With a land mass of 2.7 million square kilometers, the Central Asian nation of Kazakhstan is one of the largest countries in the world, being about the same size as all of Western Europe combined for most of the 20th century, it was known as the Kazakh Soviet Socialist Republic and was a member state of the Soviet Union. With the fall of the USSR in 1991, the nation finally gained independence and was freed from communist rule. Despite its large size, Kazakhstan has a relatively small population of 19 million, giving it one of the lowest population densities in the world. The low population density along with vast deposits of natural resources gave Kazakhstan the potential to become one of the richest countries in the world.

In an effort to liberalize the economy, the government started privatizing formerly state-owned Enterprises. Like many other post-soviet states, the privatization process was fraught with corruption. Well-connected oligarchs were often able to buy valuable state-owned Enterprises for pennies on the dollar, building billion dollar fortunes almost over overnight. Three of the biggest beneficiaries of this were Alexander Mashkovic Alexander.

Together, they acquired iron ore and other metals mines from the Kazakh government and founded the Eurasian Natural Resources Corporation or Enrc. Foreign investors were quick to realize the potential for Kazakhstan and were eager to invest in the country. And in 2007, they got their opportunity. when Enrc ipo'd on the London Stock Exchange raising 1.36 billion pounds at a 6.8 billion pound valuation.

At the time, this was equivalent to 15 billion dollars, quitting it well within the top 100 largest companies traded in. London. Enrc ended up being a terrible investment for anyone who bought it at the IPO with the shares Falling by more than 75 percent by 2013. in the summer of 2014, Enrc was taken private for 4.7 billion dollars, less than one-third of its IPO price.

Six years prior, the buyers in this take private transaction were none other than the three Central Asian oligarchs who counted the company in the first place. Allegedly, the poor performance of Enrc's stock price was the result of the three founding oligarchs orchestrating a sophisticated campaign of bribery, embezzlement, and fraud. They siphon money from the publicly traded company into their own pockets. For the past 10 years, the UK's Serious Fraud Office has been investigating alleged corruption at the highest levels of Enrc.

At first, this looks like a clear-cut case of post-soviet oligarchs defrauding unsuspecting Western investors. However, this is only one side of the story. When the corruption allegations first surfaced in 2011, Enrc hired a prestigious law firm called Dutcher who put their top lawyer Neil Gerrard on the case. Gerard was tasked with conducting an internal investigation to help them uncover and clean up any corruption within the company.

Motivated by selfish greed and a large ego, Gerard secretly conspired with the UK's Serious Fraud Office to expand the scope of the investigation and to slander his own clients. This caused the company's share price to Free Fall leaving the founding oligarch with no choice but to take the company private again to protect their own interests. In some corporate fraud cases like Enron and Worldcom, It's pretty clear to see in hindsight who are the good guys and who were the bad guys. But as we will see with Enrc, the world is rarely so black and white as you've been watching this video.

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Use our code Wall Street when signing up or click the link in the description down below and enjoy the first five dollars added to your account straight away. Foreign major minor of iron ore, copper, coal, and other minerals primarily within Kazakhstan Following their successful IPO in London, they were flush with cash and decided to expand their operations into Africa, which is also abundant in valuable natural resources. So they went on an acquisition spree, paying hundreds of millions of dollars to buy up various mines across the continent. Some of these Acquisitions were highly suspicious.

For example, in 2010, they paid 300 million dollars to acquire a copper and Cobalt mine in Zambia. As it turns out, this mine was owned by the trio of oligarchs who acquired it for just 6.5 million dollars in 2003.. two years later, Enrc recognized the 96 million write down on the asset. It appeared like the founding oligarchs might have been lining their own Pockets by selling assets to Enrc for inflated prices.

Their most controversial acquisition was when they paid 175 million dollars for valuable Mining rights near Calwaysi, a city within the Democratic Republic of the Congo or DRC. The Congo is notorious for being one of the most corrupt countries in Africa if not the entire world. Enrc purchased the rights from an Israeli businessman named Dan Gertler, who had purchased the rights from the Congolese government for 20 million dollars the prior year. He was now selling them to Enrc for nine times the price.

It seems almost certain that Gertler leveraged his political connections and possibly greased the wheels with some bribery to acquire the call Weezy Mining rights and an artificially cheap price. With Enrc being a London listed company, the UK authorities had jurisdiction over the company even in relation to its activities in foreign countries. So, in 2010, the UK's serious Fraud Office or SFO looked into Enrc's acquisition of the call Weezy Mining rights. However, they concluded that there wasn't enough evidence to start an investigation To the extent that any bribery happened, it would have been done by Dan Gertler.

There was no reason to believe that Anrc had any knowledge or involvement, but with Enrc operating in notoriously corrupt regions in Central Asia and Africa, they were on the Sfo's radar. In 2010, an employee at one of Enrc's subsidiaries sent an anonymous email to Kazakhstan's Chief prosecutor's office alleging widespread corruption at the company. He claimed that high-ranking Executives were giving Supply contracts to companies owned by their relatives and receiving Kickbacks in return. the deputy Head of Security was making between two hundred and three hundred thousand dollars per month in Kickback payments to purchase poor quality and often second-hand equipment at inflated prices.

Another director bought a farm and allegedly used Enrc's budget to pay for his personal Farm expenses. Given the seriousness of these whistleblower allegations, Anrc's Chief compliance officer decided that they needed to hire an outside Law Firm to conduct an internal investigation. so he hired Neil Gerrard a highly respected lawyer from the prestigious Law Firm Dutchert. This is where things started to go South Foreign started his career as a police officer in London and eventually moved to become a lawyer.

One thing to know about Gerard was that he had a very large ego and was obsessed with advancing his career in the UK legal profession. one of the most prestigious agencies to work for is a serious Fraud Office which is in charge of investigating and Prosecuting complex cases of white-collar crime. Becoming the director of the SFO would be the dream job for any white-collar lawyer in London In a testament to how career obsessed Gerard was, he told some of his acquaintances that he was offered a job to be the director of the SFO but turned it down because the pay was too low. On his profile on Durchart's website, he said he was shortlisted to be the director of the SFO.

This was completely false. The SFO had never given him any job offer and he was never on any short list, but this was just the beginning of his embellishments. In 2011, he applied to become a partner at Dutcher which is one of the most highly respected corporate law firms in the U.S and UK In the interview, he said that he expected to generate 12 million pounds in fees per year. Impressed by his confidence Dutcher gave him the job shortly after joining.

Dutcher Gerard Landed Enrc as a client to conduct the internal investigation about. The Whistleblower complaint in Kazakhstan While Enrc was a large company, the case wasn't that complicated. Enrc was not the subject of any law enforcement investigation, so this was purely an internal review. Getting to the bottom of any whistleblower allegations and drafting a report for the audit committee wouldn't take that long.

Gerard would only be able to charge them a few hundred thousand pounds worth of vs. This was a big problem. Enrc was the only big client he was able to land and he was nowhere close to bringing in the 12 million pounds that he claimed he could generate. At this rate, the facade of him being some big shot lawyer would soon crumble.

So he was desperate to find as much dirt as he could at Enrc so that he could expand the investigation and earn more fees. In order to accomplish this, he needed to raise the stakes and the best way to do this was to get the SFO involved. If Enrc was being investigated by the SFO, they'd be far more willing to pay Gerard to protect them. So Gerard thought of a plan.

he met with Cameron Finley who was a security consultant hired by Enrc also to with the internal investigation. Gerard told Finley that he wanted to turn up the heel on Enrc by selectively leaking damaging information. An expansion of the investigation would benefit both men as they would both be able to generate more. V's Gerard handed Finley an envelope containing confidential documents related to the internal investigation Finley then handed them to a third colleague named Robert Trevelyan, who had a contact at the Sunday Times one of the UK's largest newspapers.

The Sunday Times were more than happy to publish this bombshell story exposing corruption at a large corporation. The goal is for the SFO to read the article and start an investigation. Given the wide circulation of the Sunday Times, the SFO probably would have read the article anyway, but just to be sure, Gerard had a secret meeting with Richard Alderman the director of the SFO to give him a heads up shortly before it was published. One day after the Sunday Times article was published, the SFO sent a letter to Enrc saying that they would start investigating alleged corruption at the company.

Neil had gotten exactly what he wanted. By getting the SFO to begin an investigation, he head upped the ante and put himself in a position to earn millions of pounds in legal fees right after Enrc received the letter from the SFO Gerard met with his accomplices Finley and Trevillian at a fancy restaurant in London according to Finley, Gerard was ecstatic. Allegedly, he said, quo right, boys, I'm in rape mode unquote. He was apparently using rape as a figure of speech, meaning that he intends to take advantage of his client.

He also expressed his intention to quote screw these efforts for 25 million pounds, presumably meaning that he intended to generate 25 million pounds of legal fees from Enrc. Whether metaphorical or not, talking about raping your client is not common practice for a lawyer. With the SFO investigation underway, Gerard convinced the NRC to substantially increase the scope of the internal investigation. Gerard Then commenced a metaphorical fishing Expedition where he scoured Enrc's internal documents in an attempt to find as much incriminating evidence as he could.

He organized numerous secret meetings with the SFO tipping them off about incriminating information they found and clear violation of attorney-client privilege. He also sabotaged Enrc by giving them faulty legal advice. For example, he told Enrc that the SFO was likely to raid their offices to seize documents despite knowing full well that such a move was extremely unlikely to preempt this. Enrc should voluntarily give the SFO more disclosures.

Enrc handing over additional evidence to the SFO risk incriminating themselves, and there is no need to do it. One of the most egregious cases of Gerrard's fishing Expeditions related to a scholarship fund owned by one of Enrc's subsidiaries in Kazakhstan. The purpose of this fund was to provide University scholarships to Children of RC's employees. In one case, they gave a scholarship to the son of a local police chief.

In the course of the internal investigation, there were concerns that this scholarship was a bribe. As it turns out, no children of Enrc's employees applied for a scholarship that year and the police chief's son had the highest grade of anyone who applied. There was no evidence that this scholarship constituted a bribe, it was just a charitable thing that they did for the local community. But Gerard hyped up that this could be perceived as a bribe and used this to further expand the scope of the internal investigation, earning more and more fees along the way.

While he was sabotaging Enrc from the inside, he also continued selectively leaking information to the Press. Over time his leaks would become more and more Brazen In December of 2011, he did another League to the Sunday Times which continued to trash NRC saying that the company's culture was more Soviet than City but just asparaging his client wasn't enough. Being the narcissist that he was, he couldn't help but talk about himself. The Sunday Time article, which was based on Gerard's own leaked information, gave a glowing profile of himself.

It said that he was a former police officer and had been asked to spearhead the internal investigation. During the course of the investigation, he uncovered huge amounts of malpractice including the deletion of documents creating false documents, deletion of electronic data Etc. In reality, the relevance of this malpractice was highly exaggerated and a lot of it was uncovered as a result of Gerard and appropriately expanding the scope of the investigation. For example, many of the false documents were uncovered during a sham investigation of a scholarship fund and were immaterial to the core corruption allegations against the NRC.

Gerard was clearly trying to paint himself as a big shot lawyer who is taking on this corrupt Soviet-style Enterprise In 2013, Gerard made perhaps his most Brazen League yet to the financial Times. He gave them a PowerPoint presentation that Enrc had presented to the SFO in regards to the internal investigation. However, Gerard doctored the PowerPoint to make it much more damaging to his client. He said that they are investigating Nrc's Chief Financial Officer as the NRC made 100 million dollars of payments to accompany connected to her.

These allegations had already been investigated and the CFO was exonerated of any wrongdoing, but Gerard slandered her anyway. Between 2011 and 2013, Gerard was able to build Enrc for 13 million pounds of legal fees on behalf of Detroit and generate over 1 million pounds of bonus payments for himself personally. While all of this was happening, the corruption allegations Gerard had lead to the media as well as poor financial results caused Enrca's share price to Fall Like a Rock The three founding oligarchs took advantage of the low share price to take the company private for 4.7 billion dollars less than one-third of the IPO evaluation six years prior. With the huge bonuses that he was earning from Dutcher, Gerard was able to afford a life of luxury living in a multi-million pound Mansion, but his past sins would eventually catch up to him by 2013.

Executives At Enrc were starting to get suspicious about the seemingly unending nature of Gerard's investigations, as well as a strange legal advice he was giving them. While Neil's deception was highly sophisticated, he made a few key mistakes which ultimately led to his downfall. In the very first leak he made to the Sunday Times the documents were physically delivered in paper format. Instead of printing out a clean copy of the documents, he accidentally sent them his working documents, which he personally annotated by hand.

Enrc eventually got their hands on these documents and the handwriting was easily identifiable as Gerard's Enrc sued Degger Gerard and the serious Fraud Office for breach of Duty and other legal offenses. The Crux of the lawsuit was that Gerard conspired with the SFO to work against the interest of his own client. While the financial motivation for Gerard was clear here, the motivation was far less clear for the SFO. They knew that Gerard was acting inappropriately in its capacity as Anarc's legal counsel, but they continued to engage with him anyway.

This put the SFO itself in legal Jeopardy. It can probably be chalked up to the director of the Sfo being overzealous. He likely thought that he was doing the right thing by going after what he believed to be a corrupt company, and he was willing to bend a few rules to bring them to justice. Over the next few years, a convoluted legal process ensued where Gerard was caught in multiple lives.

In 2022, a UK Court found Gerard Detcher and the SFO guilty of various crimes. Ditcher was ultimately forced to pay 20 million pounds in Damages to Enrc. As for Neil Gerrard, he was forced to sell his Mansion to pay for the mounting legal expenses and his professional reputation has been completely destroyed. Enrc changed its name to the Eurasia Resources Group and to this day it continues to operate business as usual in Central Asia and Africa.

The SFO investigation has technically not been closed, but given the highly improper nature of the investigation, most of the evidence will not be admissible in court. This makes it extremely unlikely that the company will ever face charges. Just because Enrc was a victim of misconduct from this lawyer doesn't mean that as innocent of corruption. it is indisputable that the trio of founding oligarchs own various Minds in Africa that Enrc acquired at seemingly inflated prices, and there was some bribery at some of their subsidiaries in Kazakhstan, although the extent of which is unclear.

Also, in the Years, following the Nrc's take private transaction, there were a few suspicious deaths which may or may not be related to the company. In 2015, two of Enrc's employees named James Bethel and Garrett Sturdum abruptly quit their jobs. They'd been working in the company's African operations. After quitting, they both took a vacation to Missouri in the U.S where they died on the same night in their shared hotel room.

The official cause of death for both men was malaria. They had traveled from Africa where they conceivably could have contracted the disease, but they had been in the U.S for two weeks already, so it seems highly coincidental that they died at almost the same time. Both men could have been key Witnesses in the Sfo's investigation. In 2016, a South African geologist named Andre Becker was found dead in his burned out car in Johannesburg.

Baker Had previously raised suspicions about the seemingly inflated prices that Enrc was paying for some African mines. We will likely never know the full story behind the untimely demise of these three men. All right guys, that wraps it up for this video. What do you think about Enrc? Do you think it was a corrupt company or just the victim of a corrupt lawyer? Let us know in the comments section below.

As always, thank you so much for watching and we'll see in the next one. Wall Street Millennial Signing out.