As far as the Royal Canadian Mounted Police are concerned, the acronym IPOC stands for "Integrated Proceeds of Crime". That may seem richly ironic to those who have been following the long and highly complex case of the Bermuda-based IPOC International Growth Fund Ltd., as it has dragged through courts in Bermuda, the British Virgin Islands, Russia and Switzerland over the past five years.

On more than one occasion during the protracted legal squabble, it has been suggested that the Fund was a money-laundering vehicle established by Russian Telecommunications Minister Leonid Reiman — something he has always vigorously denied.

As the years have gone by, the IPOC saga has accumulated many elements of a good movie. Rich and powerful people fighting over huge amounts of money, courthouse intrigue, a touch of alleged espionage and the man at the centre of the case going missing.

That man is — or perhaps was — Leonid Rozhetskin, who disappeared in March this year. A flamboyant Russian-born American businessman, his actions were the key driver of the IPOC case coming to court in the first place. The crux of the matter was that Mr. Rozhetskin owned a company called LV Finance, which sold a 25.1-percent stake in Russian telecommunications company Megafon to the Alfa Group for $300 million. IPOC claimed it had a prior agreement to buy the Megafon shares from LV Finance and took legal action. Years of court battles ended with Alfa Group managing to complete their purchase of the shares after all.

An outspoken critic of Vladimir Putin, whose tenure as Russian President ended this week, Mr. Rozhetskin had been placed on Russia's world wanted list on swindle charges related to the Megafon case.

His disappearance reads like something out of a Cold War-era spy novel. The 41-year-old businessman, well known for his enjoyment of lavish parties, stayed at London's Dorchester hotel on March 14 this year. The following day, he flew by private jet to his $2 million mansion in the resort of Jurmala, Latvia. The last people to have seen him alive, according to Russian media reports, were two men picked up from the mansion at 2.30 a.m. on March 16. A taxi driver said he had driven them to Riga's biggest gay club, called XXL.

Mr. Rozhetskin's disappearance was reported later in the day by an associate who turned up for a meeting and found no one at the mansion, but saw overturned furniture and blood on the carpet. DNA tests later showed the blood belonged to Mr. Rozhetskin. His car was found abandoned the following day, also bearing traces of his blood. Adding to the mystery was the fact that his private jet left Latvia that same day, and flew without Mr. Rozhetskin, reportedly to either Switzerland or Austria. Police are investigating whether he was kidnapped, murdered, or even faked his own death to escape his enemies.

That was just the latest twist in a remarkable story whose Bermuda connection started in 2000, when Vidya Sharma, a former Merrill Lynch broker, set up IPOC. Three years later Mr. Sharma was fired as the Fund's president, when it was discovered that he had been found guilty of fraud in Germany in 1998. Embarrassingly for Bermuda, the Wall Street Journal highlighted in a December 2006 story that the Fund had been established by a convicted felon — something that should have raised a red flag during the due diligence carried out by regulator the Bermuda Monetary Authority (BMA).

The IPOC International Growth Fund was given a licence to operate as a mutual fund in Bermuda. But it was no run-of-the-mill mutual fund. It did not receive its money to invest through shareholders, but through a group of subsidiary companies it owned. These earned income by lending to or consulting for a second set of companies, according to documents submitted in court by IPOC in order to help the $1 billion Fund's effort to disprove claims it was a money-laundering vehicle.

But where did all of IPOC's assets come from?

The story of IPOC has its roots in the early 1990s, when Mr. Reiman, then in his mid-30s, was an executive at Leningrad City Telephone Network. He became friendly with Jeffrey Galmond, a Danish lawyer, who was in town to help a client. They started doing business together, but also became close friends, close enough for the families to vacation together.

After the fall of the old Soviet Union, a telecommunications revolution began to take hold. Mr. Reiman was at the centre of it in St. Petersburg, putting together a network of companies for his Russian state employer, offering a wide range of services from billing to paging. Any company or foreign investor who wanted to get in on the St. Petersburg telecoms action had to connect to the state equipment, so they had to go through Mr. Reiman. Meanwhile Mr. Galmond was working closely with him, providing legal help and introductions to potential outside investors.

One of those investors was British businessman Anthony Georgiou, who owned a share in one of the ventures and claimed he was cheated out of it. In a sworn affidavit filed in a BVI court, Mr. Georgiou said Mr. Reiman "seemed an expert in 'oiling the wheels' and had no compunction about doing it". He provided a 1992 receipt for a $1.04 million "bonus" transferred to Mr. Reiman's Swiss bank account. Mr. Reiman denied that such a transfer ever took place and said the receipt was a fake.

The telecoms ventures were growing fast and in 1994, Mr. Reiman gathered his state-controlled employer's interests in into a firm called Telecominvest — the employer owned 95 percent of it. Mr. Galmond has said that he indirectly owned the rest. But the numbers changed dramatically by early 1996. By then the stake of Mr. Reiman's employer and another state company had shrunk to under half, while an obscure Luxembourg company called First National Holding owned 51 percent.

The state-run companies, represented by Mr. Reiman, had not exercised their right to invest in extra shares issued by Telecominvest and so had lost their controlling interest. First National Holding put up a modest $1.8 million for the new shares and wound up with the majority stake. Later its stake rose to 85 percent through the same process.

Then Russian Telecommunications Minister Vladimir Bulgak heard about the deal through the media and called representatives of the state-controlled St. Petersburg companies for an explanation. He was told that First National Holding was simply a vehicle for the German banking giant Commerzbank. Telecominvest said the same thing and even Commerzbank purported to the owner of the mysterious company. Now however, the Bank admits that was not the case. Mr. Reiman has claimed that the real owner was Mr. Galmond, who was trying to keep his interests quiet in the ruthless landscape that was new Russian capitalism.

It was when Commerzbank ended its arrangement with the telecoms entities that Mr. Galmond set up several Bermuda companies, among them the IPOC International Growth Fund, to serve as a new home for the telecoms holdings. At about this time, Mr. Reiman became Telecommunications Minister, enjoying a close relationship with President Putin. Their ties dated back to when Mr. Putin's wife got a job at Telecominvest, before Mr. Putin became the most powerful man in Russia.

The dispute between IPOC and LV Finance over the disputed stake in Megafon sparked a tidal wave of cross-border litigation that would bring to light some extraordinary revelations about the workings of the IPOC Fund. Ironically, it was IPOC itself that brought the matter to court and thereby opened its own can of worms.

According to the findings of one such hearing, a Swiss commercial tribunal, IPOC was at the centre of a massive money-laundering scheme, designed to conceal Minister Reiman's diversion of Russian state assets. Citing evidence produced by German prosecutors, who had been looking into the Commerzbank affair, the tribunal found that Mr. Reiman had used his position in St. Petersburg to shift control of state-owned companies to foreign holding companies he owned.

After he became Telecommunications Minister, the tribunal alleged, Mr. Reiman made decisions, including the granting of licences, which caused the value of his collection of companies to soar by millions of dollars. Some of those assets came to Bermuda, invested in IPOC. However, Mr. Reiman has always insisted he was not the owner of IPOC or its family of telecoms companies, rather it was his friend Mr. Galmond.

The value of several of these companies rocketed in a very short time. One such case was Telecom XXI, a small Russian company, acquired for $3 million in late 1999 and controlled through two Bermuda-based businesses Mr. Galmond says he owned, Comitas and Honestas. Just over a year later, the tribunal found, Telecom XXI was sold to Russian telecommunications giant MTS for some $40 million.

The company's dramatic rise in value came about because it had acquired a much sought-after licence — from a branch of Mr. Reiman's Ministry — to provide cellular services in the St. Petersburg area. MTS had applied for that same licence in May 2000 and had been turned down.

Mr. Reiman had "resold the company at a profit of well over 1,000 per cent", stated the tribunal, something he had achieved by using his official powers to grant Telecom 21 a GSM 900 licence, while rejecting the application for the same licence from Telecom 21's acquirer MTS. The majority of the proceeds from the transaction, some $30.5 million, were transferred from Comitas, through its Bermudian parent company Augmentation Investments and into the IPOC Fund. The Zurich tribunal concluded that much of the huge profit on the transaction was the fruit of "abuse of official powers" by Mr. Reiman.

Mr. Reiman rejected the theory and said Russian prosecutors and government auditors who looked into the granting of the licence found no violations.

The tribunal's 350-page ruling, compiled by a panel of three, referred to the dispute between IPOC and LV Finance over the ownership in the Megafon stake. The Zurich-based tribunal also stated that Mr. Reiman was the "sole beneficial owner" of the $1 billion Fund, despite IPOC's repeated claims that Mr. Galmond was the owner. And it gave an opinion that the money in the Bermuda fund included the laundered proceeds of crime. Mr. Reiman, the ruling said, had pursued his own "personal enrichment" at the expense of state assets he had an obligation to protect.

Other money flows into the IPOC Fund proved even more questionable. In a civil case, heard in a BVI court in 2006, IPOC produced a report compiled by accountancy firm Ernst & Young, designed to prove the legitimacy of money flowing into the Fund. However, the document raised even more questions.

A firm called Lemex Company was claimed by the Fund to have paid more than $2 million to IPOC group company Lapal Ltd., which was domiciled in the BVI, for "consulting services: structuring a transaction involving a merger of two banks". Lemex Company was found to be a Budapest kitchen outfitter, whose owners knew nothing of the alleged transaction.

Then there was Euro Resources LLC, which, IPOC records showed, had paid at least $24 million to IPOC subsidiaries for real-estate and consulting services. Yet the payments, many from a St. Petersburg bank, began even before Euro Resources was incorporated - and even before any consulting contracts were signed. IPOC provided no proof its subsidiaries did work for Euro Resources in return for the $24 million. IPOC gives Euro Resources' address as Lexington, Kentucky. Phone directories in Lexington list no such company.

Another IPOC group company, BVI-domiciled Albany Invest Ltd., claimed it had been paid $803,901 in two separate payments by UK company Advanta Corporation Ltd. But court papers showed that Advanta had never even traded at the time of the alleged transaction. Yet another anomaly was the $250,000 that the E&Y report said was paid to Lapal Ltd. by Netmax for consultancy services. Netmax proved not to be a company at all, but instead a brand for a completely different firm, Cybernet Systems Corporation.

All the bad press from New York to Copenhagen, from London to Moscow, was doing the reputation of Bermuda as a respectable offshore jurisdiction no good at all. For the Island's critics, the IPOC story seemed to back up their image of shady dealings in a dodgy tax haven.

But behind the scenes, Finance Minister Paula Cox was on the case. In March 2004, she appointed two inspectors from KPMG Financial Advisory Services Ltd. to conduct an independent probe into IPOC and 11 other associated Bermuda companies. She revealed that fact only in February 2006, when a series of IPOC stories in media around the world had led to widespread criticism of the Island's business and regulatory standards.

The inspectors' terms of reference include identifying the source of IPOC's funds, considering whether it adhered to undertakings given to the BMA and determining whether Bermuda's laws were breached. The Finance Ministry had stronger powers than the BMA to enforce a full inspection and Ms Cox decided it was necessary to use them. "There will be no form of cover-up and any necessary follow-up action will be actioned," she said in February 2006. "Any suggestion to the contrary would be flagrantly untrue and palpably wrong."

With some of the stunning revelations about the questionable nature of the funding of its own IPOC-related companies, the BVI decided to take action too, with investigations into irregularities connected with those companies starting in 2004. Last August, BVI Director of Public Prosecutions Terrence Williams wrote to the US Justice Department to seek assistance into an investigation alleging that IPOC was simply "a front for the laundering of the proceeds of crime of, amongst others, the Russian Telecommunications Minister Mr. Leonid Reiman". An IPOC legal task force was set up in Bermuda, headed by former Director of Public Prosecutions Kulandra Ratneser, backed up by Susan Davis-Crockwell and Renee Foggo, and helped by Police officers and Finance Ministry officials. In December 2006, the BMA declassified the fund as a Bermuda-registered mutual fund, just one day after IPOC had run a half-page, paid-for advertisement in The Royal Gazette that restated an announcement by the Office of the Russian Federation's Prosecutor General that IPOC has no case to answer in connection with fraud allegations made against it. The following month, the Registrar of Companies, on the instruction of the Finance Ministry, asked the Supreme Court to wind up the IPOC Fund and eight related companies.

Meanwhile, investigators in the BVI were busy compiling a criminal case against IPOC and its BVI-domiciled companies, Lapal, Albany Invest and Mercury Import. The questionable nature of the information produced during the earlier BVI hearings into the disputed Megafon stake led prosecutors to pursue charges of furnishing false information and perverting the course of justice.

By redomiciling their telecoms holdings to a couple of tiny, out-of-the-way British Overseas Territories, the owners of IPOC may have believed they would be able to avoid the kind of scrutiny they had been subjected to when those holdings were stashed in a German bank. They were wrong. BVI and Bermuda investigators were sharing information as they compiled their cases, drawing information from more than half a million documents in a painstaking and complicated probe.

After what seemed an eternity, all of the effort and the diligence paid off in the space of eight decisive days. First, on Wednesday, April 30, IPOC pleaded guilty to the charges laid by the BVI. According to the indictment, the alleged falsified documents showed that IPOC subsidiaries Lapal, Albany and Mercury received payments from third parties for services rendered, when at least in part those companies had not provided the services claimed to have been delivered, or had not made the payments. The following day the sentence was handed down. In one of the largest fines ever imposed in a common law jurisdiction, some $45 million of the IPOC's BVI holdings were confiscated. The Fund was also ordered to pay $2.3 million to meet the costs of the two jurisdictions' legal and investigational costs.

This week the action moved to the Bermuda Supreme Court, where on Wednesday, IPOC said it would not contest the winding-up order against it and its eight companies. The Fund also agreed to pay Bermuda's legal costs, which The Royal Gazette understands totalled some $1.6 million. Finance Minister Paula Cox said she was proud of what the Island's authorities had accomplished. "We were committed to protecting Bermuda and sending a signal to the world Bermuda does not trifle with its reputation," she said. She added that there had been "more angles and twists and turns than a James Bond novel" in the long and complicated case. "For me what is powerful and the best aspect is that we stayed collectively to the wicket and had Bermuda's interests at heart we wanted to see that we protected Bermuda's national interest and reputation," Minister Cox added.

While the allegations of money laundering swirled around the IPOC Fund, it never faced charges of money laundering. The winding-up petition in Bermuda was filed on the grounds of regulatory breaches.

Of course, the Bermuda authorities will be happy to be rid of IPOC and all the reputation-damaging allegations it has attracted, but some may be a little sorry to see it go. After approving the winding-up order, Puisne Judge Ian Kawaley told the court: "The hearings were always challenging and they will, to a certain extent, be missed, I think."

For all the lawyers, journalists and readers who have become hooked to this amazing story over the past few years, his words ring true.