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The Audiencia National (the Spanish National Court in Madrid) continues hearing the case of money laundering by Tambovsko-Malyshevskaya organized crime group (the first part of our courtroom report is available here). The Insider has already summarized the essence of this criminal case, which features the names of Duma deputy Vladislav Reznik, head of Investigative Committee Alexander Bastrykin, chairman of Sberbank's Executive Board Herman Gref, and many other representatives of the Russian political elite. The defendants are charged with investing funds of obscure origins by transferring them from offshore firms to companies registered in Spain, other European countries, and Russia, primarily in the sphere of development and shipbuilding, and thereby participating in organized criminal activities. As The Insider found out, the cornerstone of the underworld structure was a Liechtenstein-based trust owned by Gennady Petrov and run by the very same attorney who was in charge of «Putin's Palace,» a luxurious replica of St. Petersburg's Winter Palace that was built at Cape Idokopas near Gelendzhik at the commission of the head of Putin's Administrative Directorate.

February 21

Crime bosses: Petrov, Kumarin, and Malyshev

The court continues the examination of Yuri Salikov, associate of Gennady Petrov (head of Petrov-Malyshev crime group), on the subject of Sunstar, a company that supposedly dealt in real estate. Prosecutor Juan Carrau inquires how many buildings Salikov's company purchased and sold (which the defendant fails to recall). Carrau also asks him to specify what services the company received $180,000 for. Salikov says they were commissioned to analyze a supermarket construction plan. «So, has it been built?» asks Carrau. (It hasn't.) Further on, it turns out that Salikov was receiving money transfers from England, Switzerland, and Oregon (USA). «Did you render consulting services in all of the mentioned countries?» continues the prosecutor. Salikov explains those were loans and the company lived in debt. However, he did not pay any interest on these loans. For a big-time debtor, he was doing fairly well, residing in a corporate villa on Mallorca. «Were you maybe paying rent?» inquires Carrau. «I fail to see the purpose of your question. Could you ask me about something else?» responds Salikov perplexedly.

Having analyzed the wiretapped conversations, the investigators learned that Salikov's brother, Igor, has contacted Gennady Petrov to arrange Salikov's release on bail. The matter was also negotiated with Russian oligarch Iskander «Kitayets» Makhmudov. To this, Salikov responds that Petrov offered him "nothing but moral support."

During the examination, Yuri Salikov repeatedly insists that he met Petrov in 1989 in the USSR and spent the period from 1989 to 1995 in Germany, having nothing to do with Spain. However, his words sound more like a plea of guilty than a claim of innocence because, according to the investigators, it was in Germany that the crime group started its money laundering activities. Thus, Mikhail Rebo, one of the defendants in Petrov's money laundering case who has pleaded guilty, is a German national and resident. The Spanish indictment also lists the infamous SPAG company, registered in Frankfurt and run by Vladimir Kumarin, another leader of Tambovsko-Malyshevskaya crime group, among one of the group's first major operations in Europe.

Vladimir Barsukov (Kumarin), former leader of Tambovskaya organized crime group

Vladimir Kumarin, who was imprisoned in 2007 and found guilty of many charges, had started his criminal career in St. Petersburg in the 1990s with Petrov and Malyshev. They had a falling-out, and Petrov emigrated to Spain, fleeing from Kumarin (according to the wiretapped conversations between Petrov and Malyshev). In the meantime, Tambovsko-Malyshevskaya crime group split into two rival gangs.  The Darmstadt public prosecutor's office initiated a case of money laundering against SPAG, a company co-founded by Putin's Committee for City Property Management of St. Petersburg Mayor's Office, in 2000, but the case was dismissed in 2009, when the relevant statute of limitations expired. As the prosecutor's office stated to The Insider, the case featured a number of Russian and German nationals and a Spaniard as prime suspects.

In 2011, investigative prosecutor José Grinda tried to persuade Germany to initiate the investigation of Petrov and his associates' money laundering activities performed in 2008 but did not succeed. The Insider has previously covered those events. However, prosecution at the Madrid proceedings pays little attention to the German activities of Tambovsko-Malyshevskaya crime group.

Salikov is cross-examined by the defense. Salikov's defense attorney asks whether he knew that Gennady Petrov owned Baltiyskaya Construction Company in Russia (headed by Arkady Buravoi) and was a shareholder of the Rossiya Bank. Most likely, the DA is trying to point out that Salikov could have been unaware of Petrov's criminal profile due to his prominent achievements in business. Salikov vaguely agrees. In fact, reporters can barely hear most of what he is saying because his answers are curt and he whispers them, so the courtroom hears only what the interpreter says (once she even offered an answer without waiting for Salikov, which caused a gale of laughter).  Salikov denies having used Petrov's private jet.  The DA also appeals to the fact that Salikov could have been unaware of the true nature of the documents he signed, to which the judge objects that a person is always responsible for whatever they sign.

Examination of the secretary: "A village with 50 Russians"

The next defendant is Svetlana Vasilyeva, who worked as a secretary at Inmobiliaria Calvia, Gennady Petrov's company in Palma de Mallorca staffed by a total of two employees – Vasilyeva and another secretary.  Vasilyeva claims that she simply performed secretarial duties in a regular real-estate company. She mentions she has mouths to feed.  The company indeed belonged to Petrov. When asked whether she knew about Reznik's acquaintance with Petrov, she admits she did because «Palma de Mallorca is in fact a village with about 50 Russian residents, all of whom know one another.» She says Reznik and Petrov lived quite far from each other, separated by about a dozen kilometers.

Palma de Mallorca became home to many Russian crime lords

Svetlana Vasilyeva also worked as a housekeeper for Arkady Buravoi (Petrov's business partner), paying utility services bills for his Mallorcan house. Vasilyeva confirms that she knows a man by name of Oleg Noskov, who bought a villa on Mallorca as well (according to the indictment, he fraudulently obtained a Greek passport, like Petrov). Noskov is a former member of the board of directors of the Rossiya Bank. A reference cited in 2008 by Fontanka listed a total of nine companies he co-owned with Anton Petrov, Gennady's son. Both Noskov and Buravoi used to live in a premium-class compound on Kamenny Island in St. Petersburg, along with Gennady Petrov and a number of Putin's friends from the Rossiya Bank and the Ozero dacha housing cooperative.

When Petrov, Malyshev, and other suspects were taken in custody on Mallorca in June 2008, Vasilyeva received so many calls that her phone overheated, she tells the court. Yet she recollects that the list of callers included Anton Petrov, Arkady Buravoi, Leonid Khristoforov, Vladislav Reznik, and Diana Gindin. Thus, Anton Petrov was worried about his father's yacht.

Prosecutor Juan Carrau asks her to clarify: «On June 18, 2008, you received a call from Reznik, who asked whether his accounts were frozen, and on June 20, 2008, you called him back to confirm that, yes, they were frozen.» «I may have,» says Vasilyeva. It turns out that Vasilyeva had been granted access to Reznik's account on Mallorca so that she could pay the bills for his villa: maintenance, electricity, the gardener's services, and so on.

As for Ilya Traber (another Mallorcan resident who is now wanted for his connections with the crime group), she admits having heard his name, but denies having ever spoken with him. When Petrov Jr. mentioned an «Ilya» in a wiretapped conversation with Vasilyeva, she immediately understood he meant Traber. In justification, Vasilyeva says he is famous (later, Vladislav Reznik will admit he is friends with Traber in the same courtroom).

Examination of Petrov's attorney: "He can't be a criminal – he is friends with the Russian prime minister!"

The court questions Juan Antonio Untoria Agustín, a Spanish attorney and presumably Gennady Petrov's right-hand man. Untoria claims he only cooperated with Petrov «on a number of projects.» Petrov's companies were indeed registered at his office (the investigation says there were nine, but Untoria claims there were only six), but so were many other companies.

Juan Antonio Untoria is played a wiretapped recording of his own conversation with Svetlana Vasilyeva, in which she explains that the boss (Gennady Petrov) wants to ink a deal, and it has to be legitimate, but he also needs 100,000 «in coins» for his personal expenses. Untoria recommends making a «shadow» wire transfer.  «B-category money» is also mentioned.

In the next conversation, Untoria lets on that he can resort to illegal means when solving his problems. In any case, he makes a threat to that effect. In a conversation from October 2007 with a woman named Olga, Untoria reveals that he offered his secretary Maria Jesus and her friend to visit a swinger club after meeting the girls in a bar. The idea failed because «they weren't accredited.» Olga responds it was a dangerous move because Maria Jesus may complain to Untoria's wife. Untoria counters that everything is under control because, if the girl causes trouble, he can send "two Russians to her, and she will disappear."

Two months later, Untoria calls a man in Spain to collect a debt: "It is best if you give us the money in a painless way, so to say... Otherwise, we would have to send certain people to collect it."

Untoria's examination culminates with the fact that he was allegedly introduced to Gennady Petrov in 1998 by José Alises, an officer of Spanish intelligence (currently CNI) and Untoria's university pal. Untoria says it is a perfectly normal occurrence for someone of Petrov's level. Alises is expected to appear at the witness stand at some point of the proceedings.

During the break, Untoria approaches The Insider's correspondent on his own. He uses the opportunity to emphasize to The Insider that he is proud of his acquaintance with someone as high-profile as Petrov. However, he is promptly interrupted by another defendant, Kirill Yudashev (in whose office the investigators found the articles of association of Sergei Kuzmin's companies – Kuzmin being another Rossiya Bank minority shareholder and one of Malyshevskaya crime group leaders). Yudashev ushers Untoria aside, and the latter abandons his press relations efforts.

The trial goes on. The prosecutor inquires whether Untoria reported any of Petrov's financial transactions to the Spanish law enforcement as suspicious, because the Spanish legislation stipulates a number of specific markers of money-laundering activities that lawyers and public notaries are obliged to detect and report. In response to that, Untoria enthusiastically confirms that he «reported to two CNI agents about all operations of all his Russian clients.» However, in a certain contradiction to his enthusiasm, he claims that "none of the operations were suspicious – they were simply buying houses."

The prosecutor asks Untoria about Caspian, a company registered in the offshore jurisdiction of Delaware. The investigation has established that the company was represented on Mallorca by another Petrov's secretary, Yulia Ermolenko. As it turns out, Untoria previously testified that the company was controlled by Leonid Reyman, former minister of communications. At the trial, Untoria seems to have forgotten about it and says that the company simply hired a Russian CEO. Now Untoria claims that he was assisting Reyman "in the purchase of a plot of land on Mallorca for the purpose of building a house."

Prosecutor Juan Carrau asks Untoria to clarify whether Petrov was his boss. The defendant says Petrov did not speak Spanish, so he only communicated with him through his secretaries. Untoria barely manages to conceal his indignation at the court's interest in some of his high-profile clients. At some point, he snaps: "Petrov has unbelievable connections!"

The court studies the paperwork related to a five-million-dollar loan given by Vesper Finance Corporation, S. A. (Panama), to Untoria for «investment in the construction of commercial and residential facilities in Moscow.» In his turn, Untoria lent the money to OAO Orion (Russia). The prosecutor asks for details of the operation: how was the loan backed, and what did they build with this money in Moscow? Untoria replies that Russia made for a «fascinating investment market» and they planned to build a 42-story house in Moscow with «developer» Arkady Buravoi, a friend of Gennady Petrov's.

Vesper Finance has a Swiss account and wires money all over the word, including the Rossiya Bank (aka «Putin's friends' bank») and the Frankfurt branch of Dresdner Bank.

The examination of Juan Antonio Untoria continues on the following day, February 22. In particular, he clarifies that Vladimir Reznik was the one to introduce him to Leonid Reyman, who was looking to buy a plot of land on Mallorca. It is also revealed that Untoria helped Reznik to obtain a Spanish residence permit: «You see, it is impossible to own a car or a yacht in Spain without a residence permit. I helped him with his application at the Ministry of Internal Affairs so that he could register his car and yacht in his name and abide by the law,» claims Untoria. A total of 16 million euros were transferred to the accounts controlled by Untoria, of which 8.5 million were wired further – to Panama, Russia, and a number of offshore jurisdictions. Untoria justifies these transfers by Arkady Buravoi's development expenses (although he does not provide any details about the buildings). The investigation points out that Untoria had access to as many as 59 accounts.

Untoria admits having met Ilya Traber in Madrid. He knew Traber as a Greek citizen.

Untoria's DA asks to specify whether intelligence officer José Alises, who allegedly introduced them to each other, contacted Petrov frequently. Untoria confirms they «kept in touch for a number of reasons.»  Untoria's DA insists that these reasons did not include criminal activities, which is apparent from the level of Petrov's connections. The DA specifies that Petrov was connected to «the Russian minister of defense» (presumably Anatoly Serdyukov), «the prime minister» and «Gazprom chairman» (presumably Viktor Zubkov). In wiretapped conversations, Gennady Petrov and his son discuss their meetings with Anatoly Serdyukov and certain «assistance with the customs» they received from his father-in-law, Zubkov.

The recordings and witness testimonies picture former Prime Minister Viktor Zubkov as partner and friend of crime boss Gennady Petrov

February 26

Money laundering scheme

Yulia Ermolenko, Petrov's other secretary, is at the stand. To be precise, she claims she simply performed the duties of secretary and translator. However, her signature is on the documents of the companies investigated by the Spanish prosecutor's office. These companies include Centros Comerciales Antei, which Duma deputy Vladislav Reznik purchased from crime boss Gennady Petrov.

From the indictment:   

"Mr. Reznik was well aware of the fact that assets of Centros Comerciales Antei, S. L., had been acquired through money laundering in the course of multiple international transfers. In 2003, the company received seven transfers from abroad totaling €3,255,398.51, three of which came from Switzerland, amounting to €1.004.819, another from the Virgin Islands, amounting to $1,998,988... <The list of transactions goes on.>

  <> In view of the foregoing, we can conclude that Mr. Reznik is aware of the illegitimate origins of the money that is transferred to Centros Comerciales Antei, S. L., and is in the process of securing his ownership of the company. Although the governance of the company has been formally entrusted to Yulia Ermolenko, it is in fact controlled by Mr. Anton Petrov, with Messrs. Untoria and Angulo providing consulting services.

Ermolenko had the signing authority. However, she denies having seen the papers that were found in the office with her signature on them. Transfers came to Antei from Switzerland, Panama, and the British Virgin Islands and then were forwarded to the USA and Russia as investments. Presumably, Ermolenko knew nothing about these transactions.

«Antei was building and renovating houses in Russia, in particular St. Petersburg: a house in Kazanskaya Street, a house on Vasilyevsky Island, and one of the buildings of my alma mater – the Herzen State Pedagogical University,» says Ermolenko during cross-examination by the defense.

However, she fails to provide any specifics as to where the money initially came from. «Those were loans procured by shareholders [Gennady] Petrov, Buravoi, and Anton Petrov,» she presumes. «What banks did they borrow from? Swiss banks? Latvian ones?» the procurator presses on. «I don't remember,» replies Ermolenko.

Ermolenko says she did not know anything about the criminal past of Petrov, Traber, and other individuals because «she prefers classic literature to newspapers.» She claims she knew Petrov as a man of integrity and a «caballero» (Spanish for «cavalier»; Ermolenko is testifying in Spanish).

The scope of Petrov and his people's activities boggles the mind. The recordings of Petrov's negotiations studied by The Insider demonstrate that his interests have included shipbuilding, aircraft engineering, development in St. Petersburg and Moscow, road construction in Finland and St. Petersburg (e.g. the city ring road), and business aviation in Pulkovo. «Tell me if you need assistance – we'll go from above,» Petrov says to Andrei Vasilyev, who called him with regard to business aviation. «It's fine. They are now settling it with [Valentina] Matvienko,» replies Vasilyev.

One of the documents with an outline of offshore schemes found in Ermolenko's papers

 

A conveniently forgetful consigliere: How Petrov shares an attorney with Putin

The investigators searched the houses of all the accused. Most of them say they simply stored documents at Gennady Petrov's and Sergei Kuzmin's request but – believe it or not – were completely uninterested in the nature of the papers. In some cases, these papers were handwritten notes in Russian about the distribution of money among Petrov's close associates – a black ledger of sorts – and schemes of international money transfers between Spain, Switzerland, Panama, and even India. With regard to such notes, the defendants have a bulletproof argument: "This is not evidence because there is no seal."

From the indictment: "The scheme that enabled to transfer $500,000 through Spain. First, the amount is wired to Russia, and then returned to Switzerland under the cover of a transaction authorized by an Indian company.

Yulia Ermolenko is demonstrated a printed scheme captioned «OFFSHORE — ONSHORE» and other documents from Liechtenstein that were discovered at her place. The evidence testifies to the fact that Vesper, the Panamanian investor of Reznik's company Antei with a Swiss account, belongs in its turn to a trust in Liechtenstein that Petrov registered as Santon Foundation in October 2000. Having passed these countries, the money is directed to Russia and Spain. Ermolenko claims that the project «only existed on paper.»  However, the contract even features the name of the attorney in Liechtenstein – Jürg Wissmann – and his phone number.

As The Insider found out, the commercial register of Liechtenstein indeed includes Santon Foundation, a legal entity registered under unique number FL-0002.347.625-2. However, its year of association is 2010.

Jürg Wissmann even keeps a Russian-language version of his website.  It says that he has a basic knowledge of Russian and offers "advising in banking and asset management law."

He lives in St. Gallen, Switzerland. The Insider has heard the toponym from Mikhail Skigin (some say he was the one to inherit Ilya Traber's business assets because Traber could not remain their lawful owner). It could be a coincidence, but Skigin emphasized that there were few Russians in the town.

Managing Petrov's assets is not the only accomplishment of the Russian-speaking attorney from St. Gallen. Wissman runs Lirus Management,  an entity that owned a replica of the Winter Palace near Gelendzhik. The residence with a security gatehouse had been commissioned by the Administrative Directorate of the Russian President.

Sergei Kolesnikov, former co-owner of Vyborg Shipyard, declared in 2012 that Swiss company Lirus Management AG, represented by Wissman, in fact belongs to Vladimir Putin through «bearer shares» of an eponymous entity in Liechtenstein. According to him, these funds were used for the construction of Putin's palace near Gelendzhik.

Kolesnikov's name is mentioned in the Petrov case too. One of the charges against Petrov is money laundering through Wadan Yards – German shipyards located in Wismar and Warnemünde (for more details, read our story "'They claimed to act in Medvedev's interests':  How mafia laundered money at German shipyards"). On paper, these shipyards were purchased in 2008 by businessman Andrei Burlakov, who was subsequently shot, but the deal was for some reason reported to Petrov by Nail Malyutin.

As The Insider wrote earlier, Vyborg Shipyard, which was co-owned by Traber's straw men and the said Lirus Management AG, intended to launch a joint venture with Wadan Yards. However, Wadan Yards went belly up (the Spanish investigation presumes its bankruptcy was artificial), and its de-jure owner was assassinated. In wiretapped conversations, Gennady Petrov and Nail Malyutin mention «Kolesnikov» and «Sergei Vladimirovich.» Petrov reticently approves of the fact that the value of Wadan Yards’ shares grew after Russian national Burlakov purchased the company in 2008 because «everyone has realized who is backing the company.» Interestingly, Kolesnikov was Petrov's neighbor in the elite compound on Kamenny Island in St. Petersburg that we have mentioned earlier.

When The Insider reached Dr. Jürg Wissmann for comment, he claimed he could not recall working as a manager of Santon Foundation: «My name might be mentioned in some of the documents, but I can't recall any right now.» He also failed to confirm whether Gennady Petrov had been one of his clients and complained of deteriorating memory. Similarly, Dr. Wissmann did not remember the status of the project: whether it was a foundation project, as the defendant had claimed in court, or a realized one. Admittedly, his memory is astoundingly bad for an attorney who manages companies with multi-million turnovers.

«I have no clue about what's going on in Madrid and I don't recall receiving any letters from you <The Insider had sent Wissman a written request for comment, enclosing copies of Santon's documents>,» said he, apparently anxious to finish our conversation.

As learned The Insider, Jürg Wissmann was also managing 3 companies of Sergey Kuzmin, one of the leaders Tambovskaya organized crime group and ex-shareholder of the Rossiya Bank, who is now wanted by Spanish authorities. Officially these companies were represented by accused Leonid Khazin (his testimony was described in the first part of this reportage), which can be proven by a fax, sent by Wissmann to Kuzmin, where the lawyer is discussing conditions for the discounts for maintenance of his companies.

To be continued.

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