The Khrapunov files: Swiss investigations in limbo, culprits intensify counterattacks

A Swiss ex-nazi hunter accused of “treason-insinuating offences, Kazakh diplomats seeking to bring criminals hiding in Switzerland to justice, respected lawyers and state officials: according to the thieving Khrapunov family, after laundering hundreds of millions in euro of stolen funds and revenue from the sales of embezzled assets in Switzerland and elsewhere on both sides of the Atlantic under the very eyes of local authorities, about everybody should be viewed as a criminal except the real culprits. In reality, the aim of the continuing smearing campaign can only be to buy time in order to re-divert as much illegal funding from Switzerland to new hideouts and wipe out as many traces of the cash carousel as possible. The most astonishing aspect of it all is that it seems that Swiss authorities seem to ignore the facts behind the smokescreen, taking all allegations from the real perpetrators of the criminal schemes for granted.

BY CHARLES VAN DER LEEUW, WRITER, NEWS ANALYST

The Khrapunov files: Swiss investigations in limbo, culprits intensify counterattacksThe Khapunovs’ counterattack against Kazakhstan’s attempts to obtain justice took off in early 2013 and looked hefty and well-coordinated from the very beginning. “Several persons within the Swiss entourage of the Khrapunovs have filed penal complaints under the accusation that they have been spied upon in Switzerland,” a report published by the Neue Zürcher Zeitung on June 10 2013 was to read. “They say their computers have been hacked into and infected with spyware. Those programmes are supposed to have been sent at the time from forged e-mail addresses under nicknames, allegedly designed especially for the Khrapunov entourage. As early as 2010, Khrapunov’s son and daughter-in-law claimed to have found a GPS spy transmitter  in their car in Geneva. In early 2013 a lawyer on the family’s behalf as well as Khrapunov himself filed penal complaints alleging that unknown people had manipulated their computers. With the support of these complaints, Geneva’s chief prosecutor Jean-Bernard Schmid opened a criminal investigation, carried out by Geneva police. In early 2014, though, Schmid had to hand the case over to the federal prosecutor and chief of the federal prosecution for state security Carlo Bulletti – as he confirms – took over.” In March 2014, the next move came in the form of one more complaint filed by Marc Comina, Khrapunov’s “communication counsel” who claimed that the cyberspitfire website he maintained to keep throwing mud at Kazakhstan had been hacked in a manner similar to that described in the earlier complaints.

Today, the effects of the attacks on Kazakhstan carried out by the Khrapunov family and their associates have reached hallucinating dimensions. “According to media reports from January 2015, former Swiss ambassador Thomas Borer has tried to influence Swiss legal authorities, politicians and media on behalf of Kazakhstan,” a report posted recently by the Swiss English-language newsreel Swiss Info. “The reports are based on comprehensive data allegedly published recently on a Kazakh website. Borer, the former boss of the task force for unclaimed Holocaust assets, is said to be supporting the Kazakh president Nursultan Nazarbayev in hunting down the Kazakh regime critic Viktor Khrapunov, who allegedly found refuge on Lake Geneva. Borer is accused of having provided his client with insider information from the Federal Prosecutor’s Office for a monthly fee of $30,000 (CHF30,200). Furthermore, Borer is said to have supported some members of parliament by drafting a Kazakhstan-friendly interpellation for the House of Representatives.

According to the report’s account, Borer denies several of the claims made by the media. “I advise the Kazakh Justice Ministry in its dealings with the Swiss authorities in connection with criminal proceedings involving people who have cheated Kazakhstan out of billions and who laundered portions of this money in Switzerland. In particular, Mr. Khrapunov,” he wrote to swissinfo.ch. He did not, as claimed by the Neue Zürcher Zeitung newspaper, offer “insider information” obtained from the Federal Prosecutor’s Office. “I pass along information which I have obtained through formal channels.” “As the government has been largely idle in this area, a group of journalists and computer scientists is trying to disclose the vested interests of parliamentarians and their authorised “guests” through the platform LobbyWatch.ch. At least half of the parliamentarians have not declared their vested interests even though they are obliged to,” the report quotes Thomas Angeli, co-president of LobbyWatch, as declaring.

“A former Swiss ambassador secretly lobbying for Kazakhstan’s interests inside the government building; or a Swedish arms factory’s nebulous attempt to influence Switzerland’s order for fighter jets: both cases have rekindled demands for more transparency in lobbying,” the report reads elsewhere. “I don’t judge single cases, but this is certainly not lobbying,” says lobbyist Andreas Hugi, president of the Swiss Association of PR agencies (BPRA), when asked for his opinion on the lobbying activities of former Swiss ambassador Thomas Borer in Kazakhstan’s interest. The country has been under the tight grip of President Nursultan Nazarbayev and his clan for many years. Lobbying is legitimate, an attempt to influence the legislative process on behalf of particular organisations. According to Hugi, Borer didn’t do that; he simply tried to get information on an ongoing legal procedure. Borer is one of 400 “guests” who have a permanent entry pass to the Swiss parliament building. Every parliamentarian has the right to designate two people to receive these permits. Borer got his from Thomas Matter, a parliamentarian from the conservative right Swiss People’s Party. “This was purely a favour,” Matter told the media.

It is not always clear what all these “guests” are actually doing inside the parliament building.

Are there any others campaigning in the interest of other states? Hugi is convinced that Thomas Borer was an isolated case. “A constitutional state usually uses diplomatic channels to protect its interests from other countries,” says Hugi. Hugi – the founder and co-owner of ‘furrerhugi’, one of the largest PR agencies in Switzerland – has his own pass, donated by Radical Party parliamentarian Ruedi Noser, who he says has been his friend for years. As opposed to Borer, though, Hugi claims he has always been open about clients whose interests he is representing.

Like Hugi, communications consultant Iwan Rickenbacher has no knowledge of cases like Borer’s. However, the political scientist, who is the former secretary-general of the centrist Christian Democratic Party, is certain that there are grey zones – situations in which other countries tried to influence Swiss parliamentary operations.”

Not everybody, though, is convinced of the Khrapunovs’ displayed injured innocence. “Switzerland is known for its tourism, beauty and sustainable development all over the world but this country is known and popular for housing black money, plundered wealth of innocent people by politicians of South Asia also. Now information coming that Switzerland is now also popular in Central Asia for harbouring white coloured criminals having their bank accounts of black money and residing their after plundering public money from central Asian countries including Kazakhstan, a more realistic reminder of the situation published by Dispatch News Desk in August 2014 was to read. The report refers to an earlier article by an author from India named Abashek Sinha reading as follows: “The career path of Ilyas Khrapunov has been on fast track because of his alleged relations with criminal groups. He is cunning and a talented one. On the one hand, one could say that Ilyas was fortunate with his mentors. On the other, a more sinister side exists. The money he received from his mother, who also calls herself a successful businesswoman, is now believed to have been embezzled from the public purse of the Kazakh city of Almaty, with the help of his father, who was the mayor of the city at the time.

Ilyas once quiet and timid character was influenced by his father-in-law, the renegade oligarch, Mukhtar Ablyazov, who quickly became the boy’s financial advisor. In the murky waters of offshore companies and transactions, Mukhtar managed his affairs “like a fish in water”, impressing his son-in-law by siphoning off assets worth billions from Kazakhstan’s “BTA Bank” before retreating to London.”

“Ilyas’ parents, his mayoral father Victor Khrapunov and businesswoman mother Leila Khrapunova, in turn moved to Switzerland, leaving Kazakhstan shortly before criminal proceedings against them commenced. They fled almost simultaneously, in 2008 and 2009, and chose the same line of defence against possible prosecution. Therefore, when Kazakhstan sentenced them to long prison terms in absentia, and reported them to the Interpol watch list, the law enforcement system was powerless to act. The case became a political one.

Ablyazov received political asylum status in the UK and managed to disconnect himself from Kazakhstan. To gain sympathy, he portrayed a picture of himself as a national leader in exile, pursued by the authorities who had fabricated phoney accusations to discredit their rival. And so an aggressive information war began and it was working – people believed him. Eventually, aided by the lawsuit for the embezzlement of the BTA funds, a British judge ordered Ablyazov’s imprisonment for lying about his financial assets. He was labelled a criminal and had acted like one. During the civil proceedings, the court uncovered his systematic and intentional misconduct and obstruction of justice and sentenced him to a 22-month prison sentence for obstructing the course of justice and for contempt of court. The United Kingdom promptly cancelled his political asylum status. Ablyazov fled the country, accusing the High Court in London of political engagement with Astana, implying allegations of collusion and corruption. Shortly afterwards, he was arrested at his Cote d’Azur mansion and imprisoned in France. From there he continued broadcasting his message of violated rights and arbitrary justice. Today, the question of his extradition is being decided.”

“The Khrapunov family initially acted more subtly,” the report continues. “Victor Khrapunov believed that if you managed to get away with stealing there is no need to further tempt fate, and so he quietly melted away. However, Ablyazov’s information war badly needed more attention and Victor Khrapunov became new fuel for the fire. Recently, the prosecutor’s office in Geneva opened an investigation on suspected money laundering by the Khrapunov family. All their accounts with Credit Suisse and Schroder&Co. Bank AG were frozen and documents seized. The Kazakh authorities immediately filed a lawsuit against the ex-mayor of Almaty in California, accusing him of stealing $300 million. According to the case file, Khrapunov’s children, along with their wives, used the stolen funds to purchase real estate in the Los Angeles area, including $6.2 million to buy a house in Beverly Hills and $5.7 million for the purchase of two acres of land in Studio-City. In addition, they leased Rolls Royce and Bentley luxury cars. And so Khrapunov’s file on the Interpol “wanted” list was opened. It is reported that 30-year-old Ilyas is suspected of creating and managing an organized criminal group as well as money laundering and property acquired through illegal means.”

But the author does not fail to note the peculiar standards Swiss authorities tend to use where it comes to bringing criminals to justice. “Interestingly, despite Interpol actively looking for his parents it has not prevented them from leading a public lifestyle in Switzerland. This is now an issue for the European law enforcement agencies, but it is strange that the family continue to hide rather than face their accusers and prove their innocence. The high profile nature of this case should ensure a fair trial in international courts. As long as such serious accusations stand, it is inexcusable to simply dismiss them. The governments should either extradite or conduct their own investigation. It is necessary to send a clear message to the public: to dispel any doubt that the old world became a place where oligarchs are absolved of all their past misgivings in return for investing millions. It may be mentioned that there is a law suit against Khrapunov and his wife Leila Khrapunova in United States also and they are accused of embezzling more than $300 million through illegal sale of municipal property and international money laundering schemes and that the money was used to buy luxurious cars and houses, businesses and other assets in the United States, Europe and the Middle East.”

As we reported on several previous occasions, the key enterprise in Almaty during the Khrapunovs’ days of glory where it all came together was a holding called VILED. According to one of the attempts by investigators on behalf of the Kazakh authorities to unravel the entire scheme, VILED was to be sold at some point after Khrapunov left office as mayor of Almaty to a company called System Oil LLS for the sum of 684.3 million Kazakh tenge – at the time worth in the order of 3.2 million euro or 4.5 million US dollar. Another sale bringing in half a billion tenge concerned the sale of a 50 per cent stake in a company called Ayt Housing Complex LLP by the Swiss Kazakh Phoenix Holding to an unknown buyer. Subsequently, just over 2 billion tenge were cashed in on the sale of all the stock in Building Service Company LLP, on top of another 38.6 million tenge received for some of BSC’s assets sold separately. The shares were purchased by an Almaty-based firm called StroyTech LLP – assumedly in good faith where the latter was concerned. Thanks to such contributions, the accumulated sum of 4.54 billion Kazakh tenge – worth in the order of 30 million euro or 42 million US dollar at the time, was to appear on the sheet of the personal account of Madame Leyla Khrapunova by the middle of the first decade of the new century.

Apart from the abovementioned transactions, sources would appear to include what prosecutors’ documents refer to as “refunding of financial aid” for the allocation of real estate sites in Almaty and on its outskirts from two named companies, Khachatrian AS and Ilyasov AK, which had paid up for 1.22 billion and 108.7 million tenge respectively. Together with existing cash deposits and “other receipts” the thus accumulated sum of 4.54 billion tenge was transferred from Leyla Khrapunova’s account at the Kazakh Eurasia Bank. In turn, the bulk of the money, consisting of 46.4 million US dollar and 7.7 million euro, was transferred to “accounts in [unnamed] Swiss banks” on the name of Elvira Belmadani, alias Elvira Viktorovna Khrapunova, the daughter from the ex-mayor’s first marriage. Separately, 5.8 million euro were transferred to accounts in “Italian banks” belonging to unnamed “contractors” for what seems to be the construction of a number of chalets – either on the outskirts of Almaty or in the area of Geneva, which the available documents fail to specify – along with 7.5 million US dollar to “other accounts” – equally unspecified.

But Leyla’s transaction would appear to be only part of the entire story. In a parallel transaction, an extra sum of 7.5 million US dollar was transferred from a company called Elias Import Export LLP, of unknown nationality but said to have been “represented” in Kazakhstan by a certain M. Z. Nishnianidze – judging by the name of Georgian origin. The payment was done for the purchase by Elias of Asia Holding Development LLP, the assets consisted of three building sites on Gornaya Street on the southern outskirts of Almaty, close to the crossroad of Furmanova St. and Al-Farabi Avenue, around which Almaty’s new business boomtown was meant to arise. Today, the south-end of Al-Farabi Avenue has only a limited number of fancy business plazas ready, standing amidst undeveloped infrastructure and with most of the available space remaining empty. The financial crisis which took off in 2008 has taken its toll here in a very visible manner indeed. On the land plots on Gornaya Street under question in relation to Khrapunov and family residential and hotel complexes have been built, with an alarming part of the apartments also remaining vacant and the hotels empty for most of the time. In all: the deal between Asia Holding Development and Elias Import Export might well have been meant to take profit on speculation. For the former, it was easy money since they had obtained the property for next to nothing. For the latter, it was disappointment at best.

As for the $7.5 million, it was to be transferred to another personal account at Eurasian Bank belonging to Ilyas Viktorovich Khrapunov, by that time already high and dry on the banks of Lake Geneva. Later, $2.2 million was transferred to the account in Switzerland on the name of Elvira Belmadani, while the remaining $5.3 million are said to have been “withdrawn for personal expenses”. It is very well possible either amount has ended up in the investments done (in name) by young Ilyas in property in and on the outskirts of Geneva later on. Together with the transfers through mother Leyla’s account at the Eurasian Bank, 48.6 million US dollar plus 7.7 million euro were accumulated in this manner – more than enough for Ilyas’ 10 million dollar “gift” but by and large insufficient to finance his share in the ambitious Swiss project he was cherishing. It should therefore be assumed that the two mentioned transfers from Eurasia bank represent only part of a bounty adding up to the hundreds of millions Khrapunov junior’s aspirations are bound to require. Yet, the two proven cash deviations should be enough reason for Swiss authorities to render assistance to Kazakh investigators with the final aim to bring the main culprit along with his associates to justice either at home or, if this would prove impossible because of Europe’s suspicions regarding Kazakhstan’s controversial reputation in terms of detainees’ rights, in Switzerland.

The money’s end destination was a Swiss company called Helvetica Capital SA, rue du Mont Blanc 3, Geneva. With a share capital of 100,000 Swiss francs, divided in 1,000 shares, the enterprise’s goal is being described as prise et administration de participations dans toutes sociétés ou enterprises à l’exclusion de prise de participations dans les sociétés immobilières en Suisse. In other words : a nominee interest holder in all kinds of enterprises with little other aim than hiding the identity of the true owner. As of January 19 2010, Helvetic Capital, registered in Switzerland, had two authorised directors, being Leyla Khrapunova and  Swiss national by the name of Marc Gillieron. A note dated April 4 2011 was to report Leyla’s retreat from her post, leaving the entire job to her Swiss peer. In summer 2012, accounts on both the company’s and Khapunov family members at Schröder & Co Banque SA and Crédit Suisse were frozen by the Swiss authorities. How much money was involved remained undisclosed – just as it remains uncertain whether any follow-up is being envisaged. It could well end up in a formidable cover-up thanks to the Khrapunovs’ aggressive campaign portraying Kazakhstan as the root of all evil and themselves as the innocent victims of it…

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