Well known names like Vladimir Putin and the Prime Minister of Iceland have been mentioned around the seismic leak of documents surrounding off-shore law firm,  Mossack Fonseca of Panama City, Panama. On Sunday an  international coalition of media outlets published the results of an ongoing investigation based on secret documents provided by an anonymous source. The cache of documents totaling some 11.5 million records gave the cadre of more than 100 journalists worldwide a behind-the-scenes look into the offshore banking activity of world leaders, businessmen, celebrities, sports stars, and criminals. One of the businessmen linked to offshore corporations was Israeli gaming entrepreneur and Playtech founder, Teddy Sagi.

Among correspondences examined were those between the Panamanian law firm and Israel’s Bank Leumi. According to Haaretz, the communications discussed Leumi’s Jersey branch in the Channel Islands; a tax haven. One of the bank’s customers is billionaire Teddy Sagi who founded Playtech in 1999 and grew it into one of the most powerful gaming companies in the world.  Mr. Sagi also invests in real estate, having contributed heavily to the development of Camden Market into a vibrant a commercial real estate space in London.

Most of the 16 offshore companies Sagi owns, that were established by Mossack Fonseca, deal in real estate. Sagi is listed as the sole shareholder of all 16 companies. Branch officers of Bank Leumi serve as directors on many of the company boards.

None of the companies have been linked to wrong-doing. Sagi is well known in the casino industry as a creative entrepreneur who gained much of his fortune through legally buying or creating gaming related companies and then selling them to Playtech or subsidiaries at substantial profits. Analysts, if not regulators,  have raised concerns on several occasions that Playtech acquiring assets from its founder and largest shareholder could some day put the larger company in a tight spot. The fact that Sagi controlled many of those companies was not known until the sales were publicized.

As the result of a 2014 investigation not connected to the Jersey branch, Bank Leumi was found to have assisted about 1,500 American clients evade taxes. The bank paid a fine of 1.5 billion shekels (US$400 million).

All indications are that Sagi turned his life around after being convicted of, and sentenced for, fraud and bribery in a Tel Aviv court 20 years ago after he admitted to manipulating bond prices according to Wikipedia and the International Business Times. There are no allegations that he has done anything illegal with the offshore companies revealed today. For all his success there would likely be more without that dark mark from a virtual lifetime ago. In spite of that, Sagi was listed as a Forbes billionaire before the age of 40, and in 2014 alone floated three companies on the London Stock Market.

Haaretz reports that associates have said Sagi didn’t create the companies, only purchased them. They said that having branch bank managers on the boards of those companies was simply a service Bank Leumi provides its customers. Bank Leumi told the outlet that it’s sale of the Jersey branch last October was “part of the bank’s policy to diminish its international activity,” that the branch operated within the laws and regulations of the Jersey Financial Services Commission, and that, “Naturally, we are unable to address specific costumer issues due to banking confidentiality,” a representative said.

Playtech (LON: PTEC) stock closed at 841.50 GBX down 20.50 points (2.38%) unaffected by the news that the company’s founder has had 16 offshore accounts revealed. Hundreds of other  prominent Israeli business persons and lawyers were also linked to shell companies in the documents.
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