Oil CEO's Tabloid-Page Divorce Turns Criminal on Asset Scam

(Bloomberg) -- The founder of a European oil and gas company saw his messy divorce shift from the New York tabloids to the criminal courts Tuesday after federal prosecutors accused him of scams to hide tens of millions of dollars in assets from his ex-wife.

Todd Kozel, who founded London-based Gulf Keystone Petroleum Ltd., is accused of concealing assets in a foreign trust that included 29 million shares of the company he founded, and using about $12.75 million worth of those assets to buy a condominium in New York, prosecutors said. He was arrested Tuesday and ordered released on a $1 million bond following an appearance before U.S. Magistrate Judge Debra Freeman.

Kozel, 51, and his wife, Ashley, filed for divorce in Florida in 2010, and the proceedings have been frequent fodder for the New York Daily News and the New York Post, which reported in May 2017 that Ashley won a court order allowing her to seize a condo in Chelsea that he was sharing with his new spouse.

Prosecutors allege he worked to hide assets starting in February 2012 despite court orders that he fully disclose his assets. Kozel retired as chief executive officer of London-based Gulf Keystone in June 2014. He is charged with conspiracy to commit wire fraud, wire fraud and money laundering conspiracy, each of which carries a maximum sentence of 20 years in prison.

According to the government, Kozel hid his interest in the condo by creating a limited liability company that was secretly controlled by the trust, created a fake agreement that made it appear as if he was leasing the property, and also entered into a backdated “sham sale” transaction to block his wife from seizing the condo. David Meister, an attorney who represented Kozel at Tuesday’s hearing, declined to comment on the charges.

“Those who create elaborate schemes that have no purpose other than to mislead run a very high risk of prosecution,” said James D. Robnett, the special agent in charge of the Internal Revenue Service’s criminal investigation unit.

Prosecutors said Kozel earned an average of $10 million a year as CEO, but didn’t file tax returns for the years 2011 through 2014.

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