Citi’s missing €10bn that wasn’t
A Saudi prince, a Taliban financier, international spycraft and pallets of US dollars — it’s a story with everything. Except evidence.
Bad news for Lex Foundation, the obscure and asset-free UK family office that last year sued Citibank for purportedly losing €10bn. Its case has been thrown out of court.
Lex Foundation is Olgun Halil Shah, a 65-year-old British Cypriot national, his wife and his son. The suit filed at the London High Court last July alleged that their shell company was in line to receive €100bn for United Nations-approved funding of humanitarian projects, but that the first instalment of €10bn had never arrived in its Citibank account. Citi said the money did not exist and called Shah a “fantasist”.
Justice Henshaw ruled in a summary judgment dated June 7 that Lex Foundation had “no realistic prospect of showing that the alleged transfer took place, and that there is no other compelling reason why the case should proceed to trial.”
For a full backgrounder, see Alphaville’s earlier reporting. The short version is that Shah opened a private banking account at Citi in February 2021 with the help of a Saudi prince not named in the judgment, who had joined Lex Foundation as a director in June 2019 and resigned six days after the alleged cash transfer in April 2021.
A $10mn initial deposit Shah had promised Citi on opening the account never arrived. Shah then showed the prince what appeared to be a Swift money transfer docket showing a €10bn transfer from a purported Deutsche Bank account holder, Intrepid Capital. One of the prince’s people took this to Citi. (“The Prince’s staff member expressed shock at the amount.”)
Shah explained to Citi that Intrepid was a Swiss family office running funds controlled by “powers above”, namely the Bank for International Settlements and the European Central Bank, and that the documentation attached looked out of the ordinary because it was being tracked by “a US federal agency”. Citi’s inquiries led it to reject all three Swift dockets Shah had provided and by late April 2021 the bank had closed his account with zero balance.
A flavour of how the caper played out can be found in Shah’s correspondence trail.
In May 2021, Shah emailed Jane Fraser and Sunil Garg, CEOs of Citigroup and Citibank respectively, saying that unless he received €10bn within three days he would create a “shitstorm that is going to wreak havoc on your bank and end your careers”.
The next day he followed up with a letter that copied in the Governor of the Bank of England:
By now you should have realised that the dishonest dealings between Deutsche Bank and other financial institutions, including your own, have come to the attention of security services and evidence is being made available to law enforcement agencies. The extent of the dishonesty goes well beyond the €10 billion remitted to the Lex Foundation. I have been advised that it extends to around €400 billion. I have reason to believe that there are grounds to invoke RICO in this case. That will make your bank culpable in an affair that substantially exceeds the market capitalisation of Citigroup.The evidence against your bank is inescapable. I write this letter to propose a solution. That is my profession; I find ways to win in no-win scenarios. I also create no-win scenarios. If you co-operate with me and my associates, this could be your Kobayashi Maru moment. I could be your white knight or your worst nightmare; the choice is yours.
Kobayashi Maru is a Star Trek reference, in case you were wondering.
His solution proposed was for Citi to give €10bn to Lex Foundation immediately, with a further €90bn to come, in exchange for a non-disclosure agreement and waiver of claim. Shah also requested that Citi sell 10 per cent of its shares via private placement to Lex Foundation and another family office, SpiritShifting AG, so they would be incentivised to protect its reputation.
The letter continues:
The Lex Foundation takes its name from the root of the Greek name Αλέξανδρος (Aléxandros), meaning “protector of mankind”. To that end we undertake our mission with fearless vigour, because we are doing God’s work. History has shown that boundless power is bestowed upon the meek when love of humanity is in their hearts. Do not underestimate it. If financial institutions have to be sacrificed for the greater good, so be it. However, we aim to serve as agents to maintain stability of the global financial system. It is the dishonesty of bankers that puts the system at risk.
Three months of back-and-forth followed in which Shah sent Swift documentation to Citi, which the bank dismissed as likely forgeries. By late August Shah had escalated his correspondence campaign to include Christine Lagarde, President of the European Central Bank, and had changed tack from UN humanitarianism to clandestine statecraft:
I am an undercover agent for security services. I was given the mission to receive EUR 100 billion (x2) into my humanitarian foundation for approved projects, which includes a number of African infrastructure and economic development projects. I played out the process of transferring the first tranche of EUR 10 billion and was confronted by the disingenuous antics of Citibank
Shah’s version of events was that Deutsche Bank had a US fund “comprised in large part of money derived from Chinese and Russian heritage assets”, as well as cash collected through “secret commercial dealings between the US government and Iranian regime (contrary to sanctions).” Chinese State Security was introduced to this already convoluted plot, as was BOE chair Andrew Bailey and a Taliban chief with whom Shah says he “had financial dealings”:
The letter continues:
Thousands of pallets of cash US dollar notes reside in depositories around the world; including London, Moscow, Oman, Hong Kong and Istanbul, some of which I have personally inspected. The safe keeping receipts are issued by the depositories in favour of Deutsche Bank. [ . . . ][T]here is a plethora of evidence that will emerge in the course of Lex Foundation’s action. This will inevitably become a criminal matter and the careers of certain public officials will end badly. I will make sure of it.One has to consider the possibility that I am being used to trigger the crash of the prevailing global financial system, to enable those higher up the food chain to reset the debt system.I want it on record that I tried to resolve this matter discretely for the sake of stability of the global financial system. I am not responsible for what happens next.This is not a “bargaining tool” as [Citi’s lawyer] Clifford Chance called it; it is a tactical nuclear weapon, and I am going to use it.
Justice Henshaw found no credible evidence of any cash transfer, nor that any of the parties on the claimant’s side might have €10bn, nor that any of those parties had a Deutsche Bank account.
