Gerald Ronson, Canadian businessman, faces fraud, conspiracy, tax charges

The hideout was kept under cover at a hotel in Coral Gables, Florida. It looked just like a room in a Travelodge A Canadian businessman spent years setting up a variety of offshore companies,…

Gerald Ronson, Canadian businessman, faces fraud, conspiracy, tax charges

The hideout was kept under cover at a hotel in Coral Gables, Florida. It looked just like a room in a Travelodge

A Canadian businessman spent years setting up a variety of offshore companies, making more than $65m while avoiding taxes, court records show.

As investigators began closing in, however, a hotel that had been rented as a hideout for some of the company’s offshore companies.

Gerald Ronson, 63, was accused of paying himself about $1.8m in payments for identifying a Cuban connection to a Saudi arms dealer in 1993 and persuading executives at an Irish bank to help him settle a $9.9m Irish debt. In 2007, he was convicted of first-degree criminal contempt, accused of willfully violating a 2002 federal tax court ruling ordering him to pay more than $55m for failing to pay the Internal Revenue Service.

Ronson now lives at the Hotel Milford, a chain with locations across North America. Unlike its other properties, the Hotel Milford doubles as a business headquarters, the Globe and Mail newspaper reported. Under the personal and business-related alias of John Purcell, Ronson used the hotel’s amenities for purposes that included keeping up an elaborate wardrobe for meetings with Latin American bankers, the newspaper reported.

According to court documents, Ronson began setting up shell companies in Cayman Islands, where he lived, by setting up a Dighton Caribbean operation, which bought low and sold high, lining up financing from US and European banks. He bought the landmark Dolphin Hotel in Miami and used it as a base for some of the bank-arranged deals.

Investigators raided the hotel in 2010 and questioned Ronson about the offshore activity. He sent emails listing companies that he and the business people on his payroll were setting up, according to court documents. One set of addresses, then shared with Robert Malamud, who is a consultant to the Drug Enforcement Administration, included a condo at the Hotel Milford, but he left it registered as Purcell’s business address.

Investigators found that Ronson had made $66.3m in interest and profit payments through limited liability companies, including $9m paid to Joseph Fernandez, for placing the word “Cuba” in a written note for a Saudi arms dealer that Ronson claimed was about Washington’s continuing support for Castro, according to court documents. The note mentioned a rum-making facility.

Earlier this year, the Wall Street Journal published an expose about a series of offshore companies operated by Ronson and Malamud and the anonymous corporate consultant that they had used to illegally obtain more than $15m in credit from the Irish Republic’s National Asset Management Agency.

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