TVIND ALERT

Some of the corporate sponsors and charities that are giving millions to the Teachers Group:




Action Aid

Africare

Catholic Relief

Concern

USAID program

Belgian Dev. Coop

Irish Aid

Sida – Sweden

De Beer

American Express

MasterCard

Johnson & Johnson

BP

Shell

Statoil Hydro

Canon

Texaco Oil

Elton John

World Bank

UNESCO

UN AIDS

US Agriculture

US State Dept

Unilever

Tata Steel

Presidents fund

Agfund

Anglo American

EU

The Global Fund

IBM

Unicef

And many others




Source: research by Tvind Alert. Information from Humana and Teachers Group websites



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Last updated: 25th February 2010

The Charity Commission investigation 1996-9

Schools and used clothes recycling charity closed down

Links have been restored on this page



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In 1996, following a series of critical articles in the Guardian and Observer newspapers, the British Charity Commission decided to investigate Humana UK.   Its staff visited Humana UK’s clothes sorting plants and seven charity shops, as well as two Small Schools in England, Winestead Hall and Red House. They also travelled to Zambia to see for themselves the ‘DAPP’ projects supposedly financed by the Humana UK charity.

The Commission’s fraud investigation team found cause for concern over ‘serious financial irregularities’ in Humana, the schools and in Zambia. In 1997, the Charity Commission took the highly unusual step of placing Humana UK and the Red House School charities into receivership – it was the first time tough new powers had been used to do this.

The Commission initially adopted a compromise position and tried to work with the organisation’s Danish trustees to place Humana and the Schools on sound legal and financial footings. The Danish trustees proved uncooperative.

Eventually, the receiver was called back in, all the Danish trustees were sacked, and new, independent boards of trustees were appointed.

Effectively, Humana UK and the schools were closed down. Humana UK’s shops closed and it assets were transferred to a new charity, Traid, which is entirely independent of the Teachers Group and still very successful and active today. The two schools were closed. Winestead Hall remains in Teachers Group ownership. Red House school was sold.



Humana UK – what they found

In 1993, the Guardian pointed out that only ten per cent of the money raised by Humana UK actually went to charity. “Questions have been raised over the charity’s apparently commercial nature. In 1990, the last year for which It has submitted full accounts, it donated under 10 per cent of turnover to aid projects,” the paper reported.

The Charity Commission undertook a close investigation of Humana UK, which led to the closure of its shops, clothes charity and schools. Details of what the Commission found have never been officially published.

However, Humana Alert has spoken independently to the investigators, trustees and other parties, and pieced together an account of the Commission’s  indings. Those sources spoke of ‘serious financial impropriety’.

The clothes charities

Huge administration costs and big salaries for the leaders

The Charity Commission confirmed that Humana UK’s apparent ‘administration costs’ were unreasonably high – large sums of money were retained by the charity for its own administration rather than being sent abroad.

Money was supposed to benefit Humana’s own ‘DAPP’ projects in Africa. But there was no way to verify how much of the money earmarked for Africa got there, or what it was spent on. Since Humana and DAPP are essentially the same, there was no independent book-keeping.

The investigators also found another striking fact – DAPP’s ‘project directors’ in Africa, mostly Scandinavians and all Teachers Group members, were being ‘paid’ colossal salaries. Since as Teachers Group members they had undertaken to return their salaries to the common fund, in effect TG was keeping the money.

Finally, investigators visiting Zambia concluded that as well as being poorly conceived, DAPP’s projects there were very probably ‘double funded’ – they might not be paid for by Humana UK at all, but instead financed by other sources, such as other charities, embassies, consulates, grant-making bodies and the UN.

The schools

Poor facilities and payments to an offshore company

Although the Charity Commission’s statement does not go into great detail, we were told there were several grounds for closing the schools – the poor quality of the ‘education’ on offer, a lack of investment, and an unexplained relationship with a Jersey-registered offshore company (ArgyllSmith and CompanyLtd).

Winestead and Red House Schools were boarding schools for ‘problem’ children. English local authorities, who have responsibility for educating children of all backgrounds but often with no facilities of their own, paid hundreds of pounds a week to send misfit children to the schools.

Investigators quickly realised that there was a problem. The staffing, facilities, equipment and physical environment of the schools did not match the vast sums being poured in to them by local authorities. Hardly anything appeared to be spent on upkeep and running costs.

Despite the handsome publicly-funded income, the schools appeared to be run on a shoestring. Some of the staff were volunteers, and many day to day tasks like cooking, cleaning and maintenance were being carried out by the pupils themselves. There should have a been a surplus – but there wasn’t. Where did the money go?

Investigators soon established that, like the DAPP project leaders abroad, a few key Teachers Group staff were being paid large salaries, money which was returned to the Teachers Group common fund under the terms of TG membership. They also found a curious relationship between the school and its landlord, a Jersey-registered company called Argyll Smith. Argyll Smith owned the schools, their land, contents and several boats used by the pupils, and the schools paid rent on them.

The rents charged by Argyll Smith were way above market rates – the schools were paying their landlord a remarkably large sum of money. For months, the schools Danish trustees denied there was anything unusual about this. But it then emerged that Argyll Smith was a Teachers Group company – an offshore enterorise owned and operated by the same Teachers Group leadership as controlled the schools themselves. Very little was being spent on the schools, but the Teachers Group was paying itself handsomely.

Conclusion – the money machine

In the light of what we now know, following the Teachers Group trial of 2003-6, we can see a pattern to Teachers Group enterprises across the world – and the Humana UK example is absolutely classic. It looks like as much money as possible was returned to Teachers Group coffers – where, during the 1990s when the Teachers Group was beginning to expand worldwide as a commercial enterprise, it may quite possibly have been used to finance the Teacher’s Group’s property portfolio in central and south America, and its business expansion across the world.



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Details of the two charities




Humana UK Ltd

Humana charity shops, hundreds of bins branded HUMANA for used clothes collection.

Trustees 1987-98 were Mikala Gottlob, Helle Lund, Ellen Moeller and others



The Small School at Red House Ltd

Winestead Hall School

[pic] A converted hospital building at Patrington, near Hull, UK. This operated as the Tvind-run Winestead Hall School for around ten years until its closure in 1999. Today it the CICD – the College of International Cooperation and Development, another Teachers Group enterprise for over-16s.



Red House School

[pic] A school building near Buxton, Norfolk until its closure in 1999. The property has now been sold.

Trustees to1998. Hanne Hansen, Jytte Nielsen, Steen Conradsen, Agnes Steffensen, Lise-Lotte Soerensen, Mikala Gottlob (‘school adviser’, Oeyvind Wistroem,, Jesper Wohlert, Carl Petter Nielsen, Else Kragholm Nielsen, Steen Thomsen (head teacher, Winestead), Lena Eriksson (head teacher, Red House), Karen Barsoe and others.




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Steen Thomsen’s story

[pic] The last headmaster of Winestead Hall School when it came under investigation by the Charity Commission in 1996-8. Steen Thomsen had been educated as a Tvind student and a member of the Teachers Group since 1974. After questioning by the police and Charity Commission officials, Thomsen decided to defect from the Teachers Group and become a whistleblower.

In a long and detailed report to the Danish education ministry, reproduced here (pdf file) he described his life in Tvind and described the Teachers group as a cult. In one section of the document, he alleged that the Teachers Group used fraud and tax dodges to milk the small schools of money for its own purposes – ‘the English money machine’.



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Interviews

Shortly after the schools were closed, Tvind Alert carried out interviews with key trustees and participants in the events. Interview with a management consultant. This interview was carried out on condition of anonymity with a management consultant appointed to review the closure in late 1997.

Interview with an independent educationist. This interview was carried out on condition of anonymity with an educationist appointed to the trustees in 1997. “They are the most plausible, most charming, most devious conniving bastards….”



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Press reports

There were no press reports of the decision to close Humana and the two schools.  Here are the Guardian articles that originally prompted the Charity Commission to act




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Where are they now?

Ten years on, where are the directors of trustees who once ran Humana and Red House?  Here is the most recent information we have about some of them


Mikala Gottlob -Non-executive director of the Trayton Group, Shanghai, China.

Helle Lund – Manager, Gaia second-hand clothes, Chicago, a Teachers Group company

Jytte Nielsen – Manager, Humana used clothes in Holland, Austria, Sweden and Spain

Jesper Wohlert – Manager, Humana used clothes, Spain

Lise-Lotte Sørensen – Humana HQ, Zimbabwe

Hanne Hansen – Went on to become a member of council of management, CICD

Steen Thomsen – Left the Teachers Group, now teaching in western Denmark

Øyvind Wistrom – Probably left the Teachers group and become police witness.

Steen Conradsen – at the Tvind School Centre in Ulfborg, Denmark

Ellen Moeller, Agnes Steffensen, Carl Petter Nielsen, Else Kragholm Nielsen – no recent information



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Developments since closure



Humana swiftly returned to the UK under new guises. The Teachers Group opened clothes recycling enterprise Green World Recycling in April 1998 and Planet Aid UK in October 1998. Both are commercial, non-charity companies. Winestead Hall School has become CICD – the College for International Cooperation and Development. None of these entities is a registered charity.

In March 2007, the Teachers Group turned again to the Charity Commission and registered a new used clothes charity, DAPP UK, part of the Humana group. You can now read the Humana Alert dossier on DAPP UK, and the charity details.



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Last revised 19th March 2010

Do you have further information about Humana UK or the schools?  Please tell us.

Key offshore holding company, based in Jersey and  Belize.

Owns thousands of acres of land and property and major companies including U’SAgain.

Founding directors all Teachers Group leaders

Links have been restored

Corrected 15th March 2010

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Fairbank, Cooper and Lyle (or FCL) is an absolutely key offshore company at the heart of the Teachers Group money machine.    It is the ultimate owner of almost all the main sources of income:  many of the plantations, including enormous estates in central America, Brazil, Malaysia and the Caribbean; the colleges; and several of the commercial used clothes companies including U’SAgain.

The commercial plantations supply mangos, bananas, oranges and other produce for large profits on world markets.   There is a listing of Teachers Group plantations here.

The Fairbank, Cooper and Lyle website is here.

WHAT DOES FCL GROUP LTD DO?

Fairbank Cooper and Lyle, or FCL Group Ltd, is an offshore holding company, registered for tax purposes  in Jersey and run from Belize, where the Teachers Group has large plantations.



FCL portfolio

• FCL owns Teachers Group plantations in Brazil, Belize, Ecuador, the Cayman Islands , St. Lucia and Fiji
• It owns Fazenda Jatobà ranch in Brazil, the $12m property at the heart of the 2003-6 fraud prosecution against the Teachers Group.
• It owns U’SAgain
• It also probably owns Garson and Shaw, a commercial used-clothes broker “selling clothes to big customers in USA, Latin America, Europe and Africa’”
• It is a majority shareholder in “four American companies, engaged in collecting recycled clothes in nine states, for resale in USA and world wide.” [We think those companies are: U'SAgain, dormant subsidiaries U'SAgain 2000, U'SAgain 3000, and perhaps  TS Recycling.]
• It may own Argyll Smith and Company Ltd, the Jersey-registered offshore company that owns most Teachers Group schools. (This was stated to be so by Danish police in 2001.)
• Through Argyll Smith, it is therefore ultimate owner of the mysterious compound in the Mexican desert.
• Until 2005 it was owner of another key Jersey-registered holding company, Kirchheiner Bros. (Police said so in 2001, stating that Kirchheiner was ‘centrally placed in the Tvind group’, and directly controlled by KLAP [Kirsten Larsen and Amdi Petersen].) Kirchheiner is now dissolved.
• It may own forestry companies or loggingt concessions on Malaysia.  This was cited in the 2001 police report.




Who runs FCL Group Ltd?

FCL was formed by the merger of three separate offshore companies (Fairbank Limited, Cooper Investments Ltd and Lyle Enterprises Ltd) all of which were originally registered in Jersey in 1991. The companies merged after 1995.

There were then six directors, all of them Teachers Group.  They were all identified by police as top managers of the secret ‘Tvind economy’ and are on our list of the top thirty Teachers Group financial wizards. Of those six, one, Kirsten Larsen, is on a Danish police want list because they would like to charge her with financial crimes.  She is believed to be a fugitive in Mexico or Zimbabwe.    The others are running various Teachers Group enterprises around the world. They are: Else Jensen, Birgitte Krohn, Anne Hansen, Svend Sorensen, and Joep Nagel.



Dirty money?

Danish police say Fairbank Ltd, Cooper Investments and Lyle Enterprises were all key Teachers Group ‘operating companies’ in the years after 1991.   They and their successor FCL Group Ltd have a long history of ‘hot money’ transactions, according to the 2001 Danish police report.

The main police allegation is that Fairbank, Cooper and Lyle was used to mount an illegal operation to covertly channel funds from a ‘humanitarian’ Teachers Group charity into property and land for commercial purposes. The money, they say, was secretly transferred through FCL subsidiary companies with false identities.   This was the charge at the heart of the 2003-2006 fraud charge against the Teachers Group.

One network of FCL-owned companies in the USA and the Cayman Islands was allegedly used to buy a properties in Miami and a ranch in Brazil. Another nest of subsidiary companies was based in Jersey and Hong Kong. A third revolved around a fake ‘environmental project’ in Malaysia and a fourth was run through an FCL-owned investment company in Miami.

The ultimate object, say police, was to move enough money to buy the Fazenda Jatoba ranch in Brazil for $12m.  The contract for this sale was signed on 8th August 1994 by Anne Hansen and Kirsten Fuglsbjerg.  Fuglsbjerg, who also goes by the name Christie Pipps, is among those wanted for questioning by Danish police.  This ranch is still in the hands of the Teachers Group.   The money transfers through shell companies also helped buy apartments at the Sterling, Miami in 1992 (now sold).



What plantations does FCL Group own?

The Cayman Islands – Furtherland Farm

St Lucia – Park Estate Ltd, River Doree Holding Ltd, Mt Lezard Estate Ltd?

Belize – at least 13 companies including Belize Gold Bananas, Cowpen Farms Ltd, Monkey River Estate, Toledo Citrus Company Ltd and Toledo Fish Farming Ltd

Brazil – Floresta Jatoba.

Ecuador – Ecpomartes SA, Frioport SA, Grupo Danés and Jokay SA?

Fiji – Pacific Farming, Pacific Produce Ltd?




There is a list of Teachers Group Plantations here



Sources: FCL Group website and 2001 Danish police prosecution evidence



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Do you have information about a Teachers Group company?    Tell us

Last updated: 15th March 2010




Five ways the 501c3 diverts money into the bank accounts of the Teachers Group

by Tvind Alert

Links restored


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Planet Aid Inc was started in 1997 by Michael Norling and Ester Neltrup as a non-profit 501c3 (tax exempt) organization, and has quickly grown into the largest Tvind / Teachers Group used clothing operation in the USA.

It now has over 12,000 donation bins in 23 states which collected nearly $26 million worth of used clothing in 2008 alone. Planet Aid claims to use the proceeds from the sale of the clothing to fund humanitarian projects in several developing countries. These projects are not run by independent charities, but by the parent organisation Humana People to People.



Money scam 1:   not much given to charity

Planet Aid Inc generates millions of dollars through used clothing donations, but only small percentages are ever given away. The rest is said to be spent on ‘operating costs’. But what are they? These costs are much higher than most 501c3s. The same claim is made by Tvind charities all over the world.

In 2006 the American Institute for Philanthropy gave Planet Aid an “F” rating because only 28% of its funds were used for charity purposes. Likewise, the Better Business Bureau refused to accredit Planet Aid in January 2008, in part due to its low charity funding.

Planet Aid has always maintained that because its operational costs are high, it has less to give. But a closer look at Planet Aid’s tax returns and audits shows that Planet Aid’s financial dealings are even more questionable.



Money scam 2:   the USDA ‘Food For Progress’ grants

Since 2005 Planet Aid has received millions of dollars each year in funding from the USDA’s Food For Progress program. This is a programme by which U.S. agriculture commodities are provided for the benefit of developing countries. The USDA donates the produce directly to NGOs and pays for it to be sent abroad; the NGOs are responsible for distributing it and using it effectively, or selling it to fund development.

In 2004 Planet Aid received only ‘soya produce’ which it used in its ADPP soy restaurants in Africa. (ADPP and DAPP are Tvind-run financial entities in southern Africa.) Since 2005, USDA has made grants of wheat instead, which Planet Aid was told to sell in Mozambique and Malawi. The proceeds were used to finance ADPP projects such as Teacher Colleges and its so-called One World University in Malawi. Planet Aid has received more than many millions of dollars from USDA since 2004.

But since Planet Aid started receiving the money, a strange thing has happened. As the grant funding increased, the percentage of funds Planet Aid has donated to the developing country projects from its used clothing proceeds has gone down – and this despite a steady increase in the quantity and value of clothing collected.

In 2004, when Planet Aid received soy products but no money from the USDA’s generosity, it donated over 22% of its used clothing proceeds to humanitarian projects. By 2005, when the USDA wheat grants began to be turned into hard cash, the percentage of the budget from clothing had dropped to less than 21%. And by 2008, the figure was roughly 8%.

In 2008, Planet Aid’s used clothing collections soared to almost $26 million, but the Humana projects received only $2.1 million from these clothing donations…roughly 8%. The remaining proceeds, a reported $14.3 million in 2008, came directly from the USDA grants.

In other words, each year, Planet Aid’s clothing collections increased and their total charity ‘donations’ went up as well, so it looked good. But a closer look reveals that these donations were largely due to US tax payer funded USDA grants, with less and less coming from the clothing given by the public. What happened to the remaining proceeds from the clothes collections?

Planet Aid is reported to be the biggest recipient of USDA funds in the Food for Progress scheme. The USDA recently said it would investigate how Planet Aid is using the cash.



Money scam 3:   ’Membership fees’ paid to Humana Federation

Planet Aid is a member of ‘The Federation for the Associations Connected to the International Humana People to People Movement.’ This ‘membership’ connects Planet Aid to the rest of the Tvind / Teachers Group financial network. The 36-member ‘Federation’ was formerly run from Denmark, but since around 2001 it has operated in Switzerland, from an address that it shares with at least one other mysterious international Teachers Group financial trust.

According to a recent independent auditors report, Planet Aid is “required to pay an annual membership and program facilitation fee based on a specified percentage of the larger of actual or budgeted contributions.”

A quick calculation from published accounts shows how much they have paid and we can calculate that this fee averages 5.5% of a reported total of $2,276,826 raised by Planet Aid since 2004.

But in fact these fees were NOT based solely on the value of clothes donated by the public, but on everything that Planet Aid raised – including the USDA grants. We can calculate that $1.38 million paid to the Humana Federation came directly from the USDA grants. The USDA is not just paying money to Planet Aid, but directly supporting this mysterious ‘Federation’.



Money scam 4:   the Garson and Shaw connection

Garson and Shaw is a commercial used clothes company based in Atlanta, Georgia. It is the main purchaser and broker of clothes collected by the three Teachers Group clothing enterprises in the USA – Planet Aid, U’SAgain and Gaia. We know that Garson and Shaw is itself controlled by the Teachers Group: its managers are all TG members, and it is owned by Fairbank, Cooper and Lyle, the offshore company at the heart of The TG’s property empire (which also owns U’SAgain).

Since 2004, Planet Aid has collected and sold over $82 million worth of used clothing. Some of it may be sold to independent dealers, but it is no secret that Planet Aid’s biggest customer is Garson and Shaw.

Garson and Shaw acknowledges its commercial business with Planet Aid. G&S states on its website that Planet Aid is a supplier of ‘credential clothing’ (unsorted used clothes) which G&S buys and then sells on to other companies.

But Planet Aid and Garson and Shaw have a second commercial relationship. Besides supplying large amounts of product to Garson and Shaw’s customers, Planet Aid also uses Garson and Shaw as its own sales broker. Simply put, Garson and Shaw gets a percentage of the proceeds for possibly every sale that Planet Aid makes. G&S is also the main broker for U’SAgain and Gaia. The accounts for Planet Aid show that sales commission expenses for 2006 and 2007 charged by Garson and Shaw totaled $1,311,601.

The Teachers Group is ‘trading with itself’ and the commercial Teachers Group company Garson and Shaw is reaping a steady profit from the income generated by the Teachers Group’s supposedly ‘humanitarian’ clothing charities. Once again, the Tvind Teachers Group finds a way to bank some of the proceeds for itself.



Money scam 5:   the loans from Denmark

But the scandal does not end here; the money trail is much more complex. We may not yet know all the other ruses means the Tvind Teachers Group has used to move money from its charities into its private and offshore accounts, but here is a further hot money scam – the interest on loans.

Den Selvejende Institution Faelleseje (The Faelleseje Savings Institiute) is a Danish registered trust, founded in 1977, which is at the heart of the Teachers Group’s financial network. Following police enquiries in around 2001, and the decision to prosecute Amdi Petersen for fraud, the Danish government placed two independent members on the Faelleseje board to monitor transactions. But despite this vigilance, Teachers Group members have managed to retain considerable control.

In 2006, Faelleseje, developed a new way of making money; through loans to member organisations in the Humana Federation, and especially to those running schools and clothes schemes. In Faelleseje’s 2006 annual report, the following passage appears: “Besides the donations mentioned above Faelleseje has made a new sort of donations.
These donations are loans for purposes, that are expected to generate cash flow, e.g. buying containers for the purpose of collecting used clothes. The loans are given on terms equal to that of a credit worthy lender.”

In other words, Faelleseje is advancing money on a commercial basis at normal or above normal commercial rates of return, to its sister organisations in Tvind. It is selecting those Tvind organisations with the most available money.

In 2006, the Teachers Group’s IICD school in Williamstown, Massachusetts received a loan from Faelleseje of $180,077. By year’s end, this loan had generated interest of over $13,000. In 2007 and 2008 more loans were given out to several other Humana Federation members and schools, including all three Tvind schools in the US, in Massachussets, Michigan and California.

Interestingly, the largest loans of all were given to the very same Federation members that had received grant money through the USDA ‘Food for Progress’ sch with established used-clothing programs, or to projects that had already received large donations from Planet Aid, Inc. Therefore, each recipient had a known cash flow.

It is not clear from the US schools’ published annual accounts whether these loans have been repaid or are being allowed to accumulate, and at what interest. (By failing to document and report these loans properly, IICD Massachusetts and the two other US schools are breaking IRS rules.) If these loans are allowed to set and generate interest, Faelleseje stands to make several thousands, if not millions, of dollars as a result – again, from money donated for humanitarian purposes.

It appears that Faelleseje has developed yet another way to divert charity funding into Tvind’s bank accounts.



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Do you have information on a TG company? Tell us.

Revised: 1st March 2010

How the Teachers Group used offshore accounts, front companies, false invoices and fake letterheads to cream off the profits from Humana charities, 1990-2000

by ‘Whistleblower’

Links have been restored

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As told to Tvind Alert

‘Whistleblower’ is a Dutch former Tvind employee who worked for ten years in the Teachers Group’s used-clothes business in Amsterdam. He has come forward with information about the methods the TG used to evade tax and cream off profits from Humana and UFF used clothes boxes throughout Europe. This is his story.




I didn’t go to a Tvind college. I was recruited to work direct for Tvind in Holland in the used-clothing business in around 1990, after replying to a job advert.

And I never joined the Teachers Group, but I knew all the Tvind people in the Netherlands, and a lot from elsewhere too. I dealt with a lot of paperwork, sales and invoices. My job was to work out the logistics and movement of clothes between various suppliers and customers all over Europe and the USA.

I ended up staying for ten years and a day.

My employer was an Amsterdam-registered company Textile Transformation EC Trading BV – a Tvind company, of course. I worked direct for a man named Flemming Gustafsson, a Teachers Group member. (He is now elsewhere but still working for the TG, probably in Africa – and is wanted by the Russian FSB for a recent timber scam.)

EC Trading (for short) was the equivalent of the current TG clothes broker Garson & Shaw, a middleman company that never handled any clothes - there was no warehouse and the company did not make any collections.

Essentially the purpose of EC Trading was to buy clothes from UFF (Scandinavia) and Humana (rest of Europe) charities and drop-in box schemes. EC trading bought all the good quality ‘surplus’ clothes that had been donated to UFF/Humana but were not suitable for Africa – that is coats, woollens, and so on. They would then sell them on to East Europe and other places. But we never actually saw the garments at all.

In the beginning it seemed like just another job, but gradually, as the boss was often out on trips, I took on more responsibilities. I noticed some odd things. I began to see more and more strange mail coming in, that it was sometimes my job to open and deal with.

There were two key paperwork scams we used that made sure that as much money as possible went to Tvind, and not to either of the charities.

Here’s how it worked:

EC Trading dealt exclusively (more or less) with three ‘sales offices’. They were companies called Holland House, Agence Notre Dame and Transco Shipping. They were all, of course, Teachers Group-owned operations.

Holland House [registered in Jersey] had offices in Poland and was run by a Teachers Group member named Allan Foighel, and handled clothes sales all over Eastern Europe – Romania, Russia, Hungary etc. (Allan Foighel today runs Garson and Shaw in the USA).

Agence Notre Dame [registered in the UK] was also a ‘sales office’ exporting clothes to East Europe.

Transco Shipping [registered in Guernsey] handled exports to west Africa – Togo, Benin and Ghana (for some reason – quite why these kind of ‘surplus’ clothes still went to Africa is a mystery).

Each sales office had their own customers in various parts of the world. In some cases (such as in west Africa and central Asia) these were also Teachers Group-operated companies – mostly known as ‘Trade Link’. Others were genuine independent retailers.

Now here is the key thing.   All three of these ‘sales offices’ used fake or misleading letterheads.    None of the companies were actually registered in Holland, but they all had letterheads printed with an Amsterdam telephone number, an Amsterdam mailbox address (not a real office, just a mailbox), and an overseas bank account – Holland House’s was in Jersey.

So when they raised an invoice, the money would be paid into the overseas bank account, not to charity. In fact, none of the three sales offices raised their own invoices or paperwork for the sales they made to customers at all. I did it for them using the fake letterheads.

My job was to write the invoices on their behalf in Amsterdam, using the letterheads I was given. I would send the original to the customer, as if it had come from the sales office, with a copy to UFF or Humana.

Then I would arrange transport for the clothes direct from, say, UFF in Sweden to a company in Warsaw, or from Humana to, I suppose, somewhere like Latvia.

The customers got the clothes, and the price they paid was quite normal. But everything was structured so that neither UFF / Humana nor EC trading made much profit on these deals – the big profits were taken by the three sales offices and sent to their Jersey bank accounts.

The banks and account numbers were changed regularly – which I suppose all fits in.

Out of curiosity, I once visited all three addresses of the “Amsterdam based” sales offices on the letterheads. All three turned out to be nothing more than independent secretarial service offices, that received mail and some telephone calls and forwarded everything on to my office.

Most of the fixed phone lines we used came in through a re-route, though I don’t know from where.

However you looked at it, the profits went back to Tvind in Denmark, but the biggest profits were made with companies registered in the places where the least possible tax was paid, for example in Poland, and that is what went to the foreign bank accounts – not to Humana or UFF.

There was a second scam involving split invoices used by EC Trading.  This involved writing two invoices for each consignment, splitting the bill into 50-50, or 40-60. Then only one part of the bill would be sent with the goods. When EC Trading exported to Hungary, for example, customs would only be presented with one of the two documents, so only a proportion of the duty was paid.

This went on in various countries for about 5 years.

Eventually customs and tax authorities in several countries (Holland, Belgium and Hungary) grew suspicious and the network had to be folded up.

Gustafsson fled to Nairobi, Kenya, with his crony Birgit Dinesen. There they started yet another sales office called Holland Trading (this company also worked in Budapest) to capture the market for clothes in Kenya and Tanzania. But this never worked well, and they eventually returned to Holland.

I left the company in 2000, and a few months later, EC Trading folded – went bankrupt.  This was clearly anticipated, as for some time the company’s business had gradually been taken over by another enterpise  -  and that enterprise was   -  Garson & Shaw.

Garson and Shaw was a new company that took over the clothing business, first in London at a mailbox address, then in Gibraltar and the United States.  All the business was moved over in around 2000.

EC Trading left large debts, but as most of these were to its Teachers Group trading partners, of course this just meant more money falling into Danish Tvind coffers.

In Gibraltar, Garson and Shaw shared a building with three other Tvind companies in the same block, each registered on a different street around the block and so each with a different postal address. I imagine the set up in Gibraltar was the same as everywhere else – secretarial services and accountants forwarding mail and phone calls.

In the end Gustafsson returned to Holland to found yet another Teachers Group used clothing enterprise called Conmore (what’s in a name!), and he also became the European representative of Garson and Shaw.

Strangely enough, the Dutch authorities never apprehended him.

None of these network of companies now exist – they have all stopped trading (although some of the Trade Link companies in for example Almaty and Kiev might still exist). But Garson and Shaw is still in business in the USA.

What were these people like? Well, there were some odd things about the people running the show, as well as the business. Everywhere I looked, I noticed there always seemed to be a Dane in charge, always with his own private phone and fax (this was in the pre-mobile phone era – remember that?)

There was something not very businesslike about them, strange as that may seem. They were all very intelligent people but a bit absent minded, “not quite of this world”. They were all single, not in any relationship – they all appeared completely “neutered”. And they all had a glassy, brainwashed look in their eyes, and did nothing but work, work, work.

Looking back, I suspect they were from the lower ranks of Tvind recruits. They reminded me of the kind of unattractive, needy children who have been bullied at school, and desperately want to belong to something, anything. Perhaps that’s why they were selected.

That’s my story.

‘Whistleblower’




See also:

Hot Money: The clothes laundry in Gibraltar

Berlingske Tidende, ‘The Used Clothing Trophy’, 2002




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Do you have a story? Tell us.

Posted: 10th November 2009, revised 1st March 2010