Money Laundering & Doping In Italy. Armstrong, Menchov named

[Polish]

Does anyone think that a guy who barely graduated High School (GED) set up a global structure for transferring and laundering money by himself?

Of course not, there are people who do this for a living. Many of them live in Monaco.....

That would explain why Lance did not know the exact amount paid to Ferrari when questioned at the SCA trial.

Telling the truth.

"How much did you pay Ferrari?"
"dude are you stupid? I said I don't know the exact amount"
"Was it more than the DOJ spends on muffins?"
"Didn't you hear me? How would I know"

 

[Polish]

This is a good quote:

Speaking on condition of anonymity because the investigation is still not complete, an Italian law enforcement official told The Associated Press that the Corriere report is "all true, and you can relay it across the ocean."

Why does the Law Enforcement Official need anonymity?
Unnamed source involved in the investigation....

Wonder if any info from the Fed Investigation was leaked in this newspaper story.

 

[Velodude]

This is in essence what I’m saying. The shell company was being used to avoid tax and they’ll probably skimming amounts from other riders which equalled less than national tax rates which provided the incentive. In additional buying pharmaceuticals from gross earnings is a lot better than using net income.

Bags of cash indeed.

Festina was and USPS allegedly was two teams that were organised on a team basis for PEDs.

Festina were funding the drug program from benefits payable to the riders. I would be certain that the Festina backers were complicit in this arrangement.

On the other hand, the USPS "no drugs" contract clause would have required the team management to be seen not to be applying sponsorship funds and team winnings that are payable to the riders and staff as salaries and bonuses to fund the PED program.

There would be ample moneys collected from the sale of bikes, diverting merchandise sales cash and using a third party to over bill expenses to finance the team's drug program without skimming riders' benefits.

Menchov's position may be different as he may be acting alone with Ferrari and the shell corp. could also act as a tax avoidance vehicle. He could risk arranging the payment of any personal promotion and sponsorship earnings direct to this corp and for Ferrari to take his "fee".

 

[Polish]

Article from ESPN:

http://sports.espn.go.com/oly/cycli...ss&source=twitter&ex_cid=Twitter_espn_6361564

A few months old, sure, but as timely as ever.

Without identifying its source, Sports Illustrated said in January that when Italian authorities raided the home of Armstrong teammate Yaroslav Popovych last November in Italy, they found texts and emails linking the RadioShack team with Ferrari as recently as 2009.

In November, European and American agents met at Interpol headquarters in Lyon, France, to share information on all the investigations.

"Government sources are leaking inaccurate rumors to create the false impression that this taxpayer money-wasting fishing expedition actually has a purpose," Fabiani said.

The cyclists raided Thursday in Sicily and northern Italy include Michele Scarponi -- a title contender for this year's Giro d'Italia -- and Lampre teammate Leonardo Bertagnolli, as well as five current and past Russian riders with the Katusha team.

No arrests were made.

 

[thehog]

It is not possible to skim anything that a rider wins; it must be reported as income in the US. It would easily be confirmed as income of an American rider if the IRS chooses to audit. Having a shell company does not make LA winning the TdF and thus getting prize money not happen.

So, RR is right but I thought the amount was 80k tax free or so instead of 110, but who is counting.

As I mentioned I was speculating. But I would be very surprised if a rider is paid winnings directly. ie winnings are paid to a riders promotion umbrella company. This is probably the method to divert the funds. I would imagine that the umbrella company is Swiss based to avoid the holding tax.

Not possible indeed. Have you been reading the news in the US?

 

[thehog]

Festina was and USPS allegedly was two teams that were organised on a team basis for PEDs.

Festina were funding the drug program from benefits payable to the riders. I would be certain that the Festina backers were complicit in this arrangement.

On the other hand, the USPS "no drugs" contract clause would have required the team management to be seen not to be applying sponsorship funds and team winnings that are payable to the riders and staff as salaries and bonuses to fund the PED program.

There would be ample moneys collected from the sale of bikes, diverting merchandise sales cash and using a third party to over bill expenses to finance the team's drug program without skimming riders' benefits.

Menchov's position may be different as he may be acting alone with Ferrari and the shell corp. could also act as a tax avoidance vehicle. He could risk arranging the payment of any personal promotion and sponsorship earnings direct to this corp and for Ferrari to take his "fee".

To me this is potentially a big bomb for Armstrong that the drug use. In the US there is a hatred towards those in banking and avoiding tax. This won’t wash well with the Joe Public. They can cope with a guy beefing himself up to win but not putting in your fair share gets people riled to the hilt.

 

[ChrisE]

As I mentioned I was speculating. But I would be very surprised if a rider is paid winnings directly. ie winnings are paid to a riders promotion umbrella company. This is probably the method to divert the funds. I would imagine that the umbrella company is Swiss based to avoid the holding tax.

Not possible indeed. Have you been reading the news in the US?

Ah, speculating. Have you read Doc's rules about speculating without cites?

Speaking of cites, do you have one where winnings from races are not paid directly to the team or to the rider, and instead to some umbrella company? And, even if that were true that umbrella company would still have to report it as income. I am ignorant of Swiss tax laws, but if a Swiss company does not have to report income, then why the money laundering angle? Money getting to that company has involved no wrongdoing. Only if that money was then paid out to American riders for example would it require to be reported as income.

Velodude probably has it about right with the sale of bikes and merchandise IMO, and using sponsorship $.

 

[cineteq]

Article from ESPN:

http://sports.espn.go.com/oly/cycli...ss&source=twitter&ex_cid=Twitter_espn_6361564

A few months old, sure, but as timely as ever.

A follow up:
http://espn.go.com/olympics/cycling...rmstrong-paid-banned-doctor-via-front-company

 

[Dr. Maserati]

Ah, speculating. Have you read Doc's rules about speculating without cites?

You might want to reread what I said about speculation before you go giving TheHog lessons.

Speaking of cites, do you have one where winnings from races are not paid directly to the team or to the rider, and instead to some umbrella company? And, even if that were true that umbrella company would still have to report it as income. I am ignorant of Swiss tax laws, but if a Swiss company does not have to report income, then why the money laundering angle? Money getting to that company has involved no wrongdoing. Only if that money was then paid out to American riders for example would it require to be reported as income.

Velodude probably has it about right with the sale of bikes and merchandise IMO, and using sponsorship $.

I think that is pretty much it - and I would add that getting appearance fee's for events could be another revenue source that would be difficult for the taxman to track.

 

[ChrisE]

You might want to reread what I said about speculation before you go giving TheHog lessons.


I think that is pretty much it - and I would add that getting appearance fee's for events could be another revenue source that would be difficult for the taxman to track.

Agreed.

I read the thread about speculation, though I can't remember who you were jousting with. I was making a joke, doc. And, the hog needs many lessons the first of which is how to excorcise his National Enquirer tendencies out of his posts. I expect him to come along any minute and claim bigfoot was spotted on the the Tourmalet handing off bottles.

 

[webvan]

Menchov himself reportedly had $3.27 million seized from his accounts.

Hum...where was that money sitting, is it an advance payment he had made to Ferrari? Sounds a bit steep...

As someone pointed out, shame on the Italian authorities for not nailing Ferrari years ago. Doesn't sound like it would have been too hard to tail him and catch him red handed giving consultations in his dopemobile?

 

[Dr. Maserati]

Agreed.

I read the thread about speculation, though I can't remember who you were jousting with. I was making a joke, doc. And, the hog needs many lessons the first of which is how to excorcise his National Enquirer tendencies out of his posts. I expect him to come along any minute and claim bigfoot was spotted on the the Tourmalet handing off bottles.

I am wondering how long before the American media looks at the Italian & Monaco connection with this:

One year ago, LIVESTRONG premiered the LIVESTRONG Global Cancer Campaign in Adelaide. After Australia, the Campaign made stops in California, Italy, Monaco, France and Ireland.

 

[ChrisE]

I am wondering how long before the American media looks at the Italian & Monaco connection with this:

Unless some unnamed source tells the media stenographers to connect these dots then it will not see the light of day.

Interesting, though not knowing the amount of money involved here from LA's side who is to know if it is a large enough sum to have been skimmed off of something like LAF. Millions of dollars takes alot of used trek sales on ebay lol.

 

[BroDeal]

It seems to me that a $100-200K per year to buy doping products for the team was easy to obtain by selling stuff provided by sponsors, but if Dr. Ferrari was charging his rumored 10-15% of income for advice then that presented a huge problem for Armstrong. Moving millions of dollars around while not having it show up on accounting or tax records is a whole new ball game. Extrapolating from the amount seized from Menchov, the figures for Armstrong must have been very large; and that would require serious planning to circumvent and break many laws.

I am laughing at the thought of Menchov fuming over his three million dollars. It reminds me of the movie Clear and Present Danger when the drug lord, Escobeda, flips out after the U.S. grabs the hundreds of millions of dollars in his bank account.

I hope we get transcriptions of the wiretaps between Armstrong and Ferrari's son. Those could be very hard for Armstrong to explain, and they could show clear intent.

 

[Dr. Maserati]

Unless some unnamed source tells the media stenographers to connect these dots then it will not see the light of day.

Interesting, though not knowing the amount of money involved here from LA's side who is to know if it is a large enough sum to have been skimmed off of something like LAF. Millions of dollars takes alot of used trek sales on ebay lol.

I wouldn't be so sure - the NYT were the ones to get LA on record that the 'donation' from Australia in 2009 to the LAF was actually income:

Armstrong did not specify the amount of his fee but said Saturday that, contrary to what had been reported here last week, he was not donating the fee to his foundation but treating it as income, the same way he has his other speaking and appearance fees since retirement.

“It’s not simply showing up to a bike race and getting paid to race the bike,” he said. “I’m not being paid to race. Is there a fee for other things? Yes, but that’s not any different than what I’ve done the last three or four years, actually longer than that.”

 

[Velodude]

<snip>
Speaking of cites, do you have one where winnings from races are not paid directly to the team or to the rider, and instead to some umbrella company? And, even if that were true that umbrella company would still have to report it as income. I am ignorant of Swiss tax laws, but if a Swiss company does not have to report income, then why the money laundering angle? Money getting to that company has involved no wrongdoing. Only if that money was then paid out to American riders for example would it require to be reported as income.
<snip>

Generally, Swiss companies are exempt from tax in Switzerland on income earned outside of Switzerland.

These amounts allegedly earned by Ferrari's corporation would not have the character of Swiss derived income. I would not hesitate to say that at law the Swiss corporation could not be set up contractually to earn cycling income by being interposed between the rider and his team. Therefore, these amounts paid on behalf of riders (eg Menchov) would be "loans" to the corporation and be of a tax avoidance character.

Ferrari's corporation could earn tax exempt fees for his advice not transacted in Switzerland. These would be exempt under Swiss law but, due to Ferrari's control, would be assessable to him in Italy.

Dennis Menchov, being a Russian, may have other reasons to use a Swiss bank account other than tax avoidance. Security away from the Russian mafia, Russian banks and stability of currency.

 

[Race Radio]

That a guy like Menchov supposedly had 2.4 million euros seized says that this more then just interval workouts.....it also points to more then just drugs for personal use.

There are a large number of people caught up in this. Wide scale distribution of drugs is the focus, more then individual riders.

 

[mewmewmew13]

That a guy like Menchov supposedly had 2.4 million euros seized says that this more then just interval workouts.....it also points to more then just drugs for personal use.

There are a large number of people caught up in this. Wide scale distribution of drugs is the focus, more then individual riders.

..and since Menchov's name pops up continually w/r to doping et al it would be no surprise if he is heavily involved in a big way. Just guessing on my part but he sure seems an integral part of 'the scene' or whatever.

 

[Microchip]

..and since Menchov's name pops up continually w/r to doping et al it would be no surprise if he is heavily involved in a big way. Just guessing on my part but he sure seems an integral part of 'the scene' or whatever.

So disappointing to hear this of Menchov.

 

[mewmewmew13]

So disappointing to hear this of Menchov.

Sad to hear that any rider has to get involved in this manner and at an earnest level...a real waste.

 

[mewmewmew13]

to add to my thought and to be fair, I have no idea whether or not Menchov is really involved in anything at all. It just starts to seem 'iffy' when there is that much money seized in a foreign account and his name has popped up in countless investigations.

It would be great if he were completely clear and unjustly accused, but it just doesn't seem like that's the case

 

[TheMight]

to add to my thought and to be fair, I have no idea whether or not Menchov is really involved in anything at all. It just starts to seem 'iffy' when there is that much money seized in a foreign account and his name has popped up in countless investigations.

It would be great if he were completely clear and unjustly accused, but it just doesn't seem like that's the case

Well for starters, when did this brake? I'll give him a 40 hour count to start screaming about how they've wrongfully seized his money. Is he independently wealthy beyond that? Such that it's not that big of a deal? What's he have to his name, I'd imagine this is a lot of it.

 

[thehog]

Sad to hear that any rider has to get involved in this manner and at an earnest level...a real waste.

I'm starting to think there's more money in dope dealing than winning races. Might explain Menchovs inconsistency over the years.

 

[webvan]

I still don't understand what that amount corresponds to...is it money he had set aside to pay Ferrari, is it money he collected by reselling drugs ? In any case it looks like way too much money!

 

[Je ne sais quoi]

There were a few things that weren't stated outright in the Italian article.
Were there not the following inferences?

- The money seized from Menchov was not necessarily all connected with the Ferrari-linked company account.
- The money seized from Menchov might not have been his money (even if it was in his account).
- The investigation is about money laundering, in part.
- Bags of cash are being moved around.
- Cyclists are very mobile and therefore make excellent couriers.
- In the case of some cyclists, it might appear normal for large sums of cash to flow through their accounts.
- Maybe this story is all contained in the world of cycling, but maybe cycling is just a window into another world and the investigation goes way beyond that.

Note: these are inferences.