American Tied to British Fraud Case Arrested

From Staff and Wire Reports

An American linked to a major British business scandal has been arrested in Los Angeles and faces possible extradition to England, reportedly for submitting at least $5 million in allegedly false invoices to Guinness PLC, a liquor manufacturer.

A hearing is set for Oct. 13 before a federal magistrate in Los Angeles for Anthony Keither Parnes, a 42-year-old stockbroker for a British firm who was arrested by FBI agents after landing Wednesday in Los Angeles on an Air France flight from Paris. Authorities said they had no information on Parnes' U.S. background.

He will be held without bail until a bond review at the hearing, according to Dean G. Dunlavey, an assistant U.S. attorney in Los Angeles. Parnes appeared Thursday before U.S. Magistrate Ralph Geffen, who said an extradition hearing would be scheduled after a formal copy of the charges arrives from England.

The British scandal involves a $4-billion takeover by Guinness of a Scotch whiskey maker, Distillers Co., last year.

Guinness is seeking the return of millions of dollars linked to the matter. Among other actions, it has sued U.S. investor Ivan F. Boesky for the return of $100 million invested in one of his limited partnerships after the takeover. Boesky was an active purchaser of both Guinness and Distillers shares during the takeover battle.

FBI agents arrested Parnes on a warrant as a fugitive from a foreign country, FBI spokesman Jim Neilson said Friday. He and Dunlavey said they had no papers yet that give details for the warrant.

However, news organizations said in London that Parnes was sought in connection with allegedly illegal payments from Guinness on false invoices. According to sources, the invoices involved a purported scheme for reimbursement of losses on Guinness stock.

Parnes, who formerly was associated with a London broker, is accused of placing large orders for Guinness stock as part of an effort to raise its price. This, sources said, improved its bid over a competitor for Distillers.

$810,000 Bail

Since last December, British authorities have been investigating the Guinness takeover of Distillers through an illegal scheme. Guinness defeated a major supermarket concern, Argyll, in the bidding for Distillers.

The former chairman and chief executive of Guinness, Ernest Saunders, faces charges of attempting to pervert the course of justice and of destroying and falsifying records. He was released on $810,000 bail last month.

Last January, Guinness took a $205-million writeoff for payments and investments linked to possibly illegal actions in its takeover of Distillers. The writeoff included its entire $100-million investment made in May, 1986, in Ivan F. Boesky & Co. Limited Partnership. The company also wrote off $28 million on payments that it earlier said may have been involved in illegal share buying.

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World