the unravelling of a secret Libyan empire

From a townhouse in London’s Mayfair, a secret deal was sealed last year to sell three Libyan cement factories.

Hidden behind layers of offshore shell companies and non-disclosure agreements, the strategic assets passed into the hands of a businessman with connections to General Khalifa Haftar, the Russian-backed warlord who rules the east of the north African country.

But the biggest sensitivity for many of those involved was not the identity of the buyer, but that of a legacy investor in the plants: Jan Marsalek, Europe’s most-wanted financial criminal — and most-hunted Russian spy.

For years Marsalek was the toast of Europe’s business world, a dynamic young executive helping lead German fintech Wirecard to ever-greater heights, until the company was exposed as a fraud. But he was also embroiled in the world of Russian espionage, driven by a fascination with risk and power as well as an outlook on life in which he treated almost everything as a game.

In the five years since Wirecard’s collapse, two central questions about the Austrian’s role have remained a mystery: where did the money he stole end up, and how might it have been used to further Russia’s interests?

An investigation by the Financial Times and German broadcaster Bayerischer Rundfunk now sheds light on one small but geopolitically important tranche of Marsalek’s missing millions.

It is also a story about the shadow battle for control of assets by his former business partners, which has been held in check until now by their desire to keep their ties to Marsalek as quiet as possible.

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In the 2020 article that first exposed Marsalek as a likely Russian spy, the FT reported on his interests in Libya.

Marsalek had boasted about “his” businesses there, including the Libyan Cement Company. However, LCC’s owners — London-based Libya Holdings Group — denied ever having had anything to do with him.

Now, based on hundreds of pages of leaked documentation, court filings, interviews with current and former employees, investors and consultants, and Marsalek’s own emails obtained after the collapse of Wirecard, a detailed picture of his years-long involvement with LHG, now known as LH Severus, can be revealed.

Marsalek’s investments in the country, if he could still access them, are now worth tens of millions of dollars. LCC was just one of them.

Although the sums are small in comparison to the €2bn fraud Marsalek helped mastermind at Wirecard, the Libya projects shine a light on how he operated as an agent of influence, using access to illicit funds and relationships with risk-hungry businessmen to blend his own financial interests with those of his Russian masters.

The paper trail also hints at Marsalek’s political interests in Libya — how he sought to build connections with powerful factions and warlords, showcasing his usefulness to his handlers in Russian intelligence and harnessing people’s greed to further a covert geopolitical agenda.

Marsalek’s Munich-based lawyer, who has represented him in the Wirecard fraud trial, did not respond to requests for comment.

Questions remain about whether Marsalek, now in Moscow under the protection of the Russian state, continues to wield any influence over his holdings, and how aware UK authorities are of his financial network in London.

Barely six months since six British-Bulgarian citizens were convicted of spying for Marsalek in a sensational trial at London’s Old Bailey, his erstwhile financial partners — who still operate multimillion-pound businesses and travel around Europe on private jets — say they have not been contacted by security services.

Marsalek’s current involvements in Libya are unclear. But the importance to Russia of the country — a gateway to Africa, a lever to influence Europe, an arms bazaar and a geopolitical bargaining chip — makes the investments and activities of the London network more relevant than ever to Moscow’s agenda.

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Marsalek’s financial interests in Libya began a decade ago through a man who would become one of his closest friends.

Joe Bowman, a US-born entrepreneur who was based in London but had spent years in Moscow, was exploring opportunities in the north African country including a payments venture. A mutual acquaintance suggested Marsalek could help.

But the Austrian soon became interested in more than just businesses aligned with his day job.

Mayfair-based financier Ahmed Ben Halim contacted Bowman in 2015 with an investment proposition. Three Libyan cement factories were on the market at a knockdown price after the bankruptcy of their former Austrian owner.

Ben Halim, the son of a 1950s Libyan prime minister under King Idris, had been forced into exile along with his family after Muammer Gaddafi’s 1969 revolution. He grew up in London where he pursued a career in finance and founded private wealth manager The Capital Partnership. After Gaddafi’s fall in 2011 he set up the Libya Holdings Group to make investments in his native country.

Bowman, who was already operating in Libya, seemed a good fit for the cement plants. The business case was clear: the country’s reconstruction would require huge amounts of cement and the factories could have a chokehold on the resource in the east of the country.

Other investors were scouted out and Marsalek came onboard — although his name would never appear on official corporate documentation.

Instead, his investment in LCC came via a Cypriot entity, EuroAtlantic, according to four people involved in the transaction. Officially, the ultimate beneficiary of the LCC shares was EuroAtlantic’s founder, a Dubai-based businessman. Marsalek was his silent partner.

Ben Halim and LHG insist they never had any idea the Austrian was involved. However, a close relationship between Marsalek and LCC management — a small group of individuals who reported to Ben Halim and LHG — is clear from email correspondence reviewed by the FT.

Topics discussed include an attempt by LCC to set up an account at Wirecard Bank, and the hiring of Russian mercenary group RSB to clear the cement plants of unexploded ordnance. Marsalek was integral to both projects — at the very least, as a trusted adviser to LCC.

What is more, he soon became involved in an even bigger LHG-backed project: backing an opportunity in 2016 to acquire lucrative assets in Libya through a company called Lorasco, which operates drilling rigs that are rented out to oil companies and is now worth more than $80mn.

Marsalek was Lorasco’s anchor investor and ploughed millions into the business with money siphoned off from Wirecard.

In November 2016 he presented “Project Phoenix” to the German company’s board. Approval was made for $10mn of funding — which was lent via an entity in Singapore, Senjo, and then to the Dubai account of a Swiss lawyer who in turn put the funds into Isle of Man-registered Emerging Africa Energy Limited.

EAEL would invest its $10mn in Lorasco, while LHG would invest $4mn and manage the company.

At first EAEL’s ultimate beneficial owner was declared by Lorasco’s LHG- appointed management to be the Swiss lawyer. In a 2020 due diligence review, however, Lorasco updated its know-your-customer file to indicate that EAEL was in fact controlled by an offshore trust — the Labels Foundation. The trust’s UBO was named as James Henry O’Sullivan, who at the time was publicly identifiable as a Singapore-based businessman with strong connections to Wirecard.

O’Sullivan, a co-conspirator of Marsalek in the Wirecard fraud, was convicted in Singapore this year and will be sentenced in January.

But the true UBO of EAEL was and always had been Marsalek, according to two people who built the structure. A third party declared they were “100 per cent sure” Marsalek was the beneficiary based on what he himself had told them.

LHG and Ben Halim have stated that, as with LCC, they had no knowledge of Marsalek’s financial involvement until Bowman informed them of it in 2022. At that point, they said, they had acted swiftly to freeze EAEL’s shares in accordance with the law.

“At no time during the due diligence processes carried out by LHG companies was it discovered or suspected that Marsalek was the UBO of any investing party,” they said.

Despite that claim, documents reveal a close financial relationship between Ben Halim and Marsalek at the time.

In December 2016 Marsalek underwrote a $4mn bridge financing loan from Ben Halim’s British Virgin Islands-based family investment vehicle to fund EAEL’s acquisition of Lorasco shares, as the promised $10mn in funding from the Swiss lawyer — and ultimately Wirecard — was late to arrive.

According to Ben Halim and LHG, Marsalek agreed to incur this $4mn liability as a “favour”. It did not make them think he might also be the owner of EAEL, they said.

The bridge loan guarantee was not Ben Halim’s only direct financial relationship with Marsalek.

In 2018 Marsalek invited Ben Halim and other backers of the Libya projects to invest in a new crypto token — Toncoin — being launched by Russian-owned messaging platform Telegram, whose founder Pavel Durov had met Marsalek and invited him to participate.

A special purpose vehicle was set up for them to pool their money and invest but Credit Suisse, which was organising the sale of the token, blocked the transaction. It turned out the bank was happy to take money from Marsalek, whose role in the biggest corporate fraud in recent European history had yet to be revealed, but was wary of his Libyan friends.

As a workaround, Ben Halim and others decided to let Marsalek invest their money in his name, sidestepping Credit Suisse’s money laundering checks. However, the US Securities and Exchange Commission blocked Telegram’s issuance of the tokens and Marsalek refunded his Libyan associates.

In responses to questions from the FT and Bayerischer Rundfunk, Ben Halim and LHG repeatedly stressed that all relationships with Marsalek had been arranged through Bowman, who they said had concealed the true nature of Marsalek’s involvement and interests in Libya.

Bowman acknowledged he had been the main contact between LHG and Marsalek but insisted Ben Halim and others at the company were fully aware of the Austrian’s investments.

“I’ve never had any reason to be disingenuous about Marsalek’s past involvement. He was a fantastic investor and a good friend. What we were doing at the time was completely legitimate and even though it might be obvious in hindsight, we had no idea about his other life . . . To all of us, he was just this hugely talented, very successful European businessman,” Bowman told the FT.

“He was the anchor investor in Lorasco from day one and it was known to all of us internally [at LHG] — and there’s substantial evidence to support that. The business wouldn’t have been created without him. That was really one of the reasons why I parted ways with LHG. They have been trying to bury the truth,” Bowman said.

Other people who were part of the LHG-Marsalek network also dispute the notion that Ben Halim was not enthusiastic about the Austrian’s involvement.

Correspondence reviewed by the FT shows Ben Halim was involved in extensive and frequent discussions about projects involving Marsalek over a period of several years.

One topic that often cropped up was Libyan politics.

A 2018 photograph obtained by the FT shows Marsalek in Benghazi, taking tea with Ben Halim, Bowman and Wanis Bukhamada, the late head of eastern Libya’s special forces under General Haftar who was widely revered in Libya as the “black panther” for his success in fighting Isis.

People present on the trip even recall Marsalek asking Ben Halim whether he would be interested in running for political office, with a view eventually to becoming prime minister of the country.

Ben Halim confirmed details of the meeting but said he dismissed out of hand Marsalek’s suggestion, which led him to believe Marsalek to be a dangerous fantasist.

Others dispute that, and say Ben Halim knew about Marsalek’s connections in Russia and engaged with him, albeit irregularly and indirectly, as an interlocutor for Russian interests.

While Ben Halim did not wish to enter politics, other discussions took place over other potential candidates who might be sympathetic to LHG and Marsalek’s interests.

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When Marsalek fled in 2020, everything changed — not least for him.

He faced one particular irony: having salted away millions of dollars behind complex structures and frontmen around the world, he was now, trapped in Russia, vulnerable to losing control of his hidden assets.

“Assholes” were trying to “steal” his money, he would write in a December 2020 Telegram message to Orlin Roussev, one of the Bulgarian spies convicted last year in Britain, “because they think I am hiding in a cave in Afghanistan”.

While he did not indicate to whom he was referring, his hidden financial interests in Libya were being eroded.

Lorasco in 2020 and 2021 initiated a series of capital raisings that began to vastly dilute Marsalek’s holding in the company. EAEL’s stake dropped from more than two-thirds to just 10 per cent.

Matters became even more complicated in 2023 when Bowman started to acquire — via Damviol, a company controlled by his wife — shareholdings that had once belonged to Marsalek, taking part of EuroAtlantic’s stake in LCC and trying to acquire all of EAEL’s stake in Lorasco.

Bowman told the FT this was a case of sweeping up assets that were going cheap and would never be reclaimed.

LHG, however, claimed this was suspicious and has refused to acknowledge the transfer of EAEL shares to Damviol. It says it is legally bound to keep the proceeds of a crime frozen. It also says it has questions about Bowman’s motive as Marsalek’s former friend and even the origin of his funds.

Bowman told the FT he had not spoken to Marsalek in five years and that the idea he could be so stupid as to act as a front for him, given their known relationship, was ludicrous.

Bowman’s dispute with LHG will soon come to a head — in court.

Damviol in October filed a civil case in London alleging a conspiracy to defraud it, accusing Ben Halim and LHG of trying to use Bowman’s past relationship with Marsalek as a pretext to freeze the company out of his rightful minority shareholdings.

LHG, which denies the allegations, filed its legal response this week, saying there was no “animus” between Ben Halim and Bowman and stated that LHG blocked the transfer of EAEL-held shares on purely legal and fiduciary grounds.

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As with every story about Marsalek, the process of reporting on his Libyan legacy assets has not been straightforward.

This investigation began in late June, when the FT and Bayerischer Rundfunk were contacted by an anonymous source offering a file of internal LHG, LCC and other documents, evidence from which, when carefully cross-checked, forms part of the basis of this article.

The documents came with a cover letter that made a number of claims about Ben Halim, LHG, LCC and Marsalek.

The accompanying documents evidenced some of these. For example, they show that LHG sold the cement factories last year to Dubai-based Al Mored Oasis General Trading, owned by Libyan-Emirati businessman Ahmad Gadalla, who is widely reported as being close to the Haftar family.

A spokesperson for Gadalla said he had no financial arrangements with the Haftars, and was a “neutral” businessman, but confirmed particulars of the complicated sale process outlined in the documents, including a $15.5mn payment made to Ben Halim and entities controlled by him.

Ben Halim said this payment was to cover expenses he had personally incurred over the years keeping LCC in business.

Other claims made in the cover letter — particularly accusations of criminality concerning Ben Halim and LHG — were not backed up with evidence.

As the FT and Bayerischer Rundfunk spoke to various parties to try and verify or dismiss them, it became clear that an extensive dirty tricks campaign was being mounted.

Emails and messages from people masquerading as journalists and transparency campaigners appeared to be an attempt to discredit and smear Ben Halim, whose business counterparties, friends and family were among the recipients.

At first it seemed likeliest that the leaker of the documents was somehow linked to some of the ongoing disputes at LHG and The Capital Partnership.

Bowman is not the only litigant — Ben Halim is also in a business dispute with the co-founder of TCP. Meanwhile, a shareholder is suing Ben Halim in Dubai, while in recent months a number of senior staff have left LHG.

Several of these protagonists have engaged private investigators.

The FT and Bayerischer Rundfunk were even warned by two of the parties involved that they were likely to be put under surveillance or entrapped — possibly even blackmailed.

Over the past few months, the boldness and nature of the leaking campaign began to rule out several of the parties in dispute with Ben Halim and LHG as likely candidates, and suggested instead an actor with ongoing access to other parties’ files and communications as well as considerable cunning.

While the FT and Bayerischer Rundfunk have been unable to ascertain who is responsible, at least two parties involved in the affair believe they have a good idea who is behind it.

It is, they assume, Marsalek himself, aggrieved with LHG over the fact he can no longer access the millions he co-invested, and possibly sending a warning to people not to talk about what they know of his Libyan activities that have yet to come to light.

Last year’s Mayfair deal might have been the trigger, one source speculated, leading Marsalek to target and hack his former associates to find out what they were doing — and get his own back.

But perhaps, they added, it had nothing to do with the money or the politics. For Marsalek, they said, it was always more about the game.