News
American fixer who took Lankan Govt. on a billion-rupees ride
In 2014, the Sri Lankan Government shovelled US$ 6.5mn–nearly a billion rupees at prevailing rates–into the accounts of a shady American fixer called Imaad Zuberi who vowed to improve the administration’s image after the defeat of the Tamil Tigers.
Imaad Zuberi (left) seen with high profile figures: Joe Biden (above) 2nd from left and (below) with Barak Obama
As repeatedly and extensively exposed by the Sunday Times from 2014 onwards, payments were made through the Central Bank of Sri Lanka to avoid Cabinet and Parliamentary oversight. They landed in Mr Zuberi’s personal account and with a company named WR that he controlled.
This week Federal prosecutors in the US filed a criminal case against Mr Zuberi. Court papers show that, of the US$ 6.5mn paid by the Sri Lanka Government, US$ 5.65mn or 87 percent of the tax-payer funded fees were spent on himself and his wife.
“Out of the $6,500,000 wired from Sri Lanka pursuant to the Sri Lanka-WR contract, defendant Zuberi directed over $5,650,000 to the benefit of defendant Zuberi and his spouse,” the case file states. “Out of the $6,500,000 wired from Sri Lanka pursuant to the Sri Lanka-WR contract, less than $850,000 was paid to lobbyists, public relations firms, law firms, and other subcontractors identified by defendant Zuberi and retained by BGS.”
BGS is Beltway Government Services Inc, a company set up on Mr Zuberi’s instructions. Both WR Group and BGS were controlled by him.
Court papers also show Sri Lankan officials eventually started getting suspicious about where the monies were going and insisted on disbursing them to the contracting party, WR, instead of Mr Zuberi’s personal account. They also belatedly requested receipts from WR for wire transfers already made.
By then, however, millions of dollars had already been paid out. And the receipts that were issued were fraudulent.
| 2010: Enter Imaad Shah Zuberi | |
| Imaad Shah Zuberi’s activities started in or about 2010 when he set up an informal entity named Avenue Ventures, state papers filed by Federal prosecutors in the US District Court for the Central District of California and obtained by the Sunday Times. Following are excerpts: Mr Zuberi told foreign nationals, foreign Government representatives [Sri Lanka included] and others that he could implement changes to United States foreign policy by wielding his influence in Washington, DC.To convince clients of his influence, Mr Zuberi distributed photographs of him meeting with high-ranking elected officials and described conversations in which they purportedly discussed public policies of international importance. His contributions, public relations work and lobbying efforts generated marginal results. And his business ventures were also largely unsuccessful for his clients.Yet Mr Zuberi gained substantial wealth–almost entirely through fraudulent representations about his education, experience, family wealth, business, employees, investment successes, financial condition, political power and disposition of client fund. It was also through the outright conversion of client money for his personal benefit. Between November 2013 and March 2014, Mr Zuberi met with high-ranking officials of the Sri Lankan Government and negotiated an agreement whereby Avenue Ventures, or a special-purpose company created by Avenue Ventures, would do lobbying and public relations to rehabilitate Sri Lanka’s image in the US. It would focus on modifying US policies, particularly through issuance of Congressional resolutions, and improving public perception relating the Sri Lanka’s alleged persecution of its minority Tamil population. Mr Zuberi promised to spend US$ 2.25mn per quarter on this effort: US$ 1.5mn for lobbying expenses; US$ 500,000 for legal expenses; and US$ 250,000 per quarter for media buys. He vowed to introduce Sri Lankan officials to executive branch administration officials, Senators and Congresspersons as well as recruit Sri Lankan expatriates to engage in political organising in the US. In April 2014, WR–represented by an old college mate of Mr Zuberi named Mark Skarulis–signed a contract (effective May 1, 2014) with the Central Bank of Sri Lanka (CBSL) in which the client agreed to pay US$ 8.5mn in return for services rendered. In May, CBSL wired the first US$ 3.5mn to WR’s Bank of America account. The same month, Mr Zuberi transferred US$ 1.6mn of this into his personal brokerage accounts and US$ 1.5mn to escrow accounts for the purchase of property in the name of an Imaad Zuberi/WR Real Property LLC. A sum of US$ 300,000 was used to settle debt on personal credit card accounts. Most of the remaining US$ 100,000 went into bank accounts held by Imaad Zuberi/WR Real Property LLCs. In June, on Mr Zuberi’s request, CBSL wired another US$ 1mn to the Imaad Zuberi/WR Bank of America Account. The same month, he transferred approximately US$ 650,000 of this into his brokerage accounts and nearly US$ 200,000 of Sri Lanka money into Imaad Zuberi/WR Real Property LLC accounts. In July, Sri Lankan officials insisted on wiring fees to the contracting party, which was WR, rather than Mr Zuberi’s personal accounts. They also asked for receipts for payments already made. In response, Mr Zuberi instructed Mr Skarulis to issue fraudulent receipts on behalf of WR for the US$ 3.5mn and US$ 1mn wire transfers, despite the funds having been received into his personal account and spent for his personal benefit. Later in July, CBSL wired a further US$ 1mn to a WR bank account. Mr Zuberi, meanwhile, gave instructions to transfer over US$ 500,000 of Sri Lankan money from WR to corporate entities controlled by him and his spouse. These included Avenue Capital Group LLC (ACG), ISZ 9 LLC, Fountain LLC, and Clary LLC. He also transferred most of the Sri Lankan money into the Imaad Zuberi/WR Bank of America account which was then used for his personal benefit, including brokerage account investments, real estate investments, and to pay debt on his personal credit cards. But in September 2014, CBSL wired yet another US$ 1mn into a WR account. And Mr Zuberi gave instructions to transfer US$ 725,000 of Sri Lankan money from WR to corporate entities controlled by him, including ACG and Avenue Investment Services. He then relayed most of the funds into the Imaad Zuberi/WR Bank of America account for personal use. Over US$ 5.65mn of the US$ 6.5mn paid by Sri Lanka to Mr Zuberi was spent on himself and his wife. Less than US$ 850,000 was paid to lobbyists, public relations firms, law firms and other subcontractors. Even certain invoices issued by these subcontractors, however, were not settled. Mr Zuberi falsely represented to them that Sri Lanka had provided insufficient funds to make payment. |
| Who did what, according to Sajin de Vass Gunawardena | |
| A Sunday Times investigation in 2015 found that the Central Bank of Sri Lanka paid out money to Imaad Zuberi on the written instructions of Sajin de Vass Gunawardena, then Monitoring MP to the Ministry of Foreign Affairs, Ajith Nivard Cabraal, then Governor of the Central Bank, and Lalith Weeratunga, then Secretary to President Mahinda Rajapaksa.We saw emails that validated this. Mr Vass Gunawardena and Mr Cabraal used their personal email accounts for the correspondence.“Nivard, please release the payment for the Month of June 2014,” says an email to Mr Cabraal from Mr Gunawardena. “I recommend this payment,” supports Mr Weeratunga. “Thank you. We will action same,” replies Mr Cabraal. This week, after it was found Mr Zuberi used the bulk of these payments for his personal benefit, the Sunday Times asked Mr Gunawardena what role he played in the saga. Zuberi was introduced to the Government by Namal Rajapaksa, Mr Gunawardena said. He recalled being summoned by the then President Mahinda Rajapaksa to his room where he found Mr Zuberi, a Pakistani Senator named Saleem Mandviwalla and Mr Weeratunga. The President said Mr Zuberi had been introduced to his son, Namal Rajapaksa, by President Zadari of Pakistan. And President Zadari had sent his personal envoy Saleem Mandviwalla along with Mr Zuberi to meet with Namal Rajapaksa. “President Rajapaksa then asked Lalith Weeratunga and me to meet with Mr Zuberi to discuss how best he can assist the Government of Sri Lanka as he works very closely with the Pakistan Government in representing their interests in the USA,” Mr Gunawardena said. “The initial meeting was chaired by Namal Rajapaksa.” Mr Zuberi visited around two or three times and introduced Mark Skarulis as an associate of his company. Their contract was negotiated between the Central Bank of Sri Lanka and Mr Zuberi. It was for lobbying, representing Sri Lanka’s interests in the Senate and Congress, investment promoting, and representing the Central Bank in promoting Sri Lankan bonds, etc. The agreement was signed by the Presidential Secretariat–either Secretary to the President or the Central Bank Governor, Mr Gunawardena said. “I was doing the entire coordination with regard to the Foreign Ministry work,” Mr Gunawardena said, in response to why he instructed money to be paid. “Whatever Mr Zuberi requested, I would have forwarded to the Secretary to the President and Governor, Central Bank. I was not the deciding factor on such matters.” Mr Zuberi helped secure more than 50 appointments with Senators and Congressmen to whom the case of Sri Lanka was presented. “We effectively persuaded them to support the cause of Sri Lanka,” Mr Gunawardena claimed. “Even a Congressional hearing was to be arranged for the GoSL to make their case. In addition, we engaged with think tanks and media effectively for the GoSL.” Mr Gunawardena was among those who held the meetings. Mr Zuberi “could have done more”, he admitted. “However, we as a Government then made progress and headway with the meetings and the lobbying that was made possible through his offices,” he added. |
| Charged with Violating FARA and tax evasion in the US | |
| In addition to violating the Foreign Agents Registration Act (FARA), Imaad Zuberi is charged with tax evasion and making almost $1 million in illegal campaign contributions that included funneling money from foreign entities and individuals to influence US elections, a press release said.Mr Zuberi, a 49-year-old resident of Arcadia, California, has agreed to plead guilty to the three counts in the information. A plea agreement also filed in United States District Court notes that Mr Zuberi faces a statutory maximum sentence of 15 years in federal prison once he pleads guilty.The court papers show that Mr Zuberi, directed and personally engaged in lobbying officials and their staff “at the direction and control of Sri Lanka”. In April 2014, Mr Zuberi instructed Mark Skarulis to sign the Sri Lanka-WR contract, create Beltway Government Strategies and WR, and open bank accounts for them to “insulate and conceal defendant Mr Zuberi’s control of the Sri Lanka lobbying and public relations effort and defendant Mr Zuberi’s personal receipt of money from Sri Lanka”. He directed Mr Skarulis to sign contracts on behalf of BGS in which it retained various lobbyists to support the Sri Lanka-WR contract. While asking him to pay lobbyists and other contractors on behalf of BGS and WR, Mr Zuberi also ordered Mr Skarulils not to pay certain lobbyists, despite their rendering of services. MR Zuberi failed to register with the Department of Justice as a foreign agent of Sri Lanka prior to acting on Sri Lanka’s behalf. To hide his conduct, he directed Mr Skarulis to register BGS as an agent of Sri Lanka, rather than Mr Zuberi himself. Only in August that year did Mr Zuberi file a short-form registration statement claiming that BGS had contracted him to provide consulting work for Sri Lanka. Court papers say it contained material false statements and omitted material facts. For instance, he wilfully and falsely claimed that BGS retained him as a consultant when, in fact, he orchestrated all of BGS’s activities. He said he engaged in no political activity on behalf of Sri Lanka when, in fact, he lobbied the US Congress. He maintained that he merely received a salary from BGS when, in fact, he received not a salary but rather over US$ 5.65mn of Sri Lanka funds. In that short-form statement, Mr Zuberi also did not disclose the US$ 3.5mn and US$ 1mn wire transfers he received into the Imaad Zuberi/WR Bank of America account in May and June 2014; or the US$ 500,000 in Sri Lanka funds he converted from WR to his own benefit in July that year. WR did not register under FARA at any time during the 2014 calendar year. Mr Zuberi only filed a FARA registration statement in September 2015–over 20 months after having begun working as an agent for Sri Lanka. WR also filed its initial FARA registration around the same time followed by a supplemental FARA registration statement by BGS. It is a crime to knowingly and wilfully fail to register under FARA and to make false and misleading statements or material omissions in documents submitted to the FARA unit. |