Azerbaijani Laundromat
Millions Seized in the UK; More to Come?
No, it’s not a novel way to wash dirty clothes. It’s yet another massive scheme to launder misappropriated funds that cleaned nearly $3 billion—this time from Azerbaijan—over two years using four UK shell companies.
Through a joint investigation between numerous media outlets and the intrepid Organized Crime and Corruption Reporting Project (OCCRP), the probe uncovered billions of dollars misappropriated by Azerbaijani elite to bribe European politicians, buy luxury goods, and gain personal benefits.
The money, according to OCCRP, bought silence from 2012 to 2014.
The silence of European politicians about human rights abuses.
The silence of corrupt media that printed stories friendly to the regime.
The silence of a company that praised Azerbaijan’s regime and ignored the human rights abuses in which it was engaged.
During this period, the Azerbaijani government threw more than 90 human rights activists, opposition politicians, and journalists (such as OCCRP journalist Khadija Ismayilova) into prison on politically motivated charges. The human rights crackdown was roundly condemned by international human rights groups.
So what were those anonymous shell companies that listed no shareholders and disguised their true origins? And Danske Bank—a financial institution that lost a lot of credibility and money in financial penalties for allowing its Estonian branch to launder billions of dollars in corrupt assets—also turned a blind eye to all four of the shell companies connected with the Azerbaijani Laundromat, allowing misappropriated billions to flow to other shell companies located all over the globe.
The four companies, Polux Management LP, Hilux Services LP, Metastar Invest LLP, and LCM Alliance LLP, are registered with the UK’s Companies House. Two of them—Polux and Hilux—were both registered at the same address: Mailboxes Etc. on 111 West George Street in Glasgow, Scotland.
They both listed Solberg Buisness Ltd. as a general partner and Akron Resources Corp. as a limited partner. Akron and Solberg are both entities located in the British Virgin Islands and serve as officers for an entity called Ertex Trade, LLP., which was registered at 43 Bedford Street, London—another Mail Boxes Etc. location.
The officers for Metastar are also two entities in… Belize! Yes, it’s another secrecy haven! And the address this entity lists—Cornwall Buildings 45-51 Newhall Street, Office 330, Birmingham, B3 3QR—has 295 companies listed at it.
LCM alliance is registered at 175 Darkes Lane, Suite B, 2nd Floor, Potters Bar, Hertfordshire. Companies House has 658 entities registered at that same address! What does that tell you?
As you can see, a quick search reveals that these companies are nothing and do nothing but provide cover and layers of anonymity for shady transactions. They have no real purpose, no real address, and have been moving assets for kleptocrats. More information on these shell companies can be found here.
Where did this money come from?
Almost half of it came from an account held in the International Bank of Azerbaijan (IBA) by a mysterious shell company linked to Azerbaijan’s ruling family, the Aliyevs.
The second and third biggest contributors were two offshore companies with direct connections to a regime insider. Some of the money came directly from various government ministries. Mysteriously, another portion came from Rosoboronexport, a state-owned Russian arms exporter. It is clear that the full extent of the Azerbaijani Laundromat will be explored for years to come.
Meanwhile, the UK’s National Crime Agency (NCA) this week announced that it seized more than $7 million belonging to an Azeri politician, alleging that the funds were part of the Azerbaijani Laundromat money laundering scheme.
Financial investigators secured a Forfeiture Order for £5.6million in UK bank accounts belonging to family members of Javanshir Feyziyev, who is a serving member of the Azerbaijan parliament, Chair of the UK-Azerbaijan All Parliamentary Co-operation Committee, and Co-chair of the EU-Azerbaijan Parliamentary Co-operation Committee.
Coincidentally (or not), Feyziyev claimed he was libeled by the OCCRP after the organization assessed that a major company he founded—AvroMed—received $138 million of those misappropriated funds. According to the settlement, OCCRP agreed to add Feyziyev’s ardent denial to its articles. But a UK court obviously thought there was enough there there to approve a forfeiture order for the money held in UK bank accounts belonging to Feyziyev’s family.
Initially, the NCA had petitioned to forfeit more than $20 million, but the judge allowed only a quarter of that amount, which made the Feyziyev family gloat that they were relieved to keep most of the money.
I’m sure we will hear more about the Azerbaijani laundromat and the people involved as OCCRP continues to investigate.