Forty-one years ago, Canadian businessman Frank Giustra learned the hard way that money you didn’t want anyone to find could be a lot more hard to conceal.
Mr. Giustra, who earned an estimated $1.5 billion in the mid-1990s from investments in mineral production and metals mining companies, had reportedly opened a blind trust to keep his money out of the reach of outsiders, according to CNN. But between 1997 and 2001, when investigators began sniffing around his activities, he converted part of his trust into an offshore company that was registered in the Cayman Islands, according to the New York Times.
Mr. Giustra was eventually indicted by the Canadian Securities Commission on two felony counts: concealing substantial income and laundering money. But instead of spending the next four decades behind bars, the father of three was awarded a conditional sentence on his Quebec court charges and spared from prison time.
In February, Mr. Giustra stepped down as executive chair of Vancouver-based mining firm First Quantum Minerals Ltd. shortly after ABC News reported his offshore company failed to disclose his payment of $100 million in bribes to the ruler of the Democratic Republic of Congo.
After opening the company in 2005, Mr. Giustra effectively hid his mining deals from the public, according to Reuters.
“I don’t know if he ever asked himself or should have asked himself, is there any expectation for anybody to be on any sort of watch that he had placed on that company to know who he was,” Gary Clark, Mr. Giustra’s lawyer at the time, told the Times.
But in April, the firm revealed that police in Zambia had found an illegal cache of gold bars worth $59 million as well as $4 million in undeclared diamonds in a shipment to its flagship Zambian mine. The Katanga Mining Co. Ltd. said Mr. Giustra was not connected to the illegal gold shipment, despite his control of the company. It has now returned all his investment to investors, according to Canada’s Globe and Mail.
By this point, however, Mr. Giustra had seemingly abandoned efforts to keep the matter private. Days after Zambian police broke up the illegal shipment, The Globe and Mail reported that Mr. Giustra’s firm had tried to conceal the connection by offering to hand over 20 percent of its share in KCC to keep it from falling into public hands.
The scandal may also have an impact on Mr. Giustra’s investments with President Joseph Kabila’s Congo government. The Associated Press reports that his investment in the mining firm Mr. Giustra controls in Congo has notched several mining concessions there, but it was unclear whether he’s been hurt by Mr. Kabila’s inability to win the confidence of his investment firms.
In his resignation announcement, Mr. Giustra said he “will step down from the board of directors of First Quantum during the next month to allow the Board to continue to focus on the company’s strategy.”