By Max Colchester and Margot Patrick 

"If you are reading this, it is probable that you wonder who Ben Worsley is."

Typing on his computer, Benedict Worsley felt surrounded. The plan, the Englishman told friends, was to work for the Russian financiers for a few years and then retreat to his gated pied-à-terre in the south of France.

Mr. Worsley, tall with thinning gray hair, flew on private jets and sailed on luxury yachts. His Rolodex swelled to include people in Luxembourg, Cyprus and the United Arab Emirates. Despite having no finance background, the 50-year-old former headhunter reinvented himself as an offshore specialist helping manage hundreds of shell companies. Along the way he acquired a ringside seat into how rich Russians quietly shuffle money across the European Union and marveled at how easy it was.

Now, as he explained in his online statement, it was all unraveling. A banking crisis had turned acrimonious. "I now find myself caught in the middle between two warring Russian factions," he wrote.

He was having panic attacks. He had cut himself off from many of his old friends in London, where he got his start. The threat of legal bills loomed. When he traveled, he thought he was being followed. "I was a nobody," he had written to an opposing lawyer in a pleading email. "I like to be a nobody. That's fine for me."

Nobodies like Mr. Worsley are the building blocks that made London's reputation as an international money center. Countless fixers -- lawyers, real-estate agents, corporate-service providers -- help funnel foreign money though the city and cater to the world's superrich.

It isn't always glamorous work, as Mr. Worsley ultimately found, and the extraordinarily Byzantine job of hiding money on a vast international scale can take a heavy psychological toll. This account of his adventures, based on interviews with more than a dozen people familiar with his situation, documents, court records and the public statement he posted on his website, reveals a conflicted man ricocheting from loyalty to betrayal as the legal noose tightened on his Russian clients.

Mr. Worsley, who hasn't been accused by authorities of any crimes, was paid hundreds of thousands of dollars in salary and expenses for his work. He said in an affidavit in a subsequent court case that he didn't stop to consider that the money flows he facilitated might be construed as illicit.

"At that time the use of offshore companies was an everyday reality around the world," he wrote in his online manifesto at the end of 2017. "This is not a 'poor me' story," he went on, "But rather a statement of truth in regard to a terribly messy situation."

In the beginning

In the fall of 2009, Benedict Worsley sat in the back of a tinted-glass Range Rover crawling through Moscow's thick traffic. An old contact at Russia's National Bank Trust had called him. The bank's chairman, Ilya Yurov, wanted to discuss secret business in person. Mr. Worsley was intrigued. He had previously helped recruit staff for Mr. Yurov's NBT but this promised to be something different, and hopefully more lucrative.

Mr. Yurov didn't look like your typical retail banker. A thick neck and squat build spoke to the Russian's continued interest in kickboxing. Sporting a shaved head and a neatly trimmed beard, Mr. Yurov wore suits that hid a collection of tattoos. In Moscow, this wasn't unusual, Mr. Worsley told himself. This was Russia, not the genteel English countryside.

Born in Eastbourne, an unremarkable seaside resort on England's south coast, Mr. Worsley grew up in a solidly upper-middle-class British family. His father, a respected barrister, met Mr. Worsley's mother ballroom dancing. The young Mr. Worsley attended an imposing private school and then found himself adrift in London.

A friend suggested Mr. Worsley get into executive recruiting. Since London's finance industry was deregulated in the 1980s, the City's square mile was becoming a global banking hub. As a new class of international rich flooded into the capital, an army of locals was finding gainful employment facilitating their needs. It was in this crowd that Mr. Worsley found his professional calling.

Western banks were piling into Eastern Europe. They needed staff and Mr. Worsley formed a firm called Central Search to help find them.

To his clients, Mr. Worsley came with a calling card: an amped-up brand of Englishness. In winter he headed to the Alps with the Les Avants Bobsleigh and Toboggan Club to descend the icy slopes dressed in plus-fours. He dined at London's historic private members clubs, the Travellers and the Garrick, and spoke in a hushed, slightly clipped voice. He owned a secondhand Bentley.

Then the financial crisis hit. Scores of bankers packed their cardboard boxes, and a large chunk of Central Search's revenue evaporated. Mr. Worsley decided he was bored of schmoozing bankers in hotel lobbies. He needed a new challenge -- one that paid. So in late 2009 when Mr. Yurov requested a meeting, Mr. Worsley packed his bags and went.

As a young man growing up in the Soviet Union, Mr. Yurov faced a choice between professional boxing and finance. He chose finance. After clambering up the ranks in the treasury department of a Russian bank, he was taken under the wing of Mikhail Khodorkovsky, an oil tycoon who later fell out of favor with President Vladimir Putin. In the early 2000s Mr. Yurov helped orchestrate a buyout of two Russian banks, which had been controlled by Mr. Khodorkovsky, just before the billionaire was arrested on fraud and tax-evasion charges. The resulting venture was called National Bank Trust.

Mr. Yurov ran NBT along with two other major shareholders, Nikolay Fetisov, a derivatives expert and Sergey Belyaev, a trained biologist. Together they later wooed Russian depositors with an ad campaign featuring "Die Hard" actor Bruce Willis and the tagline: "When I need money, I just take it."

NBT's owners had a new assignment in mind for Mr. Worsley.

Like several other Russian banks, NBT skated through the financial crisis by hiding problems from regulators. To dress up bad loans, NBT had a system. It would lend money to a Cypriot shell company, which would recycle the funds through a maze of companies before funneling it back into NBT to cover the defaulted borrower's interest payments. This circular flow kept the bank afloat -- at least for a time.

NBT's management wanted to create distance between the bank and the offshore network. They needed a fixer, a legitimate middleman, to help administer the shell companies seemingly at arm's length. They knew this person shouldn't be Russian. Russians kept getting ripped off by European lawyers who smelled new money and jacked up the fees.

Mr. Worsley ticked the box, Mr. Yurov thought. He was a well-connected businessman with a pleasing whiff of old-world aristocracy. The fact Mr. Worsley knew next to nothing about offshore finance and spoke no Russian wasn't a problem.

The Range Rover pulled up at NBT's yellow-fronted office in east Moscow. Mr. Yurov met him in an office with religious pictures on the wall and pitched Mr. Worsley the job. The Brit felt flattered and after more meetings willingly accepted.

"Is it going to be trouble?" Mr. Yurov recalls thinking upon hiring him. "Not really."

Cypriot games

In November 2013, Mr. Worsley watched delivery men haul desks into a squat block in downtown Nicosia, the capital of the Mediterranean island of Cyprus.

Harried yet exhilarated, the Brit sat down in the bare, open-plan space to write to Mr. Yurov in Moscow. Meetings with Deloitte & Touche LLP in Malta and Amsterdam on new tax rules had gone well. Teos Corporate Services Ltd., Mr. Worsley's new company, was close to being licensed by the Cyprus securities regulator. He'd hired a dozen staff to process filings and loan payments for 250 companies.

"In short then, all on track," he signed off.

Asked for comment, Deloitte said it couldn't disclose information relating to clients.

For Mr. Worsley the ascent into the world of offshore finance had been steep and, to his amazement, fairly easy. He called his London accountant for leads. Remembering ads he'd seen in a Moscow airport, he strode into the Mayfair office of a London corporate-services provider. It in turn introduced him to a Cypriot lawyer, Christos Vassiliades, who had many Russian clients and was expert in complex tax setups. Mr. Vassiliades didn't respond to calls and emails seeking comment.

Cyprus was a natural fit. The island dubbed "Moscow on the Mediterranean" was long used by Russians as a back door into the European Union's financial system. The arrival of another facilitator for rich Russians didn't raise eyebrows. Teos was just one of more than 100 corporate service providers in Cyprus.

To his mainly local staff, Mr. Worsley appeared successful, if a little eccentric. He rented a small house in Nicosia's crammed downtown, unwilling to pay for something airier with a pool, and listed six mobile-phone numbers on his email signoff. Life was humdrum. Staff sent emails to their colleagues advertising cake in the fridge. The work was largely administrative -- mountains and mountains of paperwork.

"It was normal work," said one person Mr. Worsley hired, "setting up bank accounts, company formation."

The aim of the Teos office was to help manage the merry-go-round of cash. Laid out on a piece of paper, the NBT offshore structure is hard to follow, with arrows pointing back and forth between companies making and receiving loans. The goal was simple, though: keep NBT's bad loans from coming to the attention of auditors, regulators or customers.

Each time a major bad loan needed handling, Mr. Worsley would receive instruction from NBT's Moscow headquarters to create a new "silo" of companies to service it.

NBT would make loans to companies set up by Mr. Worsley in Cyprus, with directors supplied by Teos or Mr. Vassiliades's law firm to rubber stamp their business. The proceeds were lent onward to a string of companies in Cyprus and the British Virgin Islands before returning to NBT to service the bad debt. Sometimes the Cyprus company would use the borrowed money to buy Russian bonds or other securities, lending them out for additional cash to plug holes in NBT's balance sheet, according to documents filed in a subsequent case in London high court.

At its peak the network cost around $4 million a year to run, with each company needing to follow local rules on filing annual returns and audits. Lots of advisers proved willing to help. At least one of the Cyprus borrowers had its accounts audited by KPMG. The Cyprus arm of Greece's Piraeus Bank provided accounts to dozens of companies in the network.

George Appios, chief executive of Piraeus Bank Cyprus, now called AstroBank, said the bank can't comment on clients but follows strict anti-money-laundering rules and is never knowingly involved in any unlawful activities. KPMG declined to comment.

To mask the involvement of NBT's owners, Mr. Worsley flew to the Isle of Man, a rainy island in the Irish Sea. A corporate-service provider there called Boston Ltd. set up trusts for Mr. Yurov and his partners that allowed them to own the offshore network with almost ironclad confidentiality. Boston in a statement says it "rigorously complies with its legal responsibilities."

Mr. Worsley took comfort from how consultants, lawyers and bankers were aware of the structure and didn't seem to have a problem with it.

The fixer went to increasing lengths to keep his clients happy. Once, when canceled flights stranded a restless Mr. Yurov in London, Mr. Worsley rented a car and drove all three Russian clients to visit Stonehenge. Another time, he hired former British special-service operatives to box with Mr. Yurov in a London gym.

In 2011 Mr. Yurov had another task for Mr. Worsley: move his family out of Russia. Mr. Worsley helped Mr. Yurov's wife acquire a U.K. investor visa, and helped place the Yurov children at a private school on the grounds of Canterbury Cathedral. He found a bed-and-breakfast that could be rented in its entirety to accommodate the eight-person family. The family paid Mr. Worsley $50,000 for his efforts.

The family later moved into an 18th-century manor house, paid for by Ms. Yurov with GBP4.1 million cash. The Yurovs bought property in Cyprus too, securing EU passports under a Cypriot program that lets foreigners who invest at least EUR2 million become citizens.

By 2014 Mr. Worsley's offshore aspirations were gaining momentum. He began to formulate plans to open up the Teos office to other clients.

While Mr. Worsley crisscrossed Europe and the Middle East cultivating his business, storm clouds were gathering in Moscow. Loan losses at NBT were spiraling as U.S. sanctions weighed on Russian business and oil prices fell. Each month NBT needed to come up with around $30 million to plug a growing hole on its balance sheet.

In the summer of 2014, the NBT shareholders decided it was time to offload their bank. Mr. Yurov courted potential purchasers including Igor Sechin, the boss of oil giant Rosneft. Mr. Sechin declined to comment.

But the three NBT partners had a problem: what to do with the offshore network?

In November 2014, Mr. Worsley, Mr. Yurov, and an NBT lieutenant gathered in a conference room at a law firm near London's West End theater district. Sitting in the room, Mr. Worsley secretly recorded the ensuing conversation on his phone. The men fretted over how they could discreetly communicate with each other, according to a transcript in a court document.

Mr. Worsley -- ever the fixer -- came up with a plan. He had read in the press that former Central Intelligence Agency director David Petraeus conducted an extramarital affair by writing drafts in an email account that were never actually sent. His paramour would allegedly log into the account and read the drafts.

His suggestion was ignored and the takeover never materialized. Russia raised interest rates to prop up its fast-devaluing currency. NBT was running out of cash and couldn't make margin calls. On Dec. 22, Mr. Yurov, on vacation in Australia, called Mr. Worsley, saying that NBT would be seized by the Russian central bank in a couple of hours.

The Russian deposit insurance agency appointed Otkritie Holding JSC, a powerful Kremlin-linked lender that had already acquired several weakened banks with loans from Russia's central bank, to manage NBT. Within a week, the central bank said it contacted Russian police about possible criminal activity.

The reckoning

A few weeks later a jet-lagged Mr. Yurov flew to Cyprus with his son to collect a Cypriot passport Mr. Worsley had helped to organize, according to a document filed in London court. The two men caught up for coffee and went for a walk. Then Mr. Worsley slipped in a bombshell. He wanted more money to pay the expenses of maintaining the offshore network -- even though it was no longer propping up NBT.

Mr. Yurov's face hardened. The bank had sent over a tranche of cash a few months before. How could it be spent already? Suspicious Mr. Worsley had been pocketing funds from their shell operation for his own use, he demanded to see the office books.

Late that night, Mr. Worsley appeared at the lobby of the Hilton Park Nicosia nervously clutching the paperwork. Thumbing through the accounts, Mr. Yurov said the records showed that some $300,000 had been transferred to Mr. Worsley's bank account in the United Arab Emirates and another $45,000 had been used to renovate an old house in the rolling hills of southern France Mr. Worsley had bought.

Flustered by Mr. Yurov's allegations, and increasingly frightened of the banker, Mr. Worsley denied stealing the money, offered to hand back his apartment keys and said if the Russian wanted to end their business relationship that was fine. He warned Mr. Yurov he had a bodyguard waiting for him in a car outside.

Mr. Worsley left. In the car there was no bodyguard. Instead the Brit had persuaded an aging doorman at the Teos office to make sure he made it out of the Hilton safely. The next day Mr. Yurov and Mr. Worsley tried to patch things up. They went on a sightseeing trip around Northern Cyprus, followed by dinner.

As NBT crumbled, so crumbled a very dysfunctional business partnership.

From the beginning colleagues found the rapport between Mr. Yurov and Mr. Worsley odd. Mr. Worsley appeared enthralled by Mr. Yurov's power and wealth. Mr. Yurov meanwhile seemed to treat his British business associate like a true friend.

The two men spent so much time together that Mr. Yurov's wife suggested he should hang out with someone else. The men traveled on vacation. They met each other's parents. Mr. Yurov's children called Mr. Worsley "Uncle Ben." Mr. Worsley converted to the Russian Orthodox Church, with Mr. Yurov standing by his side translating from Russian.

Privately Mr. Worsley viewed himself as a "paid friend" to Mr. Yurov. A teetotaler, Mr. Worsley dreaded having to entertain the Russians. The language barrier created awkward situations. There was the time when Mr. Worsley organized the rental of a 230-foot superyacht to ferry the three NBT owners and their wives on a cruise from Athens. Mr. Worsley was invited. A few days in, Mr. Yurov found his fixer red-faced with rage, shouting that one of the Russians aboard had drunkenly mocked him. Mr. Worsley asked to disembark at the next stop but eventually calmed down.

After the failure of NBT, Mr. Worsley initially clung to his patron. He still needed a job and money. The offshore network still had to be shuttered or transferred to Otkritie.

"I am now one of Europe's leading offshore specialists," Mr. Worsley wrote to ex-NBT shareholders along with a request for a $750,000 success fee for winding down the network. "In short I gave up my whole show, and changed my life....Some sort of final payment seems very fair."

Mr. Yurov needed his British fixer for something totally different: to prove his innocence. Russian authorities believed the offshore network might be a vehicle for stealing money from NBT. Mr. Worsley had access to paperwork Mr. Yurov could use to argue he was simply trying to keep the bank afloat. Mr. Yurov argued in an affidavit that many Russian banks had done the same, what he called "balance sheet management." By artificially keeping NBT in business hadn't he protected depositors?

Russian authorities were circling, trying to work out how NBT was owed hundreds of millions of dollars by seemingly worthless shell companies. Criminal charges had been filed against two lower-level NBT employees in Russia. The NBT owners were already gone. Mr. Fetisov had already taken up full-time residence in a leafy suburb of London. Mr. Belyaev moved to Connecticut on a student visa.

Otkritie said it wanted control of several profitable companies held through the offshore network, including a large Moscow real-estate portfolio. Mr. Yurov and the ex-NBT shareholders said they were personal investments and refused to hand them over.

In the fall of 2015, Mr. Yurov and Mr. Worsley met in the marbled foyer at Claridge's, a five-star hotel in London, for coffee. It was an odd meeting. Both men felt the other was acting strangely. Mr. Yurov said he wanted to fight back against Otkritie, arguing the scale of the losses had been exaggerated and the bank unfairly expropriated. Mr. Worsley warned him it was a bad idea. It would be years before they saw each other again.

Mr. Worsley flew to Dubai to weigh his options. The last thing he wanted was to be sucked into a protracted battle backing a Russian who had overseen a major bank failure and was in self-imposed exile.

Otkritie lawyers flew to Dubai to approach Mr. Worsley with a different business proposition: help trace NBT's money, sign over assets and provide information against the three former NBT owners. Turning informant on Mr. Yurov wasn't something Mr. Worsley took lightly. Late one evening an email landed in his inbox, saying Mr. Yurov intended to launch a legal broadside against Otkritie. Staring at the screen Mr. Worsley snapped.

"There are times when one has to face reality," he later said in an emailed statement to The Wall Street Journal.

He decided to switch sides.

New instructions

Otkritie hashed out an arrangement to pay Mr. Worsley a retainer of $32,500 a month for a year and up to 4% of the assets recovered from the offshore network. They also agreed not to sue him.

Otkritie sued the three ex-NBT shareholders in London for breach of duties, seeking $830 million in damages. The three men deny the allegations. In turn, Mr. Yurov, shocked to discover that Mr. Worsley had betrayed him, filed a criminal complaint in Cyprus alleging that Otkritie bribed Mr. Worsley to provide evidence. Russian authorities filed embezzlement charges against the former NBT shareholders. Lawsuits sprouted in Switzerland and Austria as Otkritie tried to claw back some of the money NBT had lost.

Mr. Worsley retreated to his French house and tapped out his online manifesto, though he later scrubbed it of some details. He feared a reprisal by Mr. Yurov. He also worried that Otkritie would refuse to pay his legal bills and ditch him. He cut a forlorn figure, no longer in contact with old friends. He asked Otkritie for funds to beef up security at his home.

Mr. Worsley needed to build a new life. Working in Russia was out of the question but finding a new career proved challenging. He signed up to become a member of the Masonry Heater Association in North America, a group that shares know-how for building large ovens. A month later Mr. Worsley asked to have his name taken off the association's website and didn't turn up to meetings, an official there said.

Mr. Worsley's turmoil coincided with a hardening of attitudes toward offshore centers and the people who facilitate their use. In 2016 a trove of leaked documents from the Panama law firm Mossack Fonseca & Co. showed how tax havens around the world were used to hide funds from tax authorities.

A political backlash grew and laws changed. U.K. authorities could now ask hyper-wealthy foreigners to reveal the source of their money via a system called "unexplained wealth orders." The government pressured the British Virgin Islands and other offshore centers to keep better track of company owners.

Authorities also targeted fixers. A new British watchdog oversees 22 trade bodies that regulate solicitors, accountants and other "professional enablers." In theory it is harder to quietly fix peoples' problems from London.

After NBT's takeover Mr. Yurov holed up in the Kent countryside in southern England. Despite his business failure, the Russian was no pauper. His family's assets included several London properties, a vast wine collection, and a $55,000 Turkish carpet. In 2016 Canterbury Cathedral listed him as a major donor.

Mr. Yurov and the other former NBT shareholders say they were victims of a conspiracy: Otkritie had exaggerated the losses at NBT to access a big Russian taxpayer loan, which it used to patch up its own balance sheet, he said. Otkritie lawyers deny this.

In the summer of 2017 Otkritie itself keeled over after customers yanked their deposits. The Russian central bank rescued Otkritie and said the private bank had falsified its accounts.The collapse did little for Mr. Yurov, who is currently fighting extradition to Russia.

For years Mr. Yurov had no direct contact with Mr. Worsley. But that summer, as Otkritie teetered, Mr. Yurov and his fellow former NBT shareholders got an unexpected email. It was from Mr. Worsley proposing they broker a truce with Otkritie. Mr. Worsley also had another suggestion: Maybe he could help.

Write to Max Colchester at max.colchester@wsj.com and Margot Patrick at margot.patrick@wsj.com

(END) Dow Jones Newswires

August 04, 2018 00:15 ET (04:15 GMT)