Posts Tagged ‘sunday times’
London ‘rolls out the red carpet’ for money launderers
THE head of a hedge fund that was the victim of a £144m fraud in Russia has complained that Britain has “rolled out the red carpet” for money launderers.
Bill Browder, founder and chief executive officer of Hermitage Capital Management, said British authorities had failed to investigate the fraud against his firm despite evidence showing the involvement of UK companies.
In 2007, Hermitage’s offices in Moscow were raided by police who seized corporate records, company seals and tax certificates.
The documents were used by a criminal gang to fraudulently claim a tax refund from the Russian government.
A lawyer who tried to expose the crime, Sergei Magnitsky, was arrested and died in custody in 2009.
Browder and his team have since traced some of the stolen funds around the world. Investigations have begun in Switzerland, Latvia, Lithuania, Estonia, Moldova and Cyprus. In America, a law, the Magnitsky Act, was passed to deny visas to and freeze assets of those implicated in his death.
Yet Browder, whose firm is based in London, says the UK authorities have taken no action despite the involvement of British companies receiving funds or acting as agents for those involved in the crime.
In a letter to HM Revenue & Customs (HMRC) last month, lawyers acting for Hermitage said a company services firm, GSL Law & Consulting, with offices in London, had acted as an agent for some of the companies involved in the fraud. The letter said GSL’s role meant it should not meet HMRC’s “fit and proper” test for companies providing offshore company services.
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Fraud trail leads to OAP’s tiny flat
A hard-drinking pensioner in Latvia has been revealed as the frontman for a network of scandal-hit companies.
In a bustling cobbled street in central Riga, an alleyway leads to a modest red-brick and wooden apartment block. It is the last known address of an apparent business colossus — Erik Vanagels.
Friends and relatives of the former factory worker claim he has poor sight, is a capacious drinker and disappears for weeks on end.
A leak of offshore documents to the International Consortium of Investigative Journalists (ICIJ) reveals a rather different figure: an apparent tycoon with interests in banking, investment funds, pharmaceuticals and shipping. He is a director or an owner of several hundred companies around the world.
On paper Vanagels is probably a billionaire. In reality the 73-year-old is a corporate cipher used as a veil to conceal the real beneficiaries of companies.
Among the world of investigators and lawyers who unravel complex frauds, Vanagels is an almost mythical figure. His companies have been involved in a series of financial scandals and alleged frauds. These include:
■ The Hermitage Capital fund money laundering scandal in which $230m (£146m) was allegedly looted between December 2007 and February 2008 in a fraud involving the fund’s Russian operations.
■ Technomark Business, a London company, is alleged to have received $43m of stolen Hermitage funds that were wired to a Latvian bank account. Vanagels was a director of Technomark’s parent company.
■ Mukhtar Ablyazov, who has been sued by BTA Bank, for which he worked, for misappropriating billions of dollars using various companies including British-based Loginex Projects. Vanagels was a shareholder and director of the companies that controlled Loginex.
■ A Ponzi scheme that operated in America in 2009 — the Rockford Group — routed more than $500,000 illicit funds to a British company, Intercity Transit, according to court filings by the US Securities and Exchange Commission.
A Cypriot company in which Vanagels was a director was used as a UK corporate director of Intercity Transit.
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Russian mob money ‘bolsters Cyprus’
YOU can buy a mink coat or rent a Ferrari at the click of a finger. Many of the street signs are in Russian and so are some of the radio stations. Welcome to “Limassolgrad”, as the locals have taken to calling their town on the Mediterranean island of Cyprus.
It may be the southernmost town in the EU, but Limassol’s popularity among Russians puts it high on the agenda for finance ministers meeting in Brussels tomorrow to work out how to prop up Cyprus’s rickety banking system with the latest eurozone bailout.
With only 1m inhabitants, tiny Cyprus poses a giant dilemma for the overlords of the EU: Russian mobsters are believed to have deposited so much money in its banks that suspected money launderers might become big beneficiaries of the bailout.
Yet asking depositors to carry some of the burden, an idea being promoted by the Germans and Finns, could trigger a run on the banks and rekindle the sovereign debt crisis by undermining trust in the euro.
Underwriting a suspected money-laundering hub could prove just as disastrous for Angela Merkel, the German chancellor. The last thing she needs is accusations of rescuing the Russian mob as she prepares her campaign for re-election later this year.
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Putin hounds Russian whistleblower in his grave
THE mother of Sergei Magnitsky, a Russian anti-corruption lawyer who died in custody after accusing officials of embezzling £140m, has condemned a decision to put her late son on trial as illegal and morally reprehensible.
In Russia’s first posthumous prosecution of its kind, a court is to try Magnitsky on tax evasion charges more than three years after he died in a Moscow prison, where he was beaten and denied medical help.
“Maybe they’re planning on bringing the sentence to my son’s grave. There’s no limit to these people’s cynicism,” said Natalia Magnitskaya. “To put a dead man on trial is not only shocking beyond words; it’s also a travesty of justice. These people have no conscience. I’ll be boycotting this trial and urge all Russian lawyers to do the same. It’s perverse.”
Magnitsky died in prison in November 2009 while awaiting trial on tax evasion charges. His family and friends say the charges are trumped up and were brought as revenge after he reported a gang of corrupt officials and criminals to the police. The case was closed when he died.
Under Russian law, proceedings against a deceased person can be resumed only at the request of the defendant’s family to clear their name. But Magnitsky’s family strongly opposed reopening the case in protest at Russia’s notoriously biased and politicised judicial system.
“After Sergei’s death the case was reopened and sent to trial, not at our request but by prosecutors,” said Magnitskaya, 61, who has ignored several court summonses. “It’s blatantly illegal.
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MI5 alert over death of Russian supergrass exile
MI5 is monitoring the mysterious death of a Russian supergrass after a second post-mortem examination on his body failed to rule out murder.
Alexander Perepilichnyy, a wealthy businessman who sought sanctuary in Britain three years ago after falling out with a crime syndicate and testifying against it, was found dead outside his luxury home on a private estate in Surrey.
Ministers are awaiting the results of further toxicology tests on the body for radioactive poisons including polonium 210. The same poison was used to murder Alexander Litvinenko, the former KGB spy who died in London six years ago.
Perepilichnyy, who was 44 and apparently in good health, was co-operating with the Swiss authorities, who have been investigating allegations of money-laundering and a network of corrupt Russian officials.
The network is said to be led by Dmitry Klyuev, a convicted Russian criminal, who has been named by American and British politicians as the head of the so-called Klyuev crime group.
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Police raid on Moscow love nest splits Putin’s inner circle
A dawn police raid at the luxury Moscow flat of the blonde director of a defence procurement agency at first seemed merely the latest in a long line of corruption scandals to hit the Russian government.
But when news broke that a bleary-eyed Anatoly Serdyukov, the defence minister, had opened the young woman’s front door when police came knocking, it became clear that this was altogether bigger news.
The titillating detail seemed to break the Russian media’s traditional refusal to delve into the private lives of politicians.
It appears that the scandal became public because Serdyukov, 50, is married to Yulia, the daughter of Viktor Zubkov, 71, a deputy prime minister, a close ally of President Vladimir Putin and one of the most powerful men in Russia.
Serdyukov, who is reported to owe his meteoric rise from furniture salesman to minister to the influence of his father-in-law, incurred Zubkov’s wrath by allegedly having an affair with Yevgenia Vasilyeva — the official whose flat was raided — and in the process humiliating his daughter.
The case is mushrooming into an embarrassing scandal that may lift the veil on corruption, nepotism, selective justice and bitter Kremlin infighting under Putin’s rule.
Prosecutors searched Vasilyeva’s flat for several hours as part of a £60m fraud investigation into Oboronservis, a state-owned company that manages supplies to the armed forces. Vasilyeva, 33, who was until recently the head of the defence ministry’s vast property portfolio, is one of the company’s directors.
Officers from the prosecutor’s investigative committee said they had seized documents at her flat and confiscated more than £60,000 in cash plus antiques, paintings and hundreds of items of jewellery, including many diamonds. They also searched Oboronservis’s offices and have charged five people who, they allege, skimmed off large personal profits by using the company to sell state assets at far below their market value.
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May bans 60 Russians over corruption scandal
Downing Street is facing a diplomatic row with the Kremlin after blacklisting 60 Russian intelligence officers and top officials linked to a corruption scandal. The home secretary, Theresa May, has sent the British embassy in Moscow names of the officials, including judges, intelligence officers and prosecutors, implicated in the torture and death of a young lawyer.
Sergei Magnitsky, 37, was beaten and died in a Moscow jail in 2009 after uncovering a corruption scheme involving tax officials and police.
The ban on officials entering Britain will anger the Kremlin when relations were starting to thaw. Ties have been strained since the radioactive poisoning of the former KGB spy Alexander Litvinenko in London six years ago.
This weekend, Sergei Markov, a former adviser to President Vladimir Putin, threatened reprisals. “Russia will never recognise such a situation and will reply. That means that those officials who took part in making the decision to restrict the rights of officials to travel will have their own rights restricted,” he said.
A similar move by the United States last year provoked tit-for-tat retaliation by the Kremlin which banned some American officials from visiting the country.
Details of the blacklist have been disclosed by the immigration minister, Damian Green, in a letter to a Tory MP. Green said a list of 60 officials, including prosecutors, judges, tax inspectors, police and prison chiefs, compiled by an American congressional committee, had been sent to the British embassy in Moscow. “[It] will be considered if an entry clearance application is received from any of the named individuals,” Green wrote.
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My whistleblower son is dead – now they’re after me
The mother of a Russian anti-corruption lawyer, who died in custody after being jailed on trumped-up charges, has spoken of her “utter disbelief” that prosecutors have reopened a criminal inquiry into her son.
Natalia Magnitskaya, whose son Sergei Magnitsky died nearly two years ago after a savage beating by prison guards, described as “perverse” an attempt to question her as part of the investigation.
“This is a clear attempt to put pressure on me and Sergei’s family,” said Magnitskaya, 60, who is frail and suffers from high blood pressure.
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Briton uses YouTube to accuse Russian tax official of £25m fraud
The Sunday Times
A leading British investor has accused a Russian official and her husband of embezzling more than £25m (€29m) through their part in a scam that led to the theft of three of his companies and the largest tax fraud in Russia’s history.
William Browder, a British citizen born in America who has been barred from Russia since 2005, has gathered evidence that, he claims, shows a senior Moscow tax official and her husband went on a multimillion-pound spending spree, despite earning a combined annual salary of only £25,000.
It happened after interior ministry officials allegedly stole three companies from Hermitage Capital, Browder’s London-based investment fund, and used them to apply for a fraudulent £140m tax rebate, which was paid in a single day.
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