Bermuda-based IPOC International Growth Fund Limited has paid KPMG Financial Advisory Services more than $8 million in fees as a result of a government-mandated investigation into its affairs.

Minister of Finance Paula Cox appointed KPMG to investigate IPOC after allegations surfaced that IPOC was involved in money laundering.

Under the Bermuda Company Act 1981, companies being investigated must pay for the costs of the investigation. Minister Cox expected the investigation to wrap up in February, but as of last night she still had not received KPMG?s report on its findings.

IPOC?s revelation on the fees came in a complaint it filed against Diligence LLC and Washington-based lobbyists Barbour Griffith and Rogers LLC last week.

Diligence is the same Washington-based intelligence firm that KPMG Bermuda took to court last year accusing it of obtaining confidential materials it gathered during its investigation of IPOC.

While KPMG and Diligence have just agreed to dismiss the action (See story on Page 27), IPOC appears to have taken up where KPMG left off.

KPMG and now IPOC accused Diligence of improperly obtaining information received or generated by KPMG in the investigation and providing the misappropriated business information to others.

In its complaint last week, IPOC accused Diligence of acting on behalf of BGR which was working on behalf of IPOC?s litigation adversaries Alfa Group and LV Finance.

IPOC has been engaged in a three-year-old legal battle with those companies over a 25.1 percent stake of Russia?s third largest mobile phone operator.

The IPOC complaint follows closely on the original compliant lodged by KPMG alleging that Diligence approached one of KPMG?s employees, apparently looking for damaging information on IPOC for use in upcoming litigation.

KPMG said in its complaint last year that it learned that information about its IPOC investigation had gone astray when a bundle of Diligence documents including internal e-mails and working papers was dumped at the offices of KPMG LLP in Montvale, New Jersey.

IPOC said in last week?s complaint that a portion of the unlawfully obtained materials appeared almost verbatim in submissions made by LV Finance to a Zurich arbitration tribunal. It also accuses Diligence or the other parties of leaking portions of the misappropriated draft report to the press.

The complaint goes onto allege that Diligence submitted invoices to BGR including an invoice ?for Bermuda report and German work ? A Telecom? and for ?June Consulting Alfa Telecom ? Subcontractor Fee?.

IPOC said the conduct including interference with the investigation and intimidation of KPMG employees was calculated to harm IPOC and advance rival litigation and commercial interests.

?IPOC suffered and continues to suffer harm as a result of the actions of Diligence and BGR including but not limited to acts constituting unfair competition,? the complaint said.

It added, without offering details, that Diligence and BGR received substantial sums of money in exchange for their efforts.

?The sums received by Diligence and BGR as a result of their wrongful conduct were earned at the expense and detriment of IPOC. It is unfair and inequitable for Diligence and BGR to retain the funds wrongfully earned at the expanse and to the detriment of IPOC,?

Diligence is a company comprised of former Central Intelligence Agency and British M15 operatives who specialise in obtaining non-public or hard-to-get information on corporations, said IPOC?s complaint noting that Diligence chairman Richard Burt also serves as a member of the Advisory Board of Alfa Capital ? which is part of the Alfa Group and which in turn owns LV Finance Group Ltd.

The co-founder of BGR, Ed Rogers also sits on the Advisory Board of Diligence and his company?s website lists Alfa Bank as a client, the complaint said.

IPOC is seeking injunctive relief and damages. It asked the court to prevent Diligence and BGR from further disclosing information from the KPMG probe.

It also wants disclosure regarding Diligence?s contacts with KPMG employees as well as the return of all documents and information obtained.

In addition to seeking compensatory damages, punitive damages, attorneys? fees and costs, it also wants Diligence and BGR to disgorge to IPOC ?all monies received in connection with any attempt to obtain information related to IPOC or the investigation and or to influence the investigation and Zurich arbitration?.