On the heels of allegations that Amer Abdulaziz Salman of Phoenix Thoroughbreds has been named a “key figure in a major money-laundering operation”, the Racing Post reported Monday that Abdulaziz's Phoenix Luxembourg Fund, billed by Abdulaziz as “the world's first regulated Thoroughbred fund” has been put into voluntary liquidation and “never operated as a functioning investment fund at all.”
According to the report, Abdulaziz registered Phoenix Luxembourg Fund SICAV-RAIF, created by his Dubai-based Phoenix Fund Investment LLC, in Luxembourg, but the fund was never regulated there, taking it outside of the governance of the country's financial services regulator. Application to place the fund into voluntary liquidation was made last month, according to the Luxembourg business register.
Racing Post also reported that Phoenix Luxembourg Fund was required by law to have an outside fund manager, known as an Alternative Investment Fund Manager, to get off the ground, but one was never brought on board.
“An AIFM was approached by Phoenix, but is understood to have walked away from the role during the due diligence process, meaning the fund never started and never traded despite Phoenix acquiring more than 300 horses, including stallions and broodmares, since its inception,” Racing Post wrote.
The report also went on to quote “a source with knowledge of the situation” who said, “This fund never got off the ground. It never did business and wasn't approved for any assets. Imagine someone built a warehouse, hired a manager. That manager never showed up for work, nothing ever went into the warehouse or went out of the warehouse.”
It was revealed Sunday that Abdulaziz was named in a U.S. court proceeding this month by a witness as a “key figure” in a money-laundering trial related to a sham cryptocurrency called OneCoin. That witness, OneCoin co-founder Konstantin Ignatov, pleaded guilty to several charges and also alleged that Abdulaziz stole €100 million from the scheme partially in order to fund his racing venture.
Earlier on Monday, Phoenix Fund Investments LLC categorically denied all allegations made against it and Abdulaziz in a statement released via Twitter.
The statement read: “Phoenix Fund Investments LLC believes that the firm and Mr. Amer Abdulalziz have acted according to the law at all times, and will vigorously contest all allegations of wrongdoing. Phoenix Fund Investments LLC will fully cooperate with relevant authorities should they require any assistance. Phoenix Fund Investments LLC is currently seeking legal advice and will take appropriate action against those involved in the publication of false and defamatory statements.”
BHA Investigating Allegations
Responding to the reported allegations against Abdulaziz, the British Horseracing Authority (BHA) announced that it is conducting an investigation in a statement issued late Monday evening.
The statement is as follows: “The BHA is aware of the allegations which are emanating from a criminal case in the United States. We are in contact with the appropriate authorities and are continuing to make enquiries as a priority. We cannot comment further on the specifics of this case at this time.
“More generally, British racing takes its reputation–and its responsibility to protect its participants from potentially corrupt activity–very seriously. Wide-ranging criteria are in place for the suitability of those involved in the sport, and every application for registration as an owner is assessed in line with these criteria. If an individual is found to have acted in a manner which makes them unsuitable to be an owner then their registration can be rescinded. There are also strict rules against engaging in conduct which is prejudicial to the sport's good reputation.”
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