Who helps Russian oligarchs secretly buy jets, yachts and other luxury toys?

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Since Vladimir Putin came to power in 2000, his oligarch allies have found few barriers to luxury, snapping up yachts, jets, villas and other assets, with plenty of professional help along the way. .

Russia’s invasion of Ukraine changed all that.

Governments have sanctioned members of President Putin’s inner circle, alleging their wealth stems from insider trading for sovereign assets. Authorities seized docked yachts and aircraft in hangars.

But targeting landlords is one thing. Identifying the enablers – the elite professionals who help the oligarchs buy, conceal and maintain the assets – is another.

Leaked documents show that for every luxury toy they bought, Russians now under sanctions relied on the services of a small army of professionals in Europe, Asia and North America: lawyers to draft contracts , brokers to sell insurance, bankers to move the money, accountants, shipbuilders to hand over the keys, all without asking too many questions about where the money comes from.

Western facilitators say they broke no law by helping the oligarchs. Yet experts say they have a choice and every opportunity to identify their customer and refuse the business.

“Without Wall St, London, Zurich bankers, lawyers, real estate dealers, yacht brokers and other financial consultants, the oligarchs could not have secretly and safely moved vast funds to Western markets,” he said. said Frank Vogl, co-founder of Transparency International. told the ICIJ in an email. “Everyone in business has a choice – do the right thing, serve the basic public interest and act with integrity, or act behind the scenes to get more and more money.”

In 2011 billionaire Arkady Rotenberg, Putin’s judo partner, bought a jet.

He bought it through a secret shell company in the British Virgin Islands (BVI) set up by Appleby, the offshore law firm at the center of the ICIJ’s Paradise Papers investigation in 2017.

Arkady’s brother Boris also picked up a jet through a similar arrangement.

Bombardier in Canada sold the jet to Rotenberg’s offshore company. Ernst & Young, also known as EY, advised on taxes. Swiss lawyers, Meyer Avocats, offered legal advice and Avcon Jet in Austria handled the maintenance of the jet.

Avcon Jet and EY did not respond to our questions. Appleby had no comment during our first report on the jet.

Meyer Avocats in Switzerland sent us this response when we asked them what due diligence they had done before working for Rotenberg.

The Isle of Man branch of the Royal Bank of Scotland opened an account for Rotenberg’s company. The bank said it could not comment on customers.

Rotenberg used a tenancy agreement which helped him avoid Isle of Man tax.

Public records show Rotenberg’s front company owned the plane until 2016. Records show a church in Fort Worth, Texas purchased the plane in 2017.

Last month, the United States sanctioned Arkady and Boris Rotenberg, alleging they were among “Putin’s cronies”. The brothers denied having benefited financially from their friendship with the Russian president.

Many sanctioned Russian billionaires come from humble beginnings. One was selling used carpets and reselling theater tickets. Others, like Gennady Timchenko, reportedly studied espionage alongside Vladimir Putin decades ago at the KGB training school. All have since amassed tantalizing riches.

In 2009, Timchenko, a Russian gas and petrochemical billionaire, used a secret offshore company to buy the Lena yacht for over $18 million.

Timchenko’s wife, daughter and son-in-law Gleb Frank were all permitted to use the yacht, records show. All three were sanctioned last month by the US Treasury.

The United States sanctioned Timchenko in 2014 after Russia annexed Crimea.

Aleman, Cordero, Galindo & Lee, an offshore law firm operating in the BVI, helped Timchenko set up a shell company in the Caribbean.

Italian shipbuilder Sanlorenzo SPA built the 130ft yacht, signing a contract with the oligarch’s offshore company.

Sanlorenzo told the ICIJ that he applies strict due diligence and that the BVI company and its owner were not sanctioned at the time of the purchase.

Timchenko’s offshore company was represented by two law firms: the London-based Clyde & Co. and the Monegasque Moores Rowland.

Clyde & Co has told us that it meets its obligations. Moores Rowland has previously said he follows all laws and regulations and accepts customers after “rigorous” checks.

Timchenko also set up his offshore company with a bank account at BNP Paribas in Monaco.

Last month, the US Treasury Department sanctioned the yacht Lena, adding it to an official sanctions list.

Timchenko has denied that President Putin is linked to his businesses. He previously said he always acted legally. In March, the Italian government seized the Lena, one of at least nine luxury yachts seized worldwide since Russia invaded Ukraine on February 24.

“The enablers are not just those who deal with finance,” Vogl said, adding that others “have used their influence in exchange for handsome fees, to try to polish the reputation of the oligarchs who in many cases, have totally failed to disclose how they made their fortunes and how they continue to acquire massive wealth.

In 2011, the Moscow office of accounting firm EY helped now-sanctioned billionaire Alexander Ponomarenko set up an offshore company with business partner and former politician Alexander Skorobogatko to buy a $44.5 million Gulfstream jet.

Ponomarenko’s offshore company, Tarona Ltd., hired Appleby on the Isle of Man. The purchase of the jet was “funded by…corporate profits,” Appleby wrote.

The Moscow office of US law firm Latham & Watkins provided a personal reference for Ponomarenko.

Gulfstream Aerospace Corp., based in Savannah, Georgia, has signed a sales agreement with Tarona Ltd.

Isle of Man government agencies assisted Ponomarenko’s business, including providing registration certificates.

Adding to the secrecy, Ponomarenko’s company was owned by a trust and was on paper controlled from St. Kitts and Nevis, a tax haven. The families of Ponomarenko and Skorobogatko were beneficiaries of the trust.

BVI company, Tarona Ltd., opened an account with Barclays Bank in the Isle of Man.

A London-based company, United Insurance Brokers, insured Ponomarenko’s airline and jet.

In this case, records show that at least 10 Western enablers helped Ponomarenko acquire and profit from his luxury asset. None responded to ICIJ’s requests for comment.

Ponomarenko has previously dismissed reports of financial ties to President Putin.

The United Kingdom, Switzerland and Singapore are among the countries that have condemned Russia’s invasion of Ukraine and sanctioned state-owned companies, including Russia’s biggest gas company, Gazprom. For years, leaked documents show these same governments have harbored investments in Gazprom, shell companies and pit stops for suspicious transactions.

In 2010, Russian gas company Gazprom bought a 157-foot yacht, Alexandar V, for over $25 million.

The yacht, complete with a hot tub, was intended for guests and Gazprom staff, records show.

In 2016, Gazprom added “additional protection of vessel assets”. This complicated the ownership structure with three new front companies in infamous tax havens – Singapore, BVI and Liechtenstein.

The facilitators, including Asiaciti, knew Gazprom was under sanctions when it provided services for the yacht, records show.

Auditors for a shell company that owned the yacht were Robert Yam & Co. in Singapore, which signed a nondisclosure agreement on its work. A major law firm, KhattarWong LLP, advised the shell company. He told the ICIJ that his “professional obligations” prevented him from answering questions.

A Singaporean company behind the yacht, Winable Investments Pte Ltd. opened a bank account in Switzerland with CIM Bank.

In 2018, Asiaciti reported to Singaporean authorities that it was suspicious that the Gazprom company was paying bills that “did not appear commercially valid” to a shell company in Scotland.

The Scottish company, which shared an office with dozens of other companies, is opposite a pub in a small town 30 miles from Glasgow. The company had a bank account in Bulgaria.

Pandora Papers records show that Gazprom paid the company to install an elliptical trainer and a massage chair, among other things.

The yacht was last seen earlier this year docked in Italy.

The ICIJ asked Gazprom and its other facilitators for comment but received no response.

The leaked records show, however, that the Russian company’s facilitators had their own questions. “The additional information provided has not allayed…concerns,” AsiaCiti employees wrote in 2018.

“Reasonable suspicion maintained.”

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