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The Gibraltar Gambling Division has cast doubt on its legal authority to investigate allegations against the defunct Mansion Group.

When the Mansion Group shut down its entire operation in October 2023, it left many questions unanswered.

Last month an article in The Olive Press, which describes itself as Spain’s largest expat newspaper, reported that former CEO Karel Mañasco has accused the company of a long list of alleged unlawful acts, including operating without appropriate licences, circumventing regulations, and evading taxes in countries such as Austria, Germany and Israel.

Several companies and corporate structures were allegedly set up to mimic a B2B offering and included companies in Curaçao to ensure these activities remained untraceable to Mansion Group.

While some gaming activities occurred pre-regulation when gambling was a grey area, the article noted that some illegal practices allegedly continued even after regulations were tightened including activity in markets where online gambling became illegal.

Contacted by NEXT.io, the Mansion Group’s lawyer said the article “makes sensationalised, unsubstantiated and factually wrong allegations against various entities and individuals” and said the group “vehemently denied” the claims. (More on this below)

Asset freeze order

Prior to the business closure, Mansion Group hit the headlines in February 2023 when the Supreme Court of Gibraltar issued a £5m asset freeze order against Mañasco, at the request of Mansion Group.

The company alleged Mañasco engaged in serious misconduct during his tenure as CEO, including unauthorised and improper transactions, such as awarding himself bonus payments and transferring funds to third-party companies from which he personally benefitted.

For context, Mañasco joined Mansion in October 2010 as CFO and became a director of several of its companies in May 2016.

He assumed sole directorship of these companies on 1 December 2016 when then-CEO Sagi Lahav resigned.

In January 2017, Mañasco was appointed CEO alongside his role as CFO.

He resigned after Mansion launched an internal investigation at the end of 2021.

Call for open justice

When approached by NEXT.io, Mañasco emphasised that he cannot comment on the ongoing civil claim related to the asset freeze order due to privacy conditions mandated by the judge.

He explained that his defense material can only be revealed with notice to Mansion’s legal team, which he claims contradicts the principle of open justice.

By definition, open justice requires that judicial proceedings be conducted transparently, with public oversight to safeguard the rights of those involved and allow for public scrutiny.

Mansion Group’s legal representative confirmed that the parties to the claim “are all subject to an interim privacy regime which presently prevents any party” from commenting on, or referring to, documents and evidence filed in respect of an application by Mañasco to amend his defence in public.

“This interim privacy regime will cease upon the Court handing down its judgment. We are therefore unable to comment further for the time being,” the lawyer said.

Mañasco, meanwhile, reiterated his call for the Gibraltar Gambling Division to investigate the company.

Regulator’s response

When contacted by NEXT.io for comment, Gibraltar gambling commissioner Andrew Lyman responded that the regulator and the Gibraltar government are aware of “certain outline allegations” made by Mañasco in the case against the former CEO by the Mansion Group.

Lyman added that due to the ongoing civil proceedings, “it would be inappropriate to make any detailed comment as to any allegations which may arise therein at this time.

“That said we would expect any consumer of media on this subject to look at the context in which these allegations are made and to draw their own conclusions as to the weight to be attached to them,” Lyman told NEXT.io.

“Some of the allegations are very historical and Mansion are no longer a licence holder in Gibraltar.

“Therefore, it is questionable whether or not the gambling commissioner has any legal standing to investigate these allegations,” he added.

According to The Olive Press, Mañasco’s lawyer flagged the former CEO’s allegations to the commissioner in 2023.

Lymann reportedly stated at the time that “the bare assertions are insufficient to immediately trigger an investigation.”

Inconsistent and ambiguous

When asked by NEXT.io for the underlying reasons, Lyman stated that some allegations, which were made in November 2023, were “inconsistent with known facts and ambiguous.”

The Gambling Division, he said, asked Mañasco’s legal advisers to provide further written detail to support the allegations, which they never did.

“During his time as CEO of Mansion Group companies in Gibraltar, Mr. Mañasco never raised any concerns or allegations regarding his employer,” he added.

2022 settlement

Lyman also referred to a 2022 regulatory settlement that the gambling commissioner reached with Onisac Ltd (part of the Mansion Group) in relation to anti-money laundering failings which “dated back to at least 2020.”

At that time, the regulator identified shortcomings within the company concerning customers from outside the EU and UK, where internal controls related to anti-money laundering requirements did not meet regulatory standards.

According to the Gambling Division, the subsidiary’s previous management team inadequately responded to regulatory advice and did not fulfil a previously agreed action plan.

However, the two parties eventually reached a settlement because the operator’s current management team cooperated fully with the regulator during an onsite visit.

The regulator stated that although Mansion ceased business in October 2023, its licence remained active for several weeks to ensure consumer residual balances were protected and to facilitate an orderly market exit without any consumer issues.

Mañasco alleged that he was never given a fair opportunity to be heard during the investigation.

He claimed that a deal was made allowing Mansion to seek recovery of the negotiated penalty from him.

This penalty is included in Mansion’s initial request for damages of £2.4m and nearly €3m, which was covered by the asset freeze order.

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