The Makhlouf Family hides a vast fortune behind proxy accounts,
companies and an Israeli Businessman
Secret bank accounts of the family in Switzerland lead
this investigation to “safe havens” in Panama and the British Virgin Islands
By Ibrahim Saleh *
When Syria’s revolution began in 2011, the family of President al-Assad’s maternal uncle, Mohammad Makhlouf and his family had openly controlled Syria’s largest telecom company, millions of dollars in real estate, contracting, insurance, oil and gas companies, banks, duty free zones as well as agricultural marketing outlets.
The 50 declared companies run by the Makhloufs family that rose from a humble beginning to millionaires, are the visible tip of the iceberg beneath which are complex transactions and companies hidden in tax havens and constituting the hidden world of this family.
Israelis, employees in international banks, proxy people and offshore companies: These are some of the documented findings that you will learn about, through documentation of the hidden support network managing the family fortune of Makhlouf, known as “Al Khal”, Arabic word for the Uncle as the latter is the brother of the mother of Syrian president Bashar Al-Assad.
The empire of the former civil servant Mohammad Makhlouf and his family. His wife Ghada Mhana and his sons: Rami, once advisor at the Ministry of Industry before turning into one of Syria’s wealthiest business tycoon, Hafez, security officer Hafez, and Eyad, a captain in the army, in addition to Kinda, Sarah and Roba Eissa Makhlouf, the wide of Hafez’s wife), were on the list of HSBC’s Private Bank clients who were assisted by the latter to evade taxes as exposed by the Swiss Leaks project.
The data were handed over by an employee from the bank to the French tax authority and then leaked by French authorities to the leading French newspaper Le Monde and the International Consortium of Investigative Journalists (ICIJ). The reporter working on this investigation had full access to the full bank accounts of the Makhlouf family under an agreement signed between ICIJ and Arab Reporters for Investigative Journalism (ARIJ).
The documents unveiled a cash flow of $43 million that moved among the mentioned accounts of the Makhloufs between 1997 and 2007.
This investigative reporter followed the threads and discovered new documents on hidden companies and people managing the family’s fortune. This investigation reveals that the ties between HSBC and the Makhlouf family exceed a regular bank/client relationship. As a result, this investigation gives an interpretation to the article that was published by the Sunday Times in London end of 2012 and based on documents unearthed by their reporters showing that Britain’s HSBC bank, along with its branches worldwide, maintained business with the Makhloufs despite EU sanctions. This report also showed that HSBC managed Makhlouf’s money through off-shore slush fund.
Secret Agent for International Companies
The leaked documents from HSBC’s Private Bank in Switzerland indicate that former civil servant Mohamad Makhlouf provided his bank account statements as agent for the following international companies: US Philip Morris (Marlboro and L&M), Japanese Mitsubishi and USA’s Coca-Cola. This was not public information before.
This investigative reporter emailed officials of those companies on March, 2015 to get their side to the story. The media office at Philip Morris formally answered the question by denying knowledge: “We have no info about Mohamad Makhlouf being an agent for our company”. Mitsubishi and Coca-Cola have not replied by the time of the writing of this report.
Although these international companies were represented in Syria in 2007 by other companies and people, the HSBC document showed that Mohamad Makhlouf is the agent of these companies. This solved the puzzles of 2006 and 2007 when the Syrian government authorized Coca-Cola to open its factory in Syria, and Philip Morris to produce some of its brands, such as Gitanes cigarettes in Syria. Mitsubishi Motors delayed its decision to open a showroom and name a local agent until the end of 2006 and beginning 2007 to open its showroom and name an agent though other car manufacturers had made up their minds on naming their local agents.
Five Companies in British Virgin Islands
Coca-Cola, Mitsubishi and Philip Morris are not the only big brands in Syria whose ties to the Makhloufs was revealed by the Swiss Leaks. In fact, HSBC documents point out to other hidden offshore companies registered in the British Virgin Islands. The investigative reporter was able to get registration papers from the official authorities in the British Virgin Islands in cooperation with help from the Organized Crime and Corruption Reporting Project (OCCRP) and after paying all fees.
These documents shed the light on five secret companies owned by the Makhloufs: Uncle Mohammad and his sons: Rami, Hafez, Eyad and Iehab. The documents revealed the names of some proxy partners and people managing these companies, including Israeli businessman Freddy Zinger and other Syrian and non-Syrians, who were asked to operate these companies in Europe and Canada to conceal the real owner.
The first lid that was uncovered by these official documents as provided by the government of the British Virgin Islands showed that these five companies are managed by a woman named “Rosemarie Flax”. This reporter formally contacted her to ask for her feedback on managing the Makhloufs’ companies despite the EU and US sanctions as the documents showed her as the apparent director of these companies until late 2011, as the documents shown. Five months passed since our April 1, 2015 request to Ms. Flax to answer our questions and we heard nothing from her.
This investigative reporter got hold of the documents from the British Virgin Islands revealing that Mohamad Makhlouf, his wife Ghada Mhana, and his son Rami Makhlouf are the owners of five hidden companies. Mr. Rami Makhlouf identified himself in these papers as a businessman and advisor at the Ministry of Industry in Syria. Hafez Makhlouf presented himself as a public servant at a time when he was running the Al Khatib branch of Syria’s General Intelligence Directorate.
Eyad presented himself as an army captain as well as Iehab Mohamad Makhlouf.
The Swiss bank accounts and official documents pertaining to the registers of these companies in the British Virgin Islands unveil other personalities linked to those companies. Among them is Israeli businessman Freddy Zinger, born in Poland (1954) and living since in Israel. Zinger, who appeared in the accounts of Hoxim and Cara Corporation, also appeared as a beneficial owner who is allowed to access the accounts of Hafez Makhlouf, as well as Rami, Iehab and Eyad. Documents also showed that the four Makhlouf brothers are beneficial owners of the bank account registered under the Israeli name Zinger. His wife, Lauria Zinger, also appeared as an owner of the account.
Zinger, who today lives in the Kiryat Shmona settlement and manages a local NGO that supports education in Israel, also owns medical companies in Israel Medingalil and pazatid ltd and a shareholder of West Pharmaceuticals internationaly.
Zinger, also severed as a development manager at the Israeli Army, Tel Aviv, 1976-1981.
His name is spelled in different ways as this reporter has concluded after comparing his date of birth, address, Cv and photos: Freddy Zinger, or Fredy, or Friddie Singer. This journalist emailed Zinger on February 26, 2015, to his email address as shown by the website of the NGO asking him to comment on all the facts he had in his possession. But Zinger never replied though the email clearly mentioned a deadline for his reply..
Personal and Confidential
Files of the family account in the Swiss bank show that those accounts were not meant to hold the funds but to pass them on and to link persons and companies. Indeed, there were financial transactions that touched the accounts of persons, such as Sarah, Roba and Iehab Makhlouf for no longer than three minutes. These accounts also had other names and numbers for owners other than the Makhlouf family. In Rami’s account, there was a network of beneficiaries connected to it. He is connected to 18 bank accounts in the bank and his account includes code numbers referring to some hidden names. It also includes the name “Mona” without any surname, as well as that of an apparent partner, with the name of “Ahmad Ghassan Al Benshi”, a shareholder in Cham Holding, the biggest company in Syria. Also, Ibrahim Farid Zaccak from Toronto Canada and the Israeli Freddy Zinger appeared in Rami’s account, in addition to eight companies linked to the Makhlouf family: Drex, Masmak, as well as the five previously mentioned companies in the British Virgin Islands.
The account belonging to Mohammad, head of the household and his wife, Ghada Mhana, also comprises many mysteries as exposed by these documents including meetings between Mohammad Makhlouf and the administration of HSBC bank to manage one of his new investments. Mohammad and Ghada visited the bank on January 5, 2005, according to the documents.
Information about the maternal uncle’s account also show that he presented one of his addresses using “a confidential and secret” name. For another, he mentioned two addresses pertaining to some of HSBC’s Private Banking officials in Lebanon.
In order to follow up on the relationship between the Makhloufs and HSBC Bank itself, we moved from the leaked bank files, to the documents that we got from the British Virgin Islands authorities. Nadine Raccah as one of the director of two secret companies owned by the Makhlouf’s in the British Virgin Islands (namely Cara and Hoxim), according to the updated registers of 2011. In the two companies’ registers, she used her official mail address at the bank website (hsbcpb.com). At that time Ms. Raccah, according to her LinkedIn profile, was also the Bank’s official in charge of the Israeli team between 2000 and 2012.
The investigative reporter emailed Ms. Raccah on April 1, 2015 and sent a message to her account on LinkedIn on April 19, 2015. However, she did not answer his questions in line with a deadline.
The relationship between HSBC and the Makhloufs is intertwined as shown by another of the documents obtained from the British Virgin Islands’s commercial register department. It mentions that one of the Makhlouf companied registered there, Seadale International, had Iehab Makhlouf on its management team as well as Mohammad Abbas, one of Makhlouf’s proxies and relatives in Czech republic. However, and in the official registers of the company they gave their addresses as HSBC Bank in Switzerland.
In the BVI documents that this reporter got hold of and documents taken from the commercial register in Panama — both countries are considered safe havens for taxes for those who wish to hide their funds, two of the most prominent proxies covering the funds of leaders and influential people around the world appeared: Jose Jaime Melendez and Lizet Moreno. Both were registered by the Makhlouf’s as managers for Ramak Ltd, which is registered in Panama and currently manages huge contracting companies in Syria and Lebanon.
According to the commercial register in Panama, Melendez manages more than 700 other companies belonging to other personalities around the world, while Moreno manages around 16 companies on the behalf of other personalities registered in Panama.
Both the ICIJ and this journalist were not able to get a comment from the Makhloufs despite various attempts.
Although the Makhlouf’s have been distancing themselves from the media even before the unrest erupted in Syria in 2011, they were part of the anti-regime slogans that were heard in many of the post-2011 protests: “No Makhlouf..”. At the same time, the family, which owns public and secret companies and a media outlet, always had stand-by defenders willing to talk about their good deeds as philanthropists.
* Syrian journalist
This investigation was completed with the support of Arab Reporters for Investigative Journalism (ARIJ)