Login
iscover
The US government has charged a former defence contractor with allegedly defrauding the United States and evading taxes, then using those funds to purchase a ski chalet, property, yachts, and a music television franchise.
To continue reading the rest of this article, please log in.
Create free account to get unlimited news articles and more!
The US Department of Justice has unsealed an indictment alleging former defence contractor Douglas Edelman and his wife, Delphine Le Dain, engaged to defraud the US and evade taxes on more than $350 million in income made as a defence contractor during the United States’ post-9/11 military efforts in Afghanistan and the Middle East.
Edelman was allegedly a 50 per cent owner of defence contracting business Mina Corp and Red Star Enterprises (Mina/Red Star) between 2003 and 2020. The company is alleged to have received more than US$7 billion from contracts with the Department of Defense to provide jet fuel to US troops in Afghanistan and the Middle East.
“Working with Le Dain and several other co-conspirators, Edelman allegedly engaged in a lengthy scheme to hide his profits from Mina/Red Star, including by concealing his income in undisclosed foreign bank accounts, creating false documents and making false statements that Le Dain – who, as a French citizen residing abroad, did not have US tax obligations – founded and owned Mina/Red Star,” the US Department of Justice alleges in a public statement, published earlier this month.
“Le Dain allegedly signed some of the false documents, including those that purported to ‘gift’ Edelman money for certain personal expenses.
“The indictment further alleges that to carry out his scheme, Edelman conveyed this false story of Le Dain’s ownership to arms of the US government.
“Until approximately 2015, Edelman allegedly did not file any US individual tax returns and did not pay any tax on the tens of millions of dollars he was allegedly making each year from Mina/Red Star.
“In 2015, Edelman allegedly filed false returns for tax years 2007 to 2014, claiming that his business interests, income, and assets belonged to Le Dain. From 2015 to 2020, Edelman allegedly filed false tax returns reporting that his only income was as a consultant, and that he had no interests in any foreign businesses.
“The indictment further alleges that Edelman directed his profits from Mina/Red Star into banks known at the time to shield account holder identities from US authorities, in countries such as Switzerland, the Bahamas, Singapore, and United Arab Emirates.
“He allegedly held the accounts in the name of non-US entities created in countries such as Panama, Belize, and the British Virgin Islands. Edelman allegedly always controlled the money in these accounts and used it to fund his other business ventures around the world, including a business selling internet services to US troops and contractors at Kandahar Air Base in Afghanistan, a Mexican fuel infrastructure project and a music television franchise in Eastern Europe. Edelman allegedly also used the money to buy a ski chalet in Austria, a house in Spain, a townhouse in London and multiple yachts – all of which were purchased in the name of nominees.”
Edelman and Le Dain are charged with conspiring to defraud the United States and 15 counts of tax evasion, according to the US Department of Justice.
In addition, Edelman is also charged with two counts of making false statements to the United States, and 12 counts of wilfully violating his foreign bank account reporting obligations, as part of a pattern of unlawful activity.
The United States will seek Edelman’s extradition to stand trial in the United States after he was arrested in Spain on US criminal charges on 3 July.
IRS Criminal Investigation and the Special Inspector General for Afghanistan Reconstruction are investigating the case, with assistance from His Majesty’s Revenue & Customs of the United Kingdom.
Assistance was also provided by the Joint Chiefs of Global Tax Enforcement (J5), which brings together the taxing authorities of Australia, Canada, the Netherlands, the United Kingdom, and the United States. Assistance with the arrest was provided by the US Drug Enforcement Administration and Guardia Civil of Spain.
