07
Oct 20

Promising Infusions of Cash, Fake Investor John Bernard Walked Away With $30M

September featured two stories on a phony tech investor named John Bernard, a pseudonym used by a convicted thief named John Clifton Davies who’s fleeced dozens of technology companies out of an estimated $30 million with the promise of lucrative investments. Those stories prompted a flood of tips from Davies’ victims that paints a much clearer picture of this serial con man and his cohorts, including allegations of hacking, smuggling, bank fraud and murder.

KrebsOnSecurity interviewed more than a dozen of Davies’ victims over the past five years, none of whom wished to be quoted here out of fear of reprisals from a man they say runs with mercenaries and has connections to organized crime.

As described in Part II of this series, John Bernard is in fact John Clifton Davies, a 59-year-old U.K. citizen who absconded from justice before being convicted on multiple counts of fraud in 2015. Prior to his conviction, Davies served 16 months in jail before being cleared of murdering his third wife on their honeymoon in India.

The scam artist John Bernard (left) in a recent Zoom call, and a photo of John Clifton Davies from 2015.

After eluding justice in the U.K., Davies reinvented himself as The Private Office of John Bernard, pretending to a be billionaire Swiss investor who made his fortunes in the dot-com boom 20 years ago and who was seeking investment opportunities.

In case after case, Bernard would promise to invest millions in tech startups, and then insist that companies pay tens of thousands of dollars worth of due diligence fees up front. However, the due diligence company he insisted on using — another Swiss firm called Inside Knowledge — also was secretly owned by Bernard, who would invariably pull out of the deal after receiving the due diligence money.

Bernard found a constant stream of new marks by offering extraordinarily generous finders fees to investment brokers who could introduce him to companies seeking an infusion of cash. When it came time for companies to sign legal documents, Bernard’s victims interacted with a 40-something Inside Knowledge employee named “Katherine Miller,” who claimed to be his lawyer.

It turns out that Katherine Miller is a onetime Moldovan attorney who was previously known as Ecaterina “Katya” Dudorenko. She is listed as a Romanian lawyer in the U.K. Companies House records for several companies tied to John Bernard, including Inside Knowledge Solutions Ltd., Docklands Enterprise Ltd., and Secure Swiss Data Ltd (more on Secure Swiss data in a moment).

Another of Bernard’s associates listed as a director at Docklands Enterprise Ltd. is Sergey Valentinov Pankov. This is notable because in 2018, Pankov and Dudorenko were convicted of cigarette smuggling in the United Kingdom.

Sergey Pankov and Ecaterina Dudorenco, in undated photos. Source: Mynewsdesk.com

According to the Organized Crime and Corruption Reporting Project, “illicit trafficking of tobacco is a multibillion-dollar business today, fueling organized crime and corruption [and] robbing governments of needed tax money. So profitable is the trade that tobacco is the world’s most widely smuggled legal substance. This booming business now stretches from counterfeiters in China and renegade factories in Russia to Indian reservations in New York and warlords in Pakistan and North Africa.”

Like their erstwhile boss Mr. Davies, both Pankov and Dudorenko disappeared before their convictions in the U.K. They were sentenced in absentia to two and a half years in prison.

Incidentally, Davies was detained by Ukrainian authorities in 2018, although he is not mentioned by name in this story from the Ukrainian daily Pravda. The story notes that the suspect moved to Kiev in 2014 and lived in a rented apartment with his Ukrainian wife.

John’s fourth wife, Iryna Davies, is listed as a director of one of the insolvency consulting businesses in the U.K. that was part of John Davies’ 2015 fraud conviction. Pravda reported that in order to confuse the Ukrainian police and hide from them, Mr. Davies constantly changed their place of residence.

John Clifton Davies, a.k.a. John Bernard. Image: Ukrainian National Police.

The Pravda story says Ukrainian authorities were working with the U.K. government to secure Davies’ extradition, but he appears to have slipped away once again. That’s according to one investment broker who’s been tracking Davies’ trail of fraud since 2015.

According to that source — who we’ll call “Ben” — Inside Knowledge and The Private Office of John Bernard have fleeced dozens of companies out of nearly USD $30 million in due diligence fees over the years, with one company reportedly paying over $1 million.

Ben said he figured out that Bernard was Davies through a random occurrence. Ben said he’d been told by a reliable source that Bernard traveled everywhere in Kiev with several armed guards, and that his entourage rode in a convoy that escorted Davies’ high-end Bentley. Ben said Davies’ crew was even able to stop traffic in the downtown area in what was described as a quasi military maneuver so that Davies’ vehicle could proceed unobstructed (and presumably without someone following his car).

Ben said he’s spoken to several victims of Bernard who saw phony invoices for payments to be made to banks in Eastern Europe appear to come from people within their own organization shortly after cutting off contact with Bernard and his team.

While Ben allowed that these invoices could have come from another source, it’s worth noting that by virtue of participating in the due diligence process, the companies targeted by these schemes would have already given Bernard’s office detailed information about their finances, bank accounts and security processes.

In some cases, the victims had agreed to use Bernard’s Secure Swiss Data software and services to store documents for the due diligence process. Secure Swiss Data is one of several firms founded by Davies/Inside Knowledge and run by Dudorenko, and it advertised itself as a Swiss company that provides encrypted email and data storage services. In February 2020, Secure Swiss Data was purchased in an “undisclosed multimillion buyout” by SafeSwiss Secure Communication AG.

Shortly after the first story on John Bernard was published here, virtually all of the employee profiles tied to Bernard’s office removed him from their work experience as listed on their LinkedIn resumes — or else deleted their profiles altogether. Also, John Bernard’s main website — the-private-office.ch — replaced the content on its homepage with a note saying it was closing up shop.

Incredibly, even after the first two stories ran, Bernard/Davies and his crew continued to ply their scam with companies that had already agreed to make due diligence payments, or that had made one or all of several installment payments.

One of those firms actually issued a press release in August saying it had been promised an infusion of millions in cash from John Bernard’s Private Office. They declined to be quoted here, and continue to hold onto hope that Mr. Bernard is not the crook that he plainly is.

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40 comments

  1. The Sunshine State

    One word here ” Shysters”

  2. Funny how the media doesn’t seem to notice the problem of tobacco crime; it is getting serious along the Canadian boarder from what little is published on the problem. This is what makes KOS so interesting, is the netherworld of under ground creepy crawlies like these characters. The Davies guy could be played by Robert Downey Jr, as he looks like him. I thing the movie going public would be very interested in such a story – as well as many personal ones involving Brian Krebs. In fact I find it much more entertaining than the old Elliot Ness historic biographies.

    • TOTALLY agree! Maybe a Tales from the Krebs anthology on Hulu or Netflix

      I’m still holding out hope for Spam Nation to get a The Big Short style treatment

  3. This sounds like the beginnings of another book!

  4. Why blur the face? Is this really John McAfee?

  5. Wannabe tech guy

    After reading the last two paragraphs, it’s hard to feel bad for these people. Are these the type of people who have all the data losses because they don’t secure the data they are responsible for?
    I’m not making a connection as such, just wondering about mind set or thinking.

  6. Companies are required to perform due diligence in these situations. It is obvious that they have little idea what it entails

    • …required is strong way to say they should do due diligence before investing or taking money as it goes both ways and is a generic name for a variable process that is very industry specific…

      …we once had to divest an investor as a condition of going IPO because FINRA did their due diligence…

  7. Is the Gru in that pic? ;-0

  8. Brian, you’ve been writing for years about cyber security. How come you are now desperately producing three articles which you’ve never done before more than two on this fraudster?

    In every article you fail to mention any names of victims or informants. On the basic that cyber security is your specialized field you can name who you are being paid by and the amounts you being paid to report what you are writing.
    It would be good to understand your motives in all of these “unnamed” people.

    I mean, I don’t dispute that this guy is a fraudster if you say so, but who pays 1 million $ for a due diligence? This just doesn’t add up.

    • FYI, the advertisers on this site help me give this content away for free. And for that I am grateful. I don’t accept paid posts, links, endorsements, or anything like that. And I certainly don’t accept money to write certain stories.

      Is it so hard to believe that a bunch of people who make their living introducing companies to investors might not want to advertise to the world that they got scammed, and inadvertently helped scam their clients in the process?

      Then again, Matthew, I’m sure you could identify with that. Perhaps you would like to enlighten us on your relationship to Mr. Bernard? I am told by several companies that got scammed by Bernard that you were instrumental in introducing them. Please let’s hear more about that.

      • Nice reply Brian. Keep doing your work, its amazing. Someone should reveal frauds instead of police doing their work.

      • Now that is what I call a comeback.. Interesting that Matthew used his actual name! Cry for help?

  9. some higher power high postion in play money makes money

  10. Thanks for follow up on the story about this scam.
    Just wanted to mention that it is incorrect to use Kiev. It is spelled as Kyiv.
    Thanks

    • It’s not incorrect. “Kiev” is how it is pronounced in Russian, “Kyiv” in Ukrainian. Both types of transliteration are acceptable

    • Wannabe tech guy

      It’s not incorrect.
      “Kiev is the traditional and historically most commonly used English name for the city”

    • Hi John,

      I dont know about the correct spelling of Kyiv, but according to Brian this Bernard guy made $30 million there in 3 years ! sounds to me that it should be spelt New York Kiev :-), 10 mill a year in a third world country, not bad.

  11. Pankov went to the barber and said “make me look like a criminal”

  12. Brian well I am sorry you don’t get paid for the amount of work that you do.

    I just don’t think you are accurate with figures. You didn’t answer my question, who in the world would pay 1 million backs for a due diligence?

    I start to doubt your intentions, sounds like you are turning into one of those journalists that would write any figures and stories for hype and catchy headlines.

    No facts, no names, no companies.. I mean, whatever.. but to actually call somebody A MURDERER is going a bit too far. Don’t you think?

    • Honestly, you got refuted pretty hard and now are avoiding replying to his refutation, so it’s obvious that you’re just trying to spam now and sow doubts in journalism that has demonstrated accuracy for many years now, even with confidential non-public information.

      You have no specific gripe except “I want your sources.”

      Tough. That’s not how journalism works 100% of the time for reasons that were explained to you above, which you’re avoiding.

    • Matthew, the $1 million payment was made by a company that was roped into helping to build some kind of data room in conjunction with Bernard’s phony tech company that never materialized.

      So I’ve answered your question. How about you answer mine: Please tell us about your relationship to Mr. Bernard. I understand the two of you met in person on number occasions in Ukraine.

    • Humour Anderson

      Oh, shut up, Mr. Bernard.

    • I’m guessing whoever wrote this comment is pretending to be the MatthewB that I thought was commenting, a name which corresponds to someone who did work with Mr. Bernard for quite some time (the email address left by the MatthewB commenter specified the person’s last name).

      “1 million backs”? Nobody who speaks English as their first language would make that spelling mistake. This is a Russian-speaker’s typo for “1 million bucks.” There is no “u” equivalent in Russian, so the transliteration of “миллион баксов” in Russian spells as “backs” in English.

      Fail.

  13. Brian,

    be more specific otherwise its just fake news. what company paid $1 million and to whom?

    What was the name of the phoney tech company that never materialised? What was the name? What wa sthe deal? When was this?

    In answer to your question, yes I met him 4 times in Geneva and once in Ukraine and I don’t have a relationship with Bernard anymore, I presented 14 investment opportunities to him and he funded 2 of them which I would be happy to name but would you be happy to name sources and people and companies that you say have been defrauded by him?

    How much are you getting paid for this? I have to say your credibility is starting to come in to question as Mealy says above your avoiding everything. Interesting!

    • I_think_u_goofed

      So wait… you forget to post under MatthewB or is there two different guys who met and worked with Bernard advocating for him? What is compelling you to do so?

      I’ve read Brian’s blogs for years and I’ve always seen him clearly mention his affiliation with advertisers and previous employers. As well I don’t think I’ve ever seen him name a source without reason and/or permission. I have no reason to doubt his integrity as a reporter.

      You, Andrew and MatthewB, on the other hand, seem to be advocating for someone who is heavily implicated in scamming these companies seeking investments (he owned the due diligence firm, Inside Knowledge, I mean come on…). You should reconsider your approach and think about how this reflects upon you, and if you care so much, Mr. Bernard.

    • Andrew/MatthewB I think you might have misread Mealy’s comment; it seems to have been directed at you.

      So you met Bernard five times. And you still don’t believe Bernard=Davies, is that correct?

    • Andrew is MatthewB is John Bernard is John Clitton Davies

      BruHaHaHaHaHa what a fool this Andrew/MatthewB or whatever he wants to call himself. this fool cannot help but want to read news about himself and cannot help but want to engage. HaHa his rap sheet is filling up with his aliases.

    • Andrew – You’re very keen on defending this person. Either you’ve got another deal with him in the pipeline and this is putting that into jeopardy or you’re the man himself. I’m leaning towards the latter NardDog. Put your money where your mouth is and name those two companies you’re “happy” to name.

  14. Oh, shut up, Bernard!

  15. Lol These comments are just as riveting as the articles themselves. Can’t wait to see the next chapter of JB/Andrew/MatthewB saga. Keep up the good work Brian!

  16. Fabulous article and interesting comments. It appears that Mr. Krebs has indeed ruffled a few feathers in a hornet’s nest. I love it. This is worth a million “backs.”

  17. “continue to hold onto hope that Mr. Bernard is not the crook that he plainly is.”

    That statement above is the primary reason, IMHO, why crooks like Bernard continue to ply their trade. As one of the characters in “Mr. Robot” said: “There can’t be a con with the confidence…”

  18. I am a NYC-based FINRA Registered banker that was duped and defrauded by this scam. We hired Inside Knowledge and a professionally written report was prepared, after paying a$28,500 fee. An offer was made, then responses stopped.