John Deuss

Johannes Christiaan Martinus Augustinus Maria "John" Deuss (born 28 August 1942) is a Dutch trader and convicted criminal who broke sanctions by selling oil to the apartheid regime of South Africa and owned a bank which permitted carousel fraud.

Head and shoulders black and white photograph of a man pulling his mouth down
Deuss at the 1989 Rotterdam Oil Symposium

Career

At the age of 25, Deuss became a commodity trader, entering the oil market with his company JOC Oil.[1] An initial deal was to buy kerosene from Jacques Detiger and sell it at profit.[2] He signed a contract in 1976 with the USSR's national oil company Soujuznefteexport to export crude over a number of years. The deal broke down in controversial circumstances after Deuss sold 39 consignments but only paid for the first six. Years of litigation followed, with hearings in the Bermuda Supreme Court, the Bermuda Court of Appeal and the Judicial Committee of the Privy Council.[3]: 66 [4]

Deuss moved to Bermuda and in 1973 set up the First Curaçao International Bank (FCIB) in the Antilles.[5][6] JOC Oil was located in Bermuda for tax reasons and made deals globally in places such as Cuba, Denmark, Ghana, Indonesia, Iran, Iraq, Malta, Mexico, Taiwan and Zaire. Deuss employed former CIA agent Theodore Shackley as a risk analyst.[5]

Since JOC Oil was embroiled in legal difficulties, Deuss created a new company, Transworld Oil.[3]: 66  In 1984, The Observer revealed that Deuss had broken the United Nations sanctions imposed on trade with apartheid South Africa.[7] He was shipping Soviet and Iranian oil to South Africa using stealth and deception until in 1987 Transworld announced it had stopped supplying the apartheid regime.[8][9] A castle he owned in the Netherlands, in the village of Berg en Dal, was firebombed in protest by a group called Pyromaniacs against Apartheid.[7][6] Researcher Steve LeVine later estimated that Deuss had made between $280 million and $500 million from these deliveries.[10] The Shipping Research Bureau tracked the shipments at the time and after South African archives were declassified, the statistics showed that Deuss and Transworld Oil had supplied over half of South Africa's oil in 1982.[3]: 89 

A diagram explaining VAT fraud
Carousel fraud explained

In early 1988, Deuss attempted to corner the global oil market. Having conferred with Mana Al Otaiba, Minister of Petroleum and Mineral Resources of the United Arab Emirates, and gained an assurance that the Organization of the Petroleum Exporting Countries (OPEC) would reduce production, Deuss bought up almost all crude shipments from the Brent oilfield for $425 million. He expected oil prices to rise since he controlled the available supply, but Shell and Exxon had secretly teamed up to organise extra shipments; Shell trader Peter Ward said "Deuss is a buccaneer [...] Let's teach him a lesson".[11] When Shell leaked their plan to the media, Deuss realised he had been outmanouevred and was forced to sell the shipments at a loss of $600 million.[11]

After the dissolution of the Soviet Union in the early 1990s, Deuss saw an opportunity for profit in Kazakhstan. He proposed selling oil from the Tengiz Field to Chevron Corporation, via the Caspian Pipeline Consortium. As president of the Oman Oil Company, Deuss negotiated with the Kazakh and Russian governments to set up the consortium, but Chevron refused to negotiate with him and was backed by the US government.[12] Eventually, Russia dropped its support for Deuss and he stepped away so that the project could continue.[13]

In 2006, his Dutch castle was raided and he was arrested then extradited from Bermuda to the Netherlands to face charges of receiving stolen goods, running a criminal organization and money laundering.[6] In a co-investigation, Dutch prosecutors had requested an international arrest warrant after British police had observed that everyone arrested in the previous two years for carousel fraud had been a customer of the FCIB. The fraud was estimated to cost around £30 billion across Europe every year. The bank was raided in Willemstad and had its assets frozen, whilst people (including Deuss' sister Tineke) were arrested in England, the Netherlands and Wales.[6][7] Deuss was convicted of banking without a license and not reporting unusual transactions, which resulted in a six-month suspended sentence and a fine of 327,000 euros.[14] In 2013, Deuss and his sister paid a settlement of 35 million euros to the Dutch authorities and in 2020, they paid an undisclosed amount to the Public Prosecution Service in Curaçao.[6]

Personal life

Johannes Christiaan Martinus Augustinus Maria Deuss, known as John Deuss, was born in Nijmegen in the Netherlands in 1942.[3]: 64–65  Deuss took an interest in show jumping, breeding horses in Bermuda and also Connecticut and Florida.[8]

See also

References
  1. Eklund, C. S.; Miller, S. (30 June 1986). "The high-octane world of John Deuss". Bloomberg Businessweek. No. 59. ProQuest 236647594
  2. Hurt III, Harry (1 October 1984). "Feasting on the Oil Glut". Texas Monthly. Retrieved 30 October 2022.
  3. Blas, Javier; Farchy, Jack (2021). The world for sale: Money, power and the traders who barter the earth's resources. London: Random House Business. ISBN 9781847942654.
  4. Marchant, David; Gibbons, Coggie (4 October 2006). "Deuss: From second-hand car dealer to controversial world figure". Bermuda Sun. Archived from the original on 23 July 2017. Retrieved 30 October 2022.
  5. Boon, Marten (2016). Deuss' demise: An oil trader's struggle to keep up with the market, 1970s-1990s. Joint Conference Association of Business Historians (ABH) and Gesellschaft für Unternehmensgeschichte (GUG). Berlin.
  6. "Profile: Amsterdam banker on Curaçao John Deuss (77)". Curacao Chronicle. 5 February 2020. Retrieved 30 October 2022.
  7. Cobain, Ian; Seager, Ashley (16 October 2006). "Tycoon held in carousel fraud investigation". The Guardian. Retrieved 30 October 2022.
  8. LeVine, Steve (1 August 2013). "Legendary tycoon John Deuss's latest exploit is cutting a money-laundering deal with Dutch prosecutors". Quartz. Retrieved 30 October 2022.
  9. "Transworld Oil Ltd., one of the world's largest oil..." UPI. 14 October 1987. Retrieved 30 October 2022.
  10. LeVine, Steve (23 October 2007). The Oil and the Glory: The Pursuit of Empire and Fortune on the Caspian Sea. Random House Publishing Group. p. 134. ISBN 978-1-58836-646-7.
  11. Bower, Tom (2010). Oil: Money, Politics, and Power in the 21st Century. Grand Central Publishing. p. 59. ISBN 978-0-446-56354-3.
  12. Reifenberg, Anne (9 October 1995). "Crude awakening: Dispute over pipeline keeps oil locked up in Kazakhstani fields". Wall Street Journal.ProQuest 398490994
  13. Boudreaux, Richard (28 April 1996). "Kazakhstan, Russia End Oil Deal Dispute". Los Angeles Times. Retrieved 3 November 2022.
  14. "Deuss Agrees To Pay $47 Million Settlement". Bernews. 3 August 2013. Retrieved 30 October 2022.
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