BGC Partners has identified luxury jewellery and 18 English properties it claims may have been funded by an alleged $35m fraud perpetrated by two of its UK employees.
The US interdealer broker has accused Michael Viney and Xavier Alcan of funnelling cash due to or from the UK tax authorities into their own pockets between 2015 and 2020, according to a London court filing.
The civil lawsuit names Viney’s girlfriend, Hallelujah King, as a third defendant, claiming she may have received some of the proceeds of the alleged fraud in the form of Cartier and Bvlgari jewellery and a £1.2m property in St Albans.
BGC, whose brokers act as middlemen between investment banks, disclosed the alleged $35m fraud in February but did not name the accused employees or reveal detailed allegations. Howard Lutnick, BGC chief executive, said at the time it was “an unfortunate event”.
A lawyer for Viney and King had no immediate comment.
Clerks at London’s High Court said defences for Alcan and King did not appear to have been filed yet, and that a defence for Viney was filed this week but was still being processed due to an administrative backlog and was not yet available.
Alcan’s law firm, Taylor Wessing, did not immediately respond to requests for comment. BGC did not immediately respond to a request for comment. The April filing claims that Viney and Alcan have been suspended.
The lawsuit, brought by BGC subsidiary Tower Bridge International Services, alleges that Alcan, a senior BGC broker, “encouraged” Viney, a TBIS tax adviser, to facilitate the frauds.
The court filing claims Viney diverted £8.6m owed to BGC by the UK’s tax authority to an account controlled by Alcan after telling HMRC that Alcan was authorised to receive the money on BGC’s behalf.
Viney is accused of diverting a further £12.6m of payments owed to HMRC by BGC to himself and Alcan, including with the use of “doctored” documents that replaced bank details for the tax authority with their own.
The lawsuit also alleges Viney moved £5m of TBIS cash into a Handelsbanken account he controlled, falsely representing it as a payment to HMRC, before returning it to a BGC account.
Those claimed transactions were allegedly designed to create the impression of a pool of loans arriving from the German bank to fund 2018 capital contributions by BGC’s UK partners.
“In fact no such loans had been obtained from Handelsbanken, and the payments had in fact been funded, predominantly, by the fraudulent transfer [from TBIS],” the lawsuit claims.
Viney then received repayments of the supposed loans amounting to about £1.4m, the lawsuit alleges, adding that Viney had repaid the £1.4m after he was confronted in November 2020.
BGC alleges that Viney diverted further funds of almost £2.5m intended for some of the company’s partners to himself and Alcan.
The lawsuit claims Alcan bought Viney “extravagant items including holidays, electronics and luxury designer jewellery”, and cites alleged WhatsApp conversations about Alcan buying Viney a Canary Wharf flat and a new Audi car.
The filing also cites a claimed solicitor’s letter describing Alcan’s desire to transfer properties to Viney for “wealth and estate planning” purposes.
BGC claims Viney admitted the scheme “in broad terms” and that Alcan asserted he believed the monies he received were legitimate payments to him.
The lawsuit states that BGC uncovered the alleged fraud during a November 2020 investigation sparked by unspecified “accounting issues” relating to the 2018 UK partner contributions.
The court filing lists a series of properties potentially funded by the alleged fraud, including the St Albans home that Land Registry records show is owned by King, and student rental properties in Nottingham, Manchester and Leeds owned by Viney.
The lawsuit further alleges Viney and Alcan destroyed documents. It claims Alcan, during a December 27 meeting with BGC representatives, deleted many of his texts to Viney after BGC warned him earlier in the meeting not to delete any electronic communications.
Alcan has previously appeared in the London courts as a witness in the early 2000s when he was an executive at Cantor Fitzgerald, from which BGC was spun off in 2004.
He caused a media furore in the case between Cantor and rival ICAP when he testified that going to strip clubs was common practice for brokers. “On a good night at Spearmint Rhino you can see 80 per cent of the market,” he said on the stand in 2002.