proxy directors and shareholders for both the companies and the accounts; and the so-called formation agents that can quickly create, maintain, and dissolve the offshore companies as needed.

The bank orchestrated all of these components of the Troika Laundromat, in addition to directing the money flows and fake trade deals that made up its operations.

The pivotal mechanism was based on trade: Shell companies created bogus invoices for non-existent goods and services to be purchased by other companies in the system. The practice provides a fig leaf of legitimate economic activity that makes the transactions appear less suspicious to regulators.

Al-Qaida founder Osama bin Laden used a similar system to move money around the Middle East, she said.“You’re disguising an illegal payment by pretending that it is linked to a shipment of goods,” said Shelley, the George Mason corruption expert. “The trade-based system is one of the most central parts of money laundering in the world today.”

If Troika was the capstone of the Laundromat, its cornerstones were three British Virgin Islands-based shell companies: Brightwell Capital Inc., Gotland Industrial Inc., and Quantus Division Ltd. Brightwell’s first known transaction was on April 12, 2005. Gotland was established on Feb. 17, 2006, and Quantus followed six months later on Aug. 23.

An analysis of these companies’ banking records reveals how they put the Laundromat together: Starting in 2006, they made numerous small payments to a formation agent called IOS Group Inc. to create the dozens of companies that comprised the complete Laundromat. IOS didn’t respond to requests for comment.

The three cornerstone companies then continued making payments to IOS ranging from 40 to almost 5,000 euros over almost six years to keep the entire network operating. Over that span, the total reached over 143,000 euros.

Quantus, for example, paid formation and maintenance fees for the British Virgin Islands-based Kentway SA. This company was later used, among many others, to send millions of dollars to Sandalwood Continental Ltd., a company connected to Sergei Roldugin, the cellist, and one of Vladimir Putin’s oldest friends.

Quantus’ involvement with Kentway demonstrates the many ways in which the Laundromat companies were interconnected. In this case, after first helping establish Kentway, Quantus then funded it with money that Kentway forwarded to Roldugin’s company.

The Bank

To direct the flow of funds through the Laundromat, Troika needed a commercial bank to host accounts for the companies involved. And it needed that bank to avoid looking too closely at the contracts and trades Laundromat businesses used to justify moving money from one offshore company to another.

Troika chose Lithuania’s Ukio Bankas for the job. (The Lithuanian lender would later be seized by the country’s National Bank in 2013 for engaging in risky deals and failing to follow regulators’ orders.) Ukio is known to have set up accounts for 35 companies used in the Troika Laundromat, and likely more.

Because Lithuania wasn’t yet using the euro, Ukio needed correspondent accounts at European banks, such as the Austrian Raiffeisen or the German Commerzbank AG, to handle euro-denominated transactions. Those two lenders and many other large European and U.S. financial institutions accepted Laundromat money, though they did sporadically inquire about the nature of some transactions. After prodding by one of the correspondent banks, for example, some Ukio compliance officers made inquiries about Laundromat payments that didn’t make commercial sense.

“What is the essence of this transaction? We have a contract (attached), but to be honest, I don’t really get what’s happening,” one officer wrote, adding an unhappy face, in relation to a payment that went to a company associated with Roldugin.

By this point, the money had already left Ukio’s accounts.

Asked why Ukio was chosen as the banker for the offshore companies Troika created, Vardanyan said it was just one of about 20 banks Troika used around the world.

The Armenian Proxies

A central figure in many of the transactions involving the Laundromat companies was Armen Ustyan. Far from being an investment banker, Ustyan, 34, works seasonally as a construction worker in Moscow.

Ustyan said he had never heard of Dino Capital SA, the Panama-based Laundromat company whose Ukio bank account was registered using his signature. A copy of his passport was attached, but Ustyan insisted he had no idea how it got there. Ustyan’s signature can be found on contracts and banking paperwork in the Troika Laundromat along with those of a few other Armenians. Wearing an old military jacket and hat, he sat down with reporters this January in his cold living room to answer questions about high finance.

At his mother’s request, he wrote his signature on a piece of paper and concluded that the one associated with Dino Capital had probably been forged.

The Armenian said he knew none of this, though he did recall a slim connection to Troika Dialog: While in Moscow looking for work, Ustyan stayed with a Russian Armenian whose brother he said worked for the investment bank and helped him find employment. In addition to having his signature associated with Dino Capital’s bank account, Ustyan is also listed as an attorney authorized to sign contracts on the company’s behalf, and his signature appears on at least $70 million worth of financial agreements.

The Moscow address is indeed that of Nerses Vagradyan, a Russian citizen of Armenian descent. Nerses’ brother, Samvel Vagradyan, is a director of a Russian company that received millions of dollars from Brightwell, a core Laundromat company. A Samvel Vagradyan is also mentioned on Vardanyan’s website as a donor to the banker’s charitable causes. It’s unknown whether Samvel really worked for Troika.

Neither of the Vagradyan brothers could be reached for comment. Ustyan said he doesn’t believe they used his identity.

Another Armenian front man in the Laundromat appears to be Edik Yeritsyan. His identity was used to register an account at Ukio for the Cyprus-based Popat Holdings Ltd. This company was involved in Laundromat transactions worth millions of dollars.

Yeritsyan told OCCRP that he lost his memory three years ago after a car accident and doesn’t remember some parts of his life. However, Ustyan said that he and Yeritsyan lived together in the same flat they were renovating in Moscow.

This article was first published by The Organized Crime and Corruption Reporting Project (OCCRP) a global network of investigative journalists.

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