What is a 'Prête-nom' / 'Un homme de paille'/ Straw buyer In Horse Racing Mauritius and its relation with Money laundering and Fiscal Fraud/Tax Evasion ? Cross-agency collaboration between GRA, FIU, MRA, and FCC is Required.

In the context of horse racing in Mauritius, the term "prête-nom" (French word) refers to a person who legally holds ownership or registration of a racehorse or racing license on behalf of another person, who is the actual beneficiary but prefers to remain anonymous. In horse racing, a "prête-nom" is a person who allows their name to be used as the official owner or license holder of a racehorse, while the real owner remains hidden. This can be done for various reasons, including tax evasion, avoiding racing bans, or laundering illicit money.

🏇 Definition of "Prête-nom" in Horse Racing:

  • A "prête-nom" is a front person who appears on official records as the owner or trainer of a horse, while the real investor or operator remains hidden.

  • This is often used to circumvent regulations, such as rules about:

    • Number of horses one can own

    • Conflict of interest (e.g., owning horses in multiple stables)

    • Past criminal record or disqualification from racing

    • Undeclared sources of income

Jean‑François Gayraud (in La Grande Fraude)

Defines prête‑nom in French law as when “une personne promet d’agir pour le compte d’une autre” while appearing to act in her own name 
In horse racing, this aligns with a registered owner who is actually an agent for another person—i.e. a nominee owner. 

Source : Jean-François Gayraud, La Grande Fraude: Crime, subprimes et crises financières, Odile Jacob; Avril 2011, p. 46

Droit français appliqué aux sport hippiques (legal commentary)

Describes prête‑nom as a form of “dissimulation totale de la qualité d’intermédiaire” (complete concealment of the intermediary’s quality)
Applied to racing, it refers to hiding the true beneficial owner of the racehorse.

Un homme de paille ou prête-nom désigne une personne qui couvre de son nom les actes ou les écrits de quelqu'un d'autre. La personne ainsi protégée peut agir de manière anonyme à travers la couverture que lui procure l'homme de paille.

Le blanchiment d’argent fait partie des autres délits qui peuvent être commis par un homme de paille en considération de la section 3(1) et (2) du FIAMLA, 2002. Si le prête-nom s'engage dans une transaction illicite, reçoit, dissimule ou possède de l’argent de façon illégale dans le but de faciliter le délit de blanchiment d'argent ou le financement du terrorisme, il commet une infraction. Il y a aussi l’escroquerie, en vertu de la section 330(1) du Code pénal.



Source : https://defimedia.info/prete-nom-tout-savoir-sur-cette-pratique-legale-detournee


1. Jean Carbonnier (1996)

“Le prête-nom est celui qui prête son nom à un tiers pour masquer l’identité du véritable acteur juridique, sans intention de transférer un droit réel ou personnel.”
Carbonnier emphasizes the concealed nature of the relationship, which exists to shield the real party's identity.
Reference: Carbonnier, J. (1996). Droit civil, Les biens: Les obligations. Presses Universitaires de France.

2. Gérard Cornu (2005)

“Le contrat de prête-nom est une convention par laquelle une personne agit en son nom pour le compte d’autrui, qui demeure caché.”
Cornu underlines the contractual nature of the arrangement and the secrecy surrounding the real party.
Reference: Cornu, G. (2005). Vocabulaire juridique (11e éd.). PUF.

3. Philippe Malaurie & Laurent Aynès (2016)

“Le prête-nom implique une dissociation entre l'apparence juridique et la réalité économique.”
These authors stress that the prête-nom relationship separates the visible legal status from actual ownership.
Reference: Malaurie, P., & Aynès, L. (2016). Droit des obligations. Defrénois.

4. René Demogue (1923)

“Le prête-nom n’a qu’un rôle d’écran : il donne une existence juridique à une action réalisée pour le compte d’un autre.”
Demogue presents the prête-nom as a "screen" or legal façade for the actual actor.
Reference: Demogue, R. (1923). Traité des obligations en général. Rousseau.

5. Marcel Planiol & Georges Ripert (1932)

“Dans un contrat de prête-nom, la volonté réelle est masquée; le véritable rapport juridique existe entre le tiers et le donneur d'ordre.”
Here, the concept of hidden intent is central, with legal relations existing behind the name used.
Reference: Planiol, M., & Ripert, G. (1932). Traité pratique de droit civil français. LGDJ.

6. Frédéric Zenati-Castaing & Thierry Revet (2012)

“Le prête-nom est un acte juridique simulé, distinct de la simulation totale, en ce qu’un effet juridique est recherché entre les parties.”
The authors distinguish prête-nom from pure simulation by noting its intended legal effects.
Reference: Zenati-Castaing, F., & Revet, T. (2012). Les obligations. PUF.

7. Lucien Capitant (1930)

“Le prête-nom est une modalité de représentation occulte, sans mandat apparent, créant des effets entre le représenté et le tiers.”
Capitant focuses on its status as a form of hidden representation.
Reference: Capitant, L. (1930). Introduction à l’étude du droit privé. Dalloz.

8. Philippe Delebecque (2000)

“Le contrat de prête-nom permet de contourner certaines règles légales ou fiscales, mais il est licite s’il ne vise pas la fraude.”
Delebecque introduces the concept's use in legal or fiscal planning, within legal limits.
Reference: Delebecque, P. (2000). Contrats spéciaux. Dalloz.

9. Bertrand Fages (2018)

“L’usage d’un prête-nom repose sur une convention de gestion dissimulée, sans transfert de jouissance ou de propriété.”
Fages clarifies that no real transfer of property occurs between prête-nom and principal.
Reference: Fages, B. (2018). Droit des obligations (10e éd.). LGDJ.

10. Aubry & Rau (1877, modern editions by P. Esmein)

“La convention de prête-nom est une fiction juridique admise sous réserve du respect de l’ordre public.”
This classical duo stresses its legitimacy, conditional on public policy compliance.
Reference: Aubry, C., & Rau, C. (1877). Cours de droit civil français (rev. by Esmein, P.). Sirey.

 

Across these authors, the core features of prête-nom include:

  • An agreement in which one person appears as the actor in legal or commercial transactions;

  • Concealment of the true beneficiary;

  • No transfer of actual ownership or control in many cases;

  • Potential for legitimate use (e.g., privacy or commercial flexibility), but also risk of fraud or illegality if misused.

Straw buyers—also termed nominee or front buyers—are individuals who execute transactions on behalf of others to conceal the true party behind a purchase. In the dual context of horse‑racing and financial crime, their role can be summarized as follows:

  1. Concealment of intent: the true investor or bettor remains anonymous, while the straw buyer appears on official documents or betting accounts.

  2. Inflated valuations or payouts: they may help perpetrate over‑valuation scams (buying non‑performing horses at inflated prices) or funneling insurance or betting payouts.

  3. Facilitation of laundering: illicit funds from race‑fixing or insurance claims can be moved through straw‑buyer transactions to obscure origin.

  4. Financial institution exposure: when loans or credit are used—such as for horse syndicate financing—straw buyers expose lenders to default and fraud risk.

💰 Connection to Money Laundering and Fiscal Fraud:

The use of "prête-nom" arrangements in the horse racing industry can be exploited for illicit financial practices, including:

1. Money Laundering

Horse racing is a cash-heavy and high-stakes industry, which makes it attractive for laundering illicit funds.

  • How it works:

    • A criminal uses a prête-nom to invest illicit money into horse ownership (e.g., buying, training, or racing horses).

    • Winnings, sales, or sponsorships are then presented as legitimate income.

    • This "cleans" the money, disguising its illegal origin.

  • The prête-nom provides legal cover, distancing the real investor from scrutiny by authorities.

Jean-Michel Belorgey (1997)

  • “Le prête-nom dans le droit sportif”

  • Describes the use of prête-nom in various sports including horse racing, identifying it as a tactic to bypass rules or preserve anonymity.

Pierre Lascoumes & Laurent Gauthier (2004)

  • Fraudes et sociétés

  • Discusses prête-nom structures in the context of tax fraud and money laundering, with horse racing named as a vulnerable sector due to cash flows.

Francis Caballero (2001)

  • Droit pénal économique

  • States that the use of prête-noms is common in sectors with high financial speculation, including racing, to hide beneficial ownership.

Horseracing Regulatory Authority (UK)

  • In several disciplinary cases, they define prête-nom as a “false owner” and note it violates integrity rules, especially if the real owner is banned or unlicensed.

Dr. David Forrest (University of Liverpool)

  • "Integrity in Horse Racing: The Role of Regulation"

  • Explores how prête-noms are used to undermine regulatory frameworks in the UK and how stricter identification of true owners is needed

Australian Racing Board (AR Rules)

  • Clearly states that horses must not be registered under a prête-nom unless full beneficial ownership is disclosed. Non-compliance can lead to deregistration.

Julien Migaud (2012)

  • "Le prête-nom en droit civil et fiscal"

  • Though not racing-specific, Migaud explains the legal risks of prête-noms, including in high-stakes sports ownership, where undeclared interests can result in sanctions.

International Federation of Horseracing Authorities (IFHA)

  • Emphasizes that all ownership must be transparent and traceable, with rules against hidden or proxy owners, i.e., prête-noms, to prevent corruption.

Jean-Pierre Beaud & Jean-Guy Prévost (2005)

  • Les règles du jeu: Une introduction aux sciences sociales

  • Use horse racing as an example to show how regulatory loopholes like prête-noms can distort fair competition.

⚠️ Why It Matters

  • Fraud prevention: Prevents money laundering and tax evasion.

  • Integrity in betting: Ensures no hidden manipulation.

  • Accountability: The real owner can be held responsible for welfare and conduct.

Just imagine a CASE FIGURE/ Supposition  whereby A honourable Member is a HIDDEN OWNER of HORSES and at the same time dictating LAWS within the National Parliament ? this is the Danger of Prete Nom.

2. Fiscal Fraud / Tax Evasion

  • The real owner may avoid declaring profits or paying income tax, VAT, or capital gains.

  • By operating through a prête-nom, individuals can:

    • Underreport earnings

    • Evade tax liability

    • Conceal assets from financial regulators or tax authorities.

⚖️ Legal Status in Mauritius

In Mauritius, the practice of using prête-noms is not explicitly illegal, but it becomes criminal when:

  • It is used for fraudulent purposes

  • It obstructs regulatory oversight

  • It is linked to money laundering under the Financial Intelligence and Anti-Money Laundering Act (FIAMLA)

  • It facilitates tax evasion under the Income Tax Act

🕵️‍♀️ Investigations and Public Concerns

Several reports and investigations in Mauritius  have pointed to:

  • Use of prête-noms by drug traffickers and businessmen to hide illegal funds

  • Links between horse ownership, unexplained wealth, and criminal activity

  • Suspicious bets and winnings by owners with no visible income

✅ Possible Solutions

  • Stronger vetting of horse owners

  • Mandatory declaration of beneficial ownership

  • Real-time financial audits of winnings and ownership transfers

  • Cross-agency collaboration between GRA, FIU, MRA, and FCC