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Further blows traded in EPF fraud case

Growth investing

The war of words continues in relation to the long-running fraud investigation in Belgium into the Equity Power Fund, which is under the same umbrella as the collapsed Columna Commodities sub-fund.

Last month, Expert Investor reported the conviction of Levi Dewaegenaere, a former tennis pro and director of property developer Urban Capital Group (UCG).

The case was brought by an unnamed technology group that invested in an entity he owned which entered bankruptcy in March 2020.

He was sentenced to 30 months – half suspended and while this case did not directly linked to LFP I sub-fund Equity Power Fund, the board of directors believed that the actions taken by Dewaegenaere that led to this conviction were similar to his dealings with EPF.

Further appeals 

In a response, Dewaegenaere told Expert Investor that he did not agree with the latest verdict.

He insisted that, in relation to an earlier court verdict, he had been acquitted almost completely for all charges; except for two invoices that were “qualified as not correct”.

Dewaegenaere was handed (and appealed) a 10-month suspended sentence in 2018 for the forgery of two sales invoices relating to his healthcare business Waegener R&D, which entered bankruptcy in 2012.

Referring specifically to the latest court verdict, Dewaegenaere said that he had decided -after deliberation with his lawyers- to lodge an appeal before the supreme court in Belgium.

“This appeal will suspend the latest verdict until the supreme court will come to a conclusion. I look forward to the conclusion of the supreme court with confidence.”

Tangled web

The 42-year old Belgian is one of eight people accused of forgery, fraud, abuse of trust, corruption and money laundering in relation to EPF.

A sub-fund of alternative investment fund manager (AIFM) Luxembourg Fund Partners (LFP I), EPF was launched in June 2013 and is focused on short-term loan agreements and equity holdings.

UCG was 99.4% owned by the EPF, and Equity Power Fund assets were invested in UCG real estate projects.

Investigators claim the majority of the fund’s real estate projects were sold or transferred out without the fund receiving any proceeds.

LFP itself went into liquidation in 2017 and was acquired by fund platform and administrator Alter Domus in December of that year.

The fund’s collapse saw Switzerland-based financial investigator David Mapley of Intel Suisse become director of LFP I in September 2018.

His role was to recoup around €35m in assets and cash from EPF and about €55m from Columna, plus two other funds.

In May 2020, however, Mapley was suspended from his duties by the Luxembourg regulator, which stated that he “no longer satisfies the requirement of good repute”.

Mapley announced shortly afterwards that he would appeal the decision through the administrative court.

Gloves are off

Mapley and Dewaegenaere have continued to trade blows in the media.

This week Dewaegenaere claimed the company Mapley says he represents, Intel Suisse, does not exist; that he has been involved in more than 30 bankruptcies; that he has been subject to regulatory sanctions in the US and is subject to criminal investigations and court cases in various jurisdictions.

Responding specifically to EPF, Dewaegenaere said: “Mr Mapley should never have been appointed as a director of LPF in the first place as he does not comply with CSSF criteria for such a position.

“On top of that, he is subject to criminal charges from shareholders of City Windmills in Switzerland and from shareholders of LFP1-EPF.”

Dewaegenaere pointed to a €41m claim launched by the shareholders of LFP1-EPF for mismanagement and refusal to convene a general shareholder meeting on request of the shareholders.

‘Quite a joke’

In reply, Mapley insisted Dewaegenaere’s response overlooked criminal filings brought by the fund in Belgium and Luxembourg, now in the hands of an investigating judge and criminal proceedings.

He argued that the side-show against him was irrelevant and refuted the allegations.

Mapley also denied improper conduct in relation to City Windmills, a social impact company specialising in small wind turbines for urban use.

“I have filed a defamation claim against Didier Pretot, ex-director of City Windmills. As I financially support City Windmills, to say I used its money is quite a joke. Pretot was paid by Dewaegenaere to attend an EGM in Luxembourg and throw rocks at me, hence my legal claim in the Geneva courts.”

Mapley also dismissed Dewaegenaere’s claims about involvement in bankruptcies and company reputation issues.

“I take over companies all the time, restructure, re-develop or bankrupt – all declared to CSSF. As to Intel Suisse not being a real company, we have always made it clear that we are an informal group of investigators who go after criminals.”

Strong arm tactics

Both sides have accused the other of threats and intimidation.

On Dewaegenaere’s webpage, there is an expletive-peppered telephone recorded message with Mapley’s fellow director of LFP1 Tudor Fedeles and claims from the Dewaegenaere camp that Mapley and his associates have used blackmail and threatened to kidnap wives and ‘send back body parts’ until payments are made.

Mapley denies all these charges insisting the threats have come from the other side and that Dewaegenaere’s accusations are an attempt to smear all investigators and distract from his crimes.

David Burrows

For more than 25 years, Dave has written for a wide range of newspapers and broadcasters including The Times, The Financial Times, The Independent, The Wall Street Journal, The Mail on Sunday, Reuters...

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