Just when you’ve forced the Serious Fraud Office to drop its case against you, the former Israeli intelligence agents invited into your life file a new lawsuit.
The long legal battle between Britain’s millionaire Tchenguiz brothers and the fraud watchdog – which sees them suing the SFO for £300m damages plus interest after its humiliating climbdown – has taken another remarkable twist.
Vincent Tchenguiz is now being sued for £330,000 by a private intelligence agency, Black Cube, which is staffed by members of an “elite intelligence unit in Israel”. Its agents allege breach of contract after he hired them to help with his global legal work.
Mr Tchenguiz is in turn suing them in Israel, alleging fraudulent invoices – allegations Black Cube describes as a “fabrication”, according to written arguments.
The dispute throws a spotlight on the increased use of private intelligence firms by corporations and the world’s rich.
In the case of Vincent Tchenguiz, the agents he hired accompanied him wherever he went; they sat next to him at meetings; and four of them even took up residence in Park Lane at the offices of his family trust, Vincos, according to legal documents laid before the High Court. Black Cube was paid an £85,000-a-month retainer, the papers say.
The papers also show that Mr Tchenguiz planned to make a film about his struggle with the British authorities, which began with arrest by City of London police and now sees the brothers Vincent and Robbie heading for court with a huge damages claim.
A witness statement from Avi Yanus, chief financial officer at Black Cube’s parent company, claims that the agency was hired immediately after Mr Tchenguiz’s arrest over the collapse of the Icelandic bank, Kaupthing.
One of the agency’s primary tasks was to track down who was providing damaging information to the SFO, the papers say. Thereafter, its team formed “the core of an entourage Mr Tchenguiz liked to have surrounding him for long periods of time”. Black Cube’s employees have extensive contacts within the Israeli government and intelligence world. Several members of the Black Cube board are still in the Israeli military reserves.
Colonel Aric Granit is “strategic consultant with the Israeli ministry of defence and defence industries”, and Brigadier General Mati Leshem spent 27 years in the Israeli Defence Forces (IDF) during which, the company states, “he commanded various spearhead units, led soldiers in several wars and combat operations, and served as commander”.
Ido Joseph, a project manager, was a captain in the IDF where he carried out “infrastructural complex researches using economical models and intelligence knowledge”. Vlad Tiktin, also a project manager, was the head of unit commander’s bureau, where his responsibilities included “classifying incoming information and analysing it into relevant data”.
One London-based strategic consultant – a former British army officer who has worked with the Israeli security sector – said: “Black Cube is at the high end of the market. From what we know they are into analysis and security systems rather than heavy, muscle stuff. They appear to have good connections within the IDF, [but] we don’t know the level of [any] work they carry out for the Israeli state.”
A source connected to Black Cube insisted that it had played an important role on behalf of their millionaire client in seeing off the SFO.
Black Cube claims, in court papers, that Mr Tchenguiz, in addition to the retainer, agreed to pay the company 1 per cent if successful “from the the revenues achieved from Project Athena or from any other project he will decide to instruct the company... These proceeds include cash settlements, court case settlements and proceeds of the movie.”
After the Serious Fraud Office admitted defeat and dropped the charges against the Tchenguiz brothers last June, a party was held. Black Cube’s Mr Yanus states: “In the course of this party, I said to Mr Tchenguiz words to the effect of ‘What about Black Cube?’ Mr Tchenguiz responded: ‘You got your 1 per cent’.”
However, Mr Tchenguiz subsequently began to question some of the invoices submitted by Black Cube. A witness statement from Vincos’s in-house legal counsel Jamie Drinnan alleges that between December 2011 and February 2013 “Black Cube and its directors, officers and employees engaged in a wholesale fraud on Vincos by issuing false and fraudulent invoices, by dishonestly misrepresenting the nature and scope of the services being undertaken and by taking secret profits or ‘kickbacks’ from associated Israeli organisations introduced to Vincos.
“Some £823,790 has been paid to Black Cube over the past 13 months by Vincos. It is believed by Vincos that much of this sum has been obtained dishonestly.”
The intelligence outfit’s solicitors, Peters & Peters, have taken out an injunction to strike out the counter-claim made in Israel by Mr Tchenguiz alleging BC Strategy, of which Black Cube is a subsidiary, “engaged in wholesale fraud”, a claim the Israeli firm strongly denies.
Black Cube refused to comment at its office in Tel Aviv about the case.
Keith Oliver, a senior partner with Peters & Peters said: “It is a matter of considerable regret to BC who have been working assiduously on behalf of Mr Tchenguiz and his companies that this dispute will have to be resolved by the courts. BC are confident that their integrity and the justification for their claims will be vindicated.”
A hearing to determine whether the two claims should be heard together in London will take place at the High Court in London later this month.