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.lawandorderinrussia.org

www.facebook.com/russianuntouchables

Twit­ter: @Billbrowder

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