Tycoon ‘linked to laundromat money laundering operation’ in secrecy battle
A multi-millionaire businessman found by a court to be linked to a vast international money laundering operation is fighting to keep his identity secret in a potentially landmark legal battle over secret justice.
A judge ruled earlier this year in response to applications by the Evening Standard and the BBC that the businessman could be named because he was “a person of importance” in court action taken by the National Crime Agency against three members of an Azeri oligarch’s family.
The case led to the forfeiture of £5.6 million from the trio’s London bank accounts after the judge found that they had all benefited from funds funnelled to them via a “criminal enterprise” known as the “Azerbaijan laundromat” in which a complex network of offshore and UK companies was used to shift huge sums around the world.
The court heard that some of the money forfeited as the likely proceeds of crime went via the businessman’s account into one of the Azeri family member’s bank accounts targeted by the NCA.
The court also heard that the businessman was either the owner of or connected to some of the companies involved in the money laundering operation and had received tens of millions of pounds into his personal account.
But the businessman – referred to in court as MNL because of a temporary anonymity order – is trying to keep his identity secret permanently after succeeding at the second attempt to secure a judicial review of the decision to name him.
He is trying to use the contentious Supreme Court ruling in the case of ZXC v Bloomberg – in which a person under criminal investigation was given anonymity - and European Court of Human Rights judgments to support his claim for privacy.
He claims that he will suffer “enormous and irremediable” damage to his reputation and businesses if his name is made public and has hired three of the country’s most expensive King’s Counsel, including Lord Pannick and the former Bar Council chairman Desmond Browne, as well as a junior barrister and the law firm Farrer & Co to fight his case.
But this news organisation and the BBC are arguing that the businessman’s name and activities should be exposed to public scrutiny in accordance with the long-standing principles of open justice and because of the importance of shining a spotlight on dirty money cases.
A High Court hearing lasting one and a half days will take place in March to determine the dispute with the campaigning organisations Spotlight on Corruption and Transparency International both backing the case for identifying the millionaire businessman in the public interest.
Susan Hawley, executive director of Spotlight on Corruption, said the public would be deprived of important information about the businessman unless the media’s bid to name him was upheld.
“The creeping use of anonymity in the UK courts, particularly for wealthy individuals implicated in serious economic crime, is really alarming,” she said.
“It undermines this country’s proud tradition of open justice when individuals with deep pockets can essentially buy privacy in the courts through expensive legal representation to shield themselves from any public scrutiny."
The looming High Court battle follows a judgment earlier this year at Westminster Magistrates by District Judge John Zani in which he rejected the businessman’s claim to be only a “peripheral” figure in the NCA’s account forfeiture proceedings against three members of the family of Azeri oligarch Javanshir Feyziyev.
Judge Zani ruled that the trio – Mr Feyziyev’s wife Paravana Feyziyeva, their son Orkhan, and nephew Elman Javanshir – had all received illicit money and that the businessman had “featured directly (and indirectly) on a number of occasions in the detailed opening note prepared by .. the NCA” setting out the alleged money laundering and in evidence provided by the law enforcement agency’s lead investigator.
The judge said he had also concluded that there had been a “significant money laundering scheme in existence in Azerbaijan, Estonia and Latvia” and that “substantial funds from this criminal enterprise” had been paid into the Latvian bank account of a business called Avromed Company (Seychelles) that the businessman had founded with Mr Feyziyev and another man.
He also found that the businessman had in turn received more than $48 million from this bank account in “account replenishment”, while Mr Feyziyev and members of his family had received further multi-million dollar sums.
The judge added that there was “overwhelming evidence” that the “invoices” and “contracts "involved in the scam were “entirely fictitious” and being used “to mask the underlying money laundering activities of those orchestrating the accounts.”
Judge Zani also cited his forfeiture judgment from last year against the Feyziyev family showing that a $500,000 deposit by the businessman was one of the sources of the £1 million seized from the account of Orkhan Javanshir by the National Crime Agency on the grounds that it was illicit money.
The judge added that the businessman, who has political connections, had failed to provide any “clear and cogent” evidence to demonstrate the “enormous and irremediable damage” to him and his businesses that his barrister had told the court he would suffer.
Judge Zani said this considerably weakened any argument for anonymity and cited a Divisional Court judgment in an earlier court victory by the Standard in the case of the millionaire DJ Izzat Javadova and her husband Suleyman Javadov stating that it is “wholly insufficient simply to aver” damage without providing details.
He added: “In all the circumstances I am no longer satisfied that it is necessary or proportionate for the [anonymity] order .. to remain in place. Accordingly the said anonymity order … is hereby revoked.”
Judge Zani’s decision followed a ten day hearing last year after which he ruled that the three members of the Feyziyev family – which has a multi-million pound mansion on Cumberland Terrace overlooking Regent’s Park – should forfeit £5.6 million forfeiture from their respective accounts.
The court heard then that in addition to the other findings about his links to the case, the businessman protected by anonymity was also the owner of a company, Vynehill Enterprises, involved in receiving suspect funds and believed to be the owner of Brightmax, another of the entities that the court heard was part of the money laundering scheme.
The businessman was not a party to the forfeiture proceedings and, as a result, he was not given an opportunity to contest any of the evidence concerning the alleged money laundering operation in those proceedings. He has denied any wrongdoing.
The battle over the businessman’s identity began in October last year when he made a last-minute application for anonymity at the start of the account forfeiture proceedings against the three members of the Feyziyev family.
The application was opposed by the Evening Standard and a journalist from the website moneylaundering.com but was granted by District Judge Zani on privacy grounds.
After the forfeiture judgment in January ruling that money laundering had occurred, this newspaper and the BBC applied to overturn the anonymity ruling.
A hearing was held in April after which Judge Zani reversed his earlier decision and ruled that the businessman’s anonymity should lapse. He said he was doing so on the basis of the findings of the forfeiture hearing and the insufficient evidence provided by the businessman about the harm that disclosure of his name would cause.
The businessman sought a judicial review and was initially refused permission by Mr Justice Eyre on the grounds that he had "failed to show a public law ground of challenge with any real prospect of success."
But after the businessman was given another opportunity to challenge the ruling at an oral hearing last month, a second High Court judge, Mr Justice Lane, granted permission to hold the forthcoming judicial review, saying that there was an “arguable” case that an error of law had been made when lifting anonymity. The judicial review will take place at the High Court in March in a hearing scheduled to last for a day and a half.
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