> Deloitte Cyprus said it could not comment on the specific allegations because the documents were more than 20 years old and no longer accessible.
That's convenient.
Also, I received a similar response when inquiring about a financial account that had been overlooked (there are reasons, I'm not getting into it) for a couple of decades. "Can't help you. Too old for us to have records." Well, my records are printed documents. Why can't you tell me anything? Reminds me of when the USA government stole my money from a bank transfer claiming suspicion of whatever (my landlord had a Middle Eastern sounding name and it was the 2000s) and then said they had no record of it when I provided all the required documentation to recover it.
In both cases, unfortunately, I concluded that the odds are so stacked against me that I gave up. Convenient system if you're fabulously wealthy or a massive org (such as corporations and government).
Most institutions (especially financial) have strict document retention policies to protect themselves from situations like this. It's not shady – just a way of limiting liability.
At my first job I made the mistake of discovering a cache of old documents, documents that were far older than the company's seven-year document retention policy. The cache, being my discovery, meant I became the one responsible for destroying it. It was dozens on dozes of bankers boxes filled with documents that I had to de-spine before shredding.
You would have thought that the process was a chore but for me it was exhilarating. The slowness of the process gave me the opportunity to speed read through it all. There was nothing scandalous in there, but I became somewhat of a historian over many quiet nights.
> Most institutions (especially financial) have strict document retention policies to protect themselves from situations like this. It's not shady – just a way of limiting liability.
Yup. With every data breach, HN is full of (correct, imo) comments about how tech companies should treat private data as a liability and prune it aggressively.
You go look at mature businesses and you'll find that they do exactly this.
I wouldn't go that far. If it's a legal practice, it's a legal practice. I can understand why a company would want to limit their liability over something that happened seven years in the past, even when they are confident that their procedures are both rigorous and in compliance with the law.
On the whole, I would say the problem isn't so much using language to whitewash the practice as the troublesome tendency to turn a blind eye until someone becomes persona non grata.
In most jurisdictions there are retention policies defined in law. Companies, like almost anyone else in the world, will do the bare minimum necessary to meet the legal requirements because it doesn’t make sense to do more. They only incur expenses while exposing themselves to all kinds of liability.
Organizations are not run by a single person. Imagine yourself as an investor into a large organization. Or you are invited to work as a CEO. You would definitely want to limit your own responsibility (in terms of financial losses or legal costs) when there are hundreds or thousands of people working together and anyone can make a mistake.
Of course you'd have compliance department to look over the processes to minimize the risk of mistakes and correct them ASAP (if you don't, you'd be liable for negligence and open yourself to a higher chance of failures). But since mistakes and miscommunication is inevitable anyway, you'd require hard limits in every obligation - in terms of time, money, scope etc.
Organizations that are not protecting themselves do not live long. And this principle has nothing to do with the nature of their activity.
Because the legal requirement is to keep those financial records for a maximum of 10 years? I'm sure it depends on jurisdiction, and the type of the document, but financial records generally 10 years in Europe.
Oh, come on. HN complains about excessive data hoarding all the time. Now it's wrong to not hoard data? This is just another damned if you do, damned it you don't situation and, predictably, the outrage option is voted to the top.
Strong disagree. You want to keep track of how many times I go to the bathroom each day, and how much toilet paper I use each time? I complain about data hoarding. You're handling my money? You'd better not lose it, and you'd better keep accurate records, and you'd better keep them forever.
And in these specific cases, 20 years ago? They weren't handling stuff with computers 20 years ago? They didn't keep backups of that? (Another commenter notes a 10-year record keeping requirement in Europe, so in that case it may have legitimately been removed.)
But it's worse with the government. It wasn't 20 years ago, you just did it. And you don't have records? That's theft.
Why would you need to know anything about 20 years ago. In a sense financial data is even easier. There is a ledger and if you have kept 10 years of detailed history that is plenty.
Deloitte has got, I've heard (!), in their training material a section about integrity and how important it is to act ethically correct. Deloitte also does sh*t like this and - again, I've heard (!) - asks its employees to bill hours on projects they are not working on so that they can maximize profits at their clients expenses. Also elephants are pink.
How this company can proceed to exist is beyond me.
For legal reasons I must emphasize that this is hear-say and should not be trusted as facts. At least one statement is a lie. What you believe to be true is up to you.
Deloitte operates much more like a franchise network than a single multinational corporation. It's technically a network of independent, locally owned professional-services partnerships.
This one appears to be Cyprus - clearly the center of ethical business operations...
I'm sure the seniors had a blast producing that material. "...and then I told them - get this (*wheezes between laughs*) - we have to be honest ! Hah!"
I see their work product with some regularity. To say I'm not impressed would be a severe understatement and I really don't understand why companies keep hiring them.
They did a 'cloud strategy' for a previous client. There was a 'partner', numerous 'consultants', 7 figures US$ AFAIK.
It was mostly regurgitating the AWS published best practices on Deloitte letterhead. We all grumbled how "this was not a good use of money", but one of the senior folks from the line of business side said "you guys were going to basically do this anyway...now noone can say you picked the wrong strategy". Which, to be fair, was true.
So that's probably why companies keep hiring them.
Its a bit more complex. its a network of national firms, and each member firm is a separate legal entity. in this case it was the Cypriot member firm.
From the footer on (the Uk section) of their website:
> Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organisation”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties.
Yes, that link was trivial to find. But it does not expound on how the decision making process works. Each nation’s Deloitte organization is presumably able to avoid blame for actions done in any other nation, so the question is are they all operated completely independently? Is there no hierarchy above the national level?
Deloitte employees, former as well as current, are not allowed to share details about hiring process, management structure or compensation schemes. Enjoy.
KPMG, E&Y, PWC, they're all the same because they have to compete with each other's dishonesty in order to both maximise profits and maximise cough tax savings cough for their customers.
There have been a couple of scandals in Australia, and yet they all remain part of 'the big four'. They're all tainted as fuck.
They also exist to transfer wealth to workers with the right pedigree (much like the tech industry for many years). If you go to the right school, but graduate without actually being able to do anything, you apply to a consultancy. You'll at least make enough to afford your apartment and groceries while you make the connections to get paid 6-7 figures doing nothing someplace else.
A while back there was a simple scheme available that allowed you to avoid taxes on the first few hundred thousand / million of taxes.
- You created an LLC in Cyprus and transferred some IP (usually a trademark) to it
- You licensed that IP to your LLC in an EU country for the amount that basically erased any profit that LLC made
- Cypriot LLCs were not taxed on non-Cyprus income
- Each of non-resident director (or board member, I don't remember) of a Cypriot LLC was not taxed on first 400k euro of income from those LLCs. Double taxation deals Cyprus had protected you from being taxed on that income back home.
I know this is no longer possible with Cyprus, but a variation of that is now happening with e.g. many EU clothing brands having their brand ownership transferred to Egyptian LLCs.
Cyprus deliberately set out to make itself attractive to wealthy Russians in the 2000s and 2010s.
Various controversies relating to bailouts after the financial crisis, the rise of anti money laundering controls in the late 2010s, and the Ukraine invasion have severed many of the ties but Abramovich was just one of many to take advantage in the past.
You might learn how tax havens work. Those of us familiar all went "Cyprus...shocker /s".
Deloitte Cyprus is a separate legal entity from all the other (separate, legal) Deloitte entities precisely so any consequences of tax evasion resulting from the...em...lax oversight in Cyprus don't impact all the other things called 'Deloitte'.
This isn't unique to Cyprus. Deloitte Global is specifically structured this way:
"The member firms are primarily organised on an individual country or regional basis and each operates within the legal and regulatory framework of its particular jurisdiction(s). They are separate and independent firms that have come together to practise under a common brand and shared methodologies, client service standards and other professional protocols and guidelines."
I just know this will be thoroughly investigated, all responsible parties held accountable, and the proper countermeasures and applicable laws will be updated to punish and disincentivise this behaviour in the future. Just kidding.
Things change when the cost-benefit analysis moves. If you apply the law strictly and effectively, the behaviour will adjust.
I think you’re framing this at the wrong level: the cost-benefit analysis needs to be vs the rest of the rich world sanctioning Cyprus. It’s far from clear that it’s currently in Cyprus’s best interests to see heads roll for this, and so the rest of Europe needs to grow some balls for enforcement.
I dunno. This all implies a level of central control that doesn't reflect how professional services firms operate. Mostly they're loose partnerships and local offices and partners have the significant discretion. Even legally they're mostly not structured as a global corporation but rather a loose association of legally distinct entities.
There's a tension between having a brand that reflects trust and institutional rigor and avoiding liability for the actions of partners in some far flung jurisdiction.
And, nothing will happen. Did anything happen via Panama and Pandora paper leaks? Perhaps players with negligible political power to protect themselves were held accountable or selected by bigger fish to fall, but beyond those, nothing. The phenomenon is still happening and social collective action is continuously disrupted via no shortage of mechanisms. Wealth concentration is increasing and buying politicians was always a thing, but now it's publicly flaunted without recourse and they operate against what's good for the electorate interests openly--almost in spite.
I mean, the faltering ability to stir people to deal with Flock issue should be incredibly eye opening to what continuously slides under the radar for heinous activities that are not nearly as public facing or noticeably evident.
One would imagine you want your bankers doing just enough fraud and other illegal shit to build your money pile, just not enough of it to get caught.
I imagine most groups compete on exactly what they can get away with. The more money you can build for clients the more you can earn. If your competitor is getting away with more illegal shit than you then your clients will go to them.
The Big Four really like back-dating things to help their clients. But lying is difficult because the facts come with built-in consistency. Mother Nature ensures all her arithmetic lines up properly every single time like clockwork, but when you try to make stuff up you have to do all that work and not make any mistakes.
And so it's actually easier to spot this fraud than to conduct it. What you need is people willing to go look and people willing to prosecute it even though that's uncomfortable because these crooks always have powerful friends.
Ultimately the bigger problem is the Big Four themselves. They are obviously Too Big To Fail and three of them are based in a single place, London. I believe that the Paris MOU provides us a model for how to fix this in the medium term but I've seen no political will to even look at the problem, much less address it.
This must be the first time someone important [0] has been involved in shady financial dealings. One of the joys of being in the internet era is we have much better visibility on the vast multinational web moving money around. We know that senior politicians are well aware of it because they use it to.
It would actually be reasonable if this was headline was news to Abramovich. I expect there are a bunch of standard services rendered to wealthy Russians and they just all use the same guy, who is known to get good results and no-one ever asks why. It is quite likely that there are a small group of fixers who maintain networks for certain geopolitical in-groups. They probably have excellent connections to people like Jeffery Epstein too. No surprise if the Russian circuit is actually flouting western law directly.
I know this is anecdotal but I remember anywhere you went in financial or political circles in 1990s London, everyone was falling over themselves about the nouveau riche from Russia and former Warsaw Pact countries investing. There were some who said it would drive up real estate prices and some upset about lack of oversight but they were looked at in the media and by politicians as kooky or close to it. Decades later - the Panama Papers, the Epstein files and articles like this and from that journalist killed in Malta exposing corruption.
Mind-boggling what people and corporations knew and did in the shadows while we cheered on and cheer on their holdings.
It took enormously corrupted and murderous personality to be nouveau riche from Russia and former Warsaw Pact countries during the 1990s. With links to former USSR security and intelligence agencies on top of it. Anyone else back then in these regions was eating mud pies.
I'm not able to see the article - for some reason, the Beebs, a division of the British government, wants me to subscribe to see their coverage - but how would this compare to Arthur Anderson and Enron?
If it's anything remotely similar, I don't see how Deloitte could be trusted to file one more tax return.
The amount of dirt Deloitte has on governments, it is surprising something like this even came out. Likely someone will lose their job and the whole thing will be kicked in the long grass.
Reddit changed recently to deter AI scraping so that to use "old", you needed to log in sometime in the past 6 months. The "old" lets you see all the comments while the 'new improved version' only lets you read comments to a shallow depth while inserting ads everywhere.
Also real estate prices in London at the top of the market are going down and down now that the money pump of corrupt Russian money has been switched off.
It was one huge tax evasion mechanism and even purchasing tens of millions of pounds worth property was likely only a side effect of it. It even tickled the British pride a little for a moment because they were made to believe that someone appreciates their mansion architecture;)
I thought this article was a parody for the first few paragraphs... that's how times have changed, I guess.
I couldn't agree with the guy more, when he says:
>> when workers have more money, businesses have more customers—and need more employees
But that seems to be exactly the sane logic that old Jeff Bezos is spending his life and his billions trying to find a hack around. I'm still not clear who Amazon's customers will be if everyone's unemployed and AI and robots have taken all the middle class jobs... oppressive governments, I guess.
The article brings up Ford Motor Co. in the early 20th century as an argument for why this doesn't have to be the case. There have been other examples of businesses that care for their employees and society at large. The author is saying that that mentality needs to come back into fashion.
I think that this type of thought about strengthening the middle class is possibly the most dangerous and verboten to the people with a radical utopian worldview who are looking for revolution. In a sense, it's probably more important to attack this than it is to attack billionaires. Massive inequality is a much preferable state for would-be revolutionaries than a stable middle class with centrist political views. Which only reinforces the author's point.
Maybe because it's not true? Selling early access to posts through Truth Social is worth $10-20 million a year (most estimates are they have 10-20 subscribers at 60-100k/month). And obviously no one is valuing that revenue stream at 50x or 100x earnings: it's expected to go away when Trump does, which, actuarially speaking, should be in the next ten years.
Communist with a capital C - means the post-USSR oligarchs. When the nominal state control collapsed, a few well-connected people managed to walk away with all the state's assets, and those are the post-{USSR|Communist} oligarchs.
The audience of this site is VCs, founders, wannabe founders, and a few wannabe VCs. They will do anything to get rich. Used to be you'd get rich by making useful software, now you get rich by corruption.
Do not assume people downvoting stuff about Trump because they support him. I downvoted it because I am sick of American politics being dragged into every discussion - in this case the evasion of UK taxes by a Russian oligarch being facilitated by Cypriot accountants.
I am interests in learning more about the oligarchs involved, and the accounts, and the tax evasion, but I am not interested in reading the same comments about Trump I have heard countless times before. If anyone has something new to say about Trump I am happy to read about it where it is relevant to the topic being discussed.
Many people will assume you like trump if you are sick of hearing about him and avoid the topic. İt seems to be a shibboleth with some ppl that you must spit a curse at the demon or you secretly like him.
Or if you dare critique any corruption on the opposite team as well. Binary thinking is fairly standard in all sectors of society.
I did not assume that. In this case Trump felt quite off-topic so I almost downvoted myself but I have seen many other threads where Trump supporters were plentiful, both in downvoting and posting comments.
I hate Trump, but I don't see how Trump's corruption is relevant to this discussion. Are we supposed to comment on every story about someone doing something bad with "Trump's even worse"?
Deloitte didn't deny it. The only possible interpretation of their statement is that they absolutely did do it, but they believe they can get away with it. Otherwise you'd just say "Deloitte doesn't falsify documents"
I get this is an unpopular opinion, but it’s even more important given the nature of the allegations. They “look bad” but it’s all accounting stuff in Cyprus, none of us know what’s actually legal here and what isn’t, it’s the BBC making insinuation about stuff to promote an investigative reports show or something they run.
I don’t want to defend anyone involved in the allegations, and don’t personally think they’re above shady business dealings, I just don’t like usual sensationalist “reporting” - essentially advertising like this and how people eat it up.
That's convenient.
Also, I received a similar response when inquiring about a financial account that had been overlooked (there are reasons, I'm not getting into it) for a couple of decades. "Can't help you. Too old for us to have records." Well, my records are printed documents. Why can't you tell me anything? Reminds me of when the USA government stole my money from a bank transfer claiming suspicion of whatever (my landlord had a Middle Eastern sounding name and it was the 2000s) and then said they had no record of it when I provided all the required documentation to recover it.
In both cases, unfortunately, I concluded that the odds are so stacked against me that I gave up. Convenient system if you're fabulously wealthy or a massive org (such as corporations and government).
At my first job I made the mistake of discovering a cache of old documents, documents that were far older than the company's seven-year document retention policy. The cache, being my discovery, meant I became the one responsible for destroying it. It was dozens on dozes of bankers boxes filled with documents that I had to de-spine before shredding.
You would have thought that the process was a chore but for me it was exhilarating. The slowness of the process gave me the opportunity to speed read through it all. There was nothing scandalous in there, but I became somewhat of a historian over many quiet nights.
And storage costs.
Yup. With every data breach, HN is full of (correct, imo) comments about how tech companies should treat private data as a liability and prune it aggressively.
You go look at mature businesses and you'll find that they do exactly this.
It's not euphemistic – just diplomatic phrasing.
On the whole, I would say the problem isn't so much using language to whitewash the practice as the troublesome tendency to turn a blind eye until someone becomes persona non grata.
Of course you'd have compliance department to look over the processes to minimize the risk of mistakes and correct them ASAP (if you don't, you'd be liable for negligence and open yourself to a higher chance of failures). But since mistakes and miscommunication is inevitable anyway, you'd require hard limits in every obligation - in terms of time, money, scope etc.
Organizations that are not protecting themselves do not live long. And this principle has nothing to do with the nature of their activity.
And in these specific cases, 20 years ago? They weren't handling stuff with computers 20 years ago? They didn't keep backups of that? (Another commenter notes a 10-year record keeping requirement in Europe, so in that case it may have legitimately been removed.)
But it's worse with the government. It wasn't 20 years ago, you just did it. And you don't have records? That's theft.
How this company can proceed to exist is beyond me.
For legal reasons I must emphasize that this is hear-say and should not be trusted as facts. At least one statement is a lie. What you believe to be true is up to you.
All the while we were doing financial regulation software without any proper tests on the models being done outside of some spot checks.
And the idea of doing those was frowned upon :)
Lovely place.
This one appears to be Cyprus - clearly the center of ethical business operations...
There's also a fine print at the bottom that says 'lolz'.
It was mostly regurgitating the AWS published best practices on Deloitte letterhead. We all grumbled how "this was not a good use of money", but one of the senior folks from the line of business side said "you guys were going to basically do this anyway...now noone can say you picked the wrong strategy". Which, to be fair, was true.
So that's probably why companies keep hiring them.
From the footer on (the Uk section) of their website:
> Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”), its global network of member firms, and their related entities (collectively, the “Deloitte organisation”). DTTL (also referred to as “Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which cannot obligate or bind each other in respect of third parties.
This is fairly typical for accountancy and law firms.
More explanation here: https://en.wikipedia.org/wiki/Professional_services_networks
WTF - I am being downvoted for explaining this above? Pure facts!
You can read more about it: https://en.wikipedia.org/wiki/Deloitte#Legal_structure
*cringes in multiple ways*
There have been a couple of scandals in Australia, and yet they all remain part of 'the big four'. They're all tainted as fuck.
Isn't the whole point of these companies to rubberstamp shady things corporations are doing, so they can shed resposibility more easily when caught?
For those who don't know, Cyprus is widely regarded as one of Europe's tax havens. And, of cause, Deloitte has offices there.
- You created an LLC in Cyprus and transferred some IP (usually a trademark) to it
- You licensed that IP to your LLC in an EU country for the amount that basically erased any profit that LLC made
- Cypriot LLCs were not taxed on non-Cyprus income
- Each of non-resident director (or board member, I don't remember) of a Cypriot LLC was not taxed on first 400k euro of income from those LLCs. Double taxation deals Cyprus had protected you from being taxed on that income back home.
I know this is no longer possible with Cyprus, but a variation of that is now happening with e.g. many EU clothing brands having their brand ownership transferred to Egyptian LLCs.
It hardly seems surprising (nor damning) to have one in Cyprus.
Various controversies relating to bailouts after the financial crisis, the rise of anti money laundering controls in the late 2010s, and the Ukraine invasion have severed many of the ties but Abramovich was just one of many to take advantage in the past.
https://www.politico.eu/article/cyprus-is-losing-its-russia-... has a reasonable summary of how the relationship developed.
Deloitte Cyprus is a separate legal entity from all the other (separate, legal) Deloitte entities precisely so any consequences of tax evasion resulting from the...em...lax oversight in Cyprus don't impact all the other things called 'Deloitte'.
"The member firms are primarily organised on an individual country or regional basis and each operates within the legal and regulatory framework of its particular jurisdiction(s). They are separate and independent firms that have come together to practise under a common brand and shared methodologies, client service standards and other professional protocols and guidelines."
https://www.deloitte.com/ce/en/about/governance/network-bran...
Things change when the cost-benefit analysis moves. If you apply the law strictly and effectively, the behaviour will adjust.
There's a tension between having a brand that reflects trust and institutional rigor and avoiding liability for the actions of partners in some far flung jurisdiction.
I mean, the faltering ability to stir people to deal with Flock issue should be incredibly eye opening to what continuously slides under the radar for heinous activities that are not nearly as public facing or noticeably evident.
Sanction Deloitte Cyprus: don't ever except any paperwork from them again. "Sovereign state", my ass...
I imagine most groups compete on exactly what they can get away with. The more money you can build for clients the more you can earn. If your competitor is getting away with more illegal shit than you then your clients will go to them.
And so it's actually easier to spot this fraud than to conduct it. What you need is people willing to go look and people willing to prosecute it even though that's uncomfortable because these crooks always have powerful friends.
Ultimately the bigger problem is the Big Four themselves. They are obviously Too Big To Fail and three of them are based in a single place, London. I believe that the Paris MOU provides us a model for how to fix this in the medium term but I've seen no political will to even look at the problem, much less address it.
It would actually be reasonable if this was headline was news to Abramovich. I expect there are a bunch of standard services rendered to wealthy Russians and they just all use the same guy, who is known to get good results and no-one ever asks why. It is quite likely that there are a small group of fixers who maintain networks for certain geopolitical in-groups. They probably have excellent connections to people like Jeffery Epstein too. No surprise if the Russian circuit is actually flouting western law directly.
[0] https://en.wikipedia.org/wiki/List_of_people_named_in_the_Pa...
Isn't that their core business?
Mind-boggling what people and corporations knew and did in the shadows while we cheered on and cheer on their holdings.
If it's anything remotely similar, I don't see how Deloitte could be trusted to file one more tax return.
i miss being able to donate my liabilities away.
there's no way to absolve yourself from the murder machine anymore.
https://old.reddit.com/r/soccer/comments/1x3vru3/deloitte_he...
Reddit changed recently to deter AI scraping so that to use "old", you needed to log in sometime in the past 6 months. The "old" lets you see all the comments while the 'new improved version' only lets you read comments to a shallow depth while inserting ads everywhere.
They obviously haven't done anything wrong then.
Also real estate prices in London at the top of the market are going down and down now that the money pump of corrupt Russian money has been switched off.
Oh sweet summer child
https://www.politico.com/magazine/story/2014/06/the-pitchfor...
I couldn't agree with the guy more, when he says:
>> when workers have more money, businesses have more customers—and need more employees
But that seems to be exactly the sane logic that old Jeff Bezos is spending his life and his billions trying to find a hack around. I'm still not clear who Amazon's customers will be if everyone's unemployed and AI and robots have taken all the middle class jobs... oppressive governments, I guess.
Great piece, and thanks for posting it.
I think that this type of thought about strengthening the middle class is possibly the most dangerous and verboten to the people with a radical utopian worldview who are looking for revolution. In a sense, it's probably more important to attack this than it is to attack billionaires. Massive inequality is a much preferable state for would-be revolutionaries than a stable middle class with centrist political views. Which only reinforces the author's point.
Making the relative comparison is useful in understanding what a shitshow is going on in the USA.
Back in the day, we used to think Abramovich was corrupt as fuck and very dodgy.
In 2026, I understand him to be a relative amateur ...
I am interests in learning more about the oligarchs involved, and the accounts, and the tax evasion, but I am not interested in reading the same comments about Trump I have heard countless times before. If anyone has something new to say about Trump I am happy to read about it where it is relevant to the topic being discussed.
An article like like this could be auto-generated with anybody's name.
I don’t want to defend anyone involved in the allegations, and don’t personally think they’re above shady business dealings, I just don’t like usual sensationalist “reporting” - essentially advertising like this and how people eat it up.