UK MANSIONS BOUGHT WITH PROCEEDS FROM RUSSIAN FRAUD

A £10 million luxury apartment in Knightsbridge and a £22 million sprawling country house on the Wentworth estate in Surrey was bought with the proceeds of a controversial Russian defence contract which is now the subject of a criminal investigation.

The properties were bought last year by Elsina Khayrova, a daughter of the Russian MP and member of the Russian Defence Committee Rinat Khayrova who was instrumental in lobbying for a $36.6 million contract to develop Russia’s first heavy military strike drone.   At the time Khayrova was also an economic advisor to the Russian Defence Minister Anatoly Serdyukova who was later dismissed for major corruption offences.

The contract was awarded in 2011 to OKB Simonova which is now under criminal investigation after allegations that some of the proceeds of the contract ended up in the UK bank account of a UK company affiliated with Elsina Khayrova and her husband Dmitry Tsvetkov.  OKB Simonova’s general director was arrested in April and continues to be under investigation, according to published reports.

Sources close to the investigation say that Khrayrova used his political connections to secure the contract for OKB Simonova on the condition that a substantial part of the proceeds were paid to a UK company called Hegir Advisory UK Ltd (later renamed EK Group UK Ltd) of which his daughter Elisna was a director.

This unusual arrangement was facilitated by her husband, Dmitry Tsvetkov who used a Russian intermediate company called Miltek to channel $16 million of the contract revenue to the UK company.  “Tsvetkov convinced me to take part in this project as an intermediary in order to obfuscate direct payments to Hegir Advisory UK Ltd”, said a former Miltek executive.  “Miltek was only used as a payment facilitator while OKB Simonova contracted with Hegir Advisory UK Ltd directly to procure research and technological assistance from German subcontractors.  He needed a Russian company to be in the middle and I agreed.  The money was wired first to Miltek and then to a Barclays bank account in the UK controlled by Hegir Advisory”

The former Miltek executive added that over $3 million was transferred to Hegir Advisory Ltd using this arrangement during the summer of 2012.  And during the course of the following year another $13 million was sent by Miltek to Hegir Advisory UK Ltd, disguised as payment for a German contract.  Bur over the two year period the funds moved to Hegir had barely been spent on any designated tasks and no work took place, and so the channelling of millions to the UK company is now under criminal investigation by the Federal Investigative Committee of Russia.

The case highlights the issue of Russian money being “parked” in UK property asset and bank accounts via UK registered companies.  Elisna Khrayrova and her husband, Dmitry Tsvetkov, are both UK citizens and have non-domiciled resident status which allows them to avoid paying tax on income accrued outside the UK.  The disclosure that Khrayrova bought UK properties with money from a defence contract under criminal investigation makes her and her husband a potential target for Unexplained Wealth Orders which can be sought by the UK National Crime Agency.

The Russian couple have been living in the UK for the past 13 years and Elisna Khrayrova and her husband have been linked to over a dozen UK companies.  While Hegir Advisory UK Ltd is further owned by an obscure Belize company, Elisna is a director and her husband works directly for the firm, signed contracts on its behalf and uses the company’s email address.

Tsvetkova will also be of interest to the UK National Crime Agency because of fraud allegations against him filed in court documents in the UK, Cyprus and Switzerland.  In criminal and civil complaints, he has been accused of fraud and embezzlement while working for the Cypriot jewellery retailer Equix Group, the sole Cypriot franchise holder for Graff Diamonds.

The court documents allege that Tsvetkov stole nearly $1 million and misappropriated $22 million during his employment with the firm.  In 2016 he fraudulently passed off his own Swiss company as a Cypriot holder of a Graff Diamonds franchise and took $5 million for jewellery products which he never supplied.  Subsequently, several civil and criminal complaints have been filed against him and his company in the UK, Switzerland and Russia.

Despite an arrest warrant against him in Cyprus (later dropped) and multiple ongoing civil and criminal lawsuits, Tsvetkov is currently advising wealthy clients on moving their wealth out of Russia and into the UK.  His latest client is the controversial Russian Oligarch Alexander Shchukin who is under house arrest in Russia.  Last month Shchukin was accused in a UK court of paying for threats and intimidation against the UK mining company Lehram Capital during the alleged seizure of a Siberian coalmine worth £250 million.  Tsvetkov was a director of a Cypriot company owned directly by Shchukin

Despite being the direct focus of multiple criminal investigations and civil lawsuits , Tsvetkov continues to spend much of his time in the luxury London flat and Surrey country house owned by his wife.

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