Panayiotis (Peter) Kyriacou is facing up to 10 years in jail after he admitted to defrauding the United States by failing to comply with the Foreign Account Tax Compliance Act (Fatca).
The former investment manager at defunct London-based Beaufort Securities appeared before a Brooklyn federal court on Wednesday 20 November, over three years after he was first contacted by an undercover FBI agent.
Investment manager failed to request relevant Fatca info
In the autumn of 2016, the undercover agent met with Kyriacou and stated that he was a US citizen interested in opening brokerage accounts at Beaufort.
The intention was to execute trades in several multi-million-dollar stock manipulation deals.
Six brokerage accounts were opened in the names of various international business operations in Belize, with local nominees listed as the beneficial owners.
At no point did Kyriacou request relevant Fatca information from the agent, which was in breach of US federal law.
In January 2018, Kyriacou facilitated the manipulation of trading in the stock of a publicly traded US company.
He later agreed to launder the proceeds of the securities fraud through the purchase and sale of works of art.
FCA and UK police facilitated investigation
In announcing the guilty plea, the US attorney for the eastern district of New York, Richard Donoghue, thanked the US Securities and Exchange Commission (SEC), the City of London Police, the UK’s Financial Conduct Authority (FCA) and the Hungarian National Bureau of Investigation for their significant cooperation and assistance.
The FCA received some flak in 2018 after it was revealed that the regulator could have shut down Beaufort Securities and its clearing arm Beaufort Asset Clearing Services much sooner, which would likely have stopped some customers losing even more money.
Both firms were placed into insolvency in March of that year following an urgent application by the FCA, but it had delayed the decision due to fears it would expose the FBI’s undercover operation and cause the collapse of a long-running investigation.
Beaufort acted as a traditional stockbroker servicing private investors, corporate clients and institutions.
Approximately 14,000 clients have invested in products such as Isas and pensions and the firms hold around £37m of client money and £664m in client assets.
