Rakhat Aliyev: tit-for-tat moves between parties continue in Austria, Malta and where else

With Mukhtar Ablyazov having rather involuntarily attracted the spotlights since his arrest in France by the end of July, other “bad boys from Kazakhstan” have enjoyed certain levels of oblivion. Prominent among them is Rakhat Aliyev, Kazakhstan’s head of state’s former son-in-law, national security chief, banker, ambassador to Austria and what else. Apart from three murders – two of which were committed in Almaty and a third one in Beirut – and a number of kidnappings and torture, Aliyev is also supposed to have embezzled at least a hundred but probably several hundreds of millions in hard currencies and secured them through an network of mailbox firms and investment participations extending over a number of European countries as well as across the Atlantic. Authorities in Austria, Aliyev’s initial hideout after the law in Kazakhstan got on his heels, remain divided over whether or not to prosecute him, while those in his current refuge of Malta remain reluctant to take action as well – despite the fact that evidence on Aliyev’s cases keeps piling up.

CHARLES VAN DER LEEUW, WRITER, NEWS ANALYST

Rakhat Aliyev: tit-for-tat moves between parties continue in Austria, Malta and where elseOn Tuesday July 30 this year, MaltaToday [http://www.maltatoday.com.
mt/en/newsdetails/news/
national/Investigators-
told-of-Rakhat-
Aliyev-s-alleged-money-
laundering-network-20130729
] reported details about Rakhat Aliyev’s business and finance network – adding details about what has been exposed several times in these columns. The Maltese periodical based its report on documents from both Austrian and Maltese police investigators it had looked into, as well as reports by Berlin lawyers Danckert Spiller Richter B?rlein, who have been hired by the government of Kazakhstan to defend its case against Aliyev, bring Aliyev to justice and get the stolen money back. “Documents of complaints submitted to both the Viennese prosecutor and the Maltese police, seen for the first time by MaltaToday, now raise questions about the flow of monies from Austria into Malta through companies that were owned by Rakhat Aliyev or his wife, Elnara Shorazova, and their known associates,” the article reads. “According to Austrian lawyers Lansky Ganzger Partner, who represent the widows of the two Nurbank bankers allegedly murdered by Aliyev or on his orders – accusations which Aliyev denies – monies belonging to Aliyev were transferred to Malta using various companies in Austria and Liechtenstein.”

Some of the names mentioned in the latest disclosures are all too familiar – but there are also new names and connections popping up for the first time. “The lawyers have mapped out a complex network of transaction flows: in the first step, money was fed via two offshore companies, AV Maximus SA and Argocom Ltd into another company, A.V. Maximus Holding AG,” MaltaToday writes further down. “That money was then channelled into subsidiaries Armoreal GmbH and S.T.A.R.T. Managementconsulting GmbH. In the second step, loans were granted between the subsidiaries, with large amounts going to the German company Metallwerke Bender Rheinland, partly via ITR GmbH. In the third step, the money flowed back to A.V. Maximus SA or, via A.V. Maximus Holding AG, to Maltese and Caribbean enterprises. The Austrian A.V. Maximus Holding was owned by a Maltese company, A & P Power Ltd, which was itself owned by Nevis-registered A + P Power Holdings Ltd. Past evidence presented in the Maltese civil proceedings between Shorazova, Aliyev’s wife, and her former lawyer, Pio Valletta, showed that she was the beneficial owner of the companies in Malta and Nevis, perhaps acting as a trustee on her husband’s behalf. A & P Power Ltd became the owner of A.V. Maximus Holding AG on 16 March 2011. In her dispute with Valletta before the Maltese civil courts, Shorazova testified that the Maltese lawyer founded A & P Power Ltd on her behalf. The official purpose of the company as indicated was to render aeronautics services. It was via this company that Shorazova transferred the sum of €2.4 million from Austria to Malta.”

The patterns in Aliyev’s financial schemes have become clear by and large because one of his Maltese proxies, who was also his lawyer, fell out at one stage, resulting in a court battle. “A & P Power Ltd had assets of just €300 in 2009, incurring a loss of €2,100 in 2010,” MaltaToday notes. “Valletta then charged a total of €1.5 million in legal fees to found the company and for name-lending services he rendered to Shorazova, which sum he claimed had been determined on the basis of the amount of money administered by him. According to Valletta, he had rendered these services not only for Shorazova but also for Aliyev. In a bid to reach an out-of-court settlement on the litigation, on 14 July 2011, Valletta transferred his beneficial ownership in A + P Power Holdings back to Shorazova and resigned his directorship to GSB Management Ltd, the enterprise of Aliyev’s new lawyer, Dr Joseph Giglio. Now seated at the address of Giglio’s law firm, A & P Power has been renamed Zurich Asset Management Ltd. The Viennese prosecutor was also asked to investigate claims that, as third embassy secretary in the Kazakh embassy to Austria, Shorazova was unable to build up “assets of any dimension worth mentioning”, pouring doubt over her ability to amass millions of euros in wealth which were transferred to Malta.”

As in the case of Ablyazov, the shameless manner in which Rakhat Aliyev has engaged and deployed his own relatives in his vicious schemes goes beyond all limits. “While residing in Vienna, Aliyev appeared as a board member of the company A.V. Maximus Holding AG, whose subsidiary Armoreal Trading – whose managing director was Shorazova, his new wife – was the sole shareholder in Metallwerke Bender Rheinland (MBR), a metallurgy factory in Krefeld, Germany,” MaltaToday relates. “The lawyers claim that MBR, with Shorazova’s father, Muratkahn Shorazov, acting as the company’s managing director, received large amounts of money obtained illegally in Kazakhstan and then paid back as debt payments on alleged loans from Armoreal Trading, ultimately to A.V. Maximus. Through 21 banking operations between 2006 and 2007, €2.4 million was transferred from MBR to another A.V. Maximus subsidiary, S.T.A.R.T. Managementconsulting. In March 2010, when Aliyev and his wife decided to move to Malta, his father-in-law sold off MBR to a Dubai-based company called SF Holding, ostensibly at an “unwarranted high price” – dubiously high enough to have prompted the German authorities to conduct a search of the involved notary’s office. In December 2010, Elnara Shorazova liquidated Armoreal Trading, and that same month an Austrian company – Veitlissen – transferred €2.4 million to a Maltese company, A & P Power Ltd. When in January 2011, Aliyev and Shorazova were issued with their permanent residency permit, MBR filed for bankruptcy. Then in March, A.V. Maximus Holding was sold to A&P Power Ltd, and renamed Zurich Asset Management.”

On moving to Malta, Aliyev and Ms Shorazova appear to have liquidated Zurich Asset Management Ltd. (formerly A & P Power Ltd.) and restructured their network, now centred in Malta, as it is known today. “As stated by Shorazova herself in the Maltese courts, she remitted €2.4 million from Veitlissen GmbH to Malta,” MaltaToday’s article continues. “There is no evidence of how this €2.4 million was amassed, but lawyers Lansky Ganzgner believe the money came from the sale of a property on Winzerstrasse 25a, a house which constitutes a part of the “Veitlissen complex” comprised in part by employee apartments.

According to a June 2008 purchase contract, the house was sold by Aliyev and Dr Hans Jerabek for €1.85 million. In December 2010, €2.4 million was remitted from Veitlissen GmbH to Malta-based Trade & Trade Yachting Ltd, owned by Pio Valletta and Trade & Trade AG, a company registered in Liechtenstein and founded by Valletta, but liquidated as early as 26 June 2004. But Valletta only remitted €2.2 million from Trade Yachting to Shorazova, giving rise to the civil action between the Aliyevs and Valletta. In her civil proceedings, Shorazova submitted statements of remittance from Liechtenstein’s Valartisbank, on which the names and the account number of the party ordering the payments were blackened. These statements of account were to support her claim that her ‘Austrian lawyers’ had settled Valletta’s Malta fees via the indicated account in Liechtenstein.”

In a recent reminder, MaltaToday (http://www.maltatoday.com.mt/en/newsdetails/news/national/Times-owners-reprint-Kazakh-exile-s-memoirs-20130722) sums up outstanding cases against Aliyev in various parts of the world.  “Aliyev, formerly the Kazakh ambassador to the OSCE in Austria before Nazarbayev forcibly divorced him from his daughter in 2008, lives in Malta where he claims the Kazakh secret service is watching him and waiting to kidnap him,” the article reads. “Sentenced to 20 years’ imprisonment in 2010 by a Kazakh court in absentia for the murder of bankers Zholdas Temiraliev and Aybar Khasenov, Aliyev denies the charges. But the Austrian government, which has refused to extradite him to Kazakhstan, is investigating the claims itself and has also questioned Aliyev here in Malta, where he moved in 2010 with his wife Elnara Shorazhova, a naturalised Austrian citizen. Aliyev today uses the surname Shoraz. Everybody wants a piece of Aliyev, it seems: former Kazakh prime minister Akezhan Kazhageldin has challenged the Maltese police in court, unsuccessfully, to force an investigation into the torture of his former bodyguards. Aliyev is accused, as former deputy head of the Kazakh secret service (KNB), of attempting to force a confession from them that Kazhageldin was planning a coup. In Germany and Austria, legal firms like Lansky, Ganzger and Partner are also pursuing their own actions in Malta against Aliyev over human rights abuses and money laundering, representing the widows of two managers of the Kazakh Nurbank who were allegedly kidnapped and allegedly murdered by Aliyev and his associates in 2008.”

Maltese media are sharply divided over the affair: whereas MaltaToday takes all allegations seriously, its rival the Times of Malta by and large takes sides with the culprit, and incriminating  The Times’ publisher recently reprinted the English edition of Aliyev’s book The Godfather-n-law, an avalanche of ill-formulated suggestions and accusations against Kazakhstan’s ruling elites. “An editor at MaltaToday was arrested and asked by the police to reveal his source about facts related to Aliyev’s frozen assets, Tengrinews was to write, (http://en.tengrinews.kz/crime/Malta-OK-with-Aliyev-using-fake-number-plates-21414/) quoting MaltaToday. Besides, MaltaToday revealed that Mr Aliyev had expressed interest in purchasing the media company that owns MaltaToday.” In June, Aliyev’s and his relatives’ assets in Malta were frozen, including his bank account, real estate and yacht. But on hardly more than a month later the Austrian newspaper Kurier (http://kurier.at/chronik/oesterreich/juristische-teilerfolge-des-verfolgten-ex-botschafters-in-malta-und-deutschland/19.443.038) reported that the assets had been given freed by the authorities again. In contrast to most other Austrian news media, Kurier is known to be apologetic in favour of Aliyev and his entourage.

According to Austria’s German-language periodical Format in a lengthy report published on July 7 this year (http://www.format.at/articles/1327/930/361645/causa-aliyev-verteidigung-endgueltich), Aliyev’s cases have been accepted by the federal crime office, or Bunderskriminalamt (BKA). Officials have spent months earlier in the year watching more than 300 hours of videotaped evidence and testimonies against the accused, sent to them by Kazakh prosecutors. “An analysis carried out by the Austrian BKA on the order of the prosecutors’ office attributes a high level of credibility to Kazakh investigations’ results which have led to the conviction of former diplomat and former national security chief Rakhat Aliyev alias Shoraz for extortion and kidnapping of two bank managers,” the article reads. “[…] in 90 per cent of the analysed videotaped interrogations positive or at worst neutral assessments are given regarding the credibility of the persons questioned. […] Most of those few witnesses whose credibility was subject to the BKA’s doubt were those in defence of Aliyev or his accomplices, who gave false testimonies for their own protection or that of their [security] chief Aliyev. The credibility of the witnesses in Kazakhstan’s investigations was not only affirmed by the BKA but thoroughly motivated and sustained as well. One example included in the analysis reads: ‘M. gives a shattered impression. He can hardly understand that his all-powerful former chief could in any way be held responsible. One gets the impression that he is aware of the seriousness of the situation and declares voluntarily. No pressure on behalf of the investigation has been noticed’. […] Regarding the crown witness G. against Aliyev, who narrowly escaped becoming the third victim to be kidnapped, the BKA writes literally: ‘He speaks self-assuredly, quietly and convincingly. Neither his voice nor his mimics betray any sign of excitement or stress. His declarations are consistent, logical and contain no contradictions’.”

It is now in the hands of Austra’s state prosecutors to bring (or not to bring) charges against Aliyev. Whereas the murder and torture cases, they could argue, have taken place outside Austria’s jurisdiction, this cannot possibly be said about money laundering charges now under consideration in Austria, Germany and Malta – possibly to be followed in months to come by authorities in other countries including Switzerland, Italy and the UK (among the locations of Aliyev’s transactions are the British Virgin Islands). In all: a colourful affair that should be kept an eye on.

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