How a Pentagon contractor built a global empire — and a massive tax evasion scheme

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Douglas Edelman's rise and fall is a compelling tale — particularly for those of us who have spent years chasing hidden money around the globe.

The California-born businessman parlayed deep knowledge of  Russia's fuel industry and the unique patronage of an American-themed bar he owned in Kyrgyzstan into more than $7 billion in defense contracts to service the U.S. invasion of Afghanistan.

Using a near-invisible corporate empire — not even the Pentagon knew who was behind its suppliers — Edelman profited from the U.S. military's insatiable desire for fuel as Afghanistan-bound jets took flight from an airbase near the Kyrgyz capital of Bishkek.

Along the way, Edelman amassed a personal fortune that included luxury properties, yachts, and other investments, much of it hidden beneath layers of jurisdiction-jumping, tax-evading offshore structures.

Last week, he pleaded guilty to multiple charges in one of the largest tax evasion prosecutions in U.S. history.

Image: Vyacheslav Oseledko/AFP via Getty Images

The trial was the culmination of an investigation by the Joint Chiefs of Global Tax Enforcement, or J5, an international collaboration of tax authorities from the U.S., the U.K., Canada, Australia and the Netherlands, formed in response to ICIJ's own offshore investigations, including the Panama and Paradise Papers.

Indeed, details of Edelman's secret business empire have been peppered throughout multiple leaked financial datasets obtained by ICIJ since 2013.

As part of their case against Edelman, U.S. prosecutors gathered roughly two million documents seized from across jurisdictions. This level of collaboration between authorities was unprecedented until just a few years ago, and the outcome of the Edelman case has been hailed as a signature success for the J5.

"They're going to be crowing about this for years," one expert told ICIJ. Read more.

PRESS REPRESSED
Leaked Chinese government records reveal that Beijing targeted U.S.-based Uyghur reporter Shohret Hoshur as part of a yearslong push to silence Radio Free Asia, a U.S.-funded news outlet now in the crosshairs of the Trump administration.

DEADLY POETS SOCIETY
Irish drug cartel godfather Christy Kinahan Sr. wrote and edited poetry and prose as part of a high-security prisoners' writing group, writing under a pen name that was then used to register companies within his business empire.

SANCTIONS UNIT STALLS
Cyprus missed the European Union's deadline to create a long-awaited national sanctions implementation unit after objections from the local bar association. The unit was part of a package of reforms spurred by ICIJ's Cyprus Confidential investigation.

Thanks for reading!

Hamish Boland-Rudder
ICIJ's head of digital and product

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