BGC Partners has identified luxury jewelery and 18 UK properties that it claims may have been funded by an alleged $ 35 million fraud committed by two of its UK employees.
The American interdealer broker has accused Michael Viney and Xavier Alcan of depositing cash to or from the UK tax authorities in their own pocket between 2015 and 2020, according to a London court.
The civil suit cites Viney’s girlfriend, Hallelujah King, as a third defendant, alleging she may have received a portion of the proceeds from the alleged fraud in the form of jewelry from Cartier and Bvlgari and a £ 1.2 million property in St Albans.
BGC, whose brokers act as intermediaries between investment banks, disclosed the alleged $ 35 million fraud in February, but did not name the accused employees or disclose detailed allegations. Howard Lutnick, CEO of BGC, said at the time it was “an unfortunate event.”
A Viney and King attorney made no immediate comment.
Clerks at the London Supreme Court said the defense for Alcan and King does not appear to have been filed yet, and that a defense for Viney has been filed this week, but which was pending due to an administrative backlog and was not yet available.
Alcan’s law firm, Taylor Wessing, did not immediately respond to requests for comment. BGC did not immediately respond to a request for comment. The April filing alleges that Viney and Alcan have been banned.
The lawsuit, filed by BGC subsidiary Tower Bridge International Services, alleges that Alcan, a senior BGC broker, “encouraged” Viney, a TBIS tax advisor, to facilitate the fraud.
The claims court diverted Viney £ 8.6 million owed to BGC by the UK tax authorities into an account managed by Alcan, after telling HMRC that Alcan was authorized to receive the money on behalf of BGC.
Viney is accused of diverting an additional £ 12.6 million in payments owed by BGC to himself and Alcan to HMRC, including through the use of “forged” documents that replaced the tax authorities’ bank account information with their own.
The lawsuit also alleges that Viney transferred £ 5 million in TBIS cash to a Handelsbanken account he controlled, falsely representing it as a payment to HMRC, before returning it to a BGC account.
Those claimed transactions were reportedly intended to give the impression that a pool of loans is coming from the German bank to fund the capital contributions of BGC’s UK partners in 2018.
“In fact, no such loans were obtained from Handelsbanken, and the payments were actually mainly funded by the fraudulent transfer [from TBIS], ”The lawsuit claims.
Viney subsequently received repayments of the alleged loans amounting to approximately £ 1.4 million, the lawsuit alleges, adding that Viney had repaid the £ 1.4 million after being confronted in November 2020.
BGC claims that Viney has diverted more money of nearly £ 2.5 million intended for some of the company’s partners to himself and Alcan.
The lawsuit alleges that Alcan has bought Viney “ extravagant items including holidays, electronics and luxury designer jewelry, ” and cites alleged WhatsApp conversations about Alcan buying Viney a Canary Wharf condo and a new Audi car.
The filing also cites a claimed attorney’s letter describing Alcan’s desire to transfer properties to Viney for “estate and estate planning.”
BGC claims that Viney “broadly” admitted the plan and that Alcan claimed he believed the funds he received were legitimate payments to him.
The lawsuit states that BGC discovered the alleged fraud during a November 2020 investigation sparked by unspecified “accounting issues” regarding the UK partner’s 2018 contributions.
The court filing cites a range of properties that may be funded by the alleged fraud, including the house in St Albans that the land register shows is owned by King, and student rental accommodation in Nottingham, Manchester and Leeds that is owned by Viney.
The lawsuit further alleges that Viney and Alcan destroyed documents. It alleges that at a December 27 meeting with BGC representatives, Alcan deleted many of his texts to Viney after BGC warned him not to delete electronic communications earlier in the meeting.
Alcan had previously appeared in London courts as a witness in the early 2000s, when he was an executive at Cantor Fitzgerald, from which BGC was spun off in 2004.
He caused a furor in the media in the case between Cantor and rival ICAP when he testified that going to strip clubs was a common practice for real estate agents. “On a good evening at Spearmint Rhino you can see 80 percent of the market,” he said at the booth in 2002.