BBC Online :
Leaked documents seen by BBC News show how a sanctioned oligarch from Putin’s “inner circle” hid his wealth.
They reveal how a Swiss tattoo artist was falsely named as owner of a company that transferred over $300m (£230m) to firms linked to Suleiman Kerimov.
They also show how $700m of transactions – and the secret ownership of luxury properties – went undetected.
The investigation exposes failures of the banking system and the obstacles impeding Western sanctions.
Tom Keatinge, director of the Centre for Financial Crime and Security Studies at the defence think tank RUSI, said the oligarchs Western countries are trying to sanction have many of these shell companies.
“That just shows you how big a challenge we are going to have in genuinely enforcing the sanctions against oligarchs – beyond just seizing their yachts and houses in Belgravia.”
Suleiman Kerimov appeared in February with a dozen other billionaires alongside President Putin, as Russian tanks crossed into Ukraine.
He has been subject to US sanctions since 2018 “for being an official of the government of the Russian Federation” having served as a member of both the lower and upper houses of parliament.
He was sanctioned by the UK government on 15 March this year, as well as by the EU, which said he was “a member of the inner circle of oligarchs” close to Putin.
Mr Kerimov rose from humble origins as a Soviet era economist to become one of Russia’s richest and best-connected oligarchs.
He made his fortune buying up energy assets and major stakes in Russian banks after the fall of the Soviet Union. He reportedly made $21bn investing in the giant gas company Gazprom – and Sberbank, the biggest state bank.
In November 2006, he almost died from injuries sustained in an accident in southern France. He skidded off Nice’s Promenade des Anglais in a $650,000 Ferrari Enzo, which burst into flames. Mr Kerimov and his female passenger were pulled from
the wreckage. Our investigation of Mr Kerimov exposes the failure of the international banking system to identify who was behind hundreds of millions of dollars of transactions which banks identified as suspect.
Mr Kerimov is among more than 4,000 Russians whose names appear in data obtained by the ICIJ and examined as part of Pandora Papers Russia – a new investigation by ICIJ and global partners to shed light on covert financial transactions linked to the oligarchs and others close to the Kremlin in the wake of Russia’s invasion of Ukraine.
Corporate records show how fake owners were used to heighten secrecy and that banks did not know exactly who was behind big US dollar transactions.
That throws into doubt the ability of governments to identify and seize the assets of those they are targeting in the aftermath of the invasion.
“We are coming for your ill-begotten gains,” US President Joe Biden pledged in his annual State of the Union speech. The US has announced a major intergovernmental programme to identify oligarch assets. But that won’t be easy, as the Kerimov case highlights.
Experts say Western countries have a lot of work to do because, for years, they have taken a lax approach to the fight against dirty money and failed to hold banks to account.
“They are going to have to play a lot of catch-up if they want to follow through with this,” said Julia Friedlander, a former US Treasury Department sanctions adviser now with the Atlantic Council think tank.
These are the key new findings relating to Suleiman Kerimov.
A secret French court document – seen by the BBC – reveals how the oligarch is alleged to have hidden his wealth behind one of his closest associates.
Mr Kerimov was arrested in November 2017 in France on suspicion of laundering the proceeds of tax evasion. The case against him related to the purchase of a string of luxury properties in the French Riviera between 2006 and 2010.
It focused on Villa Hier in Cap d’Antibes, a luxurious property once used as a filming location for the 1988 film Dirty, Rotten Scoundrels.
It had been sold to a Swiss company called Swiru Holding AG in 2008 for €35m (£29.3m) – but investigators discovered hidden payments showing tax had been evaded on the real purchase price of €127m.
Alexander Studhalter, a Swiss accountant and businessman was also arrested. He claimed to be the owner of Swiru Holding and of four villas, but French investigators believed they were really owned by the Russian oligarch.
They believed Mr Studhalter was a false beneficial owner, or straw man, for Mr Kerimov – but criminal cases against both men were halted, with indictments against them being cancelled by a French appeal court.
In 2020, Swiru Holding accepted its involvement in evading the tax and was fined €1.4m and made to pay another €10.3m to settle the case.
Mr Kerimov’s lawyer put out a statement saying that the French courts had “officially dismissed the allegations made by the former Nice Prosecutor against Suleiman Kerimov of having carried out money-laundering operations.”
Mr Studhalter maintains he was “never the straw man for my Russian friend”.
But according to the leaked French court document, seen by the BBC, this is not true.
At a secret hearing in June 2018, judges laid out evidence collected by the investigating magistrate, which concluded: “the effective and exclusive beneficiary of the villas is Mr Kerimov and his family.”
The evidence included records from three banks – including documents apparently signed by Mr Studhalter, Mr Kerimov and his nephew Nariman Gadzhiev – stating that Mr Kerimov and his nephew were the true owners of Swiru Holding.
In response, the court recorded, Mr Studhalter claimed the “documents held by the bank and signed by Suleyman Kerimov or Nariman Gadzhiev… were forgeries”.
In response to questions from the BBC and ICIJ partners, Mr Studhalter claimed the same bank employee had forged documents at two banks, but said he didn’t know why.
Mr Studhalter also said: “I was the sole beneficial owner of Swiru Holding AG from its foundation until I sold the company in 2019, as confirmed by the Swiss Federal Tax Administration and a court in France.”
Mr Kerimov’s French lawyers said: “After several years of investigation, no charges were brought against our client.”
Mr Studhalter says the four villas in France have now been sold. Official records in France show the ultimate beneficial owner of the companies that own them is Mr Kerimov’s daughter.
France was not the only country where Mr Kerimov used Swiru Holding to conduct secret financial transactions.
Our investigation has discovered that – at the same time the Russian billionaire was buying up properties in the south of France – he was building another secret property empire in London.
One Cornwall Terrace is a luxury four-storey mansion at the end of a row of terraced houses overlooking Regent’s Park in London. The home is connected to half an acre of landscaped grounds, with a grand double staircase leading on to an imposing courtyard.
It hit the headlines in 2013 when its sale for a reported £80m made it one of the most expensive terraced properties ever sold in the UK.
