Morgan Lawyer & Co. was acting as intermediary in the acquisition of a large lot of diamonds and had provided documentation and legal support for the deal. The seller was a billionaire from Russia living at One Hyde Park, a luxury residential complex in London, and the buyer – a sheikh from Saudi Arabia. The Russians wanted to remain in the shadows, so he involved an offshore company from the Virgin Islands for the sale and acted through representatives. All negotiations between buyer and seller, without exception, however, involved Robert.
The firm usually had him support these kinds of deals worth hundreds of millions of euros. So, this wasn’t the first transaction of this sort for Robert.
The day before, there had been a meeting at the office of the firm’s director, where Roland said to Robert: “I understand your concerns about the rush. I know Christmas is just days away, but the buyer wants to spend the money before the year’s end. You know, for tax purposes. Besides, the buyer is a Sunni, and for them our Christmas doesn’t really exist. Everything will be ready by December 16. No later. Brink’s Incorporated, the shipping company, has already delivered the diamonds to the bank, and I was notified today that the buyer’s money has been transferred there too. Here’s the SWIFT transfer confirmation."
“Roland, the rush is not a problem. Rather, I'm concerned about insurance liability and possible consequences. I told you the diamonds' sales contract clearly specifies a strict deadline for completion of the deal. If the deal falls through, the default party will have to pay a penalty of five percent of the value of the deal.”
“Well, what’s bothering you there?” asked Roland, surprised. “The bank already blocked this amount on the accounts of the parties to the contract.”
“That’s not what I mean. I am suspicious that the payment of the penalty and insurance indemnity to the seller under the preliminary agreement and at the request of his representative are transferred not to the account, where the funds from the sale of the diamonds are transferred, but to an offshore account. The buyer, meanwhile, makes the payment through a top bank, and the possible penalties and insurance indemnities are also transferred there.” Robert paused and took the contract in his hands. “The fact that the buyer agreed to that is what is most suspect. These kinds of contracts take at least a month to prepare and we have only slightly over a week. By the way, December 16 is the last day. I'm not used to being so pressed for time. What if the deal does not go through on the 16th? We are really short on time,” he said.
“Listen, if the buyer does not object, what can we do? I offered, but the Arabs did not focus on this at all. Also, Robert, why do you think that the agreement will fall through? After all, the insurance indemnity is paid only if nothing happens. I think your suspicions are groundless. Both parties are serious about this and nobody will risk their image for some five percent. No, that’s just silly."
“Roland, the penalty is nearly fifty million dollars! You think that’s silly?"
“Robert, maybe the seller wants to evade taxes this way.”
“You mean the taxes he would pay on the principal bothers him less than a possible loss from the penalty?”
“Well, that’s why we are sending you, Robert. You have to make this deal happen, so that nobody has to pay any fines.”
