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The truth behind McMafia: London is ‘the jurisdiction of choice’ for Russian crime gangs

Vladimir Putin and his cronies in the Kremlin will no doubt dismiss the plot behind the new BBC thriller, McMafia, as a sensational piece of Western propaganda.

But for Bill Browder, the British based financier dubbed ‘Putin’s no 1 enemy’, the reality is even worse. Browder believes that Russian crime gangs now treat Britain as their jurisdiction of choice for laundering both their money and their reputations.

The head of Hermitage Capital began a nine year battle against Putin after his lawyer, Sergei Magnitsky, died in Russian custody when he uncovered widespread corruption.

Browder’s story and his quest for justice for the Magnitsky family has done more to shine a light into the Russian criminal underworld and its murky connections to the Kremlin than any Western agency.

A series of Magnitsky Acts, brought into law across Europe and America, has imposed financial and travel sanctions on named Russian officials linked to the lawyer’s death.

Laundering London

Late last year a court in Moscow sentenced Browder to nine years in prison in absentia after finding him guilty of deliberate bankruptcy and tax evasion. The financier, who has repeatedly dismissed the charges against him as baseless and politically motivated, has said he will appeal.

Browder told the i: “Unfortunately, London has become the global centre for laundering the money and reputations of Russian organised criminals. McMafia brings that realisation into the living rooms of people all over the country. Hopefully, this will actually lead to some political change and tougher rules in the future.”

Chief Executive Officer and co-founder of the investment fund Hermitage Capital Management Bill Browder attends the “Prospects for Russia after Putin” debate in the Houses of Parliament in 2014. Photo: Getty

The reality to which Browder refers is the stealthy corruption of European institutions through a criminal alliance of the Russian state and its mafia agencies. In London these gangs have already gained an icy grip on international financial networks where they are supported by biddable lawyers and greedy business consultants.

Light touch regulation and a desperate imperative to keep the City of London at the heart of Europe’s money markets, have also helped to smoothe their passage.

Blurred lines

The blurring of the lines between asylum-seeking oligarch, Putin stooge, and crime boss means it is increasingly difficult for the authorities to work out where criminal acts begin and legitimate business ends.

Gangs which make their money in drugs, human trafficking and extortion have also tried to clean up their operations by using a combination of British banks and the luxury property market. They have even tried to wash away the crimes of the fathers by sending their children to some of Britain’s finest public schools.

But just like in McMafia, wherever the Russian mafia set up home, crime is never far away.

Russian President Vladimir Putin speaks during his annual end-of-year news conference in Moscow, 14 Dec 2017. Photo: PA

In recent years Russian crime bosses have sent hit squads to London to impose mafia justice and in the case of Kremlin whistleblower, Alexander Litvinenko, state assassination.

Many believe that Litvinenko paid the ultimate price because he was investigating alleged ties between the Russian mafia, Putin and British-based oligarchs.

Fatal links

The notorious crime gangs of Moscow and St Petersburg were Litvinenko’s area of special expertise when he worked for the KGB, and the Kremlin knew it. Britain’s own Secret Intelligence Service (MI6) knew it too. So when he defected to the West in 2000, Britain quickly put him to work investigating the money laundering operations that appeared to link the crime gangs to Putin as well as many of the Russian businessmen who enjoy the protection of the Kremlin.

The high number of rich Russians who end up dead in London and the home counties have prompted a series of high profile police investigations.

Among them was Litvinenko’s friend and financial sponsor, Boris Berezovsky, who had fallen out with Putin. He was found dead at his estate in Berkshire in 2013. An inquest was unable to reach a firm conclusion as to how he died, returning an open verdict.

Litvinenko before death at University College Hospital in London. Photo: PA

A year later the British tycoon Scot Young died falling from his fourth-storey London flat, allegedly owing millions of pounds to the Russian and Turkish crime gangs. Scotland Yard ruled out foul play, saying it was not treating the death as suspicious.

This year an inquest into another suspicious death of a Russian living in the UK will once again ask awkward questions about the activities of the Russian mafia in Britain. And it is a case which could have been written by the scriptwriters of McMafia.

Scratching the surface

Russian businessman Alexander Perepilichnyy, 44, collapsed and died while jogging near his home in Weybridge, Surrey, in November 2012 after his name appeared on a “hit list” in Moscow and after he had confided in friends he had received death threats. He sought sanctuary in the UK where had been helping William Browder in his ongoing battle to uncover a £150m Russian money-laundering operation.

The crime gangs, some named in the Perepilichnyy and Litvinenko cases, operate across Europe where law enforcement agencies are fighting a losing battle.

A suspected member of the The Tambovskaya-Malyshevskay gang, a Russian criminal network walks out of a building in Palma de Mallorca on June 13, 2008. Photo: Getty

In September last year Europol and Spanish counter-mafia agencies broke up a Russian group that had infiltrated the very heart of the Spanish business and sporting world. Codenamed ‘Operation Oligarkh’, the investigation uncovered a complex system of money laundering ventures in Spain through a football club, a water bottling company, and a golf club.

The raids led to the arrest of eleven Russians linked to two of the most prominent Russian mafia groups, the “Solntsevskaya” and the “Izmailovskaya”.

Among those arrested was one of the leaders of the “Solntsevskaya” group, as well as the President and the Vice-president of a local Spanish football club. But the Spanish success merely scratched the surface.

State involvement

Mark Galeotti, a senior researcher at the Institute of International Relations Prague and coordinator of its Centre for European Security, has warned that what makes this type of organised crime unique is “how it is instrumentalised by the Russian security apparatus.”

In his paper for the European Council on Foreign Relations, he described the gangs as “Russian-based organised crime” which he said defined the nexus between criminals and “Russia and its state apparatus above and beyond anything else.”

He said: “[its] crucial feature is that its members, while operating abroad, have a strong stake in Russia, regardless of their official nationality, residence, or ethnicity. This means the Kremlin has leverage over them.”

This is how one Western counter-intelligence officer described the problem to Galeotti: “so long as his balls were in Moscow, the Russians could always squeeze.”

From Russia, with extortion

St Petersburg: The Tambov Gang.

The Tambov Gang, founded in 1988, takes its name from the St Petersburg district of Tambov Oblast. Their stock in trade is extortion and racketeering.

The gang has allegedly been led by two senior members, Vladimir Kumarin and Valery Ledovskikh. Kurmarin has close links to Putin who returned the favour by awarding Kumarin a lucrative gas contract for St Petersberg, making him very wealthy. The gang has since spread its criminal tentacles to Western Europe where its ‘businesses’ are principally used to launder the vast fortunes it had accumulated under Putin.

On June 13, 2008 Spanish police arrested 20 members of the organisation’s Spanish operation. Similar raids took place in Germany and Bulgaria, leaving the Tambovs looking for new countries in which to launder their cash. MI6 played a key role in helping to break up these enterprises by supplying intelligence to the Spanish, German and Bulgarian police.

Moscow: Solntsevskaya Bratva

Moscow-based Solntsevskaya Bratva is an extraordinarily wealthy and ruthless syndicate allegedly run by its founder, Sergei Mikhailov, a man hardened by years in the gulags and well connected thanks to the criminals he met there.

Under Mogilevich’s stewardship, Solntsevskaya Bratva has turned its business interest to London where its been involved in UK money laundering since mid-1990s. It is Russia’s largest criminal group with about 8,000 members, working mostly in the drugs trade and human trafficking.

The group is headquartered in Moscow and composed of ten “brigades” that operate more or less independently. The group does pool its resources, however, and the money is overseen by a 12-person council that meets regularly in different parts of the world.

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