Perepilichnyy Linked To World’s Largest Cash Scandals

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After Alexander Perepilichnyy fell dead while jogging outside London, US intelligence came to the conclusion that he was probably murdered “on the direct orders” of “Russian President Vladimir Putin” or by people close to him. Perepilichnyy had exposed the Magnitsky scam, a $ 230 million tax fraud committed by corrupt Russian government officials two years ago that became a focal point in US-Russia relations and resulted in sanctions against Russian officials.

Perepilichnyy knew about the fraud because he had relieved him and helped launder the stolen funds in Swiss bank accounts. He has worked with all sorts of dubious clients, from the alleged leader of the Magnitsky fraud to funders of the Syrian Assad regime, which has used chemical weapons against civilians. And even after Perepilichnyy’s death in 2012, a company he founded, Financial Bridge, would be embroiled in one of the biggest dirty money fiascos in history.

In what is known as the mirror trade scandal, money launderers moved at least 10 billion US dollars through some of the world’s most renowned banks over a period of four years. During that time, Deutsche Bank had at least three internal warnings about Financial Bridge – and more than 100 for the mirror trading network. However, the German never stopped the flow of illegal funds.

The inside story of how the German moved the dark money and continued to collect fees – released today in the FinCEN files, a joint investigation by BuzzFeed News and the International Consortium of Investigative Journalists – reveals new information about one of the greatest financial crimes in history.

But it also sheds light on how illegal cash from the former Soviet republics is channeled into the mainstream banking system. Perepilichnyy and Financial Bridge serve as prime examples.

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After Perepilichnyy turned from a money launderer to a whistleblower, Financial Bridge didn’t go away – instead he found a new life in the criminal underworld. In October 2012 – a month before Perepilichnyy’s death – it was taken over by two anonymous Shell companies.

Shortly thereafter, Financial Bridge informed another bank with which it had accounts, Danske Bank, that it had two new “beneficial owners”, according to records from L’Espresso and ICIJ.

One was a security advisor named Igor Marakin. The US authorities have linked a company he controls with the Russian mafia.

Financial Bridge was an integral part of the mirror trading scandal. According to a secret US government report, the money laundering gang moved illegal money for criminals and terrorist financiers.

Had the banks acted violently after Perepilichnyy’s death, they might have curtailed Financial Bridge’s plans and perhaps even halted one of the biggest financial scandals of the decade years before it unfolded.

Alex Fradkin for BuzzFeed News

Deutsche Bank headquarters in London

The system was exposed four years later in 2016, and the following year the US and UK authorities fined Deutsche Bank $ 630 million. Mirror deals are permitted by law but can be manipulated for illegal purposes such as money laundering.

A spokesman for the German noted that the mirror trading network was “criminal acts by individuals” and that authorities in the US and Europe had praised the bank for its “exceptionally cooperative” investigation. Since the scandal, the bank has provided “significant resources” to fight money laundering, the spokesman said.

Danske Bank declined to comment on Financial Bridge, but admitted its own € 200 billion money laundering scandal. “We were slow to realize the extent of the problem and closed it,” said Philippe Vollot, chief compliance officer, in a statement.

Marakin’s alleged role in the giant mirror trading network is outlined in a classified intelligence report written by analysts for the Treasury Department’s Financial Crimes Enforcement Network and shared with ICIJ by BuzzFeed News.

The report labeled “Law Enforcement Sensitive” warned that the network “highlights a vulnerability in the global securities market for money laundering”. Using a mixture of banking details and other information, it detailed how the network allegedly conducted billions of dollars’ worth of business, some on behalf of “illegal actors”.

According to the report, the focus of the system was on four Russians who transferred “billions of dollars a year” to a number of banks and brokers for a “fee of up to five percent”. According to the report, they used Russian rubles to buy shares in large companies, then immediately transferred the shares to Europe and resold them for dollars, euros or pounds – allowing them to change large amounts of currency without the usual oversight of the authorities.

Two of the four Russians, Alexei Kulikov and Oleg Belousov, owned shares in Promsberbank, where President Putin’s cousin Igor was director. Millions of dollars have been stolen from the bank. Promsberbank bankruptcy documents show that money has been directed into the mirror trading network.

Kulikov was imprisoned for his role in stealing Promsber Bank. Belousov’s whereabouts are unknown. No one responded to requests for comments.

Another alleged key figure in the program, Russian financier Andrei Babenko, is now in Israel, where he has worked in the cryptocurrency industry. The fourth, Andrey Gorbatov, is in Moscow according to his LinkedIn profile. Both Babenko and Gorbatov denied involvement in the network in interviews with BuzzFeed News.

Marakin was the director or owner of at least three companies on the Mirror Trading Network, including one that sent cash to a Lazar Shaybazian-controlled company who was banned from the US financial system in 2012 for working with Vladislav “Blonde” Leontyev. Described by US authorities as a Russian gangster and high-ranking drug dealer.

The government has stated that Shaybazian and Leontyev are part of a group called “Brothers’ Circle,” a network of Eurasian criminals associated with drugs, human trafficking and violence around the world.

Shaybazian did not respond to requests for comment. Leontyev said he was falsely attacked by US sanctions and did not know Shaybazian.

All of these transactions took place behind closed doors while another saga was played out in public: Was Perepilichnyy murdered, and if so, was that murder linked to his disclosure of Russian money laundering?

Dominic Lipinski / PA Images

Bill Browder helped Alexander Perepilichnyy expose the Magnitsky scam before Perepilichnyy died.

In 2017, a BuzzFeed News investigation found that the American intelligence community had “great confidence” that Perepilichnyy had been murdered by agents linked to Russia.

The coroner’s investigation, held up for years by requests from the British government to keep information about his death secret, ultimately found that Perepilichnyy had died “probably” of natural causes, but it could not be ruled out that he was killed.

The trial was overshadowed by revelations of an inadequate police investigation into Perepilichnyy’s death. The police admitted losing hard drives containing the financier’s financial information. Lawyers argued during the investigation that the drives could shed further light on the risks Perepilichnyy faced.

Earlier this year officials brought evidence of a number of suspicious deaths, including perepilichnyys, to Parliament in a UK government review of Russia’s interference in the country. However, the evidence was withheld from the public for reasons of national security.

Igor Marakin did not respond to requests for comment. Pictures online show him partying and learning to fly. ●

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