Miami’s chicken king Christian de Berdouare rules more than a chain of popular poultry restaurants — at least on paper, he and his family have ties to an elaborate network of offshore companies administered by Mossack Fonseca, the law firm at the heart of the Panama Papers.
One of the companies was set up by de Berdouare’s mother, the 59-year-old CEO of Chicken Kitchen told the Miami Herald. He inherited the offshore, which holds the international rights of Chicken Kitchen, after her death last year.
But the 16 other offshore firms mystify him, de Berdouare said, although leaked documents from Mossack Fonseca show they belong to a New Zealand company that helped manage the financial affairs of his late mother, Katy.
“I have absolutely nothing to do or have any ownership interest in any of the entities,” de Berdouare said.
The conundrum is a common one in the opaque world of offshore companies: figuring out who’s really behind them is as easy as scuba diving in pea soup. That frustrates law enforcement and creditors, leading President Obama and other world leaders to propose bringing more transparency to the corporate quagmire.
Owning an offshore is perfectly legal, and it’s a common practice for the wealthy.
De Berdouare speculated that his mother’s lawyer, Anthony Able, used the New Zealand company as a vehicle for several clients, and that those people controlled the other companies.
In an interview, Able confirmed that he set up the company, Aeternus Trust Limited, to manage or represent corporations controlled by various clients, including de Berdouare’s mother. Able declined to name the other clients.
“As far as the outside world is concerned, you have one body controlling the companies,” Able said. “Although it looks as if there is a connection between them, there is no connection, apart from the shared administrator.”
Able is based in Naples and is not affiliated with Mossack Fonseca, although he used their offshore services. He said the decision to administer the web of companies through Aeternus was a standard arrangement and a matter of legal convenience. It also kept clients’ names private.
De Berdouare, who recently bought and tore down the Miami Beach mansion of Colombian drug lord Pablo Escobar, is one of several South Floridians who show up in the leak of the Panama Papers, a cache of secret offshore documents analyzed by the Miami Herald and the International Consortium of Investigative Journalists.
Others include Ella Fontanals-Cisneros, an art collector who owned a 156-foot yacht through a Mossack Fonseca offshore; Alan Trustman, a Hollywood screenwriter; and Ping Donaldson, a Weston Realtor who says she ended up with offshores in her name after a vacation to Hong Kong.
More than 50 people who list South Florida addresses show up as owning offshore corporate entities in the Panama Papers.
And Miami appears in the leaked documents more times than any U.S. city except New York. (Readers can now search the database at MiamiHerald.com.)
Alleged drug-money launderers, convicted fraudsters, tax evaders and a foreign agent used Miami, a financial hub at the crossroads of the United States and Latin America, as part of their offshore operations, the leaked documents show. People accused of corruption abroad bought pricey beachfront condos through secret offshores.
Most of Mossack Fonseca’s clients were foreign nationals. The firm avoided working with Americans, in part because of a scare with U.S. law enforcement in 2000.
“It’s not the days of Scarface anymore,” said Scott Moritz, a former FBI agent who works for consulting firm Protiviti. “But Miami is a very international city, a resort city. You have people from all over the world, especially Latin America, looking to invest here. Some of these high-net-worth individuals are legitimate. But you’ll find Miami attracts colorful characters with ties to gangsters and dictators, too.”
Moritz said money launderers and other criminals relish the secrecy provided by offshore companies.
Of course, the companies have a variety of legal uses, he said, especially to preserve privacy and pay lower taxes. Most of the South Florida people who used the companies broke no laws.
Web of offshores
The Miami Herald first contacted Christian de Berdouare after finding a company called Chicken Kitchen International in the Panama Papers database. Chicken Kitchen and its quickly prepared poultry are a fast-food favorite in South Florida.
De Berdouare said the offshore offshoot was never used. It had been established so his late mother, a French citizen, could control the international rights of Chicken Kitchen.
The chain’s website discusses the opportunities of international franchising. “Chicken is the only food in the world that transcends race, religion and gender,” the website states.
Multinational companies such as Google and Apple often stash their intellectual property rights offshore in order to avoid paying taxes in the United States, which charges some of the world’s highest corporate tax rates. It’s a legal maneuver that has inspired a debate in Congress over fairness.
De Berdouare said he hasn’t sold a franchise abroad using Chicken Kitchen International — and he doesn’t see a reason to keep the company offshore.
“We’re going to reincorporate it in the U.S. and bring back the rights,” he said. “If we do any international deals, we’ll pay taxes in the U.S.”
A leaked corporate registry shows Chicken Kitchen International is officially controlled by Aeternus Trust Limited, registered in New Zealand in 2004.
Aeternus held shares in as many as 16 other offshore companies between 2004 and 2015, records show.
The offshore firms have a variety of purposes.
Some were set up to invest in the oil industries of Gabon and Congo. Another has the same name as a well-reviewed company that leads tours of Mount Kilimanjaro, Tanzania’s majestic peak. One bought real estate, although it’s not clear where.
De Berdouare said he’d never heard of those other companies.
Even Mossack Fonseca didn’t seem to know their true owners. Offshore companies are often cloaked in layers of corporate entities like matryoshka, Russian nesting dolls. (These entities are called “shell companies” because they are passive vehicles used to conduct financial transactions and hold assets, not active corporations.)
In December 2013, MF’s compliance department asked its Miami representative office a simple question about one of the offshores, a British Virgin Islands shell company called Tanglin International Limited. Could the Miami office provide a copy of the passport of Qi Xia, who controlled Tanglin? The firm needed to run a due-diligence check — a screening of its client to make sure no anti-money-laundering rules were being broken.
It took the Miami office more than a year to reply, according to leaked emails. And, as it turned out, Qi Xia wasn’t a person at at all.
“Qi Xia is a New Zealand Trust that owns Tanglin International Limited and as such will not have a passport or other identifying documents,” wrote an assistant at MF’s Miami office, in February 2015, after several reminders from headquarters.
The assistant continued that Qi Xia trust was held by Aeternus, the company that managed the financial affairs of Katy de Berdouare and others.
No more emails were exchanged on the matter, according to the Panama Papers database.
Able, the attorney for Katy de Berdouare, said he worked with Mossack Fonseca because they were “efficient” and “mechanical.”
“Mossack is the Publix ... of the offshore world,” he said. “They had a good system in place.”
De Berdouare’s chicken business, founded in 1983, now has more than 30 locations in Florida and Texas.
His brother Alain also appears in the Panama Papers. Records show he acted as an intermediary between Mossack Fonseca and an unnamed client who controlled Xenon Trading, a shell company registered in Panama and the Pacific Ocean islands of Samoa and Niue.
Alain de Berdouare, who owns a home on the Venetian Islands, said the company was part of a family trust set up for his mother.
“My mother lived in Ethiopia, I am traveling in Europe all the time, I only live in Miami a few months of the year,” he said. “That’s the way the world was working, you set up trusts offshore. I’m totally entitled to companies all over the world.”
On the high seas
Another high-profile Mossack Fonseca client with South Florida ties was Ella Fontanals-Cisneros.
Fontanals-Cisneros, born in Cuba, is one of Miami’s premiere art collectors. Her nonprofit Cisneros Fontanals Art Foundation showcases contemporary Latin American art in an exhibition space near downtown Miami. She also owns the penthouse condo suite at Grovenor House in Coconut Grove. The unit was on the market for $14.5 million last year.
In 2004, Fontanals-Cisneros bought a British Virgin Islands offshore company through Mossack Fonseca’s Luxembourg office, the Panama Papers show.
Elmaguri Shipping was used to hold Fontanal’s luxury yacht, Ellix Too.
The impressive vessel — custom-built in Italy — includes six staterooms with space for 12 guests, a private terrace on the bridge deck, a bar, a jacuzzi and a media room.
“It was a dream,” she told the website Superyachts in 2011. “I decided I wanted something that looked like an apartment so I built it in the way where it looked like a home rather than a yacht.”
Michael Moore, a Miami maritime lawyer, said it’s common for the wealthy to own yachts through offshore companies and register them abroad.
“You see this in 80 percent of cases,” Moore said. “For liability and tax purposes, the safest way to go is a so-called ‘flag of convenience.’ ”
Lawyers often tout the benefit of anonymity provided by an offshore, he added.
The word “yacht” appears nearly 20,000 times in documents from the Panama Papers.
While Ellix Too’s holding company was headquartered in the British Virgin Islands, the yacht itself was registered in the Cayman Islands, one of the world’s most-popular homes for yacht owners.
As a non-U.S. citizen, Fontanals-Cisneros would have been legally prevented from flying a U.S. flag on her yacht. High taxes make it a shunned destination for yacht owners anyway, Moore said.
Fontanals-Cisneros sold Ellix Too in 2013 for an undisclosed price. It had been listed for $17.2 million, but the price was later knocked down to $14.95 million. Mossack Fonseca shut down Elmaguri Shipping soon after the sale closed.
The art magnate did not respond to a request for comment.
Her attorney, Jose Llerena, wrote in an email that Fontanals-Cisneros does not live in the United States and does not have a business relationship with Mossack Fonseca.
Where are the Americans?
As the Panama Papers unfolded, readers have wondered why more high-profile Americans aren’t showing up.
One reason: MF co-founder Ramón Fonseca said the firm intentionally avoided working with Americans.
“As a policy we prefer not to have American clients,” he told the Associated Press.
The firm seems to have disliked attention from authorities in the United States, after the FBI threatened to subpoena one of its American affiliates in 2000.
In one leaked email, a U.S.-based MF representative wrote that in response to the federal interest, “American clients were purged, no more have been sought, no marketing in the U.S. takes place.”
(MF declined to comment to the Herald on why it had few American clients.)
One of the American citizens who does appear in the documents is Alan Trustman, the writer of the Hollywood hit The Thomas Crown Affair, about a playboy who amuses himself by stealing expensive art. Now a lawyer with a home on Fisher Island, Trustman owned a Mossack Fonseca offshore that, strangely, listed the Red Cross as its beneficiary.
He told a reporter he didn’t know why his attorney had set up the offshore in the name of a charity.
Another South Florida resident was taken aback when asked why she owned two BVI offshores set up by Mossack Fonseca.
“I don’t remember anything about that,” said Ping Donaldson, a Realtor who lives in Weston.
But a few minutes later, her husband, Michael, a property manager, called back to explain.
He said the companies were born during a family vacation to Hong Kong in 2010. The couple had met up with several friends, including a man from Ping’s village in China named Zhu Wanping, who worked in the agriculture business. Zhu had been meaning to set up an offshore company and asked if his friends wouldn’t mind accompanying him. An offshore services provider kept an office near their hotel. After filling out the forms, Zhu realized he didn’t have his ID. An employee of the firm asked: Would Ping Donaldson submit hers instead?
And so, Michael Donaldson said, the companies were established in his wife’s name, although he said in reality she had nothing to do with them.
“I never expected to hear about the companies again,” he explained.
Their story shows how difficult it is to figure out who really owns offshore companies — and how easy it might be for law-breakers to manipulate a shell.
Ping Donaldson said she would have her name removed from the firms.
Greg Gordon of the McClatchy Washington, D.C. bureau and Mike Hudson of the International Consortium of Investigative Journalists contributed to this story.