The Process Stared

By Alina Kantor

In Europe proceed trials on the case of the escaped Kazakhstani banker Mukhtar Ablyazov. Now Irish authorities have joined the process of clearing the international fraud scheme.


Recently, it has become known that Irish authorities are investigating the activity of the number of companies, founded for illegal withdrawal of assets of the CIS former biggest Kazakhstani bank BTA to offshores.


Fighting against terrorism and international financial crisis has become a turning point in the scheme of finances movement regulation. The key moment was the taboo on the main rule of the offshore – secrecy of the information of financial operations. “Tax heaven” has closed down in a number of states. One of the lasts ones - Cyprus.


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The attempt to control the movement of finances in order to legalize financial schemes damaged even the most stable (considering secrecy maintenance) state - Switzerland. For foreign citizens no bank secrecy no longer exists in Switzerland. There the law on “International assistance in tax issues” has come in force. Since February law-enforcement agencies of all states of the world are able to get information about the activities of their compatriots in Swiss banks. The reason to reveal the bank secrecy may be suspicions in violation of the tax law.


Such decisions on “legalization” of illegally withdrawn funds from various countries are very important. As often the authors of these schemes are sentenced (and if lucky, do their terms of imprisonment), but compensations, and particularly return of stolen funds is out of the issue. At the opened bank accounts of such frauds there are no funds as a rule. And legal assets evidently do not reach the stole amounts.


In the beginning of April the ”Washington Post” published the investigation of the International Consortium of Investigative Journalists, ICIJ. According to it, at British Virgin Islands, Cook Islands and on other offshores there are opened accounts of more than 120 companies, and the representatives of more than 170 countries and territories keep their funds there. The total amount of accumulated in offshores illegal finances exceeds 32 trillion USD.


Offshore bank accounts have been “irreplaceable loophole” for complicated criminal financial schemes. In particular, for example the founders of financial pyramids a financiers Allen Stanford and a former Chairman of the Board of Directors of the Stock Exchange “NASDAQ” Bernard Madoff hid their billion “profits” in offshores. 


Among the “offshore” heroes there is also an escaped Kazakhstani oligarch, a former Chairman of the Board of Directors of BTA-Bank Mukhtar Ablyazov. According to theInternational Consortium of Investigative Journalists, in 2006 and 2007 Ablyazov created 31 offshore companies in British Virgin Islands. Yet the amount at the accounts of these companies is not reported. But, most likely, the case is about several billion USD. As known, Ablyazov is blamed for that through offshore companies he had withdrawn about 6 billion USD out of the country (according to independent experts – about 10 billion USD). 


In his motherland Ablyazov has been already sentenced to a long term of prison for financial fraud. After several years of trials the High Court of London satisfied several suits of BTA-bank towards former managers of the bank. According to the sentence, 2.1 billion USD and interests shall be recovered from Ablyazov. (The bank is in the process of obtaining of court decision for 1.5 billion USD more). About 400 million USD are subjected to be recovered from a former CEO Roman Solodchenko. From a former Vice-Chairman of the board of Directors of the bank Zhaksylyk Zharimbetov – 1.5 billion USD with interests. 


Now there is only the issue where to search these funds, withdrawn from the country. 


Cyprus company “Usarel Investments Limited”, which indirectly owns the asset – port of Vitino in the White See in Russia, was obliged by the court to give the BTA the shares of the company, which possess and manage the port, as well as to pay the compensation, if the cost of these shares do not exceed 120 million USD plus interests. A former manager of the representative office of the bank in Moscow Ildar Hazhaev was obliged by the court to pay BTA the compensation in case, if the cost of above specified shares of Vitino port does not exceed 120 million USD plus interests.


There is one more asset – not finalized Trade-Entertaining Center at Paveletskaya Square in Moscow “Matreshka Moll”. Today 100% of OAO “Paveletskaya” (official owner of the project) is controlled by Cyprian “Simplecity Holdings” Ltd. The company is included into the list of companies controlled by Ablyazov. In the end of February Moscow authorities declared, that they intend to withdraw the delayed construction (the project was frozen in 2009), “compensating to the investors the expenses of the project”. Totally to the date the investor has invested into the project, according to expert estimations, about 80 mln USD from 370 planned. 


Although, it is quite possible, that soon the list of people, from who laundered millions are recovered, shall be added by several more names. The authorities of Ireland investigate the cases against the activity of the citizen of their country Philip Burwell and the citizens of Latvia Stan Gorin, Erik Vanagels and Juri Vitman. They are suspected in the establishment of the offshore network, through which BTA bank funds were withdrawn. By this not only from Kazakhstan, but from Ukraine, Latvia and Kazakhstan. In particular, it is known that Milltown Corporate Services headed by Gorin and Vanagels helped to found Loginex Projects LLP to transfer the funds abroad from BTA bank. 


Anyway, as the world practice show the main thing in the process of clearance of financial frauds is not the investigation of fraud scenarios, but revelation of hidden money, accounts and property, purchased with these funds. But the most important thing is that the process has been already started. And judging by the spirit of British jurisprudence, it shall be finished.