Director Dies after AML Warning

Firm reportedly set up structures used for proceeds of Azerbaijani corruption.

By Tim Hunter
Mon, 15 Jul 2019

The director of a company linked to alleged money laundering for clients in Azerbaijan has died, months after receiving a formal warning from the Department of Internal Affairs.

According to an obituary published in the NZ Herald Denton Morrell founder and director Matthew Butterfield died on June 9.

Asked how his death would affect the company a spokesperson said its solicitors would respond on its behalf.

A notice published by Wakatere Boating Club in Devonport said Butterfield’s death would be deeply felt.

“It is with great sadness that we pass on the news that we have lost a club member and OK sailor,” it said.

On April 30 the DIA said it had issued a formal warning on January 30 to Denton Morrell under the Anti-Money Laundering and Prevention of Terrorism Act.

The warning said Denton Morrell had failed to meet the requirements of the act between November 2015 and May 2018, including “failing to conduct customer due diligence … failing to adequately monitor accounts and transactions and failing to establish, implement or maintain an AML/CFT programme.”

In a statement, the DIA said it had taken no further action since then and was “working with the company’s legal representative to resolve the matter.”

Denton Morrell set up trusts, companies and limited partnerships for overseas clients.

Radio New Zealand reported that Butterfield set up the company in 2014 while subject to a five-year prohibition order from the Guernsey Financial Services Commission. The order from the Channel Islands tax haven barring his involvement in any financial services activity had no force in New Zealand.

Butterfield’s LinkedIn profile says he worked in Guernsey from 2007-10 before moving to New Zealand in 2011, via Switzerland.

Last year, investigative journalist Nicky Hager reported for RNZ that Denton Morrell had helped set up international structures via Malta to hold assets for Azerbaijani clients suspected of involvement in government corruption.

The report was part of an international collaboration known as the Daphne project, named after the Maltese investigative journalist Daphne Caruana Galizia, who was murdered in 2017.

New Zealand entities reportedly linked to Azerbaijan included Kubernao Trust, directed by Butterfield and owned by a Denton Morrell subsidiary.

Information from the Paradise Papers leak of data from advisory firm Appleby describes Kubernao as a shareholder of Maltese company Lighthouse Investment.

Kubernao also appears in UK company records as the controlling interest in UK company Palex Properties, directed by Butterfield, whose accounts showed assets of £11.4 million and an equal debt owed to its shareholder, interest free and with no repayment date.

Hager and Australian Financial Review journalist Neil Chenoweth reported that Palex owned two multimillion-pound London properties.

According to their reports, two other companies directed by Butterfield, Wolverine Asia Holdings NZ and Hawk Asia Holdings NZ, were set up in 2017 to hold shares in Maltese companies used for interests associated with Azerbaijani clients suspected of corruption and money laundering.