‘Fatty Boy’ Lloyd Steel: Canadian diamond magnate on trial

In the days leading up to his December 1992 arrest, Lloyd Steel secretly set up nine offshore companies in Liechtenstein, via an executive assistant and legal counsel. He assigned himself the various names, listed…

'Fatty Boy' Lloyd Steel: Canadian diamond magnate on trial

In the days leading up to his December 1992 arrest, Lloyd Steel secretly set up nine offshore companies in Liechtenstein, via an executive assistant and legal counsel.

He assigned himself the various names, listed some of the directors, arranged for passports and Swiss bank accounts in Liechtenstein, Brunei and Italy, and even transferred $50,000 to an offshore trust from a bank account in North Carolina.

It was the first time Steel, known as “Fatty Boy” in the Canadian national press at the time, had set up an offshore company in Liechtenstein, located a few hours east of Europe.

But his illegal activities were not limited to Liechtenstein. Between 1992 and 1995, according to investigators, Steel had arranged for the same person to act as a manager on a similar scheme for all of Steel’s companies.

Their combined history reads like a farcical bromance between a major Canadian business figure and his management assistant.

That was Lloyd Steel. He was the former CEO of l.a. Pusch & C.S. Ltd., a global jewelery firm that controlled large amounts of assets in Europe, and was a major donor to the Liberal Party of Canada.

He was a key representative for Robert Carter Jr., the CEO of SAS Pacific, the largest diamond company in the Philippines and the firm’s director of finance. Both of them had connections to the mafia. Steel lent Carter $50,000 as a loan, money that would help fund a trip to Las Vegas.

Only years later was the extent of Steel’s illegal dealings discovered. Canadian prosecutors eventually decided to charge him with 12 counts of money laundering, five counts of making false statements, four counts of forgery and four counts of uttering forged documents.

That same day he was arrested in front of a Canadian courthouse. By then, financial regulators had begun investigating how Steel paid for his Las Vegas trip.

Windsor, Ontario-based lawyer Craig James and longtime friend Luis Sihota, a member of the Filipino presidential advisory council, were simultaneously charged with money laundering and conspiring to export diamonds to the Philippines from Canada.

Stein Sirota, an Israeli jeweler, was also charged in connection with the diamond trade in the Philippines.

Because of his stature in the diamond industry, investigators believed that Steele’s loan helped pay for Sirota’s trip to the casinos in Las Vegas and on a luxury cruise to the Bahamas. The Philippines, where Sirota was running diamond mining operations, had only recently legalized legal trade in diamonds.

The Canadian investigation did not yield much evidence. Steel was sentenced to three years in prison in 1995, and spent almost three years behind bars.

Investigators found evidence that Steel had been known to falsify documents. Fraudulent banking documents were issued to him in the aftermath of his 1982 divorce and 1999 remarriage. And he did all of this under the nose of his own lawyers and accountants.

With lawyers in Quebec, he moved his trial to the Bahamas; court records have shown that he bought a large house and a yacht in the Bahamas.

He died in 2014, having left just over $11 million of his $40 million fortune to his wife.

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