FOREIGN DICTATORS OWN SOME OF LONDONS BEST HOMES

The secret ownership of London’s most valuable properties by foreign dictators from Malaysia, Egypt, Syria, Gabon and Libya is part of an investigation by the National Crime Agency into money laundering in the UK.

Since 2004, £190 million of UK property has been subject to criminal investigation as suspected proceeds of corruption – and this is  just the tip of the iceberg.  “The London property market has been skewed by laundered money. Prices are being artificially driven up by overseas criminals who want to sequester their assets here in the UK”, said Donald Toon, head of the National Crime Agency whose International Corruption Unit is investigating this issue.

The London property market is a magnet for those who want to launder suspect funds from state coffers. Multi-million pound cash payments are accepted without their origin being questioned.  Dictators have been able to hide ownership behind anonymously-owned shell companies registered in secretive jurisdictions.  This has allowed those with something to hide to sink dodgy money into safe, clean assets that increase in value. This makes everything from drug dealing to terrorism easier to get away with, while a London address offers a veneer of legitimacy and prestige that helps launder reputations as well as cash.

MALAYSIA:

In the heart of Belgravia at Lygon Place is an imposing mansion with high security and little sign of life.  Like most luxury London houses, the owner is rarely in residence and officially it is owned by an offshore company in the British Virgin Islands (BVI), according to land registry records.  But in reality this property belongs to a Malaysian called Riza Aziz who paid out £23.25 million in 2012 without any mortgage.

Aziz is not your regular house-owner.  He is the stepson of the Prime Minister of Malaysia who has admitted receiving a foreign donation of $800 million into his personal bank account.  And earlier this year the FBI alleged that Aziz played a key role in the Malaysian sovereign wealth fund, known as 1MDB, which bankrolled the movie ‘Wolf of Wall Street’, starring Leonardo Di Caprio and directed by Martin Scorsese.  1MDB is being investigated for criminal fraud and money laundering in the USA, Switzerland and the UK’s Serious Fraud Office has expressed an interest.

The US Attorney General, Loretta Lynch, described the case as “the largest kleptocracy” in American history.  A lawsuit filed by the Justice Department claimed that at least $3.5 billion had been “unlawfully diverted” from 1MDB.  The fund was supposed to promote economic development in Malaysia.  But instead millions of dollars were siphoned off by relatives and associates of the Prime Minister who embarked on a spending orgy on celebrities like Paris Hilton and ‘Wolf of Wall Street’. The lawsuit claimed that in 2012 $238 million was transferred to an account controlled by Riza Aziz.  From there $100 million was used to buy property which included the mansion at Lygon Place, Belgravia, using offshore companies in the BVI and Seychelles.

‘The Wolf of Wall Street’ was a Hollywood blockbuster about a notorious fraudster who spent his clients’ money on prostitutes and cocaine.  But when its star Leonardo Di Caprio thanked his Malaysian producer in his speech after winning the Golden Globes, few could have known that the movie was itself financed by money from such dubious sources.

The Malaysian producer was Jho Low, the main principals behind 1MDB.  A year after the Wolf of Wall Street was released, he bought a penthouse apartment on Stratton Street across the street from the Ritz Hotel for an estimated £12 million – he did not need a mortgage and, unsurprisingly, he used a BVI company to buy the property.

EGYPT:

Soon after President Mubarak was removed from power in 2011, the new regime in Egypt launched an investigation into allegations that his family illegally took state funds designated for presidential palaces.

The government mobilised investigators and lawyers in a worldwide search-and-recovery operation for the allegedly ill-gotten gains of Mubarak’s family.  It was not long before the hunt for secret assets stolen from the Egyptian people arrived in London.

Here they found a five-storey, double-fronted Georgian house at 28 Wilton Place, Knightsbridge, around the corner from the Harvey Nichols store.  The £20 million mansion, which contains four basement vaults, was bought by the Mubarak family in the early 1990s and Gamal Mubarak, youngest son of the former President, frequently resided there when he managed a private equity firm in the UK called Medinvest Associates Ltd.

But if Egyptian government investigators thought that this helped prove their case for recovery, they were soon disappointed.  Just before the revolution the property was sold to a Panamanian company, Ocral Enterprises Inc, whose beneficial owner was Omar Zawawi, an advisor to the Sultan of Oman and close friend of President Mubarak since 1980.

SYRIA:

The brutal regime of the Assad family has coincided with millions of pounds being siphoned off and laundered via offshore companies in the British Virgin Islands.  The President’s Uncle, Rifaat Al-Assad, is under investigation in France and is known to own a mansion in Mayfair near the Claridges Hotel.

Another close associate, Soulieman Marouf, was named in the leaked Panama Papers as owning luxury flats in London worth an estimated £6 million through shareholdings in the obligatory companies in the BVI.  One is at Queensmead, St. Johns Wood, London NW8, and another is nearby at a flat at Sheringham, also in St. Johns Wood Park. And his close relatives own two flats Mancroft Court, St. Johns Wood via shareholdings in a bewildering series of offshore companies.

LIBYA:

A staggering $10 billion of stolen assets has been hidden in the UK by former Libyan state officials, according to the National Crime Agency.  And that is a conservative estimate.

Colonel Gadaffi and his family were notorious for siphoning off state oil revenues and hiding the loot all over the world, notably in South Africa and Ghana.  In London his son Saadi bought 7 Winnington Close in the Hampstead Gardens Suburb in May 2009 for £10 million.  Legally, it was owned by a BVI company called Capitana Overseas Ltd. How it was recovered by the Libyan state became a test case for recovering stolen sovereign assets.

After the revolution lawyers for the new Libyan regime met UK Treasury officials and said that as Saad Gadaffi was on the sanctions list, the house should be requisitioned by Libya.  The Treasury agreed and informed the authorities in the BVI.  The lawyers for Libya then contacted the UK office of the law firm Speechly Bircham whose address served as the office for the BVI company.  The funds used by Gadaffi to buy the house came from a Swiss bank account under name of Tamoil.  Saad did not view the house, never lived in it, and did not rent it out.

Speechly Bircham were then served legal papers to confirm the real ownership of the BVI company.  The Libyans argued that while there was no definitive proof that the money used to buy the house had been stolen, they pointed out Saad Gadaffi was a state employee on a salary of $30,000 a year and so the money must have been misappropriated.  The Judge agreed and the Treasury’s Asset Freezing Unit placed a restriction on the property and in May 2012, it was legally transferred to the State of Libya.  What is less well-known is that Gadaffi’s family bought at least four other houses in Hampstead and used the services of Kingsley Napley, the renowned London law firm.

Several Libyan spies also owned property in London.  Our investigation has established that Abdullah Al-Sanussi, the notorious former head of Libyan Intelligence, owned 12 Ovington Mews, Knightsbridge.  He sold the property in January 2011, one month before the Libyan revolution, for £6.2 million to Perringle International Limited (BVI).  His son, the late Mohammed Abdullah Al-Sanusi, lived at the house and in 2007 was charged with beating up a woman – a common complaint about Libyan diplomats and spies while they were living in London.  Another Libyan spy, Musa Kusa, the ruthless former head of Libya’ Intelligence agency and a former Foreign Minister, owned a house in Chelsea.  Kusa was expelled from London in 1990 after MI5 concluded that he had supported an order from Gadaffi to murder two political opponents who were in exile in the UK.

In recent years three of Gadaffi’s top military officers have been living comfortably in the UK despite being wanted in Tripoli for allegedly embezzling millions from the collapsed state by laundering the funds through UK properties and banks.  They include General Ahmed Azwai, who maintained Gadaffi’s missile stockpile, who has channelled his money via Surrey properties.  Another Gadaffi henchman, Brigadier Elmaarfi, is living comfortably in a vast house in southwestern London.  And Ali Ibrahim Dabaiba, who owns a flat at Lowndes Court and a house in Walton Street in Knightsbridge, even invested some of his fortune in the London estate agents, Chesterton Humberts.

GABON:

When the President of Gabon and his wife are not flying to Paris on his private jet for shopping trips, he likes to hold discreet meetings at his Mayfair mansion at Charles Street, just off Berkeley Square.  The house was bought in August 2010, by the President’s son, Ali Bongo, for £25 million in cash – no mortgage – via a BVI company called Crystal Springs Management Ltd.
The lawyers for the seller of the house – Irish businessman Derek Quinlan – were nervous about the transaction and referred it to the Serious Organised Crime Agency (SOCA) as they regarded Ali Bongo as a PEP (a Politically Exposed Person).  The deal was cleared by SOCA which surprised anti-corruption campaigners as the Bongo family has been regularly investigated for corruption, notably in France.  In 2014, US authorities launched an investigation into potentially corrupt funds linked to President Bongo after customs agents found more than $150,000 in the luggage of one of his aides

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