: Magnitsky Legacy: Stolen Russian money laundered through British banks

11:39 May. 4, 2016

Magnitsky Legacy: Stolen Russian money laundered through British banks

U.S-born businessman William Browder answers reporters during an interview with the Associated Press in Paris, March 3, 2015 (AP photo)

Head of Hermitage Capital tells British MPs how Russian embezzlers spend cash in the UK

British authorities are unwilling to investigate the alleged laundering of USD 30 million of ‘dirty Russian money' through UK companies and banks because they don't want to "rock the boat," the UK MPs were told on Tuesday.

The allegations were made during a session of the Home Affairs Select Committee by William Browder, the former Hermitage Capital Management founder and CEO.

Browder said the illicit cash was connected to a USD 230 million tax refund fraud on his Russian Hermitage Fund uncovered by his lawyer, Sergei Magnitsky.

Magnitsky died in a Russian prison cell in 2009 after having suffered severe beatings. The US and EU have sanctioned many of the officials involved.


 A portrait of lawyer Sergei Magnitsky who died in jail, is held by his mother Nataliya Magnitskaya, as she speaks during an interview with the AP in Moscow (Nov. 30, 2009, file photo)

Law enforcement agencies across the EU spent six years investigating what happened to the money. They traced a network of offshore companies connected to Dmitry Klyuev, a convicted Russian gangster. The money was laundered via a sprawling web of corporate accounts in Lithuania.

Some USD 30 million of the stolen money ended up in Britain, Hermitage's chief executive told the committee during a session on the proceeds of crime. The figure includes USD 2 million linked directly to Klyuev. The money was wired to the UK between 2008 and 2013. Twelve British banks were involved.

Read also Bill Browder: "There is no more interest in Russian investment opportunities"

He also described how an "orgy of spending" on luxury goods including properties, private jets, yachts and designer dresses had taken place using dirty money, mainly in exclusive areas of London such as Belgravia, Knightsbridge, Hampstead and Chelsea.

Browder told the committee that 11 other countries - including Switzerland, France and the US - had launched criminal investigations into the stolen funds, while the UK's National Crime Agency, the Metropolitan Police and the Serious Fraud Office declined to do so. 

Browder concluded with a warning that turning a blind eye can make laundered funds appear legitimate, as authorities in other countries would not think to question money which was flowing into their economy from the UK.

Reporting by The GuardianSky News

comments powered by Disqus


Crime18:01 Dec. 7, 2016
Militants' "gift" for the anniversary of Ukraine's Armed Forces
Crime17:09 Dec. 6, 2016
Fatal police shootout: everyone concerned have been interrogated
Crime16:41 Dec. 6, 2016
How Ukraine documented Putin's piracy in Black Sea (video)
Crime17:01 Dec. 4, 2016
Germany expects Russian cyber-attacks during elections
Crime13:34 Dec. 4, 2016
No further progress on forces' withdrawal registred in Donbas
Subscribe to receive regular email updates about Ukraine and Eastern Europe