Iceland’s First Lady Tied To Offshore Tax Havens

Leaked HSBC files show the wife of Iceland president Ólafur Ragnar Grímsson held part of her considerable fortune in offshore tax havens.

The documents – part of a massive data breach when a tech security worker decided to steal the information he was assigned to protect – were originally leaked to the press on May 2. They show Dorrit Moussaieff was listed as a beneficiary of five companies and trusts that have held Swiss banks accounts.

Iceland’s first lady and her two sisters jointly owned a company in the British Virgin Islands called Jaywick Properties Inc. that held as much as US$80 million in HSBC’s Swiss Private Bank in 2006 and 2007. HSBC listed all three women as the both the settlor and beneficiary of Jaywick Properties Inc. and another trust, the Moussaieff Sharon Trust.

A settlor is the person who transfers control of assets to a trustee, who manages them on behalf of the beneficiaries, which, in some trusts, may include the settlor. Trusts can make it easier to transfer assets after death, eliminate probate costs and reduce estate taxes.

The HSBC files suggest Moussaieff, who is non-domiciled for UK tax purposes, was in line to inherit further portions of her family’s offshore wealth when her 86-year-old mother, Alisa, dies.

The Moussiaeff family are among the world’s wealthiest jewelers, having built up their business over generations. Their fortune is estimated to be worth more than US$300 million.

Shlomo Moussaieff

Shlomo Moussaieff

Family patriarch Shlomo Moussaieff, who passed away last year at the age of 90, was regarded as one of the foremost private collectors of antiquities of the Bible and ancient Near East. According to his own estimate, he owned 60,000 artifacts, specializing in ancient manuscripts and personal seals from the First and Second Temple periods.

The first lady was also a secondary beneficiary of Elyakeen Limited, the Moussaieff Life Interest Trust and Easton Investments Inc. Elyakeen Limited was registered with Mossack Fonseca in the British Virgin Islands in 1995 and its HSBC profile was created in 1997.

Elyakeen’s stock was in bearer shares, certificates that allow whoever holds the paper to anonymously transfer or claim their value. Today they are banned in many countries because of their usefulness in aiding money laundering and tax evasion.

The Elyakeen bearer shares were held for the Moussaieffs by a Zurich trust management company. In 1999, the directors opened bank accounts in Elyakeen’s name at Deutsche Bank and at the Royal Bank of Scotland. Elyakeen was dissolved in 2003.

It is unclear how much money was in Elyakeen’s accounts, but one Mossack Fonseca document dated April 4, 2002, shows significant sums. “The Directors had been approached by the trustees to consider waiving the loan of ($18.8 million) repayable by them, following tax advice from KPMG,” according to the minutes of the board meeting. Elyakeen also paid out a $1.6 million dividend at that meeting.

Because these trusts and companies were registered outside the UK, Moussaieff did not have to pay any British tax on them.

Dorrit Moussaieff herself appears not to have played a role in most of the holdings.

Both of Dorrit Moussaieff’s sisters – but not the first lady – had large trusts in their names at HSBC’s Swiss bank. The Tamara Moussaieff Trust held US$29.5 million at one point in 2006 and 2007, while one owned by Sharon Levontin, called Levontin 2002 Discret Sett, held US$27.6 million in the same period. HSBC documents also include the Mrs S Levontin Trust, which at one point in 2006 and 2007 held US$2 million in six accounts at the bank.

The Reykjavik Grapevine reported on April 25 that the Moussaieff family had another company registered with Mossack Fonseca in the British Virgin Islands. That company, Lasca Finance Limited, was disclosed in public filings of Moussaieff Jewellers Limited, the family firm.

The revelations of Mousaeff’s holdings after Icelandic president Ólafur Ragnar Grímsson made a surprise u-turn and announced he would run for an unprecedented sixth term on April 19. He explained that the country needed stability after the Panama Papers revealed the secret financial holdings of several prominent Icelandic politicians, including prime minister Sigmundur David Gunnlaugsson, forcing their resignations.

Grímsson praised the exposé on April 22 to CNN as “a great public service” and “important wake-up call” for politicians – and declared that neither he nor his wife were hiding any financial assets.

“No. No, no, no, no,” he adamantly said. “That’s not going to be the case.”

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