Rakhat Aliyev behind bars: one more judicial carousel begins – lawyers rejoice

Nobody would believe it would ever happen. But not unlike the case of Kazakhstan’s other black sheep, namely former BTA bank chief Mukhtar Ablyazov, justice has finally appeared to get the upper hand over politics regarding the man who is probably Kazakhstan’s most dangerous criminal. There is little chance that Rakhat Aliyev, accused of and convicted in his country of origin for multiple murder, kidnapping, torture and an attempt to overthrow the government by violent means, will be extradited. But he does risk to remain in an Austrian jail for the next quarter century or so on the first three charges – even though the crimes were not committed on Austrian territory.  Part of yet another offence, namely laundering money extorted from Kazakh citizens and enterprises to amounts of hundreds of millions in euro, did place in Austria (along with Germany, Liechtenstein, Malta, Cyprus and a number of Caribbean offshore havens) and those victims who have been lucky enough to survive their ordeals now claim it back. A verdict, including appeals, can be years off, but the danger of Aliyev’s come-back to Kazakhstan to spread havoc once more has been duly averted. For lawyers on various sides, business is in full swing.


Rakhat Aliyev behind bars: one more judicial carousel begins – lawyers rejoice“The former son-in-law of the Kazkh president, who is wanted in Kazakhstan on charges of murder and kidnapping, has been arrested in Vienna,” the Austrian Independent wrote in a report published on June 6 [http://austrianindependent.com/news/General_News/2014-06-06/15512/Former_Kazakh_diplomat_Rakhat_Aliyev_arrested_in_Vienna_]. “A lawyer for Aliyev said on Thursday that the Austrian arrest warrant included charges “from murder to kidnapping” although further details of the charges have not been released. On hearing that an arrest warrant had been issued for his arrest in May, Aliyev voluntarily flew into Vienna from his home in Malta, and gave himself in to police.”

How voluntary Aliyev’s surrender was remains subject to dispute. “It was shortly before midnight as Rakhat Aliyev landed on [his] plane at [the airport of] Wien-Schwechat and police detained the former Kazakh ambassador to Austria, the Wiener Zeitung [http://www.wienerzeitung.at/nachrichten/oesterreich/chronik/636061_Festnahme-bei-Ankunft.html] reported the following day. “He had ‘voluntarily’ turned himself in, in the words of his lawyer Manfred Ainedter. The prosecutor’s office had issued an arrest warrant on May 16. Gerald Ganzger expresses his doubt concerning this ‘voluntary’ move: ‘That is silly,’ he says. Ganzger is also a lawyer and partner at the Lansky chancellery, where he represents the widows of the two bank managers whom Aliyev allegedly killed. ‘Aliyev has no passport, the arrest warrant was valid worldwide, he had no other option,’ says Ganzger.”  According to the newspaper, he added that once apprehended in Greece where he is supposed to have lived on a luxury yacht off the coast since he fled Malta in summer last year, he could have been extradited straight to Kazakhstan.

Two of Aliyev’s aids, whose names have not beendisclosed in news reports on the event, have also been arrested. On Saturday, Aliyev’s lawyers filed a request for political asylum to the authorities. As for the reasons for the arrest warrant to be issued, Austrian media referring to officials point at “new evidence” in the form of audio-copies of a number of Skype telephone calls made back in 2011 between a representative of Aliyev in Dubai, dubbed R., and the culprit’s former ally and collaborator, Kazakh ex-security chief Alnur Mussayev. In the conversation, the latter tried to blackmail his former comrade in crime by telling that he new where the bodies of the two murdered banks were and threatening to “sell the information to the [Kazakh] authorities for money and a free conduct”. Not long after the conversations, the bodies werindeed found and identified on a plot of land registered on the name of one of Aliyev’s companies near Almaty.

In its report on the event, Malta Today, a leading daily in Aliyev’s former Mediterranean refuge [http://www.maltatoday.com.mt/news/world/
39713/rakhat_aliyev_arrested_in_vienna_#.U5KsyEoo7IU] wrote: “An arrest warrant for the Kazakh leader’s ex son-in-law was issued on May 19, 2014. Austrian Interior Ministry spokesman Karl-Heinz Grundboeck has not confirmed Aliyev’s arrest so far. Aliyev is under criminal prosecution in Austria over his alleged involvement in the murder of two bankers in 2008. Furthermore, Aliyev has had his assets frozen by Maltese courts as part of a money laundering inquiry. The Maltese investigation is being conducted in parallel with a similar inquiry underway in Krefeld, Germany.  In March, the Criminal Court  issued a freezing order on the assets owned by Aliyev, in the first confirmed action that the embattled millionaire was being investigated over money laundering.  The freezing order was issued against Aliyev, 52, and his Austrian wife Elnara Shorazova, and a host of companies he is connected to.  The freezing order has been communicated to Banif Bank and Bank of Valletta, as well as the inland revenue and VAT departments, the public registry and the financial services authority, Ganado Trustees & Fiduciaries and Iuris Fiduciaries. The order prohibits Aliyev and his wife Elnara Shorazova, and the companies mentioned, from transferring or otherwise disposing of any movable or immovable property.”

An upcoming trial should also fill in some blank spots in the Aliyev files, with dramatic consequences for some people in high places in Vienna’s plush environment. But not only Austria’s VIPs have been involved in murky business surrounding the Aliyev affair, as it appears that the US government has implicitly helped Aliyev to escape after the earlier disclosures of his criminal background. ”During a pull-aside at a commercial-diplomatic event in Astana on October 31, Austrian Ambassador Ursula Fahringer asked if the United States has any current information on the whereabouts of the former Kazakhstani Ambassador to Austria and President Nazarbayev’s ex-son-in-law, Rakhat Aliyev, who has been convicted in absentia of ‘serious crimes’  in Kazakhstan,” a classified report [https://www.wikileaks.org/plusd/cables/08ASTANA2162_a.html] by the then US ambassador Richard Hoagland to Astana dated November 3 2008 and later publicised by Wikileaks was to read. “She said the to-date presence of Aliyev in Austria has poisoned Austrian-Kazakhstani relations. Vienna has lost track of Aliyev but presumes he will try to stay within the Shengen visa area. The Ambassador responded that Aliyev is not high priority for the United States, despite requests to us from the government of Kazakhstan to help find Aliyev and return him to Kazakhstan. He said he is unaware from any source of Aliyev’s current whereabouts.”

“On November 11, Canadian Embassy Political Counselor Dierdrah Kelley confirmed for us rumors that Austrian Embassy DCM Peter Hoehlmuller and his family had departed Kazakhstan several days previously on short notice and might not be returning to the country,” a follow-up report [https://www.wikileaks.org/plusd/cables/08ASTANA2245_a.html] written nine days after the former one read. “Kelley, who is close to Hoehlmuller and his wife (and resides in the same building as them), explained that before he left, Hoehlmuller had told her confidentially, without the permission of Austrian Ambassador Ursula Fahringer, that Austria is preparing to expel a counselor-level diplomat from the Kazakhstani Embassy in Austria for his involvement in a September kidnapping attempt in Vienna against former National Security Committee (KNB) head — and Rakhat Aliyev associate — Alnur Musayev. Hoehlmuller was returning to Austria to assist the Austrian MFA in handling this sensitive matter. Ambassador Fahringer had insisted that Hoehlmuller’s wife and children leave with him, apparently fearing for their safety. 2. (S) Hoehlmuller told Kelley that the Austrians want the Kazakhstanis to withdraw the diplomat quietly, rather than formally declaring him persona non grata. […] Hoehlmuller informed Kelly that the last-minute cancellation of Austrian President Heinz Fischer’s planned October visit to Kazakhstan was the result of Rakhat Aliyev’s intervention. According to Hoehlmuller, Aliyev managed to directly relay a message to Fischer advising him not to go to Astana.” Relations were later repaired, but in the process Aliyev did manage to fix himself a safe haven in Austria. How exactly has been subject to varying theories, which should be put together in upcoming court hearings in Vienna. On such occasions, morelight could also be shed upon the way Aliyev managed to safeguard hundreds of millions in euro in Austria and other places.

As we reported before, Aliyev’s Maximus Holding stands at the centre of his global fund and cash transfer network. The enterprise has 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.

Even though behind the entire conglomerate there was little more but Rakhat Aliyev, the chairman of the board of A.V. Maximus was a certain 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 Projectentwicklung 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.

It all ended with Maximus to shift its headquarters from Austria to Malta, and most of its assets being evacuated to the Caribbean. Only briefly, Maltese authorities froze his assets on its territory in summer this year, only to free them again after hardly more than two months. Judging by the qualifications used by Malta’s PM concerning the likes of Rakhat Aliyev, there seems to be growing awareness among the island’s political elites that they have a Troyan horse on their territory. However, authorities still refrain from taking action against Aliyev – as though he were a modern-day Helen of Troy. For Aliyev’s surviving victims, this appears to become more and more frustrating if not traumatising.

Back in Kazakhstan, the Aliyev case, together with other high-profile files such as those regarding former BTA chief Mukhtar Ablyazov  and former Almaty mayor Viktor Khrapunov, does not stand alone. The starting shot for an ongoing crackdown on white collar crime in Kazakhstan was given in early April this year by Adilbek Dzhaksybekov, a former Defense Minister after he had been appointed Secretary of State replacing Karim Massimov who was appointed the country’s new Prime-Minister. “Statistics show that the level of judiciary enforcement is very low. In 2013, out of 2.2 trillion tenge subject to recovery of funds based on court rulings, only 108 billion tenge were collected, that is, 5 percent,” a press statement on Dzhaksybekov publicised by the Kazakh independent agency Tengrinews [http://en.tengrinews.kz/politics_sub/Corruption-in-judiciary-enforcement-calls-for-sweeping-reforms-Kazakhstans-new-252810/] on April 10 wasto read. “This situation necessitates a sweeping reform of the system of enforcement proceedings, and development of new approaches towards resolving of the pressing problems.”

In the meantime, words have been accompanied by tough action. According to a separate report by Tengrinews [http://en.tengrinews.kz/laws_initiatives/Over-15-billion-embezzled-in-Kazakhstan-since-2013-Financial-Police-253982/] referring to Kazakhstan the Deputy Chairman of the Agency for Combating Economic Crimes and Corruption (Financial Police) in Kazakhstan Marat Akhmetzhanov, close to the equivalent of 1.6 billion US dollar has been embezzled in the country since the beginning of this year.  “Akhmetzhanov said that in 2013 alone more than 10,000 corruption offences were discovered and investigated,” the agency’s report reads. “During [the first} five months of this year more than 5,000 cases were discovered and are now being investigated or at various stages in court.  “Of these, 27 per cent are heavy and especially grave crimes, 65 per cent are economic crimes. More than 21 percent are corruption related. The money embezzled in 2013 and in the first five months of this year amounts to 290 billion tenge ($1.58 billion). Measures are already being taken to recover 157 billion tenge ($860 million),” the official was quoted as declaring. “According to the official data, nearly 300 officials of various ranks have been prosecuted for corruption during the period. Of them, 22 are senior officials of state level, and 83 officials are regional.” Among high-raking suspects involved in fraud cases are the Deputy Minister of Agriculture, the President of the national space company Kazakhstan Gharysh Sapary, former governor of Atyrau Oblast, as well as senior executives of major state enterprises including Kazatomprom and Kazakhstan Temir Zholy.

“International estimates suggest that the money offshored from Kazakhstan amounts to $138 billion,” Tengrinews wrote in yet another report [http://en.tengrinews.kz/finance/138-billion-offshored-from-Kazakhstan-253619/] published on May 23. “This figure was given at a meeting of the National Chamber of Entrepreneurs of Kazakhstan that gathered to discuss combating corruption and shadow economy earlier this week. According to Tax Justice Network, Kazakhstan is among the ten countries notorious for offshoring money. The most popular destinations that Kazakhstanis offshore their money to are the Netherlands, Britain, Switzerland, the Virgin Islands, Cyprus, and Luxembourg.  However, the foreign law enforcement agencies are not in a rush to disclose information about Kazakhstani owners of the offshore accounts to the Kazakhstan Government. They are delaying provision of information and drawing on inquiries.”

The likes of Rakhat Aliyev and his counterpart Mukhtar Ablyazov are only topping a long list of Kazakh citizens who have deprived their national economy of amounts that really hurt. “The notorious [ex-] mayor of the Southern capital [Almaty] and his family declared only $5.3 million in their income reports,” the agency quoted Deputy Prosecutor General of Kazakhstan Andrey Kravchenko as saying, referring to Viktor Khrapunov. “Nearly 100 million Swiss francs have been frozen on Swiss accounts of the brother of a former Kazakhstan governor,” the official said about Amanzhan Ryskaliyev, brother of ex-governor of Atyrau Oblast Bergey Ryskaliyev. “But we see that when we send inquiries to the Western law enforcement authorities it takes them several months or even a year to reply. But criminals don’t sit waiting [for their accounts to be frozen]. They deal with the money very quickly and transfer them elsewhere.”