Scotland Yard detectives are scoping an investigation into a London based Russian oligarch over alleged links to money laundering.Officers were brought into the inquiry after detailed financial information was passed to the UK’s National Crime Agency (NCA).The NCA leads the fight against money laundering both at home and abroad - writes Philip Braund.
It’s alleged former media mogul Vladimir Gusinsky is using a labyrinth of litigation cases in America to move money.British officers are now likely to work with American law enforcement agencies principally concerned with money laundering allegations.
It’s believed that legal experts have found up to 15 courts cases, heard in America over recent years, showing a similar line of attack by Mr Gusinsky’s lawyers – namely, a breach of duty by former directors.
The cases follow a similar course: Mr Gusinsky and his US legal team comb through the legal documents of US companies – in particular those up for sale.They spot a legal problem that might affect shareholders and cost them money.
The Vladimir Gusinsky Revocable Trust (VGRT) files an action against the company and proceedings start.But the matter is dropped quickly, settled or voluntarily dismissed, and any monies paid into court or fees paid to lawyers on account are returned – minus costs – to the Trust.For example, last year the VGRT took action on behalf of the shareholder of USG Corp against the company and its directors for allegedly violated federal securities law. The Trust claimed USG published a misleading proxy statement for the company, pending a $7 billion acquisition by a German rival.
It argued there was not enough detail about the sale which, in turn, allegedly affected the value of the company for purchase.
The case was dismissed after an out of court settlement.
In an earlier case, heard in the same Delaware court and with the same Gusinsky lawyers - Rigrodsky & Long –VGRT took on KLX Inc.
The Trust contended KLX Inc filed misleading statements in connection with the proposed $3.25 billion sale of its aviation parts and services business to aerospace giant Boeing.
The Trust asked the court to halt the sale.
Once again, the case was voluntarily dismissed after lawyers reached an out of court settlement.
The use of litigation to launder money is not new.
It was used for a time in the UK before Judges became wary of the risks.
As a claimant to a claim it is easy to lodge a huge sum of money with eager and grateful lawyers in the expectation that they will run a case for two to three years.
Equally, it is open to a claimant to pay money into court either as an offer or as a bond or security for bringing the claim.
Once the case is settled, and the earlier the better, the money is paid out back to the client either by the lawyers or better still the court.
It is effectively “cleansed” for any source of funds purposes anywhere in the world.
A source, formerly part of and close to the UK law enforcement agencies, commented:
“This kind of activity potentially gives ‘gold standard’ source of funds verification for banks as the money comes either from a lawyer’s client account or from the court itself.
“The practice was first spotted in the UK more than 10 years ago when money was paid into court as an offer to settle.
“No source of funds checks was made on money paid into court.
“Once lodged at court, corrupt parties could make a fake settlement of their claim and ask that the money be paid out of court to the “winner”.
“Money paid from the High Court in London, which operated an account at the Bank of England, was as clean as you could wish.”
It is not known if this is what Mr Gusinsky has done and it is possible that the Trust which has brought the US claims acts independently of him.
It would however be a remarkable coincidence.
Mr Gusinsky, 64, is a serial litigator.
But Mr Gusinsky is already under investigation in the Cayman Islands after his company New Media Distribution Company went bust.
He’d promised to the London International Court of Arbitration last year to use a £5 million plus settlement in a different case to pay-off a bank [ East West Bank United] to which he owed money.
Lawyers instead put the money into the NMDC account in the Cayman Islands – but days later it had “disappeared”.
Mr Gusinsky claims it had been used to pay four “consultants” to the company for their “talent”.
He then promptly closed NMDC by having it wound up.
The NMDC accounts are now supposedly being forensically investigated by the liquidators FTI Consulting.
The London Globe contacted FTI Consulting both in London and the Cayman Islands about the liquidation of NMDC.
We asked if the money paid from the London litigation, and pledge to East West, was paid to Mr Gusinsky?
If not, who were the “four talented” consultants who were paid?
Did they invoice NMDC?
And, is FTI Consulting looking into Mr Gusinsky’s connections to Russian President Vladimir Putin and Gazprom Media?
Ashley Nicholls, Managing Director, FTI Consulting, said:
“Further to your enquiry, I can confirm that we are appointed as the Joint Official Liquidators of NMDC by the Grand Court of the Cayman Islands.
“However, per company policy, we do not comment on client engagements, so we are unable to comment further.”
Mr Gusinsky made his fortune in producing Russian television dramas television shows.
He claimed he had a production deal with the Kremlin that was sanctioned by Russian President Vladimir Putin.
Gusinsky would call this his “unbreakable agreement” – an arrangement that would guarantee him endless commissions and money for his broadcast dramas.
He lives in St Moritz, Switzerland and his family resides in Connecticut, America.
Issuance of green bonds will strengthen the international role of the euro
Eurogroup ministers discussed the international role of the euro (15 February), following the publication of the European Commission's communication of (19 January), ‘The European economic and financial system: fostering strength and resilience’.
President of the Eurogroup, Paschal Donohoe said: “The aim is to reduce our dependence on other currencies, and to strengthen our autonomy in various situations. At the same time, increased international use of our currency also implies potential trade-offs, which we will continue to monitor. During the discussion, ministers emphasized the potential of green bond issuance to enhance the use of the euro by the markets while also contributing to achieving our climate transition objective.”
The Eurogroup has discussed the issue several times in recent years since the December 2018 Euro Summit. Klaus Regling, the managing director of the European Stability Mechanism said that overreliance on the dollar contained risks, giving Latin America and the Asian crisis of the 90s as examples. He also referred obliquely to “more recent episodes” where the dollar’s dominance meant that EU companies could not continue to work with Iran in the face of US sanctions. Regling believes that the international monetary system is slowly moving towards a multi-polar system where three or four currencies will be important, including the dollar, euro and renminbi.
European Commissioner for the Economy, Paolo Gentiloni, agreed that the euro’s role could be strengthened through the issuance of green bonds enhancing the use of the euro by the markets while also contributing to achieving our climate objectives of the Next Generation EU funds.
Ministers agreed that broad action to support the international role of the euro, encompassing progress on amongst other things, Economic and Monetary Union, Banking Union and Capital Markets Union were needed to secure the euros international role.
European human rights court backs Germany over Kunduz airstrike case
The ruling by the Strasbourg-based court rejects a complaint by Afghan citizen Abdul Hanan, who lost two sons in the attack, that Germany did not fulfil its obligation to effectively investigate the incident.
In September 2009, the German commander of NATO troops in Kunduz called in a U.S. fighter jet to strike two fuel trucks near the city which NATO believed had been hijacked by Taliban insurgents.
The Afghan government said at the time 99 people, including 30 civilians, were killed. Independent rights groups estimated between 60 and 70 civilians were killed.
The death toll shocked Germans and ultimately forced its defence minister to resign over accusations of covering up the number of civilian casualties in the run-up to Germany’s 2009 election.
Germany’s federal prosecutor general had found that the commander did not incur criminal liability, mainly because he was convinced when he ordered the airstrike that no civilians were present.
For him to be liable under international law, he would have had to be found to have acted with intent to cause excessive civilian casualties.
The European Court of Human Rights considered the effectiveness of Germany’s investigation, including whether it established a justification for lethal use of force. It did not consider the legality of the airstrike.
Of 9,600 NATO troops in Afghanistan, Germany has the second-largest contingent behind the United States.
A 2020 peace agreement between the Taliban and Washington calls for foreign troops to withdraw by May 1, but U.S. President Joe Biden’s administration is reviewing the deal after a deterioration in the security situation in Afghanistan.
Germany is preparing to extend the mandate for its military mission in Afghanistan from March 31 until the end of this year, with troop levels remaining at up to 1,300, according to a draft document seen by Reuters.
Digitalization of EU justice systems: Commission launches public consultation on cross-border judicial co-operation
On 16 February, the European Commission launched a public consultation on the modernization of EU justice systems. The EU aims to support member states in their efforts to adapt their justice systems to the digital age and improve EU cross-border judicial co-operation. Justice Commissioner Didier Reynders (pictured) said: “The COVID-19 pandemic has further highlighted the importance of digitalization, including in the field of justice. Judges and lawyers need digital tools to be able to work together faster and more efficiently.
At the same time, citizens and businesses need online tools for an easier and more transparent access to justice at a lower cost. The Commission strives to push this process forward and support member states in their efforts, including as regards facilitating their cooperation in cross-border judicial procedures by using digital channels.” In December 2020, the Commission adopted a communication outlining the actions and initiatives intended to advance the digitalization of justice systems across the EU.
The public consultation will gather views on the digitalization of EU cross-border civil, commercial and criminal procedures. The results of the public consultation, in which a broad range of groups and individuals can participate and which is available here until 8 May 2021, will feed into an initiative on digitalisation of cross-border judicial cooperation expected at the end of this year as announced in the 2021 Commission's Work Programme.
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