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Russian Billionaire Charged in France With Money Laundering

Russian Billionaire Charged in France With Money Laundering

By Yuliya Fedorinova, Gregory White, and Gaspard Sebag

- Kerimov required to post bail, surrender passport: prosecutor

- Kremlin criticized Russian senator’s detention Monday in Nice

Suleiman Kerimov, a Russian billionaire and senator, was charged with laundering money gained through tax fraud in Nice and prohibited from leaving the French region after being detained by authorities for two days.

Kerimov, whose family controls Russia’s biggest gold producer, Polyus PJSC, was required to surrender his passport and post 5 million euros ($5.9 million) in bail, Nice prosecutor Jean-Michel Pretre said by phone Thursday. Polyus shares dropped to the lowest in a week in Moscow on Wednesday.

The Kremlin vowed to defend Kerimov, and a top parliamentarian warned the move may be the start of a “witchhunt” in the West against Russia’s elite. The case is a blow to one of Russia’s wealthiest men, a billionaire who’d spent years cultivating his reputation and financial ties in the West. In Russia, he’s also a prominent politician with close ties to top officials in the government and state companies.

Paul Butler of Akin Gump, a U.S. based lawyer for Kerimov, said that the billionaire had been “released on his own recognizance.”

“We feel confident that given the continuous legal work we have done, he’s fully in compliance with relevant laws and he’ll be able to demonstrate that in any proceeding that he may face,” said Butler.

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Kerimov could face up to 10 years in jail and a fine that could be in the tens of millions of euros, Pretre said, adding that it could take months before investigators wrap up the case and take a decision on whether it should go to trial.

As part of their investigation, French authorities have already confiscated four villas located in the sought-after Cap d’Antibes on the French Riviera, just half an hour away by car from Cannes. The mansions, one of which is known as “Villa Hier,” are each worth well over 100 million euros, according to Pretre. Agence France-Presse reported that Kerimov is suspected of using figureheads to acquire properties and under-declaring their prices.

‘Clear Intention’

“There was a clear intention of this individual to privatize the Cap d’Antibe,” Pretre said. The prosecutor said the investigation, which has been going on for about three or four years ago, didn’t initially target Kerimov and focused on simple drug trafficking suspicions.

While the Russian Foreign Ministry insists that Kerimov has diplomatic immunity, according to a report from the state-controlled RIA Novosti news service, France’s Foreign Ministry told reporters Wednesday that it’s up to the investigative judge in charge of the case to decide whether the matters under examination are relevant to Kerimov’s duties and protected by immunity.

In France, investigative judges, with wide probing powers, can decide to charge companies or individuals in a procedure known as “mise en examen” when there is “serious and consistent” evidence showing likely involvement in the matter under investigation.

Business Empire

As a member of parliament, Kerimov, 51, is required to distance himself from his business empire and forbidden from directly holding foreign assets. In November 2016, his son Said, a 22-year-old student at the Moscow State Institute of International Relations, became the sole beneficial owner of the company controlling Polyus, according to a regulatory filing.

The stock closed down 1.3 percent in Moscow on Wednesday after earlier plunging 5.1 percent, the most since 2015.

Nice has been bad news for Kerimov, Russia’s 21st-richest person, with a fortune ###a itemscope="itemscope" itemprop="StoryLink" href="https://www.bloomberg.com/billionaires/" title="Bloomberg Billionaires Index" target="_blank">estimated at $5.5 billion by the Bloomberg Billionaires Index. In 2006, the billionaire’s doctors had to place him in a coma after his Ferrari crashed and burst into flames in the French Riviera resort city.

In March, Nice-Matin reported that law enforcement authorities searched Villa Hier in the south of France, one of several properties in the country that the newspaper attributes to him. Kerimov’s representative denied he’s the owner, according to the Vedomosti newspaper at the time.

— With assistance by Torrey Clark, Robert Williams, and Scott Rose

https://www.bloomberg.com/news...

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