Panama Papers

Scientologist Matt Feshbach Back in the Stem Cell Therapy Business


As we previously reported, Scientologist Matt Feshbach and his investors sold their Okyanos Heart Institute in the Bahamas sometime in 2017. Okyanos having been sold, Matt Feshbach next ran into a brick wall with the US Tax Court when it ruled that he could not discharge in bankruptcy the $3.8 million in back taxes he and wife Kathy owe the IRS.

The Feshbach’s are appealing this matter. Not one to let $3.8 million in back taxes get in his way, however, Matt Feshbach has once again resurfaced in the stem cell therapy business. His new firm is called Ambrose Cell Therapy LLC. Based in Dallas, Texas Ambrose filed as an LLC on August 18, 2017.

There is a stampede to get into the stem cell therapy business in Texas since the 2017 passage of “Charlie’s Law” (HB 810) which allows chronically and terminally ill people the right to opt for non-FDA approved treatments with adult stem cells. In her article published at medium.com Dr. Kirsten Matthews,  a Fellow in Science and Technology Policy at Rice University’s Baker Institute for Public Policy, reported on Charlie’s Law:

In the 2017 Texas legislative session, which ended on May 31, the state lawmakers passed a new bill to expand the state’s ‘Right to Try’ law — H.B. 810, also known as “Charlie’s Law.” The new law, which takes effect September 2017, allows patients who are chronically ill access to experimental stem cell-based interventions (SCBI) and permits clinics to charge patients for their ‘costs.’ While the law seems like a huge win for patients, it might also hurt the same people it is trying to help by reducing their protections. In contrast, the new law does place the state of Texas in a position to more readily regulate clinics providing experimental SCBIs, closing down those which are fraudulent.

In an article published in the Texas Heart Institute Journal, Dr. Iltis and I describe the risks associated with unregulated clinics offering unproven or experimental SCBI. The new Texas law would essentially circumvent the US Food and Drug Administration (FDA) and their Expanded Access Program (EAP), which regulates clinical trials and access to experimental therapies. It also bypasses many of the required ethical and informed consent rules required by the FDA…

Dr. Matthews and her colleagues noted in their recent paper:

Born of the expectations and hype associated with stem cells and regenerative medicine over the past two decades, there are now numerous clinics around the world selling stem cell-based interventions (SCBI) that have yet to be proven effective or safe, with little to no accounting of the outcomes being collected. SCBI treatments might hold the key to help patients, but they also have serious risks of side effects, including graft-versus-host disease, unintended harm, and even cancer. Clinics are charging exorbitant prices, some for more than $20,000 per treatment.

Given the potential size and money to be made in this market, there was a big push to pass Charlie’s Law by those people and companies in Texas that stood to financially benefit by operating stem cells clinics.

Prior to the passage of Charlie’s Law, there was a great deal of lucrative stem cell medical tourism being enjoyed by Mexico, Feshbach’s Okyanos Heart Institute in the Bahamas, and many other clinics outside the US. These non-US clinics do not have FDA approval for the procedures they sell and deliver nor do they require such.

Charlie’s Law allows Texas to compete with these non-US clinics by offering non-FDA approved treatments to the chronically and terminally ill. Charlie’s law also significantly limits the liability of the doctors and providers that deliver these non-FDA approved procedures.

The logic of Charlie’s Law is that if someone is in chronic pain or dying then they have a right to try non-FDA approved adult stem cell treatments. The extremely specific and narrow focus of Charlie’s Law shows it to have been the result of intense lobbying by a specific group of people with a vested interest in adult stem cells.

These people include former Texas Governor Rick Perry whose wife Anita Thigpen Perry serves on the Board of Directors of Celltex Therapeutics Corp of Houston, Texas. In 2017, Rick Perry earned $175,000 as a consultant to Celltex. The company itself moved its operations to Mexico in 2013 after failing to comply with several issues raised by the FDA. Rick Perry was confirmed by the Senate as the US Secretary of Energy in the Trump Administration.

EMBRYONIC STEM CELLS VS. ADULT STEM CELLS

One of the key distinctions to understand in stem cells is the difference between embryonic stem cells and adult stem cells. An excerpt from the National Institutes for Health:

Human embryonic and adult stem cells each have advantages and disadvantages regarding potential use for cell-based regenerative therapies. One major difference between adult and embryonic stem cells is their different abilities in the number and type of differentiated cell types they can become. Embryonic stem cells can become all cell types of the body because they are pluripotent. Adult stem cells are thought to be limited to differentiating into different cell types of their tissue of origin.

Embryonic stem cells can be grown relatively easily in culture. Adult stem cells are rare in mature tissues, so isolating these cells from an adult tissue is challenging, and methods to expand their numbers in cell culture have not yet been worked out. This is an important distinction, as large numbers of cells are needed for stem cell replacement therapies.

Embryonic stem cells can differentiate into any structure in the body. However, embryonic stem cells can only be harvested from embryos. These embryos are donated by women who have frozen and stored them with fertility clinics for the purpose of in vitro fertilization (IVF) procedures. Following successful IVF procedures, many women wish to donate the frozen embryos they will not be using to the service of science. This practice naturally raised moral concerns in the American Religious Right. As a result, Federal laws enacted under the G.W. Bush Administration placed wide-ranging medieval and anti-scientific restrictions on stem cell research. For this reason, Charlie’s Law does not allow embryonic stem cells to be harvested or used in treatment.

Adult stem cells are harvested from the belly fat around an adult’s stomach. This fat is called adipose tissue. Thus, a patient becomes his or her own stem cell donor. Essentially, belly fat is extracted using liposuction or other means and then centrifuged in order to harvest stem cells. These stem cells are injected back into the patient’s body to treat various conditions. Unlike embryonic cells, however, adult stem cells cannot differentiate into any structure. This is one of the issues that make the many promises offered by adult stem cell therapy treatment providers so controversial.

THE FDA & STEM CELLS

Bianca Castro of NBC Dallas-Fort Worth reported in May 2018 on Federal prosecutors filing injunctions against stem cell treatment clinics:

Federal prosecutors in California and Florida filed injunctions on Wednesday to stop two companies from providing stem cell treatments, alleging the clinics marketed their procedures as remedies for ailments including cancer and heart disease without proof of safety and efficacy, according to this statement from the Food and Drug Administration.

The firms put consumers at risk by promising benefits from treatments and products never approved by the FDA, the Justice Department alleged in court filings in both states.

The filings target two companies, one of which is affiliated with Innovations Stem Cell Center of Dallas.

But now, the FDA is filing a lawsuit to stop these kinds of stem cell therapies.

The FDA says they’re not approved because they haven’t been proven to be safe and effective…

The Cell Surgical Network released the following statement regarding the lawsuit:

The Cell Surgical Network (CSN) intends to vigorously defend the lawsuit filed today by the U.S. Department of Justice on behalf of the U.S. Food and Drug Administration. CSN strongly rejects the idea that a person’s own cells should be regulated by FDA as a drug. On behalf of all Americans, we look forward to protecting patients’ rights and the physician-patient relationship. We share FDA’s concern for patient safety, but do not believe that FDA regulation of a surgical procedure that simply harnesses the healing power of a patient’s own cells, without altering the biological characteristics of those cells, is the answer. The decision of whether or not the surgical procedure is performed should be made by the patient and physician – not the FDA or any other arm of the federal government.

The Cell Surgical Network is an industry trade group that is attempting to set accreditation standards and make adult stem cell therapy a legitimate form of medical practice. To accomplish this goal, stem cell treatment providers, at present, need be excluded from FDA requirements. Stem cell advocates are trying to do this, in part, by arguing that a person’s own stem cells cannot be regulated as a drug by the FDA. Yet this argument is specious inasmuch as stem cell providers are extracting adipose tissue and extracting stem cells for the express purpose of medical treatment.

Adult stem cell providers want it both ways: They want to claim that their treatments are efficacious in treating a wide variety of medical conditions, and, they want to practice medicine without FDA approval. In this sense, these stem cell treatment providers are following the same story arc as anti-vaxxers: People should be allowed to make their own medical decisions and damn the science, dangers, and governmental restrictions.

Stem cells are classified as a drug under the FDA’s definition of a drug:

The Federal Food Drug and Cosmetic Act (FD&C Act) and FDA regulations define the term drug, in part, by reference to its intended use, as “articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease” and “articles (other than food) intended to affect the structure or any function of the body of man or other animals.” Therefore, almost any ingested or topical or injectable product that, through its label or labeling (including internet websites, promotional pamphlets, and other marketing material), is claimed to be beneficial for such uses will be regulated by FDA as a drug. The definition also includes components of drugs, such as active pharmaceutical ingredients.

Stem cells are intended for “use in the diagnosis, cure, mitigation, treatment, or prevention of disease” and are therefore properly classified as drugs. Stem cell treatment providers want to circumvent this definition and Charlie’s Law represents one such attempt. The litigation expected to arise from Charlie’s Law will test the legality of this particular piece of legislation. To argue that a dying person should be allowed to do whatever they want ignores the larger moral question: Should stem cell opportunists be allowed to exorbitantly profit from the desperation of the chronically ill and the dying by selling them non-FDA approved treatments? Another question: Do the chronically ill and the dying have the mental capacity to consent to spending large sums of money on unproven treatments? Or are they being driven by irrationality in their great suffering and mortal fear?

MATT FESHBACH, MUDHAR SHAWKAT, AND BOB DUGGAN

That Matt Feshbach is promoting stem cell therapy is old news; he first began investigating stem cells in 2009. His fellow Scientologist Ali Shawkat was the “angel investor” whose money funded Okyanos. From an article at Finsimes.com in 2014:

Okyanos Heart Institute, a Freeport, Bahamas-based developer of advanced coronary artery disease treatments, said it raised $8.9m in its Series B funding.

According to a written note, the round was led by Passion Group founder Ali Shawkat.

Passion Group’s single page website describes what the group is and does:

Ali Shawkat and his wife Noor and into the Scientology IAS for at least $10,000,000 USD based upon this particular IAS trophy:

Shawkat’s father Mudhar Shawkat — a former member of the Iraqi Parliament — is detailed in the Panama Papers. The entry on Mudhar Shawkat in the Panama Papers describes his activities and, in the final paragraph, alludes to the Shawkat’s investment in Feshbach’s Okyanos Heart Institute:

According to 2008 confidential emails, the lawyer representing Shawkat and his son, Ali, asked Appleby to hold in escrow about $140 million, the proceeds of the sale of the Shawkats’ shares in a joint venture with a Kuwaiti telecommunications company. The law firm refused that request but accepted them as clients later in 2008.

Appleby set up the Passion Group Trust for the benefit of Mudhar Shawkat’s family members and registered three affiliated companies in the British Virgin Islands in 2008 and 2011, according to the files. Shawkat was identified in the Appleby documents as an “additional settlor” (a person who creates and funds a trust) of the Passion Group Trust and as a shareholder of Passion Investment Ltd., the trust’s investment arm.

However, upon the incorporation of a not-for-profit entity, which was also a beneficiary of the trust, concerns about the Iraqi family’s reported association with Chalabi emerged at the law firm. “It is suspicious,” an Appleby employee wrote in an email, “that they are setting up a charitable company offshore [Passion for Change S.A.] for funds coming out of Iraq – there does not seem any benefit other than lack of accountability in doing so.” But Appleby continued to provide services to Shawkat and his family after the firm’s managers noted that, other than accusations of favoritism in the award of government contracts, there were no allegations against Shawkat.

In the following months, in 2009, the leaked files show that the Shawkats transferred more than $30 million to the family trust and one of its affiliated companies, some of which was converted into shares. Board meeting minutes of Passion Investment Ltd. chaired by Shawkat’s son show that from 2013 to 2016, the company has invested in two medical companies and in an Iraqi dealership for Peugeot cars.

Mudhar Shawkat and his Scientologist son Ali Shawkat are connected to Matt Feshbach via the Shawkat’s Passion Investments Ltd., Passion Group, and Passion Trust.

We have also previously shown that Scientology billionaire Bob Duggan and another Scientology OT named Michael Holstein are connected to the Shawkat’s Passion companies as shown in the Panama Papers. The Shawkats and Bob Duggan are linked via a company called Genuine First Aid International:

Matt Feshbach’s new Ambrose Cell Therapy is worth documenting here at the Scientology Money Project for three reasons:

1. Matt Feshbach filed for bankruptcy and is trying to discharge $3.8 million USD he owes in back taxes. Feshbach told the bankruptcy court and the US Tax Court that he has no money and virtually no income.

2. In September 2008, the Fessbach’s made an Offer in Compromise (OIC) to the IRS to settle their 2001 tax debt of $3.6 million for $120,000, this to be made in payments over 48 months. The IRS declined the Fessbach’s unreasonable offer to settle for pennies on the dollar of the amount owed.

Judge McEwen of the US Tax Court wrote:

Feshbach.1

3. Given Matt Feshbach’s financial position we must ask where the money for his new Ambrose Cell Therapy LLC came from. Is it more Shawkat money? Or has Feshbach found other investors? While Bob Duggan has invested in two pharmaceutical companies, we personally cannot see Duggan investing in stem cells as, unlike pharmaceuticals, the science and the FDA approval process is not there. Duggan became a billionaire by complying with scientific protocols and the FDA approval process when he was the CEO of Pharmacyclics. Of course, we could be wrong. Other smart investors and institutions are putting money into stem cell companies. Perhaps most notably Texas A&M has signed a deal with Celltex Therapeutics Corp. for “a multiyear agreement for research into potential Alzheimer’s therapies.”

Matt Feshbach has a talent for reinventing himself. It remains to be seen if his once legendary talent for making enormous sums of money remains: Can Matt make lightning strike twice?


Ambrose Cell Therapy LLC filing from the Texas Secretary of State’s Office. Note: Please hover your cursor over the document to invoke the page up/page down and size controls at the bottom of the page frame.

Ambrose Cell Therapy - TX SOS_

Dr. Kirstin Matthews and her colleagues Bhavana Kunisetty and Keri Sprung discuss Charlie’s Law (HB 810). Note: Please hover your cursor over the document to invoke the page up/page down and size controls at the bottom of the page frame.

Stem.Cell.Paper.Charlies.Law

 

Scientologist Michael Holstein & The Panama Papers

Michael.Holstein

The image above is from 2007 and was published in a Scientology magazine I received in the US mail many years ago. I posted several photos of Sea Org members contained in the magazine at xenu.net in a thread entitled David Miscavige’s Other Golden Boys.

According to this image above, Scientologist Michael Holstein was a European businessman who joined the Sea Org. Holstein was appointed the Solo NOTs Director of Processing at Flag. This is an extremely high pressure position in which one gets yelled at constantly by seniors for improved stars.

The Scientology Money Project is researching Mr. Holstein as his name appears along with that of Scientology billionaire Bob Duggan in the Panama Papers. In the relational map below, Michael Holstein is listed as a shareholder of a company called Genuine First Aid International. Also shown is Iraqi Scientologist Ali Shawkat who, along with his father Mudhar Shawkat — a former member of Parliament in Iraq — sold an Iraqi telecom company for $140,000,000 and moved the money out of Iraq. $14,000,000 of this money was invested in Scientologist Matt Feshbach’s Okyanos Heart Institute in The Bahamas. Feshbach sold, or otherwise transferred the company’s assets depending upon the different versions of changes of ownership we uncovered, and is no longer associated with Okyanos. Ali Shawkat also donated $5,000,000 to the IAS.

The scope of our research project is to examine where Michael Holstein fits into Bob Duggan’s financial empire. The diagram shows Duggan as a shareholder and Director of Genuine First Aid International — a company that has connections Amman, Jordan. Yet another Panama Papers diagram shows Robert Duggan to be a shareholder of a company called Spang CM Ltd. This diagram shows additional connections to the Cayman Islands and the Appleby Trust:

Michael Holstein is shown as the CEO of Genuine First Aid International of Fujian, China:

The connections between Duggan, Spang, Genuine First Aid International, and China are shown in the Panama Papers:

We learn at LinkedIn that Michael Holstein was apparently moved from his position as CEO of Genuine First Aid International in China to Operations Manager and transferred to Tampa:

What year did Michael Holstein leave the Sea Org and become part of what appears to be a “Scientology Money Club” that spans the globe? The locations of Scientology-owned businesses and offshore assets include, but are not limited to the following countries:

China
The Cayman Islands
Amman, Jordan
Venezuela
Iraq
United States
Canada
The Bahamas
The United Kingdom
Colombia
Taiwan

Michael Holstein’s Scientology Completions are published online:

Billionaire Bob Duggan, the Panama Papers, and the Scientology Money Club

The Scientology Money Project did an article recently on the US Bankruptcy Court’s denial of Matt and Kathy Feshbach’s attempt to discharge $3.8 million in back taxes via bankruptcy. This led me to do further research on Matt Feshbach’s Bahamian stem cell medical company called Okyanos Heart Institute. Please see my article on Matt Feshbach and Okyanos.

In the course of my research I found Feshbach and his business partner and fellow Scientology OT Manuel Vianna listed in the Paradise Papers:

BD.1

Curious as I am about Scientology and its sources of money, I checked into Okyanos and discovered its $14.2 million dollars in capitalization largely came from a Scientologist named Ali Shawkat, a man whose father is Mudhar Shawkat, a former member of the Iraqi parliament. The ICIJ Offshore Leaks Database page on Mudhar Shawkat states that Appleby Global — an offshore law firm that some have compared to the notorious Panamanian firm of Mossack Fonseca — set up the “Passion Group S.A.” for the Shawkat family. “S.A.” is a business term meaning “Society Anonymous.” A person who owns shares in an S.A. corporation can have those shares held by an offshore law firm. An S.A. grants a certain degree of anonymity.

There were concerns at Appleby about the Shawkat money and its Passion Group S.A., this according to an internal Appleby e-mail leaked by the Paradise Papers:

According to 2008 confidential emails, the lawyer representing Shawkat and his son, Ali, asked Appleby to hold in escrow about $140 million, the proceeds of the sale of the Shawkats’ shares in a joint venture with a Kuwaiti telecommunications company. The law firm refused that request but accepted them as clients later in 2008.

Appleby set up the Passion Group Trust for the benefit of Mudhar Shawkat’s family members and registered three affiliated companies in the British Virgin Islands in 2008 and 2011, according to the files. Shawkat was identified in the Appleby documents as an “additional settlor” (a person who creates and funds a trust) of the Passion Group Trust and as a shareholder of Passion Investment Ltd., the trust’s investment arm.

However, upon the incorporation of a not-for-profit entity, which was also a beneficiary of the trust, concerns about the Iraqi family’s reported association with Chalabi [Ahmed Chalabi, 1944-2015. A controversial Iraqi politician.] emerged at the law firm. “It is suspicious,” an Appleby employee wrote in an email, “that they are setting up a charitable company offshore [Passion for Change S.A.] for funds coming out of Iraq – there does not seem any benefit other than lack of accountability in doing so.”

A Paradise Papers page on Mudhar Shawkat shows the relationships for the Shawkat family and its Passion group; there are ties to Amman, Jordan and the British Virgin Islands:

BD.Passion.Group

In a development that could portend trouble for the Shawkat’s and all other Appleby clients, Appleby confirmed in October 2017 that it had been the victim of a massive computer hack. Some in financial circles are saying the hacked information from Appleby Global will amount to a Panama Papers II. In November 2017 Appleby released a less than reassuring statement to its clients:

We wish to apologise to our clients and to our colleagues for the difficulties which have arisen from this incident. We remain committed to working with each and every client to talk to them about what has happened so that they can understand its impact on them and in order to support them with their own reporting requirements.

I note in passing that when your offshore legal firm tells you that it will help you understand the impact of it being hacked and will support you with your “reporting requirements” this is not a good thing, particularly if one has not self-reported.

Ali Shawkat and his wife Noor donated $5 million to the IAS. This was covered in a 2014 article by Tony Ortega at the Underground Bunker.

BD.2
Ali and Noor Shawkat receiving their IAS trophy for donating $5,000,000

Things were intriguing at this point so I called upon my erstwhile colleague Dr. Jeff Wasel. As Jeff and I learned from the Okyanos website, Ali Shawkat’s Passion Group invested money in Feshbach’s stem cell company:

FREEPORT, The Bahamas, March 18, 2014 – Okyanos Cell Therapy, whose mission it is to bring a new standard of care and a better quality of life to patients with coronary artery disease (CAD) using adult stem cell therapy, announced today it has raised $8.9 million in its Series B offering. Passion Group founder Ali Shawkat led the round and is a visionary entrepreneur-investor with success in a diverse set of industries including cellular services, telecom, media and healthcare.

Shawkat’s investment in Feshbach’s Okyanos is borne out by the Panama Papers’ mention that the Shawkat family invested in two medical companies:

In the following months, in 2009, the leaked files show that the Shawkats transferred more than $30 million to the family trust and one of its affiliated companies, some of which was converted into shares. Board meeting minutes of Passion Investment Ltd. chaired by Shawkat’s son show that from 2013 to 2016, the company has invested in two medical companies and in an Iraqi dealership for Peugeot cars.

On a side note to this story, Freewinds Captain Mike Napier’s son Sean Napier appears on the Okyanos website as the Director of IT & Operations:

Former US Ambassador to the Bahamas John Rood was brought in by Matt Feshbach to serve as a Director at Okyanos Holdings Co LLC. Because the Bahamian government had to pass a law allowing Okyanos to operate, Former Ambassador Rood’s contacts were undoubtedly invaluable. On a related note, John Rood is the Chairman of the Vestcor Companies Inc. This firm invests in multifamily dwellings. Scientology OT8 Grant Cardone’s firm Cardone Acquisitions follows the same business model as Rood’s Vestcor Companies Inc. This raises the question: Was Cardone introduced to John Rood via Matt Feshbach? If so, was Cardone inspired to get into investing in apartment buildings by seeing Rood’s success?

I found three UCC filings on Okyanos Operating Company Ltd. A “UCC filing” is an instrument that allows a lender to secure its interest on equipment for which they loaned money to a debtor to purchase. UCC’s are routinely used where a company borrows money to purchase expensive office equipment, phone systems, computer systems, medical equipment, etc. In the event of a default on the loan, the UCC protects the lender as it prevents the debtor from selling the equipment. The UCC also allows the lender to take physical possession of the equipment if the firm goes bankrupt. The UCC gives the lender first priority over other creditors in a bankruptcy.

The three UCC’s filed on Okyanos were filed by Prince’s Gate LLC of Santa Monica. A quick check shows Prince’s Gate LLC to be an entity owned by EarthLink founder and Scientologist Sky Dayton:

BD.8

According to news reports, Black Beret Life Sciences of Houston acquired Okyanos in a leveraged buyout in July 2017. This begs the question: Why would BBLS need to use an LBO to acquire an insolvent company? BBLS has cash. Indeed, in January 2017 Affigen announced a $17 million Series A led by Black Beret Life Sciences.

Genuine First Aid International Ltd

In the map below of the Shawkat offshore money we see a company with the innocuous name of Genuine First Aid International Ltd. A search of the Paradise Papers shows that Robert “Billionaire Bob” Duggan and Ali Shawkat to be shareholders and directors of Genuine First Aid International Ltd.:


Another Panama Papers diagram shows the relationship of Robert “Bob” Duggan with the Shawkat’s; Amman, Jordan; Beirut, Lebanon; and the British Virgin Islands via Duggan’s ties to Genuine First Aid International Ltd:

BD.5

What is Genuine First Aid International Ltd.? It is a company registered in the British Virgin Islands and based in Fujian, China. The company’s Chairman is a Danish Scientology OT8 named Michael Holstein. His Scientology Completions page is extensive:

Michael Holstein’s LinkedIn page leads to dietary supplements, vitamins, diabetes supplements, etc:

Michael.Holstein

Another Panama Papers diagram shows Ali Shawkat to be a director of Genuine First Aid International Ltd:

Yet another Panama Papers diagram shows Robert Duggan to be a shareholder of a company called Spang CM Ltd:

A more micro Panama Papers diagram shows a tighter Duggan relationship to Spang and Genuine First Aid International Ltd:

BD.9
While Spang CM Ltd. is registered in the Cayman Islands (tax identification number: 139726), the company is a Chinese manufacturing firm:

BD.Spang

The Scientology Money Club Investigation, as Dr. Wasel and I are calling it, will take a look into the intertwining  world of wealthy Scientologists and their money. We are not alleging anything untoward whatsoever. Rather, we are examining linkages amongst Scientology whales who donate big money to the IAS. That these relationships have been found in the Panama and Paradise papers is part of what Dr. Wasel and I will discuss in an upcoming podcast.

Dr. Wasel’s comments on offshore corporations:

So why go offshore? Well first, “offshore” has many connotations, and can denote both legal and illegal financial behavior. There are legitimate reasons for high net worth individuals to maintain offshore companies, trusts, and other “vehicles”, mainly to lessen one’s tax obligation or to ensure privacy in sensitive, though legal financial matters.

Other reasons include political instability or corruption in their home country, or the registration of expensive assets such as planes and boats, as well as financing the associated insurance costs. Lawful tax avoidance involves organizing one’s financial affairs to legally minimize the amount of tax to be paid, versus tax evasion, which involves hiding one’s assets altogether, from the responsible reporting authorities.

Large corporations such as Apple, Google, and others use favorable tax regimes in Ireland as an example of tax mitigation/avoidance, as do individuals in the Caribbean, Liechtenstein, Switzerland, and other “tax havens”.  These “Offshore Financial Centers” (OFCs) exist primarily to provide anonymity and tax regimes favorable to the investor and not the regulator; where the illegality occurs, is when an individual or entity fails to declare an interest in an OFC to their respective nation’s tax authority or financial regulator. The use of OFCs is significant; while verifiable data is difficult to collect, it’s estimated that some 20 percent of all private wealth is located in OFC’s, as is an estimated 75 percent of the captive insurance market.

The nexus of the OFC phenomenon is geography. In other words, “sunny places for shady people” to some extent, though the post-9/11 regulatory environment has drastically altered this perception. Indeed, The Cayman Islands, Bermuda, and other former “light touch” OFC locales, now often exceed US and EU anti-money laundering and tax reporting requirements.

That said, many significant loopholes exist in the structure of OFC’s, loopholes that, in a variety of ways, are structurally resistant to regulation, and still offer the less-than scrupulous individual or entity plenty of ways to create private banks, phantom or “shell companies” and fake trusts, and to hide money and other assets. One such option within this structure is the use of “bearer shares”, a term often reflected in the associated charts in this story. Implicit in the many OFCs available to the “sophisticated” investor, is the International Business Company, (IBC), which is a corporate vehicle that can be owned anonymously, and does not do business in the country where it’s domiciled (has physical residence), and usually located in an extremely “light touch” regulatory and tax locale. An IBC can be created online in less than an hour, involves minimal regulatory and ownership filings, and has limited liability. It’s unrestricted in the type of business it can entertain, and an IBC can consist of multiple sub-entities, complicating any future audit trail.

The main ownership stake in an IBC is a bearer share, which simply means that if you physically own the shares, you own the company, yet nowhere is it recorded that you physically hold them. In essence, the IBC is a truly “portable company”, allowing one to schlep a veritable business empire in one’s briefcase.

Adding to the attractiveness of portability, is a lack of accountability, in that most IBC’s allow for “nominee” directors; that is, hired-hand “directors”, who are usually employees of the registering agent, say a corporate registration house in Curacao. Thus there is no “official” record of who owns the bearer shares, and therefore, the company’s beneficiaries, nor is there any direct owner – a responsible fiduciary –  that can be held responsible for the company’s actions. While a more thorough discussion of all the permutations of this murky financial world is beyond the remit of this article, suffice to say, it’s the concepts of “plausible deniability” and anonymity, as well as the ability to hide one’s financial affairs,  that is the greatest lure to go offshore.
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Here is the Appleby Global document on the creation of the Shawkat’s Passion Group Trust. Hover over the document with your mouse to invoke the control panel at the bottom of the PDF:

Shawkat-2011-Passion-Group-Summary

Scientologist Matt Feshbach’s Okyanos Heart Institute in the Bahamas

Okyanos logo

As covered in our previous article, the US Bankruptcy Court ruled against Scientologists Matt and Kathy Feshbach’s attempt to discharge $3.8 million in back taxes in bankruptcy. The Court found that the Feshbach’s could have paid their entire tax debt had they simply curbed their excessive and lavish spending on a luxury lifestyle. The Feshbach’s thought they could ultimately beat the IRS by going bankrupt. However, they lost that bet when the court found that the couple had, “willfully attempted to evade their tax debt within the meaning of 11 U.S.C. § 523(a)(1)(C).” The Feshbach’s lost their case and owe the IRS $3.8 million.

In this article we turn our attention to the story Matt Feshbach’s Okyanos Heart Institute in Grand Bahama. In 2011 Matt and Kathy Feshbach told the US Bankruptcy Court that their net worth was only $138,000. Nevertheless,  by By 2014, Matt Feshbach had founded and was the CEO of the Okyanos Heart Institute in The Bahamas. The premise of Okaynos was that adult stem cells taken from adipose tissue (body fat) were effective in treating certain diseases, particularly heart disease. A 2014 press release reads:

Freeport, The Bahamas (PRWEB)February 21, 2014

Okyanos Heart Institute, whose mission it is to bring a new standard of care and a better quality of life to patients with coronary artery disease using adult stem cell therapy, announces CEO Matt Feshbach will present at the STEMSO Conference. He will join a panel to discuss the opportunities available through the new stem cell research and Therapy Act. The conference will be held at the Grand Lucayan Resort in Freeport, Grand Bahamas, February 19-22, 2014. The panel discussion will be Friday, February 21 from 8:45 – 9:45 a.m.

Feshbach’s partner in Okyanos was fellow Scientologist and OT Manuel F. Vianna, formerly CFO at Condusiv Technologies (formerly Diskkeeper), a company founded and owned by Scientologist and OT Craig Jensen.

Matt-and-Manuel

Matt Feshbach and Manuel Vianna

Matt Feshbach did not have an easy time setting up Okyanos in 2013. For some reason, Feshbach apparently did not inform the Bahamian minister of state for investments of he and his wife’s bankruptcy and messy IRS problems. This is called a “withhold” in Scientology. The Nassau Guardian reported that Feshbach’s IRS problems came “in light of revelations.” Indeed, even as Feshbach and his partners were putting together $14.2 million in first round funding, Feshbach and his wife had told the IRS in 2011 that their net worth was only $138,000. As Grand Bahama was passing a set of laws to permit Fesbach’s venture to operate, the authorities naturally had reasons to be concerned once they learned of Feshbach’s bankruptcy and massive IRS debt.

Feshbach, a man who wore $6,000 suits and lived in the lap of luxury, assured the Bahamian authorities that his IRS debt and bankruptcy were mere trifles. The Nassau Guardian of July 19, 2013:

The government is undertaking a “full review” of a proposal to develop a stem cell treatment facility in Grand Bahama in light of revelations that its CEO has declared bankruptcy and is battling the Internal Revenue Service (IRS) over a $3.8m unpaid liability.

Khaalis Rolle, minister of state for investments, told Guardian Business yesterday that court documents relating to Okyanos Heart Institute CEO Matt Feshbach’s current legal and financial woes suggest the Christie administration was correct to hold off on granting final approval of the project. Okyanos Heart Institute intends to offer stem cell therapy to cardiac artery disease patients. The facility had received conditional approval from the former government.

Rolle’s comments come as the Okyanos Heart Institute described Feshbach’s IRS woes as a “personal matter that started many years ago and does not relate to the Okyanos Heart Institute.”

Feshbach himself, in a phone interview with Guardian Business, said that his legal and financial situation “does not affect the viability or solvency of Okyanos in any way”.

“Okyanos is an investor-backed company and is not dependent on any one investor. We’ve raised a significant amount of money to date,” said Feshbach, who described himself as a shareholder in the company.

The Nassau Guardian article noted Fessbach’s belief in his Scientology super powers:

He [Fessbach] has also been strongly connected to the Church of Scientology and is noted in a 2006 St. Petersburg Times article as a major financial backer of the church’s “Super Powers” program. The program is intended to heighten one’s perceptions – or “perceptics”, in Scientology parlance – via the five senses.

In the article, Feshbach is said to believe he has super powers, which helped him to save a young boy’s life, and is quoted as saying that he is “no longer dependent on [his] physical body to perceive things”.

Being “no longer dependent on his physical body to perceive things” might help to explain why Feshbach had no reality on the IRS and its tax demand. After all, L. Ron Hubbard himself had railed against income taxes as being criminal and a rip-off:

“First consider a group which takes in money but does not deliver anything in exchange. This is called rip-off. It is the ‘exchange’ condition of robbers, tax men, governments and other criminal elements.” – L. Ron Hubbard, HCO PL 10 Sep 82 – Exchange, Org Income and Staff Pay.

As an editorial aside, L. Ron Hubbard cannot be blamed for failing to lump in the International Association of Scientologists (IAS) along with the IRS. I say this because there is no evidence that L. Ron Hubbard ever sanctioned the 1984 creation of the IAS. The IAS was a contrivance in which David Miscavige converted the legal defense fund for Mary Sue Hubbard and her ten other Program Snow White conspirators into the IAS. See my article: How Scientology’s 1970s infiltration scandal led to the creation of its IAS slush fund for the story.
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Feshbach and his partners opened Okyanos Heart Institute in The Bahamas because the particular type of stem cell procedures they offer are not FDA approved in the US. While medical ventures in the tax haven of The Bahamas tend to raise eyebrows in the US, the Bahamian government is not concerned with such perceptions. Accordingly, Bahamian legislators enacted laws that allowed companies to practice stem cell medical procedures there that were not FDA approved in the US. The goal of the Bahamian government is to increase revenues on the island nation by promoting experimental medical treatments, or non-FDA approve treatments, that drive big dollar medical tourism. Desperate people will fly to The Bahamas to get treatments that are not available in the US.

Okyanos was a short sellers dream for Feshbach because both positions were covered so to speak. If the FDA did not approve these treatments then The Bahamas did and there was money to be made there. If the FDA eventually approved the procedures, however, then Okyanos could pack up its clinic in a cargo plane, fly 22 minutes to the US, open a new clinic in Miami, and start collecting big medical insurance payments for performing the now approved procedures. From there it would be a simple matter of raising capital and opening Okyanos clinics all over the US.

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Okyanos trivia: A bill of lading found online reveals one of Feshbach’s US connections, Dr. Todd Malan, who became staff at Okyanos:


Smart Lipo Institute. See: Dr. Todd Malan, Center For Regenerative Cell Medicine. Scottsdale, AZ. Dr. Malan worked for Okyanos where he did liposuction in which he presumably used the body-jet® Water-Assisted Liposuction Technology featured on Okyanos’ website.


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On March 18, 2014 Okyanos announced that its first round of funding had been completed:

We are very pleased to have recently announced the completion of our investment funding. Since our founding in 2011, the Okyanos family has grown to include life-long friends, investors, supporters, researchers and members of the cardiology community—all of whom share our purpose and commitment towards improving the quality of life heart patients.

With the success of our last round, Okyanos has raised in-total over $14 million. This kind of financial strength is essential to our mission, as it enables us to truly develop the highest possible standards of safety and care.

We feel very lucky to have been so well-embraced by the business and healthcare community of Grand Bahama Island, and we are excited for what lies ahead.

In an interview Fessbach noted that he had angel investors:

Okyanos has been funded by a group of what I would call “purpose-driven entrepreneurial investors.” They are not typical angel investors, because they do not do a lot of these kinds of deals.They nevertheless saw an opportunity to create something meaningful in healthcare, and they believed they would get a high return on their investment.

Who were the angel investors? Moreover, I can find no prospectus Feshbach offered for Okyanos. One example: Okaynos claimed to have spent $10 million on its Bahamian facility. These figures cannot be validated. The 2014 installation of what Okyanos widely promoted as a state-of-the-art Philips Cath-Angio machine figured prominently in Okyanos PR:

Okyanos-Philips-Unit

My research shows a reconditioned Philips Cath-Angio machine can be purchased for $150,000 – $375,000. I worked in medical and surgical devices as part of my portfolio for decades. I note that the Okyanos facility is an outpatient clinic and is not a true surgical theater as one would find in a hospital. Based on the foregoing, I am skeptical and do not accept that Okyanos spent $10 million on its facility. I can do a Bill of Materials for machines, computers, software, flat panels, digital imaging, HVAC, HEPA, and other constructions costs in my head and can’t get to $10 million for one outpatient procedure room equipped with one Philips Cath-Angio machine. Perhaps Matt Feshbach can correct me if I am wrong and kindly produce invoices showing $10 million.

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Despite what seemed like the rational, methodical, and sequenced building of Okyanos as a viable company, a press release of April 21, 2016 announced that Matt Fessbach and his partners were selling Okyanos after only two years of operation. No explanation was provided:

The Bahamas’ first stem cell treatment facility yesterday confirmed it has been acquired by a UK-based medical provider, with a deal designed to grow the operation and the number of patients it treats.

Freeport-based Okyanos Cell Therapy has been purchased by Thorn Medical PLC, which recently obtained its license to conduct stem cell research and therapy in this nation from the National Stem Cell Ethics Committee (NSEC).

While the purchase price was not disclosed, the deal is expected to expand Okyanos’s business and boost its ability to reach and treat more patients.

Matthew Feshbach and Manual Vianna, Okyanos’s co-founders, invested around $14 million in establishing the facility, which provides stem cell therapy to chronically ill patients in a bid to improve their quality of life.

A May 9, 2016 press release added amplifying details about Thorn Medical’s acquisition of Okyanos:

British-based Thorn Medical Plc has acquired Grand Bahama’s Okyanos stem cell facility, and says plans to expand the clinic’s services will make it one of the world’s leading centres – attracting investment and boosting The Bahamas’ medical tourism industry.

Thorn Medical, which bought a controlling interest in Okyanos Cell Therapy in April, recently obtained an unlimited license from the government of The Bahamas for both stem cell research and treatment. The company is currently preparing a stock market listing in London and will then apply for a dual listing on NASDAQ to raise further funds to invest in its stem cell operations in The Bahamas.

Despite Thorn Medical’s acquisition of Okyanos, Matt Feshbach was still apparently involved in the company as he gave a November 2016 interview . In this interview Feshbach was clearly speaking as Scientologist and not a scientist. Thus, he conspiratorially blamed Big Pharma and the FDA as the reasons that the US has not jumped onboard the stem cell train in a big way. In the quote below Feshbach uses the rather self-serving term “pharmacological paradigm fixation.” Feshbach also misstates matters as medicine does in fact think in terms of genetic ensembles and systems. This quote shows Feshbach to be pitching his product by use of pseudo-intellectualism:

Cade Hildreth: Why has stem cell therapy been slow to be commercialized and adopted within the United States?

Matthew Feshbach: I have heard different opinions in this area and various conspiracy theories. However, I think for adult cell therapy, there are two factors.

Institutional investors, the FDA, and big pharma tend to think of stem cells in the same way they think about small molecules; in other words, that pharmacological effects occur through a single mechanism of action which addresses the key factor of a disease, such as an immunosuppressant for autoimmune diseases or steroids for inflammation. They tend to ask questions like, “Can this cell do one single action, like grow new brain cells to help an Alzheimer’s patient regain mental function?”

Unfortunately, they do not understand that every one of these diseases, like diabetes or heart failure or Alzheimer’s, involve multiple factors – or put another way, there are multiple diseases within the primary diagnosis. One mechanism is not going to resolve these types of diseases. You need multi-potent cells, such as ADRCs, to solve them.

Therefore, I think what holds back progress more than anything is that these groups have a pharmacological paradigm fixation…

Of course, as a Scientology OT Matt Feshbach would secretly maintain that body thetans clustered in a mutual incident are the cause of all disease. On the other hand, Scientology’s metaphysics and theory of disease won’t make Feshbach any money. Hence, as an entrepreneur whose investment career took a big hit in 2008 he looked for something else — and that was stem cells. In the interview cited, Feshbach pressed his attack on the FDA:

Cade Hildreth: How well is the FDA regulating the cell therapy in the United States and what can be improved in future changes?

Matthew Feshbach: I think they are doing a poor job at both ends of the barbell. When it comes to getting an approval for cell therapy products, this research only entered in the marketplace in the late 1980s and early 1990s. For bone marrow, I believe there have only been one or two stem cell products approved in the past 25 years. Obviously, the FDA is making the approval process incredibly onerous, because they are taking a pharmacological approach to it.

On the other side of the barbell, the FDA has regulations, CFR 1271 to be specific, about SVF, calling it a “drug” and requiring it to go through a drug approval process that they do not enforce. So, now there is a group of non-compliant doctors and clinics, for example, the Cell Surgical Network, the Lung Institute and U.S. Stem Cell clinics, using inferior technology and getting mixed results. It is not that they never see patients benefits as stem cells even in very low dosage can work to some degree or another. The issue is that their results are mixed in terms of how profound the benefit can be to the patient and how sustainable it is. And we do hear of adverse events at these clinics that are not honestly reported by them.

As one person said, “If they will violate FDA regulations how can you trust them to not cut other corners.”

SASSOON HOUSE SHIRLEY ST. & VICTORIA AVE, P.O. BOX SS-5383, NASSAU, BAHAMAS

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Quizzically, Thorn Medical quickly suddenly went out of business in August of 2017. As reported by REDD-Monitor:

MF.4

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REDD-Monitor next reported on June 15, 2017 that a company called Teknisity had purchased Thorn Medical Inc. In his article, Chris Lang of REDD-Monitor went into stunning detail about how strange this all seemed:

Thorn Medical is a health care company. It was founded in July 2014 by Jack Kaye, a telecoms entrepreneur. The company was planning a £350 million flotation in 2016. In February 2016, Thorn Medical’s directors included Lord Beaverbrook, Sir Eric Peacock, and Sir John Lucas-Tooth.

Thorn Medical’s Corporate Adviser was Opus Capital Limited, a company that has appeared several times on REDD-Monitor. The company’s director, Paul Seakens, has been involved with several scam companies that sold carbon credits to retail investors.

It struck me as odd that a company with a Lord and two Sirs on its board would have a company like Opus Capital acting as its Corporate Adviser. So I sent a few questions to Thorn Medical, asking (amongst other things) about the due diligence process carried out before Opus Capital was appointed in October 2014.

Within a week, a response arrived from Henry Gewanter, Managing Director at Positive Profile Limited, who describes himself as, “the person responsible for Thorn Medical’s corporate communications”.

Gewanter told me that Opus Capital was no longer acting as adviser to Thorn Medical. Opus Capital’s name was swiftly removed from Thorn Medical’s website. And Gewanter requested that REDD-Monitor “immediately remove any mention of us from the article on your website”.

In October 2016, Thorn Medical wrote to its shareholders to tell them that the company had withdrawn its listing on the London Stock Exchange. But a company called Thorn Healthcare Inc would list on the Nasdaq in January 2017.

A company called Thorn Healthcare Inc was registered in Delaware in October 2016. But January came and went without a listing on the Nasdaq. In January 2017, Sir John Lucas-Tooth resigned from Thorn Medical. He was followed by Lord Beaverbrook and Sir Eric Peacock in May 2017.

Things become curiouser still as both Thorn and Teknisity appeared to be operated by the same people at the same address. The REDD-Monitor cited above continued by noting:

Teknisity’s registered office is Victoria House, 18 Dalston Gardens, Stanmore, Middlesex, England, HA7 1BU. That’s the same address as Thorn Medical. And Kurdam. And Conformo. And Zy-Go Solutions. And about 500 other companies.

It’s safe to say that Teknisity Ltd is a company that is closely related to Thorn Medical. They share the same address, directors and major shareholders. Several of those major shareholders also share the same address and directors of Teknisity and Thorn Medical.

Teknisity Inc’s letter explains that Teknisity Inc has bought Teknisity Ltd.

A third letter was sent out to Teknisity Inc’s shareholders on 1 June 2017. The letter supposedly came from the US-based company that Teknisity had instructed “to lead the program in establishing that Teknisity’s company’s shares will be listed on the New York Stock Exchange Market during the last quarter of this year”.

UPDATE – 22 June 2017: The CEO of the US-based company contacted REDD-Monitor yesterday. He wrote that, “We have no agreement or have received any compensation to be involved with any part of Teknisity, Thorn Medical or any other entity associated with these companies. These companies have no authorization to use our name.”

He added that his company, “has never authorized the use of the attached letter and we would welcome the opportunity to discuss this with you. We pride ourselves in conducting our business with full regulatory and legal compliance.”

REDD-Monitor wrote to the CEO to find out more. A Thorn Medical shareholder had alerted the US-based company to the letter, and on 13 June 2017, the CEO sent a cease and desist letter to Thorn Medical and Teknisity demanding the removal of all mention of the company’s name, including the removal of the shareholders letter from Thorn Medical’s, and Teknisity’s websites.

REDD-Monitor has therefore also removed all mention of the company and the shareholder letter from this post, edited the headline, and edited the post to make clear that the US-based company is not working in any way with Thorn Medical or Teknisity.

If you’re a shareholder in Thorn Medical, Teknisity’s Acceptance Offer includes a useful piece of advice:

If you are unsure of any matter regarding this exchange, you should seek independent financial advice.

I’d also suggest contacting Action Fraud, the Financial Conduct Authority, and the U.S. Securities and Exchange Commission.

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While these strange events were transpiring, a July 25, 2017 press release announced that Okaynos had been acquired by Black Beret Life Sciences LLC

Black Beret Life Sciences LLC Leads Acquisition of Okyanos Center for Regenerative Medicine — Houston-Based Life Sciences Firm Adds Bahamas Adult Stem Cell Therapy Company to Portfolio

HOUSTON, July 25, 2017 /PRNewswire/ — Black Beret Life Sciences LLC has finalized the acquisition of Okyanos Operating Company, Ltd., a state-of-the-art adult stem cell and regenerative medicine center based in Freeport, Grand Bahama.

Black Beret Life Sciences LLC was founded by the legendary Dr. W. E. “Ed” Bosarge. BBLS LLC acquired Okyanos Operating Company, Ltd. in July 2017.

Okyanos.Crunchbase
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While Matt Feshbach appears to be out of the picture completely at Okyanos, who knows if he really is?

Lingering questions remain. How did the ownership of Okyanos move from Thorn Medical to Teknisity to Black Beret Life Sciences? Especially considering that Thorn Medical went broke in August 2017? Teknisity, on the other hand, was incorporated on January 7, 2016; had no assets; and was dormant in 2017.

  • How did Matt Feshbach’s Okyanos sell itself to Thorn Medical?
  • Did Matt Fessbach realize a profit from the sale of Okyanos?
  • How did the bankrupt Thorn Medical sell Okyanos to the dormant Teknisity?
  • How did the dormant Teknisity sell Okyanos to Black Beret Life Sciences LLC?

Further investigation is underway.

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