A £50 million London property empire was bought by an Azeri tycoon and his wife using money brought into Britain via an “extraordinarily complex” money laundering operation involving payments for “nutritious baby food” and fake and fictitious invoices, the High Court has been told.
The National Crime Agency told a judge that it believes that Javanshir Feyziyev, an Azeri MP and businessman, and his wife Parvana acquired 22 homes, mostly purchased jointly, using the proceeds of crime and corruption.
It said the money used to buy the properties – which include two in Belgravia’s Chelsea Barracks development bought for £18.4 million and £8.1 million respectively - had been channeled into this country via a huge network of shell companies in countries ranging from the Marshall Islands, the Seychelles and the British Virgin Islands to Russia and Hong Kong.
It said the scheme also involved the use of forged invoices and other false accounting to mask the vast cash transfers and included transactions labelled as “payment for nutritious baby food”, as well as the deception of banks in Estonia and Latvia, and “corruption and fraud in Azerbaijan”.
Lawyers for Mr Feyziyev and his wife have strongly denied any wrongdoing by the couple and insisted that the politician used his “substantial fortune” generated legitimately by his tobacco, pharmaceutical and hotel businesses among others to fund the purchases.
They are also seeking the removal of court freezing orders imposed on the properties on the basis of the NCA’s claims, arguing that there is no risk of the Feyziyevs disposing of their assets to avoid any future attempt to seize them.
They have further alleged that the orders were “improperly obtained” after “egregious” disclosure failures by law enforcers and the presentation of the “flimsiest of cases” against the Feyziyevs.
At a High Court hearing to decide whether the freezing orders should stay in place, the NCA’s barrister Andrew Sutcliffe KC insisted that there was “compelling public interest” for the properties to remain frozen while law enforcers continued their investigations into the couple and that there was a “good arguable case” that the homes had been bought with the proceeds of crime.
“There is strong evidence that the property freezing order properties have been obtained through money laundering,” he told the court in a skeleton argument submitted to the hearing.
“The .. detailed tracing evidence.. reveals money flows of extraordinary complexity which appear to have been accompanied by inconsistent, false or fictitious descriptions [and] can be traced back, in part, to companies which have been found to have been involved in money laundering [and] remain largely unexplained.”
The document adds: “The transactions are breathtaking. The available banking material records payments made from different entities including Baktelekom, Polux and Hilux through companies in multiple jurisdictions (including the Marshall Islands, Hong Kong, Seychelles, Anguilla, Ireland, Russia, British Virgin Islands, Panama, St Kitts and Nevis, and the Dominican Republic), and with payment descriptions such as “account replenishment”, “payment for medicines”, “fees for licenses to clientbase” and “payments for nutritious baby food”
As well as the two homes at Whistler Square in Chelsea Barracks, which were bought by Mr Feyziyev alone, the properties subject to the court freezing order include 19 properties in the Beaufort Square development in Colindale and a home which cost the Feyziyevs just over £4 million and which cannot be identified for legal reasons.
The court document states that all the properties are held in a trust set up by the London law firm Withers and that the freezing order also covers a bank account in Liechenstein and rental income from the Feyziyevs’ London property empire.
It adds that the “estimated value of the property freezing order properties is over £50 million” and there is a “risk of dissipation” if the orders were to be lifted.
On the alleged money laundering, the document states that “specific examples of transactions that are prima facie fraudulent” include payments which funded the Chelsea Barracks and 15 of the Colindale properties.
It says these payments included “a purported contract for the sale of medicines.. (which does not appear to be genuine)” and “purported payment instructions from Les Laboratories Servier (a French pharmaceutical company which has confirmed that the document is a forgery)”. Other allegedly fraudulent transactions cited in the court document include “a purported loan agreement (which does not appear to be genuine)”.
The skeleton argument submitted by Mr Sutcliffe KC also points out that Mrs Feyziyeva, the couple’s son Orkhan, and Mr Feyziyev’s nephew Elman Javanshir have already been successfully targeted by the NCA in account forfeiture proceedings at Westminster Magistrates which led to a total of £5.6 million being seized from their bank accounts as the likely proceeds of crime.
The court concluded that the forfeited money had entered Britain via a complex money laundering scheme known as the “Azerbaijan laundromat” involving banks in Estonia and Latvia and an elaborate network of shell companies overseas.
In response, Kenneth MacLean KC, representing the Feyziyevs, said the court order freezing the couple’s properties should “never have been granted” and should be removed.
He said this was because there was no “good arguable case” against them and “no real risk of dissipation” and because of “multiple and serious breaches of the NCA’s duty of full and frank disclosure/fair presentation” in securing the orders.
He said Mr Feyziyev was a “respected academic, businessman and (independent) legislator” who had achieved “substantial success in various business ventures over the course of two decades”.
Mr MacLean added: “There is absolutely no evidence that the Respondents [the Feyziyevs] engaged in any unlawful conduct in Azerbaijan or that their funds derived from any such conduct.”
He said Mr Feyziyev also “clearly had sufficient legitimate funds to acquire all of the properties” and accused the NCA of presenting evidence that was “desperate” and “quite extraordinary in its irrelevance” in conduct that was “testament to the weakness of its actual case”.
The judge, Mr Justice Poole, adjourned the hearing and will give judgment on whether the freezing orders over the Feyziyevs’ properties will continue.
The new hearing follows the earlier account forfeiture proceedings involving Mrs Feyziyeva, the couple’s son Orkhan and the couple’s nephew Elman Javanshir.
The court heard then that Mr Feyziyev, who was not a party to those proceedings, was the source of the funds being targeted in the case.
The hearing also led to the later naming of the Tory donor and businessman Javad Marandi as “a person of importance” in the case. Mr Marandi, who owns the Conran Shop, the Emilia Wickstead fashion brand, and a stake in the Anya Hindmarch handbag retailer, had initially secured an anonymity order to conceal his connection to the case and denied any wrongdoing.
But the order, which was opposed at the outset by the Evening Standard was lifted by the High Court in a judgment which said that anonymity should never have been granted.
