Transcript generated automatically by AI and may contain errors.
Chapter 1: What is the Organised Crime and Corruption Reporting Project?
The Organised Crime and Corruption Reporting Project is an international organisation of journalists rooting out stories of bribery, coercion, fraud, hidden cash stashes and dirty deals.
On the front page of its website this week, bribery in Bosnia, cocaine trafficking across the Atlantic, Russian propaganda and a banking clearinghouse that helped dodgy customers move their money across the world. That was based in Hamilton, New Zealand.
I'm Alexia Russell and today on The Detail, the Kiwi company that moved hundreds of millions of dollars for clients who were later convicted of financial crimes. No action has been taken against it in spite of significant concerns from the Department of Internal Affairs. We also look at the light-touch financial regulations that allowed it to set up shop, which haven't changed.
Gareth Vaughan is the editor of interest.co.nz and has been working on this story for 10 years. It's complicated, dense, and the fact-checking has been off the planet. The events relating to the business dealings of World Clear Limited happened between 2014 and 2018 and made the news when a former staff member, Richard Whittam, was arrested in Singapore in 2018.
He reached out to me initially.
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Chapter 2: How did WorldClear facilitate high-risk financial transactions?
Not that long after he had been arrested in Singapore, he had clearly seen some of my stories. I think one in particular where I wrote about his company. So he was brought in as a WorldClear employee to try and help them open bank accounts, primarily in the US. And that didn't succeed.
That didn't work because WorldClear was struggling to get banks or keep banks and then to get banks because it wanted to have bank accounts that it could move customers' money through.
Right, so this was the whole premise of its business, right? That it moved money around the world for customers who might have otherwise found that difficult.
Yes, yes. So this was the premise, and they had been struggling to keep bank accounts, and then they were struggling to get new ones. And so Richard was brought in, he's a guy with a background in sales, and he would cold call banks, particularly in the US, and try and line up accounts for WorldClear.
Chapter 3: What challenges did WorldClear face in maintaining banking relationships?
This didn't So then David Hillary, who was the managing director of WorldClear, and Richard decided that Richard would establish a company in which he was the shareholder and director called T1 Holdings, and WorldClear would be able to use this company's bank accounts to move its money. What was the reservations from banks then?
to dealing with WorldClear?
Look, I think there were a few. So what Hillary said at the time was that WorldClear was classed as a remittance company under anti-money laundering rules. And at that time, banks were very wary and concerned about the remittance sector, which is true. I mean, the anti-money laundering and countering financing of terrorism law took effect in New Zealand in 2013.
So if you're talking about sort of 2015, 2016, the earlier days of WorldClear, that law was still very new, bedding in, and, you know, a lot of genuine remittance companies that were simply sending money, say, from New Zealand's Pacifica community back to people in the South Pacific Islands were struggling to retain bank accounts.
Chapter 4: What unique business model did WorldClear operate under?
So there was an element of that going on. But also, I mean, WorldClear... From what our experts that we spoke to have told us, from what I've seen, and from also what the Department of Internal Affairs, which was WorldClear's anti-money laundering supervisor, have said, is it was a pretty unique business model that they were operating in a New Zealand, within a New Zealand context at least.
Well, what made them think that it would be a going concern? Obviously, they clipped the ticket on these transactions, but why couldn't companies do that themselves?
Well, that's a good question. And, I mean, obviously, you know, they, I mean, Hillary has said that they worked with, you know, entities that other banks wouldn't necessarily have. So perhaps it was the type of operation, the jurisdiction they were from, various things. Reasons, I think, for that. Legitimate reasons.
Chapter 5: What were the findings of the Department of Internal Affairs regarding WorldClear?
that this company A is struggling to keep or open bank accounts. So an employee sets up another company that it can use to move money. So I sort of, I guess, for me, having, you know, written quite a lot about anti-money laundering requirements, I wrote a story that was kind of focused on this.
And I went to the Reserve Bank and I asked them, why are New Zealand banks allowing, you know, company A to move money through companies B's accounts? And
the rbnz had made some comments while they probably didn't realize that the t1 um you know that t1 holdings linked back to world clear so i think that was the story i think that that richard saw um and that was probably something that other media at the time had covered it hadn't hadn't really looked at it was just this fascinating tale of you know new zealand man arrested in singapore and charged with stealing all this money um and that was part of the story but it wasn't i i didn't think it was the whole story
At what stage did you realise that you had something quite complex and big on your hands?
Well, so, I mean, Richard provided the data to me in, I believe from memory, April 2024. So obviously, so he was released from Changi Prison in 2021 and things had largely gone quiet with WorldClear well before 2024. So I sort of started looking at it and I just realised there's a lot here.
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Chapter 6: How did previous financial convictions of shareholders impact WorldClear?
This is about events that happened a few years ago. It is undoubtedly going to be interesting. I had no idea of the scale of it. So I didn't realize the business had been anywhere near as big as it actually was in terms of the volumes of, you know, we're talking tens of millions of dollars and various currencies and customers literally from every corner of the world.
And yet it's on the 10th floor of an office block in Hamilton.
Yeah. Yeah, yeah, in a relatively small corner of the 10th floor from what I understand as well. And so, you know, there are documents in the leak that are in Russian. There are documents in Spanish. There was one I came across that was actually in both Russian and Spanish.
Chapter 7: What criticism has New Zealand's financial regulations faced?
So, I mean, obviously I can look at Google Translate and I can sort of, but I, you know, and there's names of oligarchs from Belarus and things like this. There's companies in Cyprus and other places. There's no way I can put all this together myself. So, you know, I guess my options were, you know, one, okay, I'm like, you know, I've got a lot on.
We described WorldClear in the first story as a tiny New Zealand company. Well, I mean, interest.co.nz is even smaller than WorldClear. So there's only sort of, you know, half a dozen or so of us who are sort of the journalist side of the business, you know, covering the financial news in New Zealand.
So why don't you say to yourself, oh, look, it's too much for me. We've got more news to fill the pages. It happened a long time ago.
Chapter 8: What led to the eventual decline of WorldClear's operations?
We'll flag it.
Yeah, well, I mean, this was the thing. I guess I just sort of, I waited up over a period of a few months, actually, because one of the things going on at the time was the Commerce Commission's market study into banking competition. And then the government also launched a select committee inquiry into banking competition.
Now, that's like an issue that I've written about for donkey's ears and was a real core issue for us. So that was dominating my time, editing my team's stories. That was dominating my time. So I kind of did just basically procrastinate. And then I thought, well, I've kind of got two options.
One, I can write a story and I can say, you know, person A, B and C and company, you know, E, F and G, they were world clear customers. But I can't really say a lot about why or what they were doing. And I thought, well, what value does that add after, you know, about a company that stopped trading a few years ago? What's, you know, what's that going to really, it's not going to move the needle.
It's not going to, you know, not going to do a lot. So then I thought, well, I knew, you know, the OCCRP, I had followed some of the work.
This is the Organised Crime and Corruption Reporting Project. Yes, give them their full name. Which is an international organization.
Yeah, it's an international organisation of investigative journalists. It's a real global network of journalists. The headquarters is in Amsterdam, but they've got people based all over the place. And they work with partners in lots of different countries as well. So they work with other media partners in other parts of the world. And I had followed some of their work over the years.
And I knew in particular they had a real strength in Eastern Europe. And I knew there was some interesting stuff in this lake from that part of the world. So I thought, well, I'll reach out to them and see if they're interested.
And they were. They were. Interest.co.nz applied for a Brian Gaynor Business Journalism Initiative grant and got more than $76,000 to hire temporary cover so that Gareth could spend more time pursuing the story. The OCCRP got serious about it too and brought in international partners to dig into it, including Belarusian journalists who work in exile.
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