UAE Companies Involved in “Money Laundering”.. 13 Companies Implicated in the Largest File of Russian Money Laundering

UAE Companies Involved in “Money Laundering”.. 13 Companies Implicated in the Largest File of Russian Money Laundering
UAE Companies Involved in “Money Laundering”.. 13 Companies Implicated in the Largest File of Russian Money Laundering
Investigations |Monday 04th February 2019
The scandal of what has become known as the “Russian money laundering” is unfolding day after day, thanks to the investigation of 30 journalists, including seven Arab journalists, of Arab companies into the “money laundering” files since it started in 2014.
The investigation followed 13 out of 150 UAE companies whose names were listed among thousands of companies which have been identified as being involved in financial corruption and illegal bank transfers in 96 countries.
In this investigation, we monitored the transfers of the 13 companies and their activities, which amounted to $ 70 million, and we made contacts with them in direct encounters.


Since 2014, the Organized Crime and Corruption Reporting Project (OCCRP) has published a series of investigations in collaboration with the Russian Novaya Gazeta newspaper to uncover the largest  money-laundering operation in history, $ 21 billion, for the benefit of Russian figures and companies. The money of fake transactions that managed money laundering was transferred to 5140 companies through 732 banks around the world.

The UAE National Bank of Dubai (NBD) is among these banks and it is responsible for suspicious bank transfers worth $ 357 million. When Arabian Business magazine in the UAE asked the bank manager about these facts, he admitted it, but he said he was victim and he did not know about it. Abu Dhabi Commercial Bank (ADCB) was also suspected of passing bank transfers in exchange for money laundering transactions worth more than $ 26 million. When the interrogator asked for a reaction, he did not respond.
 
Arab money laundering secrets
The investigator found that UAE companies received remittances from convicted Russian companies in exchange for the export of goods which are not related to the company's declared activity. It also revealed relations between some of these companies and Russian companies and departments, as well as the involvement of some companies in corruption files and major financial scandals, such as Panama documents scandal.

Economist Dr. Ibrahim Elfiky, former adviser to the International Monetary Fund, criticized the ease of transferring money and talked about the leniency of Arab central banks in controlling bank transfers because governments want to bring more money to their banks without seriously considering the negative effects of the lack of control over these transfers. However, “European banks, especially the European Central Bank, have high standards and strict rules to monitor bank transfers,” said Dr. Elfiky to the investigator.  He added: “The same is true for the American Federal Reserve System, but the Russian bank does not have financial discipline and has no strict rules.”  
This makes bank transfers between Russian and Arab companies out of strict control and financial discipline and allows them to be an easy haven for money-laundering operations related to arms or human trafficking. Dr. Elfiky asserted that one of the tasks of the International Monetary Fund (IMF) is to strictly control financial bank transfers around the world.
 
Fake companies
Many of the companies we got their names no longer exist after suspicious transactions between 2013 and early 2014. They may be closed months after they were established for the purpose of illegal trading or corrupt transactions. But, we were able to access information about other companies. 

JEWELLERY SPOT L.L.C
The company has been specializing in the trade of precious jewelry and watches in Dubai since it was established in 1999. Although there are information about this company on commercial promotional sites in the UAE, it does not have a website or an email  to communicate with it like professional commercial companies. However, the company's communications officer uses an email address followed by Yahoo, which is unprofessional and uncertain in the world of commerce.

JEWELLERY SPOT has signed deals with three Russian companies registered in Britain and previously involved in the “Russian laundering” scandal, which are CRYSTALORD LIMITED, SEABON LIMITED and GRIDEN DEVELOPMENTS LIMITED.

Transactions between February and April 2014 seemed suspicious because they were outside the company's domain. The invoices we received indicate that the payments were for export of “building materials and industrial equipment.” The total transfers amounted to $ 907,000  and arrived through 13 payments from three companies officially involved in money laundering. JEWELLERY SPOT received $ 340,973 from the first implicated company, CRYSTALORD LIMITED, for industrial equipment, and the amount was paid in eight installments between April and November 2013. It also received $ 384,614 from the second involved company , SEABON LIMITED, between October, and December 2013, in three installments for the export of building materials, according to the invoices we received. The company also received $ 181,701 from GRIDEN DEVELOPMENTS LIMITED in two installments separated by one day in February 2014, in return for the purchase of industrial air compressors.

These transfers were made through Mashreq Bank in Dubai and Commercial Bank in Abu Dhabi (ADCB). The investigator had contact with the two banks, but did not receive a response from Mashreq Bank, which witnessed four transfers of $ 471,972 during 2013 and 2014 for the same company. There was also no response from Emirates NBD, which saw a one-time transfer of $ 94,343 in 2013 to JEWELLERY SPOT L.L.C.
 
We contacted the company several times via email and phone, but we did not get any answer which would clarify whether the company was aware of the type of suspicious transactions. We have not reached a clear explanation as to the great difference between the company's competence in jewellery and the type of commercial transactions related to building materials and industrial equipment.

Jubilee Store LCC
Our research led us to the fact that this company sells watches, jewellery and renewable energy equipment. The company has a commercial website and its trade mark and information are published on commercial websites especially in the UAE and Dubai. The company has signed a single deal with the involved company KEDASSIA LIMITED, which was listed in the OCCRP files.
The company received $ 52,348.23 in December 2013. We have tried to contact the company via phone and email, but we could not get any answer.
 
Lyra Enterprises Ltd
Lyra Enterprises Ltd, which is listed in our files, has the same name of Lyra itself, which is involved in the Panama Papers scandal. According to our data, the company has signed a deal worth $ 269,769 in 2014 with an implicated New Zealand company, CHESTER (NZ) LIMITED. The deal’s price was paid through Emirates National Bank. We could not obtain the company’s contact information. However, since its name matches the name of the company involved in the famous Panama Papers, and there is no data about it, this raises doubts about its involvement in the Russian laundering cases.

New Zealand's CHESTER (NZ) LIMITED, which signed the deal with it, is also included in the Panama Papers. This further strengthens the possibility that Lyra Enterprises Ltd is the same company that is listed in the Panama Papers investigations under the name of LYRA TRADING LTD. Since March 2014, the company has been run by a man of Cypriot nationality, PAVLOS ARGYROU.
 
MALDEV GENERAL TRADING
The company is commercially active in Dubai in the field of refined oil. It has signed a trade deal with SEABON LIMITED, one of the largest companies involved in the money laundering scandal and from which it received $ 306,936 in November 2013 for building materials. The amount was transferred via Emirates NBD in Dubai.

Our attempts to track down the company and its employees brought us to one of its former senior employees, Farrukh Kadyrkhodjayev, whose name appears to be Russian. We could not confirm the nationality of this person but his account on LinkedIn reveals that he studied at the University of Tashkent in Uzbekistan and resides in the United Arab Emirates. Farrukh currently works for Leadergate Logistics LLC in the UAE, while he previously worked for Lady Collection for women’s jewellery, a Russian company as well. What is noteworthy is the fact that he has managed companies that operate with very different specialties such as oil refining in a particular year and then women's jewelry in the following year. We have contacted the company to get any explanations about the suspicious deal that was signed in 2013, but we did not get any response from them.

GULF BUSINESS PARTNERS CORPORATION
The company has signed a deal to buy electronic equipment with CHESTER (NZ) LIMITED, which is involved in the Russian money laundering case and was also listed in the Panama Papers scandal. The deal was signed for $ 25,000 in April 2012 through Ajman Bank in the United Arab Emirates. We contacted the bank to get a response or explanation about the aforementioned deal, but in vain.

Although we were unable to get any information about a company of such name in the UAE, we have found a company with the similar name that is registered in the UK. The available information about the company on the official website of Companies House state that it is managed by a Russian lady who lives in Moscow, Elena Sevastianova. She owns more than 75 percent of the company’s shares, according to the same website. The company has a partner office in South America in a region known to be one of the most famous financial havens in the world.
We could not contact the company or Ms. Elena, the company's manager, because there was no contact information anywhere.
 
GULF INVEST REAL ESTATE BROKER
It is based in Dubai and specialized in logistics and real estate selling and renting. It is interesting that the company has made consecutive deals with KEDASSIA LIMITED, a Russian company involved in the money laundering scandal that was revealed by OCCRP. GULF INVEST REAL ESTATE BROKER signed two deals for the purchase of textiles in April and November 2013; the first worth $ 66,000 and the second $ 259,000, totaling $ 325,000. It was remarkable that the type of the transactions was different from the company's specialisation according to its commercial register and from the information we found on its own Facebook page and its webpages on the websites of the companies in the UAE. This discrepancy raises suspicions that GULF INVEST REAL ESTATE BROKER may be involved in Russian financial corruption cases, and it is more likely that the deal is actually fake.

By tracking down the company's activity on social media websites, we found out that it has been managing the Facebook page starting from 29-9-2013 to publish hundreds of pictures every day in a surprising manner. The publication ceased since 10-10-2013! All photos are touristy and of towers and restaurants in the Emirates, in addition to pictures of some princes and of beautiful women on the beaches. Time-intensive activity on the Facebook page suggests that its creator sought to suggest that it was engaged in a serious business. Therefore, we think that he created the Facebook page and went on to employ a large number of employees for almost ten days, without any actual promotional benefit, according to the intense daily publication. The last two deals were paid in early November 2013, according to our information, which raises doubts that the Facebook page was created for a purpose related to the transactions.
 
GULF WORLDWIDE DISTRIBUTION FZE
A company registered in the Dubai Free Zone and has showrooms there. It has been active in the auto spare parts business since 1969 and its website is highly stable and consists of clear and transparent contact information, which discards suspicion of any illegal activities. The company signed a single deal for selling auto spare parts in April 2013 with one of the companies involved in the global financial scandal, CRYSTALORD LIMITED, which is worth $ 10,618. We tried to contact the company several times via email, but they did not respond at all. We tried to get explanations about the way they were involved in the case of suspicious money transactions, but we did not receive any response.
 
HANEDAN GENERAL TRADING L.L.C
The Company also operates in Dubai and is registered within the Chamber of Commerce as a general business. In April 2013, it has signed a $ 1,587,056 deal with PR-VERT SYSTEM LIMITED for the sale of construction equipment. At that time, the money transfer was carried out through the Bank of Baroda. We could not find any information that would enable us to contact the company. Therefore, we resorted to the website of Dubai Chamber of Commerce and Industry in order to look for an email or phone number. However, they did not respond. We also contacted Mr. Ashwani Kumar, Deputy Director of the Bank of Baroda, and we received no response to explain or clarify the financial payment and transaction carried out through their bank.
 
HOMEWORK L.L.C.
It is a company operating in the UAE in the business of construction materials. It has signed nine deals, which are worth more than $ 1 billion, with Russian companies suspected of money laundering in 2013 and 2014. The deal provides for the sale of electronic equipment to four Russian companies involved in the money-laundering scandal, namely PR-VERT SYSTEM LIMITED, with a $ 149,900 deal carried out in January 2013, GRIDEN DEVELOPMENTS LIMITED for $ 120,000 in early 2014, six deals with SEABON LIMITED for $ 82,506, $ 269,987, $ 179,541, $ 172,008, $ 109,167 and $ 218,800. The last six transfers were carried out on 1 September, 2013; in addition to another deal with CRYSTALORD LIMITED for $ 30,068 in May 2013. All these sums of money were transferred through Emirates NBD.
HOMEWORK L.L.C provides contact information and addresses clearly on local commercial promotion website, and publishes key employees’ names and images on its website. We contacted the company via email many times, but we did not get any explanation about the suspicious transactions.

HUSEYNOV DIAM L.L.C.
It is a company based in the UAE and active in commercial services. In 2013, the company signed two deals, the first of which worth $ 25,000 and the second $ 45,000, in exchange for building materials offered by WESTBURN ENTERPRISES LIMITED, a company registered in Britain and involved in Russian money laundering.
We tried to contact the company via telephone and through Dubai Chamber of Commerce, but we did not get any answer about its relationship with Western companies involved in Russian money laundering and suspicious trade.

Magic World General Trading L.L.C.
It was involved in two suspicious transactions worth $ 115,000 and $ 100,000 for buying computer equipment. The sums of money were transferred in one day in August 2013.
The company does not have a website, but information can be obtained through commercial promotion websites in the UAE. Yet, we could not contact it via email or telephone.

Integra Logistics System JLT
The Company started to provide logistics services in the UAE in 2012. It has accounts on promotion and social media websites. Integra received $ 400,000 in April 2013 for logistical services provided to CRYSTALORD LIMITED. We sent an email to its official email address, but we did not get any response.

Traceless Companies
The following companies have conducted suspicious transactions in exchange for bank transfers from Russian companies involved in financial corruption scandals, but nowadays these companies have become traceless after more than three years since the transactions took place. It is possible that these companies were established in the first place to close the fictitious deals and then closed after the end of their mission. They might have been closed for various reasons, which we can only know today in case we obtained new key information that would help us with financial investigations to detect cross-border financial corruption.

KEVLAR GENERAL TRADING LIMITED LLC
The company received 14 financial transfers worth $ 17,953,519 from two companies involved in Russian money laundering scandals. The first was GRIDEN DEVELOPMENTS LIMITED, which sent three instalments in November 2013; the first is worth $ 694,882, the second $ 1,350,000 and the third $ 2,350,000. These payments were made for the purchase of equipment in three instalments through Abu Dhabi Commercial Bank. The second was SEABON LIMITED, which concluded 11 deals with KEVLAR for $ 13,558,637. The cost was distributed in batches: $ 1,498,940, $ 1,975,218, $ 997,920, $ 539,433, $ 820,541, $ 716,376, $ 943,934, $ 1,837,066, $ 2,455,174 and $ 1,021,579. The last instalment was worth $ 752,456. All sums of money were transferred in October 2013 through Abu Dhabi Commercial Bank and Emirates NBD.

Six Arab countries were among the world's most corrupt countries, according to the report of Transparency International’s Corruption Perceptions Index in 2016. The UAE was the least corrupt  among the Arab countries with 66 points and ranked 24th among the world's less corrupt countries. The report of Transparency International explains the decline of the Arab Gulf countries on the same indicator due to the "involvement of countries in military alliances, which increases the confidentiality and lack of clarity in budgets and public expenses."
The pressure on international banks is increasing day by day to control the movement of dirty money and the laundering of wealth produced by arms trade, human trafficking and drugs. The role of the investigative press appears to be central and important in uncovering the secrets of financial corruption and organized crime around the world.

This investigation was conducted with the support and supervision of Arab Reporters for Investigative Journalism (ARIJ) and Organized Crime and Corruption Reporting Project (OCCRP).