Rakhat Aliyev’s accumulating affairs: trails of blood, trails of cash revisited

Does crime pay? Certainly not for all – but almost definitely for the likes of Viktor Khrapunov, Mukhtar Ablazov and last but not least fot Kazakhstan’s “prodigal son-in-law” Rakhat Aliyev. It will even pay if they are forced to pay coconuts back while still having enough peanuts left to maintain a lavish lifestyle. Following Lao Tze’s ideology, authorities from Kazakhstan and elsewhere including Austria, Germany and (reluctantly) Malta have decided to trace the culprit back by watching where the money pops out of the black back into the white gather than continue man-hunting. In a continuing avalanche of mutual tit-for-tat attacks on legal fronts, both authorities and victims, though, are getting frustrated by the fact that every step forward by the law appears to be accompanied with two jumps ahead by the culprits – as legal tools appear to be much more limited in their use than illegal ones, thereby making any option to dismantle illegal circuits a lot more difficult than to identify them.


Rakhat Aliyev’s accumulating affairs: trails of blood, trails of cash revisitedEver darker clouds are gathering over one of Kazakhstan’s most infamous criminals-on-the-run in the person of former banker, former national security chief, former diplomat, former son-in-law of the head of state and former what else Rakhat Aliyev, Kazakhstan’s independent news agency Tengrinews (http://en.tengrinews.kz/crime/Germany-investigates-Aliyev-and-his-father-in-law-20303/) reported on June 17. “On June 6, 2013 Maltese court initiated a criminal case against former Kazakhstan’s Ambassador to Austria Rakhat Aliyev over accusations of money laundering,” the news report reads. “The judge froze his millions in bank accounts on Malta, banned property deals and authorised the police to access his accounts, real estate and even his yacht. Besides Aliyev himself the court order included his wife Elnara Shorazova, their three-year old daughter and two of the tycoon’s business partners.”

Suspicions were already raised starting 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. It has been established that behind Amoreal Trading was little else than Rakhat Aliyev, both directly and through relatives and other proxies.

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.

The Maltese authorities’ encouraging move should make it easier for prosecutors elsewhere in Europe, notably in Austria and Germany, to lay their hands on hundreds of millions in cash and assets stolen in Kazakhstan and “recycled” n various locations abroad by Aliyev and his associates. “Malta is not the only European country investigating Rakhat Aliyev’s doings,” Tengrinews explains in its article. “Prosecutors of the German town of Krefeld have launched their own investigation against the Kazakhstan tycoon-on-the-run, Deutsche Welle reports citing the press-service of Krefeld prosecutor’s office. Earlier the German authorities initiated an investigation against Rakhat Aliyev’s current father-in-law Muratkhan Shorazov. The prosecutor’s office of Krefeld confirmed this information. The case is complicated, because chains of the investigation discover new links and initiate new chains and take the investigators to new directions, the authority’s representative explained.

What the Krefeld prosecutors are after concerns the, assumedly fraudulent, bankruptcy of Metallwerke Bender in Krefeld. The enterprise, founded back in 1931, first became insolvent in 2005. Then, out of the blue came an Austrian firm called ITR GmbH with an investment of 9.45 million euro which was supposed to keep Bender afloat – which it momentarily did. ITR took a majority share in Bender and appointed Aliyev’s (new) father-in-law “Abuuly” Shoraz as president and chairman of the board. During the two following years, the money was funneled back under the label “returns on investment” even though Bender remained without income and out of business, according to a report written and posted later by a German news analyst named Jens Brambusch (http://www.impulse.de/management/:Wirtschaftkriminalitaet-Schmutzige-Millionen/1030798.html) – upon which became insolvent once more in 2011 after Abuuly had left through the back door. Today, the enterprise is in its final stage of liquidation. In all, in the order of 100 million in US dollar is supposed to have been laundered through Aliyev’s network. But this is only the money that has been identified, and the real amount could well be a lot higher.

Whereas the financial side of the story seems to be going slowly but more or less steadily in the proper direction, cases in terms of physical offences look less great – especially in Malta where Aliyev, so far successfully, maintains his hideout. “A crucial mistake of substance on a court application led to a heated argument between the defence counsel and the representative of the Attorney General in the case of former Kazakh diplomat Rakhat Aliyev,” Malta Today (http://www.maltatoday.com.mt/en/newsdetails/news/courtandpolice/Court-application-error-leads-to-heated-argument-20130606) reported on Thursday 6 June – following a heated and disorderly debate in court between parties. “The court underwent a moment of tension as both lawyers raised their voices to drive home their arguments,” the article reads further down. “At this moment Judge Mallia rapped the parties for shouting in court and said that unless the lawyers calm down he will take measures to keep the court in order. The Deputy AG, heavily opposed that the court accepts an amendment to be carried out and claimed that the whole case was a pattern of conduct in defiance of the applicable legal provisions and the court cannot allow this behaviour to go on any further.”

For the two former bodyguards who are seeking justice after having been victimised by Aliyev in the latter’s one-time function as head of Kazakhstan’s national security service, the ruling means a disappointment. The court in its ruling maintained the content of the earlier verdict, claiming that in the case of torture committed elsewhere Malta had no jurisdiction. “Based on the submission of the Kazakh lawyers, the court could not conclude that there existed prima facie proof that Aliyev had committed crimes against humanity even if there could be suspicion that he had indeed committed crimes against the person,” Malta Today reported. “The court also stated that when the crimes were allegedly committed, they were not considered as a breach of Maltese law.”

The former security people in question got under pressure while Aliyev was still at an early, though crucial stage of his career as head of the National Security Council under the cabinet of Akezhan Kazhegeldin from 1994 to1997 – probably because they had been privy to coup plans he must have been mulling already at the time. It was then when one of the guards involved, Pyotr Afanasenko, assumedly fell into the hands of Aliyev in the service of the latter’s coup attempt in 2002, and, having been under torture as a warning, forced to cooperate. As known, the coup fell through, but while Aliyev apparently got away with it and was shelved as ambassador to Austria, Afanasenko together with a number of others went behind bars, only to be pardoned after having served a year and seven months. Having found refuge in Belgium, Afanasenko sought justice against Aliyev with the support of Lothar de Maizi?re, the last prime minister of East Germany and now a prominent lawyer.

Even more astonishing news recently appeared in the public domain in the form of high-profile intervention from a US congressman – obviously as part of the lobby mobilised by Aliyev around Capital Hill to seek support for his attacks on Kazakhstan and its ruling classes. In a separate report (http://www.maltatoday.com.mt/en/newsdetails/news/national/Congressman-tells-Brussels-to-investigate-Aliyev-allegations-20130519) Malta Today relates how Aliyev’s US lobby in the person of a US congressman. “In a letter to European Commissioner for justice Viviane Reding, and German MEP Klaus-Heiner Leine, chairman of the European Parliament’s legal affairs committee, Democrat congressman Brad Sherman called for a thorough investigation by EU agencies and the Maltese authorities into the alleged crimes committed by Aliyev” the paper’s May 20 issue reads. “Sherman, a senior member of the House Foreign Affairs Committee, told Reding in the letter that Aliyev was accused of committing acts of torture during his tenure as deputy head of Kazakhstan’s secret service.”

Sherman’s statements look rather ambiguous if not apologetic concerning the culprit. “Among the most serious allegations against Aliyev are charges put forward by Satzahn Ibrayev and Petr Afanasenko, bodyguards for Kazhegeldin, contending that Aliyev tortured them in order to induce them to falsely implicate their boss in a coup against the Kazakh president in 1998-99,” Malta Today quotes the politician’s letter as stating. “There are also allegations against Aliyev made in various jurisdictions of the EU, which include money laundering and murder. I have no way of judging the veracity of the allegations, however as a member of the House Foreign Affairs Committee, I believed these serious allegations should be examined.” The intervention looks blatant for its seer ignorance. Not just in Kazakhstan, but also in Austria and Germany evidence has been piling up for well over half a decade concerning the “serious allegations” turning them into substantially more than just allegations.

A more serious threat for Kazakhstan’s position is represented by the latest assault from a Lebanese party, initially as it looks victimised by Aliyev but since the latter did so in his position of security chief under a previous government, holding the current government responsible for it. This could eventually lead to the absurd situation that the Kazakh state might have to pay up for money stolen from the community rather than recuperating it. A press release from the Paris-based Lebanese law firm Derains & Gharavi dated June 17 this year

(http://www.heraldonline.com/2013/06/17/4952973/caratube-oil-company-and-its-majority.html) reveals the latest attack by two of Aliyev’s fiercest foes, the Lebanese Hourani brothers. The attack, though, is less directed at Aliyev than at the government of Kazakhstan, which they hold responsible for alleged losses they suffered way back in time. “Kazakh company Caratube International Oil Company LLP (Caratube) and U.S. national Mr. Devincci Hourani (Khorani)(92% owner of Caratube), have filed on June 5, 2013, a Request for Arbitration against the Republic of Kazakhstan, before the World Bank’s arbitration centre, ICSID, claiming over 1 billion US dollars in damages,” the press release announces. “The claim follows the expropriation of the Hourani family’s assets by Kazakhstan, including Caratube, starting in 2007.  Caratube was, until the unlawful expropriation, the holder of rights for exploration and production of large quantity of hydrocarbons confirmed under their management in the Caratube Field in the Baiganin District of Aktobe Oblast of the Republic of Kazakhstan pursuant to a contract entered into on May 27, 2002 with the Ministry of Energy and Mineral Resources of the Republic of Kazakhstan.

Caratube and Mr. Devincci Hourani assert that the expropriation of their rights was unlawful and that they were in reality the collateral damage of the dispute between the President of Kazakhstan and his then son-in-law, Mr. Rakhat Aliyev. ”

As reported earlier, the Caratube oil field located in the west of Kazakhstan had been discovered by the Soviets in the 1960s but left idle ever since but for a few test wells. Caratube (Karatobe) was supposed to contain 90 million tonne of oil, of which, however, with currently available technology only 31.5 million tonne, or in the order of 23 million barrels, could be recovered – representing less than one-third of the world’s daily consumption – but still in the order of 2 billion US dollar in end sales according to current trends on the oil market, with Kazakhstan’s Ural benchmark having traded at an average of a hundred greenbacks per barrel in most of 2010 and 2011. The Caratube drilling concession had been given in May 2002 to an enterprise by the name of Caratube International Oil Company, registered in The Netherlands and presumed to be Canadian-owned. The real owner, however, would appear to be Devvinci Hourani, a Lebanese whose brother Issam was, and assumedly still is, married to the sister of no one less than Rakhat Aliyev. As for the “investments”, money was painfully lacking.

As early as 2004, it became clear that neither Caratube International nor its nominal Canadian parent company Aurado Energy had the financial reserves to cope with the challenges – nor did it show much capability to raise the necessary funds up-front. On July 9, an attempt to raise the modest sum of 12 million Canadian dollar was being trumpeted – followed by mysterious silence ever since. In the course of 2006/’07, authorities began to suspect that in spite of the company’s claim that no so-called profit oil had been produced, Caratube International was in fact selling crude on the open market by proxy. Suspicions of non-commitment eventually led to the withdrawal of its licence in January 2008. During the year that followed, the enterprise nevertheless managed to lay its hands on close to 10 million US dollar cashed in despite the cancellation, while salaries and other bills were left unpaid, according to a report published later by Central Asia Online on February 21 2011. In all, the complexity of the Aliyev files is, and keeps becoming more and more imposing these days and is likely to remain so through what is promising to become a long hot winter.