On sale now at amazon.com

Estonian Residence Permit Scandal: 5 Years After

helencraig Mar 1, 2016 Crime, News

Residence permits in first-class countries have always been a hot product for wealthy Russians. They crave legal protection for their assets and in case things go too wrong in their home country – an ability to flee somewhere where they would at least have a day in proper court if extradition is requested.
Those reasons are perfectly acceptable if the migrants themselves are legitimate businessmen and investors. But as we have learnt over the years, a great deal of Russian exiles are anything but that: hordes of corrupt officials and their relatives, fraudsters, embezzlers, organized crime figures and other undesirables are successfully acquiring residence rights in the EU and other Rule-of-law adhering States.
About five years ago a scandal broke out in Estonia, a European Union member bordering northern Russia, which shows just how bad the Russian criminal emigration problem is.
In December 2011 it was revealed that two Estonian consulting firms (Advisory Partners and Integer Invest) affiliated with and run by prominent Estonian politicians created a scheme allowing wealthy Russians to obtain investment-based Estonian residence permits without actually going through the normal procedure of making a proper investment.
The residence-permit seeking applicants were asked to pay around 65,000 Euro per person as ‘investment’ into one of the 78 allegedly sham companies registered at a single address in Tallinn. The PEP-affiliated consulting firms then handled all the paperwork and permits were issued.
When Estonian media uncovered the scheme, the two politicians stepped down. However what appeared to be most interesting were not the corruption allegations, but the list of the successful applicants who got their EU residency through the scheme, which was made public in the wake of the scandal.
The Estonian Police said in 2011 that it was launching investigation into allegedly illegal acquisition of residence permits. However, after that not much happened. Many of the ‘new residents’ kept their permits, as the political stir subsided.
This year I did some current research on the people on the original 2011 list. The news which accumulated over the past years reveal now that a good deal of those ‘investors’ were dubious, corruption-linked or outright criminal individuals.
Below is some open-source information to substantiate that uncomfortable conclusion. All the persons mentioned are from the 2011 Estonian investor residence visa scandal list.
Sergei Lalakin (Сергей Лалакин) was a leader in the Podolsk organized crime group, a powerful Russian gang of 1990s. He is residing abroad and not subject to any current criminal proceedings. In 2011 he obtained Estonian residency for himself and several members of his family, all as ‘investors’.
Dmitry Akulinin (Дмитрий Акулинин), ex-shareholder and executive of the Bank of Moscow, was charged in 2012 with multiple counts of fraud, embezzlement and money laundering, billions of roubles in alleged damages. Indictments mention the stealing of shares of a Russian insurance company, stealing loans of the Bank of Moscow and laundering the proceeds offshore. Wanted by the Interpol (red notice).
Andrey Butorin, Sergey Kadanov, Ruslan Maksimenko, Igor Sitnikov and Alexander Veligodsky (Андрей Буторин, Сергей Каданов, Руслан Максименко, Игорь Ситников и Александр Велигодский) were direct and indirect shareholders in a Russian bank «Russian Financial Traditions» whose license was revoked by the Russian Central Bank for breaches of the money laundering law. Kadanov was reported to have been twice indicted for fraud.
Maria Kuzminova (Мария Кузьминова) and the previously-mentioned Sitnikov, Maksimenko and Veligodsky are beneficiaries of InvestTrustBank, a Russian financial institution. Its license was revoked in October 2015 for involvement in money laundering schemes.
Viacheslav Gubernatorov (Вячеслав Губернаторов), a Saint Petersburg businessman was indicted in June 2015 for large scale VAT refund fraud by a St. Petersburg court. His partner Andrei Kulev was arrested, while Gubernatorov absconded and is currently wanted internationally.
Evgeny Mulyukov (Евгений Мулюков), Russian businessman, currently subject to police investigation in Russia for large scale extortion (Interpol blue notice). Open court records from Russia reveal that this individual has a pattern of behaviour in line with these criminal charges: he was found to have caused damage to a local oil company by spreading damaging false information. He still has a valid Estonian residence permit and owns local real estate.
Yulia Artiakova and Dmitry Artiakov (Юлия Артякова и Дмитрий Артяков) are children of the ex-Governor of Samara Region (Russia) Vladimir Vladimirovich Artiakov. At the time of making the investments in Estonia they hardly possessed any capital earned independently of their father, a high-profile PEP. After Artiakov Sr. left the Governor post he was appointed deputy director in a huge State-owned corporation, Rostechnologii, headed by Sergei Chemezov. It would come as no surprise that Artiakov’s son Dmitry and Chemezov’s son Stanislav were revealed to be holding partner shares in an important hotel investment (Meridian hotel in Gelenjik). Any proper investigation would have a hard time proving that the origin of wealth of those Estonian investors has nothing to do with Russian PEP enrichment.
Bers Dzhambulatov (Берс Джамбулатов) is deputy general director for economy and finance in a Gazprom-controlled company, ZTP MOEK. This entity controls commercial access to heating network of Gazprom-controlled MOEK, an energy company. Obtaining swift access to monopoly-controlled energy networks is generally considered very corruption-intensive by Moscow commercial enterprises and property developers.
Gleb Ognyannikov (Глеб Огнянников) is a close person to, and some believe, a front man for, Mr. Leonid Reiman, ex-Minister of Telecommunications of Russia who is subject to multiple investigations for money laundering internationally. His corporate investment vehicles include Eventis Telecom and Sloane Square Capital Partners.
Valery Suraev (Валерий Сураев) is ex-head of an important department in the Russian Ministry of Fisheries responsible for regulating fishing fleet, sea fishing ports and allocation of funding for fleet repairs.
Anatoly Valetov (Анатолий Валетов) is an acting State official in the city of Moscow; he is deputy head of department of foreign economic and international relations of the city of Moscow since August 2011.
What I find peculiar about all of this is that much of the information on the likely real source of funds of those visa applicants and on their potential criminal affiliations was publicly available at the time they made their applications. Whoever created the visa scheme was greedy enough not to check.
Another conclusion one may draw from researching scandals like this one is how double-faced our policies are. We sign conventions on the prevention of money laundering and corruption with one hand, while opening the door to the holders of dirty money with the other.