Rakhat Aliyev’s exotic cash laundering trail: Caribbean dimensions revealed

Few might have heard of Nevis, a remote pinprick on the map in the middle of the Caribbean Sea. The man who has been busy making it more famous, or rather notorious, comes from another remote area, namely the equally little-known  immense territory of the post-Soviet republic of Kazakhstan. For according to German intelligence reports – though “confidential” – the tiny Caribbean island is the place where former Kazakh oligarch, banker, security chief, diplomat, failed putschist, accused murderer and “presidential prodigal son-in-law” Rakhat Aliyev has stacked in the order of at least a hundred million euro in stolen cash, after having it had whitewashed through enterprises in Austria, Germany and Switzerland through a long list of mailbox companies on the British Virgin Islands and Malta.


Rakhat Aliyev’s exotic cash laundering trail: Caribbean dimensions revealed“News that Aliyev is also the subject of interest of Germany’s Bundesnachrichtendienst emerged in parliamentary questions made to German Chancellor Angela Merkel by the German green MP Viola von Cramon,” Malta Today wrote on January 27. “No concrete information was supplied about Aliyev, because the information is confidential under state intelligence laws. Von Cramon was however granted access to view the documents on condition of confidentiality. The intelligence service falls directly under Merkel’s remit. In her answer, Merkel said the information on Aliyev had been part of a “successful” operation from the federal intelligence service and publication of this information would be deleterious to its source. However, the classified information could be viewed confidentially by the MP, at a non-disclosed location inside the German parliament.”

As we reported earlier, the case is not that secret and has a long history. It started as early as 2005 when a company called Armoreal Trading became the subject of a police investigation in Wiesbaden, which was reported to the local Interpol office for crossborder research. No reports of follow-ups on the initiative were to reach the public domain in years to follow. In spring 2007, however, three Austrian banks, Schoellerbank AG, Privatinvest Bank AG and M&A Privatbank AG, took the initiative to report “suspicious” transactions involving Aliyev’s companies to the Interior Ministry, upon which on the order of the State Prosecutor all his enterprises’ bank accounts were blocked.

As far as known at the current stage of investigations, between 2006 and 2009 in the order of at least a hundred million euro was pumped by Rakhat Aliyev into a network of investment targets in Austria, Switzerland and Germany. The input instruments were two firms based on the British Virgin Islands. According to Tagdyr, the pressure group of the two widows of the bankers murdered by Aliyev and associates in Almaty at the time and their lawyer, (www.tagdyr.net) the first one, A.V. Maximus SA’s BVI affiliate, received 24.8 million euro and 91.4 million US dollar from personal accounts of Aliyev while the second one, Agrocom, received 15.6 million euro. The money was subsequently transferred to A.V. Maximus’ parent company, which let it float into a range of companies in the form of in themselves legal investments. From there, the cash was wired back to the accounts A.V. Maximus (Austria) which posted it as return on investments which enabled it to wire it “legally” to A & P Power Ltd. on Malta which in turn transferred it to A & P Power Holding Ltd. on Nevis.

Nevis was first discovered by no one less than Christopher Columbus in 1493, but has been inhabited by Arawak “Indians” for more than two thousand years. Originally, Columbus dubbed it St. Martin, but not to spread confusion with the Franco-Dutch island of the same name it was later changed into Nuestra Se?ora de las Nieves (Our Lady of the Snows) – hence the current name. Spain claimed Nevis as its territory but never occupied it. In 1620, Britain assumed sovereignty over the island and the adjacent isle of St. Kitts. From there on, sugar plantations became the main economic activity, for the purpose of which slaves were brought in from Africa, whose descendants make up for the bulk of Nevis’ current population. The island was also a much-used stopover for Dutch and English ships carrying slaves to the Caribbean mainland. In 1967 Nevis, St. Kitts and Anguilla were united in an autonomous territory under Her Majesty’s sovereignty, which fell apart in 1971 when Anguilla seceded. In 1983, the two remaining islands gained full independence, though still under the British crown with a status similar to that of Australia and Canada.

With a surface of 93 square kilometre, Nevis has hardly more than 12,000 inhabitants. The volcanic island did not have telephone and electricity until 1967 and its integrated power network was only completed in 1971. Though some 40,000 tourists visit the island annually, the main activity consists of mailbox companies and banks. According to information gathered by the local representation of the European Commission, as of 1998 17,500 “international banking companies” were registered on the islands. In 2000, the Financial Action Task Force, which is part of the OECD’s think tank, added the Federation of St. Kitts and Nevis to its blacklist of states facilitating tax evasion and money laundering, but it was removed again in 2002 after no concrete cases had been demonstrated. Such a case may now well be at hand with the opening of the Rakhat Aliyev files.

Some of the names listed by Tagdyr have been known for some time while others pop up newly. They include IFF GmbH and VBM GmbH, through which a number of millions were pumped in the construction of a new media and communication centre downtown Vienna, known as St. Marx. The three companies have a single general director in the form of a Viennese businessman by the name of Christian Bodizs. The list also includes A.V. Maximus Schelling KG, led by a lawyer called Christian Leskoschek who is also at the helm of A.V. Maximus Holding AG, and an enterprise called Neotech GmbH (director unknown). Another firm on the list called ITS GmbH belongs to a certain Imashev, a Kazakh-looking name but with unknown details. A lot more is known about Elnara Shorazova and het father Muratkhan Shorazov (nicknamed Abuuly). Both have Austrian citizenship and Elnara, Aliyev’s former secretary, married him following his divorce from Kazakhstan’s President Nazarbayev’s daughter Dariga. Abuuly is director of a firm called ITR GmbH, while his daughter heads Armoreal T. GmbH, a second firm called Speedy Funk GmbH and used to lead a holding called START GmbH. As for ITR, it is supposed to have been the link with Metallwerke Bender Rheinland, the “German Connection” within Aliyev’s network as the director of which Abuuly also pops up.

Curiously, a tip of the veil was initially lifted by the culprit himself in a moment of discretion when he fell at odds with his Maltese lawyer and alleged accomplice. In a report published on January 29, Tengrinews (http://en.tengrinews.kz/crime/German-intelligence-service-interested-in-Rakhat-Aliyev-16408/) wrote that Aliyev had “… had a conflict with the registered director of Fort Cambridge Pio Valletta. Aliyev accused him of demanding 1.5 million Euro for assistance to procure the residence status for Aliyev. Earlier Valletta helped Aliyev’s wife transfer 2.4 million Euro from an Austrian company to the accounts of A & P Power Maltese company and another company registered in the Caribbean.” This leads to the Caribbean, not just to the British Virgin Islands from where the money has been funneled into Europe, but also to Nevis. The company in question was A & P Power Holding Ltd., judging by the name the parent company of its namesake on Malta.

Aliyev’s Maximus Holding had been founded on August 3, 2004 under the name Schwarcz & Co, with the address Schellinggasse 7, Vienna. On March 21, 2007, the name was changed into A.V. Maximus Holding AG – soon after which it started moving frequently from one address downtown the capital to the other. Its main activity was posted as “real estate property and management”. But there was more to it, for the enterprise controlled several other companies including a movie and television programme production firm called Speedy-Funk, a company called Armoreal Trading GmbH, an asset management firm called ASTA GmbH, and a non-profit foundation called Global Sugar Privatstiftung, according to an Austrian directory called BusinessABC. Through Armoreal, Aliyev controlled Germany’s Metallwerke Bender. Maximus also had a Swiss branch under the same name located in Geneva, and another offshore firm under its name on the British Virgin Islands.

One more enterprise within A.V. Maximus’ conglomerate, and included in Tagdyr’s list, was Vienna-based START Managementconsulting GmbH, the name of which popped up years later, after in the middle of May 2010 the Football Federation of Kazakhstan had filed a case against it at the Chief Prosecutor of Austria’s office. Aliyev, who was the FFK’s chairman in his glorious days, had put all financial interests of the Federation, including incoming money from sponsors and payments for foreign players and trainers, under the management of START, according to the plaintiffs. They were to claim later that between March 2006 and January 2007 alone, in the order a million euro in sponsor money had been paid to START that never reappeared in the accounts. All the same, in early 2007 the contract between the Federation and START was renewed, along with two transfers, one of 32,000 euro and another one of 371,000 euro, to the account of the Austrian enterprise. On Novmber 18, 2009, START was liquidated.

Chairman of the board of A.V. Maximus was Christian Leskoschek, about whom little else ever became known. A lot more, however, was to become known of the holding’s president of the board administrators – for Adolf Wala was no one less than the former director-general of the National Bank of Austria, a post he had held between 1988 and 1998, after which he became its president until he retired in 2003. Retired? Two most revealing articles in Austria’s leading daily Der Standard dated July 26 and July 31 2009 were to tell a most fascinating story. Not only did Wala hold the post of managing director of ASTA, in which he owned 90 per cent with the remaining 10 per cent in the hands of Aliyev’s A.V. Maximus. He also remained in control of OeNB Immo-Gesellschaft which he had founded back in time. In 2007, he helped A.V. Maximus to establish a new real estate company under the name Howa Projektentwicklung GmbH, under nominal director of a lawyer named Peter Jandl. Even long before Schwartz & Co changed its name and started to move to new premises time and again, trouble rose as well, BusinessABC was to report.

As things stand today, it remains unclear which of the mentioned enterprises and mailbox firms still exist and which ones have made place for new ones. The disclosure of the link through Malta, where Aliyev and his ne spouse are residents though it remains also unclear whether they are still there, may well have prompted them to change havens once more – even though action taken by the Maltese authorities remains all the more ambiguous for it. “Prime Minister Lawrence Gonzi has told green party spokesperson on EU and international affairs Arnold Cassola that he was inviting anybody with proof of illegal behavior concerning former Kazakh diplomat Rakhat Aliyev, to present it to police investigators,” Malta Today wrote in an earlier report published on January 14 this year. “In a letter to Gonzi, Cassola asked Gonzi as minister for home affairs about what measures were being taken on allegations against Aliyev, the former son-in-law of Kazakh president Nursultan Nazarbayev, on accusations of crimes against humanity. […] Cassola told Gonzi in his letter that Aliyev was alleged by his accusers of using Malta as a base for money laundering. In his reply, Gonzi told Cassola that Aliyev was married to an EU citizen and enjoyed free movement across EU member states. He also added that, after consulting with the Attorney General, that Malta did not have any jurisdiction to investigate the allegations of torture and crimes against humanity Aliyev is accused of. ‘This position is currently being challenged in a court of magistrates,’ Gonzi said, referring to an action brought by Kazhageldin in the Maltese courts. Gonzi also told Cassola that all allegations of money-laundering against Aliyev should be taken to the police for investigation. Malta’s financial intelligence analysis unit, which is presided by the Attorney General, has already received information on money-laundering from Austrian lawyers representing the widows of the murdered Nurbank bankers.”