(PA)
Police discovered a treasure trove of valuables with each having a unique tale to tell when they raided a safe deposit facility off Park Lane.
It’s only fitting that Mayfair is the most expensive property on the Monopoly board. It has some of the most exclusive red-brick townhouses, apartments, and private casinos in the entire world.
But there is a seedier side to the central London neighbourhood as well. Private detective agencies and tax companies abound in the lanes and alleyways surrounding Shepherd Market, where they serve the local billionaire international clientele. Moreover, there are a good number of brothels.
For many years, a company housing safe deposit boxes operated in a tall office building on nearby Park Street, also serving the wealthy. Here, you could hire a lockable 72cm square box without any questions asked for £1,500 per year and a copy of your passport to store whatever tickled your fancy.
Business for the Park Lane Safe Deposit Center was brisk during the boom years prior to the financial crisis. Russians, Europeans, and Americans flocked to it to store valuables and cash that they didn’t want to leave in conventional banks for their own, sometimes dishonest, reasons.
One of them was Pierre Grotz, a wealthy investment advisor from Luxembourg. Mr. Grotz is a tall, charismatic, and dashing man with swept-back black hair who wears the dark chinos and lambswool pullovers that are the hallmark of the continental smart-casual look. He is responsible for managing the money of the world’s super-rich and finding the best investments for their money.
On November 15, 2007, he rented box number 6070 and deposited two duffle bags, as evidenced by CCTV obtained by the Metropolitan Police. The bags had been given to him by a wealthy American client who was leaving his rented Knightsbridge mansion near Harrods to return to the United States.
He said he was going back to the US for a long time and just had some business papers he needed looked after,” Mr Grotz told The Independent from his lawyer’s office in Luxembourg. “I didn’t even look to see.”
Mr Grotz claims he returned to Luxembourg and promptly forgot about it.
Until the Metropolitan Police raided the Park Lane Safe Deposit Centre and its sister site in north London, using angle grinders on the hinges to open all of its boxes on suspicion of criminals using them to conceal criminal proceeds.
Operation Rize uncovered an Aladdin’s cave of drugs, weapons, diamonds, and paedophile images in one Park Lane box.
Even the police officers were taken aback when they opened box number 6070, which belonged to Mr. Grotz. Inside, they discovered bundle after bundle of banknotes totaling more than £2 million. Or, more precisely, £132,000 in sterling, more than €1.6 million in euros, and more than $1 million in US dollars.
It is now time to identify Mr Grotz’s client.
Jeffrey Brooks was the wealthy brother of David H Brooks, whose company was the largest supplier of body armour for the US military’s adventures in Iraq and Afghanistan. On the surface, David H Brooks’s New York Stock Exchange-listed company appeared to be a huge success. DHB (David H Brooks) Industries, on the other hand, was riddled with bulletholes.
For, while he was telling his Wall Street investors that David H Brooks was making money by the truckload from the US defence budget, he and his chief operating officer were actually committing a $185 million (£123 million) accounting fraud, inflating its revenues by millions of dollars.
David was syphoning millions more from the company to cover more than $16 million in personal horse-racing expenses, as well as jewellery and cash investments – forging documents to deceive their auditors and lying to regulators.
David H Brooks splurged $100,000 on a diamond-encrusted stars-and-stripes belt buckle and booked rapper 50 Cent, Aerosmith, The Eagles, Tom Petty, and Stevie Nicks to perform at his daughter’s bat mitzvah.
According to the New York court that convicted him two years ago, he spent company money on a facelift for his wife, acupuncture for the family, and health treatments for his racehorses. He is currently incarcerated for 17 years.
David H Brooks had been arrested and charged for his crimes a month before his brother Jeffrey gave Mr Grotz the bags to put in the Park Lane depository. As part of his bail, he promised to move all of his and Jeffrey’s families’ money around the world into 25 monitored accounts in the US, so the government could be sure he wasn’t hiding his ill-gotten gains.
Jeffrey and other family members were ordered to disclose all of their assets to the court. All of these terms were made public a few weeks later in David’s $400 million bail release order.
Mr Grotz denies knowing anything about what was in the bags. He could have been charged with aiding and abetting the illegal concealment of the Brooks family’s cash if he had known what was inside.
Mr Grotz has never been charged with a crime or even been interviewed by law enforcement. He claims he had no idea about the Brooks family’s problems until the police raids seven months later. He claims it was only then that he realised he was in trouble.
It appears odd that, as the Brooks family’s financial adviser, he did not conduct more background checks on his client. Mr Grotz’s name had also been used in the formation of a series of shell companies set up on the Brooks family’s behalf in secretive offshore locations.
An FBI agent’s statement from David H Brooks’ bail hearings, obtained by The Independent, cites a witness – a Luxembourg lawyer – who claims this lawyer and Mr Grotz were told this network of companies was set up to conceal the source of the cash. Mr Grotz denies this, claiming that no money was ever invested in these companies and that he was unaware of their purpose.
He claims he trusted Jeffrey Brooks because he was introduced to him by another of his wealthy clients, Russian oligarch Vitaly Malkin, with whom he is currently battling in court. Mr Malkin’s lawyer claims that it was Mr Grotz who introduced him to Jeffrey Brooks.
When The Independent contacted Jeffrey Brooks this week, he responded, “I have no idea what you’re talking about, and please do not call me again.” He then hung up the phone.
Whatever the truth is, Mr Grotz should have been aware of the scandal at Jeffrey’s brother’s company at the time of, and in the weeks following, accepting the bags of cash in London.
For starters, long before David H Brooks’ arrest, allegations of fraud at DHB were widely reported in the US media.
Second, David H Brooks’ bail issues were widely publicised in the United States in the weeks following Mr Grotz’s hiring of the deposit box. Because of the large bail amount and prosecutors’ concerns that he was hiding money overseas, media interest was high.
Third, a review of the press clippings would have revealed that both David H Brooks and Jeffrey Brooks had been severely reprimanded by regulators over an insider trading scandal at the brokerage firm the brothers controlled, Jeffrey Brooks Securities, a few years earlier. The Brooks brothers were both fined and had their brokerage licences revoked as a result of the incident. The insider trader received a three-year prison sentence.
In June 2006, five months before Mr Grotz accepted the duffle bags, New York Post columnist Christopher Byron was able to clearly connect the dots between the fraud and insider trading scandals in a lengthy article on David H Brooks. “Leopards never change their spots,” wrote Byron. “These people are known as recidivists. If Wall Street’s white-collar chisellers and cheats break the law once, chances are they’ll break it again, and David H Brooks is a prime example.”
Know Your Customer rules aimed at preventing money laundering were perhaps less stringent back then than they are now, but they existed. Financial advisers and other professionals must conduct due diligence on their clients and the potential sources of their cash.
Mr Grotz claims he only met David once and that the DHB scandal was not widely publicised in Europe.
So, why bring this up now? For starters, Mr Grotz’s actions with the London deposit box and the shell companies were central to a recent hearing in which some of David H Brooks’s family is seeking a refund of the massive $17.7 million they put up as bail.
The bail money was forfeited by the US government, owing to the way the Brooks family’s money was hidden overseas in violation of the original terms.
A judge in the United States District Court for the Eastern District of New York recently rejected the family’s latest efforts, citing the cash in Mr Grotz’s London deposit box and the “Gordian knot” of shell companies partially set up in Mr Grotz’s name. The court ruled that this was evidence that David and his family had “wilfully” violated his bail agreement by attempting to conceal the family’s assets from the government.
There’s another reason why the events in London should be discussed. Mr. Grotz is being investigated for two white-collar crimes. In the first, he was investigated for his role in a scandal at Aston Bank in Lugano, Switzerland, but was found not to have done anything wrong.
In another case, this time involving a property deal in Corsica, he is being investigated by a French magistrate for fraud, abuse of trust, money laundering, and conspiracy. It is important to note that being under investigation, or “mise en examen,” does not imply guilt, and he denies any wrongdoing.
The Corsica case involves a property transaction he arranged for a wealthy client, Vitaly Malkin, a former political ally of the late President Boris Yeltsin.
Mr Malkin claims Mr Grotz struck a deal with a local agent in Corsica to buy a property on the island’s coast with the intention of developing it. Mr Malkin claims Mr Grotz and the agent then demanded a second payment of €20.9 million (£14.7 million) to cover the cost of developing the land.
However, Mr Malkin claims that the follow-on payment vanished. Mr Malkin is now pursuing Mr Grotz for the money and has requested that a French magistrate conduct an investigation.
Mr Grotz vehemently denies the allegations of wrongdoing and, in turn, says he is countersuing Mr Malkin, claiming that the Russian breached an earlier agreement to stop pursuing him in court after he agreed to cooperate in trying to reclaim the billionaire’s money. Whatever the truth is, a legal battle is on the horizon.
But what happened to the money that was stuffed into envelopes inside the Park Lane duffle bags? Mr Grotz says that, after the Metropolitan Police raid, Jeffrey Brooks told him he did not want the money back, even urging Mr Grotz to keep it for himself as “commission”. Mr. Grotz claims he declined the offer.
Eventually, the £2 million was quietly pocketed by the Home Office under the Proceeds of Crime Act in a previously unreported forfeiture at Westminster magistrates’ court in 2011. Mr Grotz was never questioned, and the money is likely to have gone to the police department’s crime-fighting budget.
And what about the Park Lane depository? It was closed and redeveloped into luxury offices, and its former CEO, Milton Woolf, was sentenced to four and a half years in prison. Another footnote to the story of Mayfair’s seedier side.
The Raid at Lodon’s Hampstead, Edgware and Park Lane: Drugs, Cash, Guns, and Other Items
In 2008, the Metropolitan Police raided three high-security vaults in London’s Hampstead, Edgware, and Park Lane as part of Operation Rize. The raids came after a two-year surveillance mission after a tip that they were being used by criminals to hide criminal proceeds.
The Met sent two undercover “mystery shoppers” named “Vinnie” and “Billy” to investigate. They were given explicit instructions on how to store bundles of €500 notes without drawing the attention of the authorities.
The €500 note is widely used by criminals and corrupt officials to move large sums of money.
Milton Woolf, the vault company’s owner, was sentenced to prison after the jury heard how he “closed his eyes” to criminals using his boxes to hide child porn, crack cocaine, guns, illegal cash, gems, and fake passports. Jacqueline Swan, another of the company’s executives, was sentenced to a year in prison.
The Grotz/Brooks seizure yielded one of the largest cash hauls of any of the 6,717 boxes opened. The Proceeds of Crime Act was used to seize a total of £25.5 million.
