An international collaboration and months of forensic investigation and fact-checking have helped a small Kiwi financial journalism website break a story involving a New Zealand company that moved massive amounts of money for multiple clients who were later convicted of financial crimes.
Worldclear Limited - a banking clearing house based in Hamilton, which is no longer operating - was able to set up and trade without breaking any rules, and it denies it knew anything about what its more colourful clients were up to.
Those clients included a politically connected Belarusian oligarch, a UK citizen convicted as part of a large-scale European tax swindle, a Canadian-American guilty of wire fraud, and a Swedish national for whom there is still an international Red Notice out.
The resulting story features this week on the front page of the website of the Organised Crime and Corruption Reporting Project, a global network of journalists rooting out stories of bribery, coercion and dirty deals in all corners of the globe.
It was written by Gareth Vaughan, the editor of interest.co.nz, but he says he had a lot of help - from journalists from countries including Belarus, Lithuania, Sweden and Singapore.
He has been following the Worldclear story for 10 years, but this investigation was really sparked in 2024 by a leak from a former employee who had been jailed in Singapore for financial crimes.
"I sort of started looking at it and I just realised, there's a lot here," he says.
"This is about events that happened a few years ago ... it's undoubtedly going to be interesting. I had no idea of the scale of it. I didn't realise the business had been anywhere near as big as it actually was in terms of the volumes ... we're talking tens of millions of dollars and various currencies, and customers literally from every corner of the world."
Interest.co.nz applied for a Brian Gaynor Business Journalism Initiative grant and got more than $76,000 to hire temporary cover so that Vaughn could spend time pursuing the story.
Worldclear's business model was to make international banking transactions for customers who were having difficulty doing that, either because banks turned them down or they were from jurisdictions that reputable banks wouldn't deal with. Under anti-money laundering rules it was classed as a remittance company.
It targeted high risk clients facing banking or payment problems - the company says that is not evidence of knowing about or facilitating crimes, and there is no evidence that was the case.
Using firms like Worldclear is a slow and expensive way to transfer money, but it makes transactions harder to track.
It was not a bank so did not have to comply with Reserve Bank standards, and didn't break any rules under what are widely held to be 'light touch' financial regulations in New Zealand - regulations that have the World Bank classing the country as the easiest in the world to do business.
"It's very attractive for business people, right, so anyone who wants to set up a company. [For] legitimate business, it's fantastic, it's great, and it's brilliant.
"But it does mean that there may be people out there whose reasoning may not be completely wholesome - it's easy for them to do as well.
"So Worldclear registered as a New Zealand company, and then it registered as a New Zealand Financial Service Provider. And registering as a Financial Service Provider doesn't mean that you're actually regulated - that's a separate issue. So there are some areas where you can register as a New Zealand Financial Service Provider and provide certain financial services internationally, and you're not actually regulated in New Zealand.
"They didn't do anything wrong in the way they set the company up at all. They followed all the rules. And you can effectively operate as a bank internationally but you're obviously not licenced by the Reserve Bank.
"By international standards this is quite light-touch."
Two of the company's shareholders had financial criminal records, but Worldclear had no obligation to dig into their backgrounds.
"You could set up in the same way today, as Worldclear did," says Vaughan.
"There may be closer oversight of you today... also one of our experts we spoke to said he just didn't think banks would take on a company like this today."
The Department of Internal Affairs, which had oversight of such financial companies, did two inspections and was quite biting about the company's methods in the second one - but no charges were ever laid. By the time that report came out, Worldclear had in 2019 left the Financial Service Provider's register.
It is still a registered company but it has not filed an annual return since 2024 and the Companies Registrar has started the process of de-registering it. Inland Revenue has opposed the company's deregistration.
-RNZ
ISSUE
Leave a Comment