Nineteen people working for the biggest donor to the Conservative Party have been arrested in France in connection with a multi-million pounds tax and money laundering scandal.
All are linked to Lycamobile, the multinational telecoms giant, which has given at least £2.2m to Prime Minister David Cameron’s party since 2011, including half-a-million last year alone.
Lycamobile also allowed Boris Johnson to use one of their call centres during his successful 2012 campaign to become Mayor of London.
Those arrested include Lycamobile director, Alain Jochimek, who is well known as a prominent Jewish community leader in France, where he runs B’nai B’rith, the pro-Israel service organisation.
B’nai B’rith’s British branch was highly critical of Labour leader Jeremy Corbyn as he dealt with an anti-Semitism crisis in his party last month.
Mr Jochimek appeared in a Paris criminal court on Friday, along with nine others who have been charged with a variety of offences related to financial fraud.
They specifically relate to alleged illicit transactions of 13 million pounds, but the French authorities believe the figure could be far higher.
It follows a an investigation by BuzzFeed that caught Lycamobile ‘employing three cash couriers to drop rucksacks stuffed with hundreds of thousands of pounds twice a day at Post Offices scattered across London,’ according to the news site.
Bundles of cash were seized in raids on Lycamobile’s Paris headquarters, and a series of residential and business addresses across the city, while the company’ s French bank accounts have since been frozen.
Lycamobile’s Sri Lankan-born owner, Subaskaran Allirajah, is a member of the exclusive Leader’s Group for top Tory donors.
He has dined with Mr Cameron or members of his cabinet twice in the past six months, and is also close to Mr Johnson, after bankrolling his campaign.
None of those involved admit any wrongdoing, with Lycamobile previously claiming that the filmed cash drops were just ‘day to day banking’.
But according to Buzzfeed investigators the French authorities have identified money coming from shell companies suspected of acting as fronts for ‘various networks laundering profits from crime.’
Buzzfeed probed 19 companies that allegedly funnelled tens of millions of euros into Lycamobile’s French accounts.
All but one ‘was registered at PO boxes, vacant offices, derelict buildings, or a construction site.’ David Cameron pledged to crack down on money laundering and offshore tax avoidance at the global anti-corruption summit in London last month.
He said he wanted to ‘send a clear message to the corrupt that there is no home for them here’.
According to the Buzzfeed investigation, Lycamobile is selling its prepaid calling cards on the black market in Paris for cash, and is then using a ‘a vast system of false billing’ to invoice fake companies for the sales in order to conceal other illicit payments.
Lycamobile’s own auditors declared over the past two years that they could not account for total of £646 million that moved through 10 companies in its complex corporate network.
Lycamobile is the world’s largest mobile virtual network operator, buying international airtime in bulk and selling it to millions of customers around the world on relatively cheap prepaid calling cards.
Chairman of Lycamobile Subaskaran Allirajah, pictured in Canary Wharf, London
It has reported an annual turnover of 1.5 billion pounds, while legally avoiding corporation tax in the UK and Ireland by moving its money to the tax haven of Madeira.
Following the original Buzzfeed enquiry, the Labour Party wrote to the Conservatives demanding that the party freeze all donations from Lycamobile pending further investigations, but the letter was ignored.
The French enquiry, which opened in January, is being coordinated by prosecutors at the Parquet National Financier (PNF) A spokesman for the PNF said: ‘On Wednesday and Thursday, 19 people suspected of being involved in a money-laundering system implicating Lycamobile and Lycamobile Services were arrested.
‘The arrests were part of a Paris judicial investigation into money laundering and VAT fraud. Several places in Paris and its outskirts were raided and police seized about 130,000 euros in cash and 850,000 euros from bank accounts.
‘Nine people were brought in front of a judge on Friday and charged with money laundering among other things, and eight were released on bail while one man was remanded in custody.
‘The charges relate to money laundering of at least 17 million euros and VAT fraud of several million euros.’
Lycamobile has been approached for comment.