Friday, November 8, 2013

Does Serbian fraudster have links to Russian mob? - a look at Jasna Badzak

A Serbian immigrant from Bosnia who was convicted last month of perpetrating a fraud on UKIP MEP Gerard Batten has a long history of fraud, it was revealed today.

42 year old Jasna Badzak of Harrow Road, Kilburn, West London plead not guilty to charges of forgery and fraud but was found guilty by the jury at her trial at Southwark Crown Court last month. She had doctored bank statements to show she had not received her wages from the European Parliament before presenting them to Mr Batten. But records showed that after Mr Batten paid her from his own pocket she went on a shopping trip to Harrods. When Mr Batten attempted to recover the money, she launched a series of Employment Tribunal cases against him, all of which were dismissed. She received a 12 months suspended sentence and a 4 month curfew order for these offences, while the judge in the case, Michael Gledhill QC, said that if it were not for her son, she would have received an immediate prison term.
Jasna Badzak - also known as Maya Braun -
after her conviction for fraud and forgery

Things may have gone harder for Badzak had the judge been aware of the full extent of her dishonesty which dated back to shortly after her arrival in the UK as a refugee from Mostar in the early 90's.

Despite her CV claiming she was a 'high level business analyst' for the Economist Group, the Economist confirmed that they had no record of an employee or a subcontractor of that name. She did at one stage sell advertising space in European Voice magazine for an advertising sales company - KP Sales Ltd - but that is a far cry from the 'consultancy and business development' role she awarded herself. She also claimed to have "taken sole charge of European Voice and ensured it’s (sic) survival’.

The real frauds begin around the turn of the millennium, however. At that time, she emerged as managing director of a company called 'Finance Central Europe', which she claimed to have bought off the Economist when it 'consolidated or spun off some of it's operations'. The Economist has never had a publication by that name, although it did have a similarly named one which it remained the owners of.

Finance Central Europe presented itself as a magazine which specialised in the subjects which one might expect given its title. There is just one problem - nobody has ever seen a copy of the magazine, which operated from a maildrop operated by Citibox Ltd in Central London and which was registered at Badzak's home address. Her and her husband, Dragomir Mikulic, were the sole directors, while it's website (now removed) was a simple text affair with no content.

So what did Finance Central Europe do? It appears to have been in the business of selling non-existent business awards to companies - some unsuspecting, some involved in organised crime - across Eastern Europe. Badzak, occasionally using the alias Maya Braun, would contact companies in Central Europe offering them research packages costing between £ 485 and £ 5250. As revealed in an article in Montenegran newspaper 'The Monitor', they offered a ranking service for banks - the difference with their service was that only banks which paid for their 'research' - a collation of publicly available figures - would be ranked. The 'Monitor' article followed an earlier expose in a Bosnian newspaper - 'Independent' - based in Banja Luka which precipitated the threat of a lawsuit against them for £1m each. While the lawsuit never materialised, the lawyer 'hired' by Finance Central Europe proved to be Badzak's father-in-law according to Boris Djurik, the paper's foreign correspondent. 'Independent' responded by re-publishing the article, along with a selection of comments from its readers. The comments included claims that Badzak and her mother were defrauding the British social security system and that that fraud was continuing.

When it came to issuing the awards, simply buying the research packages weren't enough. There were further fees to be entered into consideration, a premium level report had to be commissioned, and then there was a formal entry fee for judging. The awards issued reflected how much had been paid, and could cost in excess of £20,000 per award per year.

Now, some of the banks which effectively purchased their awards from Badzak were reputable companies simply unfamiliar with doing business in Western Europe and who thought that publicising such awards would show their increasing strength. Others, however, had rather less reputable motives.

Universal Bank of Moldova began buying FCE awards as far back as 1998 and continued to do so through 2007, according to their website which is currently under re-construction. Universal Bank is quite interesting, as it was at one stage owned by Russian banker German Geruntsov. Geruntsov was gunned down in the street outside his London home in 2012, supposedly by a Serbian hitman. Geruntsov himself was a suspect in the assassination of Russian state Duma deputy Ruslan Amadayev, who was investigating corruption on a massive scale by companies owned by Geruntsov and his business partner, Alexander Antonov. After Geruntosov fell out with Antonov, the latter and his son were also assassinated. Universal Bank of Moldova (Best bank in Moldova, Finance Central Europe Awards 2006) is suspected of holding over £1.5bn embezzled from the Russian railway network on behalf of the Russian mafia.

This is not all. When you look at other banks which have won Finance Central Europe awards, a surprisingly high percentage are under investigation or have been closed down for links with either Serbian organised crime or the Russian mafia. What Badzak's awards managed to achieve was to lend the banks a spurious credibility and plausibility by making them appear as if they had won awards from a company linked to the Economist magazine of London. Even worse, gullible but apparently honest banks such as DSK Bank of Bulgaria continue to tout such awards in the mistaken belief that they have won honestly - DSK was awarded 'bank of the decade, 2000-2010' by FCE.

The fraud appears to have not just been limited to banks, however. At various times, non-financial companies also received awards from Finance Central Europe, including Serbian Railways and the Sarajevo Brewery.

So, how much has Badzak made from her fraudulent activities? It is difficult to say, as Finance Central Europe Ltd was struck off the register in 2004, and in any case never filed any accounts. Despite this, it continued to trade as a UK limited company until early last year, and may still be doing so. I have found evidence of at least 130 awards on the internet over the past few years, although several of these have now disappeared - either the awards have been removed from webpages, or the company websites have disappeared completely. A not unreasonable estimate of her income from these scams would be in the region of £100,000 per year, and all the while she was also allegedly claiming benefits in the UK as a refugee - she later became a naturalised British citizen.

Is this all? Apparently not. According to the Monitor, there is a link between Badzak’s ‘magazine’ and another rating company, this one called Global Ratings Ltd. Global Ratings Ltd is, as the article suggests, another company scamming businesses in the Balkans. Like Finance Central Europe Ltd, it was also struck off the register in 2004, although it’s ownership was more convoluted than Badzaks company. Shareholders in Global Ratings Ltd were two companies – Financial Results LLC of 1072 Folsom Street, San Francisco, Ca – the address is a maildrop – and Star Premier Corporation, PO Box 3321, Road Town, Tortola, British Virgin Islands – another maildrop. Registered directors were Frank and Ellen McGlinn of 6, Divert Road, Gourock, Renfrewshire, Scotland. At the time of writing, Frank McGlinn is the director of 5 companies, and is listed as having been a director of 7 others which have been struck off the register, including Global Rating Ltd. The awards made by this company followed a similar pattern, although also caught a number of unsuspecting companies. How? It invited their directors to gala award dinners in London to collect their awards, and then afterwards presented them with a bill for the dinner and accommodation of over £5,000 each: rather expensive rubber chicken. This scam stretched outside the Balkans and their immediate surroundings, gathering victims in the Ukraine, Uzbhekistan and as far afield as India. My investigations into the precise form of the link between Badzak and McGlinn are continuing.

The question must be will Badzak ever be prosecuted for any of this? Clearly the benefit fraud - which has been reported - is the most likely, although with Finance Central Europe's bank account presumably being held offshore, and with the limited company struck off long before the fraud finished - assuming it is not still being perpetrated - it is difficult to know who exactly will investigate and/or prosecute. As for Badzak's links with organised crime, who knows? Was she a useful tool to make mafia and organised crime controlled banks appear respectable, or was she a willing part of the scheme to make them so? Either way, a 12 month suspended sentence seems like a stroll in the park compared to her crimes.

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