BGC Partners has identified luxury jewelry and 18 English properties that are alleged to have been funded through an alleged $ 35 million fraud committed by two of its UK employees.
The US interdealer broker has accused Michael Viney and Xavier Alcan of putting cash from or from the UK tax authorities into their own pockets between 2015 and 2020.
The civil lawsuit named Vine's friend Hallelujah King as the third defendant, who claims she may have received part of the proceeds of the alleged fraud in the form of Cartier and Bvlgari jewelry and a £ 1.2 million St. Albans property.
BGC, whose brokers act as middlemen between investment banks, announced the alleged $ 35 million fraud in February but did not name the suspected employees or reveal detailed allegations. Howard Lutnick, executive director of BGC, said at the time it was "an unfortunate event".
An attorney for Viney and King had no immediate comment.
London High Court officials said the defense against Alcan and King appeared to have not been filed and that a defense against Viney was filed this week but was still being processed 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 claims that Viney and Alcan have been suspended.
The lawsuit filed by BGC subsidiary Tower Bridge International Services alleges that Alcan, a senior BGC broker, "encouraged" Viney, a TBIS tax advisor, to ease the fraud cases.
The judicial filing alleges Viney diverted £ 8.6m owed to BGC by the UK tax authorities to an account controlled by Alcan after telling HMRC that Alcan was entitled to receive the money on behalf of BGC .
Viney is alleged to have diverted an additional £ 12.6m in payments BGC owed HMRC to itself and Alcan, including using "handled" documents to replace the tax authority's banking information with their own.
The lawsuit also alleges that Viney transferred £ 5 million of TBIS cash to a commercial bank account he controlled and incorrectly presented it as a payment to HMRC before it was returned to a BGC account.
These alleged transactions were intended to create the impression of a pool of loans taken by the German bank to fund the capital contributions of BGC's UK partners in 2018.
"In fact, such loans were not obtained from commercial banks, and the payments were actually funded primarily through the fraudulent transfer [from TBIS]," the lawsuit said.
Viney then received repayment of the alleged £ 1.4 million loan, according to the lawsuit. Viney repaid the £ 1.4million after being confronted in November 2020.
BGC claims Viney has diverted nearly £ 2.5m in additional funds intended for some of the company's partners to itself and Alcan.
The lawsuit alleges that Alcan bought Viney "extravagant items like vacation, electronics and luxury designer jewelry" and cited alleged WhatsApp conversations about Alcan buying Viney a Canary Wharf apartment and a new Audi car.
The filing also cited an alleged attorney's letter describing Alcan's desire to transfer real estate to Viney for "estate and estate planning" purposes.
BGC claims Viney approved the program "in the broadest sense" and Alcan claimed that he believed the funds he received were legitimate payments to him.
The lawsuit alleges that BGC uncovered the alleged fraud during a November 2020 investigation into unspecified "accounting issues" related to the UK's 2018 partner contributions.
The court records list a number of properties that may be financed by the alleged fraud, including the house in St. Albans, which is owned by King according to land records, and student rentals in Nottingham, Manchester and Leeds owned by Viney .
The lawsuit also alleges that Viney and Alcan destroyed documents. It is alleged that during a meeting with BGC officials on December 27, Alcan deleted many of his texts on Viney after BGC warned him not to delete electronic communications at the beginning of the meeting.
Alcan had already appeared as a witness in the London courts in the early 2000s when he was an executive at Cantor Fitzgerald, which BGC was spun off in 2004.
He caused a stir in the media in the case between Cantor and rival ICAP when he testified that visiting strip clubs was a common practice for brokers. "On a good night at Spearmint Rhino you can see 80 percent of the market," he said in 2002 on the booth.