Bill Browder Testified to British Parliament about the Luxury Spending Spree by Klyuev Money Laundering Network in London
May 4, 2016
PRESS RELEASE
For Immediate distribution
Bill Browder Testified to British Parliament about the Luxury Spending Spree by Klyuev Money Laundering Network in London
4 May 2016 – Bill Browder, leader of the global “Justice for Sergei Magnitsky” campaign, revealed the results of a 6-year long investigation of the Klyuev money laundering network uncovered by Sergei Magnitsky. Magnitsky, Hermitage’s outside legal counsel, was killed in Russian police custody after giving testimony about Russian officials’ complicity in the US$230 million fraud – the largest known tax refund fraud in modern Russian history.
In the testimony given to the UK Parliament’s Home Affairs Committee, William Browder identified more than US$30 million in proceeds which came to the UK through the Klyuev money laundering network.
The head of the network, Dmitry Klyuev, was sentenced in Russia in 2006, and was sanctioned by the US Government in 2014 for his role in the Magnitsky case under the US law, “Sergei Magnitsky Rule of Law Accountability Act.”
Dmitry Klyuev was owner of ‘Universal Savings Bank,’ which received a portion of the stolen US$230 million directly from the Russian treasury. Some of these proceeds, through a series of shell companies, ended up in the Cyprus bank accounts of his two connected BVI companies, Altem Invest and Zibar Management, which then wired funds to the UK.
In addition, the Klyuev money laundering network used UKIO BANKAS (Lithuania) for extensive money laundering, accumulating and laundering proceeds from the US$230 million fraud and related criminal activity, and wiring them abroad, including to recipients in the UK.
US$30 million were spent in the UK to hire private jets, pay for exclusive interior design projects, pay tuition at an exclusive college, purchase a wedding dress and clothing from fashion boutiques, spend money through elite credit cards on a personal concierge service, and make payments to architects and property agents.
- US$295,622 was spent on Glamour Credit Card, promoted as “strictly by invitation only,” “catering to the wealthiest ladies worldwide,” offering “access to a privileged and luxurious service the likes of which have never before existed,” with “no spending limit.”
- Over US$175,000 was paid to hire private jets.
- US$240,000 was spent on a yacht.
- Nearly US$200,000 was paid to an exclusive home and yacht interior designer in Chelsea.
- US$259,532 was sent to a lady connected to an expensive property in Surrey.
- Over US$40,000 was paid to a couture wedding dress designer in London, Phillipa Lepley.
- About US$20,000 was spent on payment to a London fashion boutique “La Petite S.”
- US$100,000 went to an award-winning luxury architect and interior design company.
- £115,315 was wired to Harrods Estate, a luxury property agent.
- £2,500 was spent on Quintessentially, a premier personal concierge service.
- £19,500 was wired for property rental to a London real estate agent.
- £18,470 was spent on fashion items from a fashion label.
This is the first time that money from the crime uncovered by Sergei Magnitsky have been shown to reach recipients in the UK.
The Klyuev money laundering network used nearly every major UK bank.
Several UK citizens provided their services as directors for shell companies used in the Klyuev money laundering network. Some of the companies used in the Klyuev money laundering network were also registered in the UK, but held accounts with banks in the Baltics to conceal their illicit activity.
John Wortley Hunt was director of Altem Invest Ltd, owned by Dmitry Klyuev, which received proceeds from the US$230 million fraud and then sent funds to the UK. John Hunt was also listed as a director of 256 BVI companies, 364 UK companies, 29 Irish and 3 New Zealand companies, according to previous reports.
Andrew Moray Stuart was a director for a company owned by Vladlen Stepanov, the husband of Russian Tax Official Olga Stepanova, who approved a significant portion of the illegal US$230 million tax refund. Andrew Moray Stuart was also a director of Forres Limited, which received and sent funds stolen from the Russian treasury through a number of shell companies to the UK. According to previous reporting by investigative journalists, Andrew Moray Stuart was listed as nominal director of 214 BVI companies, 36 UK companies, 43 Irish and 4 New Zealand companies.
Damian Calderbank was director of Kareras Limited, registered in the UK, which siphoned stolen funds and routed them through a series of shell companies to the UK. He was registered as director of 708 companies, according to previous reports.
Past submissions to the UK law enforcement authorities from Hermitage on the activities of the Klyuev Organised Crime Group in the UK were met with reluctance to investigate.
This is in contrast to actions taken by authorities in other countries, where over US$40 million in funds connected to the crime exposed by Sergei Magnitsky have been frozen:
- The US court froze US$14 million in illicit funds, traced by the U.S. Department of Justice to Manhattan real estate and bank accounts of Denis Katsyv, the son of a senior Russian government official.
- The Swiss General Prosecutor froze about US$6 million in accounts belonging to the same Denis Katsyv and his companies and associates in Switzerland.
- In addition, the Swiss General Prosecutor froze over US$10 million in bank accounts of Vladlen Stepanov, the husband of a Russian tax official who approved part of the US$230 fraudulent tax refund.
- Last year, the French authorities froze millions of euros on accounts after launching an investigation into the US$230 million fraud uncovered by Sergei Magnitsky.
“We hope that with the new evidence of substantial spending in the UK, UK authorities will now take a robust approach to investigating and prosecuting those in the UK involved in the money laundering network uncovered by Sergei Magnitsky,” said a representative of the ‘Justice for Sergei Magnitsky’ campaign.
The UK Parliament’s Home Affairs Committee’s inquiry is currently looking at the effectiveness of measures introduced in the UK’s Proceeds of Crime Act 2002, in depriving criminals of any benefit from their crimes.
For more information, please contact:
Justice for Sergei Magnitsky
+44 207 440 1777
e-mail: info@lawandorderinrussia.org
www.facebook.com/russianuntouchables
Twitter: @Billbrowder
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