An investigation into Austrian financier Erwin Lasshofer, who has been linked to a series of frauds, reveals his company Innovatis is still open for business and working with major banks.
Erwin Lasshofer is in trouble. He is at the center of several alleged frauds in Europe and is the subject of an arrest warrant in the United States, so you might think that the Austrian financier would take his foot off the gas when it came to running his company – but that is NOT the case.
An investigation has revealed that Lasshofer’s main vehicle, Innovatis (Suisse) AG, is still open for business and operating out of an empty office in Zug, Switzerland.
Innovatis’ primary business, the company says, is asset management and the structuring of financial products. The company’s website states: “A wide network of contracting partners, banks, insurance companies, lawyers, private investors and service providers enables INNOVATIS to offer investors and clients top quality products and a high level of security for their investments.”
However, “top quality” was not the experience of Castle Aero and Banvelca & Company, two businesses who were clients of Innovatis.
According to court documents filed by the Public Prosecutor in Salzburg, Lasshofer offered to finance the acquisition of private jets by these two companies. But before they could receive the money, Castle Aero and Banvelca had to transfer cash into an escrow account as collateral. The banks holding the escrow account then provided Innovatis with a guarantee.
What Castle Aero and Banvelca did not know was that Innovatis used the guarantee as collateral to take out its own loans, and then defaulted on them. As a result, the guarantee money was seized and Castle Aero and Banvelca lost $4 million and $2.5 million respectively.
A similar story played out in the case of American investors John Niemi, Rogert Naegele III and the Swedish golfer Jesper Parnevik. It involved development of a hotel and apartment complex at Breckenridge in Colorado. Lasshofer offered to finance the project to the tune of $220 million but not before the investors had put up $2 million in collateral. The investors did so but no financing was forthcoming.
The US District Court of Colorado found Lasshofer liable for the collapse of the Breckenridge project and awarded the investors damages of $185 million. When Lasshofer failed to pay the damages or return the $2 million collateral, a warrant was issued for his arrest.
Despite the litany of legal problems that Lasshofer faces, Innovatis continues to operate and claims to do so in partnership with major banks and financial institutions.
It is thought that Lasshoffer has had dealings with at least 50 banks and finance firms in Europe over the past decade.
The legal documents in the Breckenridge case, for example, reveal that Lasshofer had no fewer than 12 accounts with banking giant Credit Suisse.
The legal documents also show that he held accounts with Societe Generale (Zurich), German financial services behemoth Commerzbank AG, French bank BNP Paribas as well as a whole raft of smaller entities in Switzerland, Liechtenstein and Luxembourg.
It is difficult to know how many of these banks are still working with Lasshofer because when approached, all of the institutions cite client confidentiality and privacy as reasons why they cannot reveal whether they are still involved with him.
Liechtenstein-based Bank Frick & Co said: “Because of data protection, privacy laws and the statutory banking secrecy we are not in a position to comment on persons or entities being clients or not being clients of our bank.”
Among the other institutions that declined to comment were BNP Paribas, Liechtensteinische Landesbank, Market Securities, Picard Angst, Sesame Financial Group SA, Silex Investment Partners, Societe Generale Corporate and Investment Banking (SGCIB), Salzburger Sparkasse Bank AG and Decentia Investment Advisory AG.
Until these banks reveal whether they still work with Lasshofer and Innovatis, the suspicion will be that some may be turning a blind eye to alleged fraudulent behavior.