Category Archives: Inside Knowledge

Fake Investor John Bernard Sinks Norwegian Green Shipping Dreams

Several articles here have delved into the history of John Bernard, the pseudonym used by a fake billionaire technology investor who tricked dozens of start-ups into giving him tens of millions of dollars. Bernard’s latest victim — a Norwegian startup hoping to build a fleet of environmentally friendly shipping vessels — is now embroiled in a lawsuit over a deal gone bad, in which Bernard falsely claimed to have secured $100 million from six other wealthy investors, including the founder of Uber and the artist Abel Makkonen Tesfaye, better known as The Weeknd.

John Bernard is a pseudonym used by John Clifton Davies, a convicted fraudster from the United Kingdom who is currently a fugitive from justice and residing in Ukraine. Davies’ Bernard persona has fleeced dozens of technology companies out of an estimated $30 million with the promise of lucrative investments.

For several years until reinventing himself again quite recently, Bernard pretended to be a billionaire Swiss investor who made his fortunes in the dot-com boom 20 years ago and who was seeking investment opportunities. Bernard generated a stream of victims by offering extraordinarily generous finder’s fees for investment brokers who helped him secure new clients. But those brokers would eventually get stiffed as well because Bernard’s company would never consummate a deal.

In case after case, Bernard would promise to invest millions in tech startups, and then insist that companies pay tens of thousands of dollars worth of due diligence fees up front. However, the due diligence company he insisted on using — another Swiss firm called Inside Knowledge — also was secretly owned by Bernard, who would invariably pull out of the deal after receiving the due diligence money.

The scam artist John Bernard (left) in a recent Zoom call, and a photo of John Clifton Davies from 2015.

But Bernard would adopt a slightly different approach to stealing from Freidig Shipping Ltd., a Norwegian company formed in 2017 that was seeking the equivalent of USD $100 million investment to bring its green fleet of 30 new offshore service vessels to fruition.

Journalists Harald Vanvik and Harald Berglihn from the Norwegian Business Daily write that through investment advisors in London, Bernard was introduced to Nils-Odd Tønnevold, co-founder of Freidig Shipping and an investment advisor with 20 years of experience.

“Both Bernard and Inside Knowledge appeared to be professionals,” the reporters wrote in a story that’s behind a paywall. “Bernard appeared to be experienced. He knew a lot about start-ups and got into things quickly. Credible and reliable was the impression of him, said Tønnevold.”

“Bernard eventually took on the role of principal investor, claiming he had six other wealthy investors on the team, including artist Abel Makkonen Tesfaye, known as The Weeknd, Uber founder Garrett Camp and Norilsk Nickel owner Russian Vladimir Potanin,” the Norwegian journalists wrote. “These committed to contribute $99.25 million to Freidig.”

So in this case Bernard conveniently claimed he’d come up with almost all of the investment, which came $750,000 short of the goal. Another investor, a Belgian named Guy Devos, contributed the remaining $750,000.

But by the spring of 2020, it was clear that Devos and others involved in the shipping project had been tricked, and that all the money which had been paid to Bernard — an estimated NOK 15 million (~USD $1.67 million) — had been lost. By that time the two co-founders and their families had borrowed USD $1.5 million, and had transferred the funds to Inside Knowledge.

“Further investigations indicated that Bernard was in fact a convicted and wanted Briton based in the Ukrainian capital Kiev,” the Norwegian Business Daily reported. “Guy Devos has sued Nils-Odd Tønnevold with a claim of 750,000 dollars because he believes Tønnevold has a responsibility for the money being transferred to Bernard. Tønnevold rejects this.”

Bernard’s scam is genius because he never approaches investors directly; rather, investors are incentivized to put his portfolio in front of tech firms seeking financial backing. And because the best cons begin as an idea or possibility planted in the target’s mind.

What’s remarkable about Freidig Shipping’s fleecing is that we heard about it at all. In the first of this now five-part series, we heard from Jason Kane, an attorney who focuses on investment fraud. Kane said companies bilked by small-time investment schemes rarely pursue legal action, mainly because the legal fees involved can quickly surpass the losses. What’s more, most victims will likely be too ashamed to come forward.

“These are cases where you might win but you’ll never collect any money,” Kane said. “This seems like an investment twist on those fairly simple scams we all can’t believe people fall for, but as scams go this one is pretty good. Do this a few times a year and you can make a decent living and no one is really going to come after you.”

It does appear that Bernard took advantage of a stunning lack of due diligence by the Freidig co-founders. In this May 2020 post on Twitter — well after their funds had already been transferred to Bernard — Nils-Odd Tønnevold can be seen asking Uber co-founder Garrett Camp if he indeed had agreed to invest in his company:

John Clifton Davies, a.k.a. John Bernard, Jonathan Bibi, John Cavendish, is a U.K. man who absconded from justice before being convicted on multiple counts of fraud in 2015. Prior to his conviction, Davies served 16 months in jail on suspicion of murdering his third wife on their honeymoon in India. The U.K. authorities later dropped the murder charges for lack of evidence. Davies currently resides with his fourth wife in or near Kyiv, Ukraine.

If you liked this story, check out my previous reporting on John Bernard/Davies:

Due Diligence That Money Can’t Buy

Who is Tech Investor John Bernard?

Promising Infusions of Cash, Fake Investor John Bernard Walked Away With $30 Million

Investment Scammer John Davies Reinvents Himself?

Investment Scammer John Davies Reinvents Himself?

John Bernard, a pseudonym used by a convicted thief and con artist named John Clifton Davies who’s fleeced dozens of technology startups out of an estimated $30 million, appears to have reinvented himself again after being exposed in a recent investigative series published here. Sources tell KrebsOnSecurity that Davies/Bernard is now posing as John Cavendish and head of a new “private office” called Hempton Business Management LLP.

John Davies is a U.K. man who absconded from justice before being convicted on multiple counts of fraud in 2015. Prior to his conviction, Davies served 16 months in jail before being cleared of murdering his wife on their honeymoon in India.

Davies’ fraud convictions stemmed from a series of U.K. companies he set up supposedly to help troubled companies reorganize their debt and turn things around. Davies ended up looting what little money his clients had left and spending it on lavish cars, home furnishings, vacations and luxury watches.

In a three-part series published last year, KrebsOnSecurity exposed how Davies — wanted by authorities in the U.K. — had fled the country, taken on the surname Bernard, remarried, and moved to his new (and fourth) wife’s hometown in Ukraine.

The scam artist John Bernard (left) in a recent Zoom call, and a photo of John Clifton Davies from 2015.

After eluding justice in the U.K., Davies reinvented himself as The Private Office of John Bernard, pretending to be a billionaire Swiss investor who made his fortunes in the dot-com boom 20 years ago and who was seeking private equity investment opportunities.

In case after case, Bernard would promise to invest millions in hi-tech startups, only to insist that companies pay tens of thousands of dollars worth of due diligence fees up front. However, the due diligence company he insisted on using — another Swiss firm called Inside Knowledge — also was secretly owned by Bernard, who would invariably pull out of the deal after receiving the due diligence money.

Bernard found a constant stream of new marks by offering extraordinarily generous finders fees to investment brokers who could introduce him to companies seeking an infusion of cash. Inside Knowledge and The Private Office both closed up shop not long after their exploits were detailed here late last year.

But it appears Davies has just assumed a new name. KrebsOnSecurity recently heard from an investment broker who previously represented multiple clients that got fleeced by Mr. Bernard/Davies over the years. That broker said he was blown away to hear Davies’ unique British accent on a recent call with a client that had been in investment talks with a Northern Ireland firm called Hempton Business Management.

This time, the source said, Davies was introduced by handlers on the call as John Cavendish.

“I just sat in on a call and John’s voice is unmistakable,” said the broker, who asked to remain anonymous. “He stumbled on the beginning of the call trying to remember which last name he was supposed to use. Immediately they go back to the standard script about the types of deals they are looking for. They want to be minority investors in private transactions and they are industry agnostic.  Their deal sizes are investments in the $5-20 million range, they prefer to not use big 4 firms for due diligence, and they have some smaller firms they use which are better suited for smaller investment deals.”

The source forwarded me some correspondence from Hempton Business Management, and I noticed it was sent from a Mariya Kulykova. This is interesting because Mr. Bernard’s personal assistant in Ukraine was a Mariya Kulikova (Ms. Kulikova deleted Bernard’s former companies from her LinkedIn profile shortly after last year’s series).

The company’s website says Hempton has been around since 2017, but the domain name was only registered in late November 2020. There is no information about who runs or owns the company on its site.

Hemptonllp[.]com was registered via Gandi, the same French registrar John Bernard/Davies has used over the years with his dozens of phantom companies.

Hempton Business Management’s only presence on LinkedIn appears to be a help wanted ad from a few weeks ago, for a marketing position at an office in Kyiv, Ukraine.

In response to an emailed request for comment on the apparent connections, Mr. Cavendish forwarded the message to a James Donohoe, who replied that he was the owner of Hempton. Donohoe said the domain was new because the company recently re-branded, although he declined to discuss the matter further.

“This sounds like an accusation of a big fraud?,” Donohoe wrote. “I have never had any dealings with a John Clifton Davies or John Bernard. You really are a cheeky little bugger aren’t you!”

Mr. Donohoe did not respond to further requests for comment.

Hempton appears to be part of a network of corporate facades designed to lead any investigators into a labyrinth of entities that exist only on paper. Hempton is what’s known as a “shelf corporation,” an aged or seasoned company that was formed but never used as a business. Shelf corporations are registered solely for the purposes of being resold to others at a later date. Simply put, their resale allows new enterprises to appear older, more established, and trusted.

“Perhaps the leading reason for acquiring an aged entity in general is credibility,” explains TBA & Associates, a company co-registered in the UK and New Zealand that has created hundreds of shelf companies for sale (PDF), including Hempton Business Management LLP in 2017.

“Business relationships are frequently influenced by the length of time a company has been in existence,” TBA continues. “This is often true when establishing financial and client/vendor relationships.”

Some of the shelf companies created and sold by TBA & Associates.

Documents from the UK business record index Companies House show two entities as officers in Hempton: ABA Group & Associates LTD, and Harper & Partners Ltd. Both of these are shelf companies in Hong Kong that are listed for sale in the same TBA PDF advertisement linked for Hempton.

Searching Companies House for information on ABA Group and Harper & Partners leads to a dizzying number of other shelf companies in Hong Kong, Belize and the U.K. — all of which also were recently listed for sale by TBA.

The only person’s name attached to each of these companies is a Joaquim Magro de Almeida, a rather mysterious 72 year-old Portuguese business consultant. OpenCorporates says this same guy is an officer in 313 active companies. The U.K.’s Companies House lists Mr. Almeida as one of three officers in Euro Forex Investments Ltd., which Reuters says was a sprawling pyramid scheme that stole $1 billion from at least 3,700 victims in China, the United States and elsewhere.

This 2017 story from New Zealand financial news site interest.co.nz follows a trail of various other investment scams leading back to TBA shell companies, and to Mr. Almeida, too.

In my first report on John Davies, I noted that before becoming John Bernard he previously used the pseudonym “Jonathan Bibi” with an address in the offshore company haven of Seychelles. That identity was tied to a number of fraudulent cryptocurrency and binary options investment schemes.

Fraudsters are drawn to complexity, and they typically incorporate their shell or shelf companies in countries with little to no oversight or background checks tied to the creation and maintenance of corporate entities. As we’ve seen here, the U.K. is a favorite of fraudsters and money launderers worldwide. In a scathing 2017 report titled Hiding in Plain Sight (PDF), Transparency International found some 766 UK corporate vehicles were alleged to have been used in 52 large-scale corruption and money laundering cases approaching £80 billion.

Who is Tech Investor John Bernard?

John Bernard, the subject of a story here last week about a self-proclaimed millionaire investor who has bilked countless tech startups, appears to be a pseudonym for John Clifton Davies, a U.K. man who absconded from justice before being convicted on multiple counts of fraud in 2015. Prior to his conviction, Davies served 16 months in jail before being cleared of murdering his wife on their honeymoon in India.

The Private Office of John Bernard, which advertises itself as a capital investment firm based in Switzerland, has for years been listed on multiple investment sites as the home of a millionaire who made his fortunes in the dot-com boom 20 years ago and who has oodles of cash to invest in tech startups.

But as last week’s story noted, Bernard’s investment company is a bit like a bad slot machine that never pays out. KrebsOnSecurity interviewed multiple investment brokers who all told the same story: After promising to invest millions after one or two phone calls and with little or no pushback, Bernard would insist that companies pay tens of thousands of dollars worth of due diligence fees up front.

However, the due diligence company he insisted on using — another Swiss firm called Inside Knowledge — also was secretly owned by Bernard, who would invariably pull out of the deal after receiving the due diligence money.

Neither Mr. Bernard nor anyone from his various companies responded to multiple requests for comment over the past few weeks. What’s more, virtually all of the employee profiles tied to Bernard’s office have since last week removed those firms from their work experience as listed on their LinkedIn resumes — or else deleted their profiles altogether.

Sometime on Thursday John Bernard’s main website — the-private-office.ch — replaced the content on its homepage with a note saying it was closing up shop.

“We are pleased to announce that we are currently closing The Private Office fund as we have reached our intended investment level and that we now plan to focus on helping those companies we have invested into to grow and succeed,” the message reads.

As noted in last week’s story, the beauty of a scam like the one multiple investment brokers said was being run by Mr. Bernard is that companies bilked by small-time investment schemes rarely pursue legal action, mainly because the legal fees involved can quickly surpass the losses. What’s more, most victims will likely be too ashamed to come forward.

Also, John Bernard’s office typically did not reach out to investment brokers directly. Rather, he had his firm included on a list of angel investors focused on technology companies, so those seeking investments usually came to him.

Finally, multiple sources interviewed for this story said Bernard’s office offered a finders fee for any investment leads that brokers brought his way. While such commissions are not unusual, the amount promised — five percent of the total investment in a given firm that signed an agreement — is extremely generous. However, none of the investment brokers who spoke to KrebsOnSecurity were able to collect those fees, because Bernard’s office never actually consummated any of the deals they referred to him.

PAY NO ATTENTION TO THE EMPTY BOOKSHELVES

After last week’s story ran, KrebsOnSecurity heard from a number of other investment brokers who had near identical experiences with Bernard. Several said they at one point spoke with him via phone or Zoom conference calls, and that he had a distinctive British accent.

When questioned about why his staff was virtually all based in Ukraine when his companies were supposedly in Switzerland, Bernard replied that his wife was Ukrainian and that they were living there to be closer to her family.

One investment broker who recently got into a deal with Bernard shared a screen shot from a recent Zoom call with him. That screen shot shows Bernard bears a striking resemblance to one John Clifton Davies, a 59-year-old from Milton Keynes, a large town in Buckinghamshire, England about 50 miles (80 km) northwest of London.

John Bernard (left) in a recent Zoom call, and a photo of John Clifton Davies from 2015.

In 2015, Mr. Davies was convicted of stealing more than GBP 750,000 from struggling companies looking to restructure their debt. For at least seven years, Davies ran multiple scam businesses that claimed to provide insolvency consulting to distressed companies, even though he was not licensed to do so.

“After gaining the firm’s trust, he took control of their assets and would later pocket the cash intended for creditors,” according to a U.K. news report from 2015. “After snatching the cash, Davies proceeded to spend the stolen money on a life of luxury, purchasing a new upmarket home fitted with a high-tech cinema system and new kitchen.”

Davies disappeared before he was convicted of fraud in 2015. Two years before that, Davies was released from prison after being held in custody for 16 months on suspicion of murdering his new bride in 2004 on their honeymoon in India.

Davies’ former wife Colette Davies, 39, died after falling 80 feet from a viewing point at a steep gorge in the Himachal Pradesh region of India. Mr. Davies was charged with murder and fraud after he attempted to collect GBP 132,000 in her life insurance payout, but British prosecutors ultimately conceded they did not have enough evidence to convict him.

THE SWISS AND UKRAINE CONNECTIONS

While the photos above are similar, there are other clues that suggest the two identities may be the same person. A review of business records tied to Davies’ phony insolvency consulting businesses between 2007 and 2013 provides some additional pointers.

John Clifton Davies’ former listing at the official U.K. business registrar Companies House show his company was registered at the address 26 Dean Forest Way, Broughton, Milton Keynes.

A search on that street address at 4iq.com turns up several interesting results, including a listing for senecaequities.com registered to a John Davies at the email address john888@myswissmail.ch.

A Companies House official record for Seneca Equities puts it at John Davies’ old U.K. address at 26 Dean Forest Way and lists 46-year-old Iryna Davies as a director. “Iryna” is a uniquely Ukrainian spelling of the name Irene (the Russian equivalent is typically “Irina”).

A search on John Clifton Davies and Iryna turned up this 2013 story from The Daily Mirror which says Iryna is John C. Davies’ fourth wife, and that the two were married in 2010.

KrebsOnSecurity sought comment from both the U.K. police district that prosecuted Davies’ case and the U.K.’s National Crime Agency (NCA). Neither wished to comment on the findings. “We can neither confirm nor deny the existence of an investigation or subjects of interest,” a spokesperson for the NCA said.