UKRAINE CRIME GANG HID PROCEEDS IN LUXURY LONDON, UK FLATS

UKRAINE CRIME GANG HID PROCEEDS IN LUXURY LONDON, UK FLATS

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A Ukrainian crime gang used offshore firms in British tax havens to secretly invest millions of pounds in the UK, a BBC Panorama investigation has found.

The gangsters, and in some cases family members, bought luxurious property in prime London locations, including a £12.5m flat. 

The daughter of a man dubbed the "Don of Odessa" is the registered owner of three homes in one expensive block.

Many of the revelations come from the Paradise Papers data breach. 

The gang were from the Black Sea port of Odessa and made money in the oil industry.

They came on to the police's radar in the late 1990s when they were suspected of drugs and arms smuggling. In the chaos following the collapse of the Soviet Union the gang branched out into Europe, using Italy as a base. 

But police were on to them. For four years specialist anti-mafia officers tracked their movements across the continent. They tapped their phones and what the men discussed was chilling, police said.

"They described murders that were particularly cruel. 'I kept hitting his head until it broke... I killed him with many blows,'" recalls Italian state police Deputy Commissioner Nunzia Savino. "They were extremely violent."

The gang was organised along strict mafia lines with each member assigned a role. 

Among them were:

  • Alexander Angert, nicknamed the Don of Odessa. Police say he was once jailed for murder
  • Nickolay Fomichev, described as a "violent and armed person"
  • Gennadiy Trukhanov, a man who trained members of the gang in "hand-to-hand combat and sniper shooting with high precision weapons", according to Ms Savino. He is now the mayor of Odessa!

Despite evidence from the phone taps, most of the gang members were never charged because their crimes were not committed in Italy. Eventually, the anti-mafia investigation was wound up. 

Mr Trukhanov returned to Odessa to begin his political career, Mr Angert settled in London while Mr Fomichev is believed to have moved to Belgium.

Offshore shell companies

Like many other investors looking for a solid return on their capital, the gangsters saw a promising opportunity for their cash in the London property market. 

The men kept their names off public records by using offshore companies registered in the British Virgin Islands (BVI), where it was possible to be an anonymous owner.

Mr Angert controlled a company called East Corner Properties set up in the BVI. 

It bought an apartment in an expensive Victorian block in Kensington where the poet TS Eliot once lived.

Riverside apartments

In 2001 another offshore firm, Matelot Real Estate Incorporated, paid just over £1m for a flat in a shiny new tower block on the River Thames across from Chelsea Harbour, which it sold in 2006.

We don't know who was originally behind it because when it was set up Matelot had nominee directors and an anonymous owner.

But thanks to the huge Paradise Papers data breach, we do know in 2010 the ultimate beneficial owner of Matelot was Nickolay Fomichev, a member of the gang. 

In a joint investigation with the Organised Crime and Corruption Reporting Project, Panorama has delved into documents from Appleby, the offshore services provider at the heart of the Paradise Papers.

The documents were originally obtained by German newspaper Suddeustche Zeitung, which shared them with the International Consortium of Investigative Journalists, the BBC and nearly 100 other media partners.

In December 2015, the Appleby Group's offshore fiduciary and administrative service business separated from its legal division to form a group of new companies called Estera. Appleby and Estera are now separately owned businesses.

As well as revealing Mr Fomichev's connection to Matelot, the Paradise Papers show two other flats in the building were owned by another offshore company linked to the gang.

Aspiring film-maker and the £12.5m flat 

Mr Fomichev's name crops up in connection with more property a couple of miles north of the river in one of the world's most affluent areas.

Number 199 Knightsbridge resembles an expensive hotel, with security and staff manning the entrance.

Two apartments in the building were bought by offshore companies called Brightside Properties Number 3 and 4. The numbers don't relate to the flat numbers.

Documents show by 2010 both companies were owned by Mr Fomichev, who is now believed to be dead.

Chronicles of Monte Friesner - Financial Crime Analyst 

Courtesy of Paradise Papers Reporting Team