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Jaded business practices Investigative reporters link the son of Russia’s deputy attorney general to a money-laundering investigation in Australia

Source: iStories

A new report by iStories, Transparency International Russia, and Australia’s ABC links Russian Deputy Attorney General Alexey Zakharov’s relatives to a suspect in a criminal case opened almost a decade ago in Australia, where officials worry that a handful of Russian business owners used local banks to launder millions of dollars in jade sales to China. Though required by law to cooperate with foreign police inquiries involving Russian citizens, the Russian Attorney General’s Office has apparently declined to share needed financial records. Meduza summarizes the joint investigative report, which also ties Alexey Zakharov’s family to several suspicious property holdings. 

Australian law enforcement started tracking the owners of “Baikalkvartssamotsvety” (Baikal Quartz Gems) after they opened more than 20 bank accounts locally. When police realized that the financial disclosures included in these individuals’ visa applications revealed large discrepancies between their income and expenses, the courts froze roughly $30 million held in Australian banks, pending an investigation into possible money laundering. Australia’s investigation stalled in late 2015, however, when the Russian Attorney General’s Office reportedly declined to cooperate. 

In 2015, as officials in Australia sought more information about the income of Baikalkvartssamotsvety’s owners, the Russian deputy attorney general’s son, Dmitry Zakharov, acquired 16 percent of the firm’s parent company, “Deo.” He was a 21-year-old university student at the time. Most of the company (84 percent) belonged to a businessman named Andrey Gudkov, who was also one of the nine Russian nationals implicated in Australia’s investigation. Gudkov’s other partners, whose money was also frozen in Australia, were co-owners of Baikalkvartssamotsvety until 2015. Since then, Dmitry Zakharov has bounced between various enterprises, apparently settling in the insurance industry three years ago, where he found work as a broker at “Sogaz,” which his father’s college friend manages.

According to the joint investigative report by iStories, Transparency International Russia, and Australia’s ABC, eight different Chinese firms received more than 200 tons of raw jade from Baikalkvartssamotsvety for a sum of $5.3 million, putting the average price of a kilogram at $27 (about $60 per pound). The typical market value of raw jade, however, is between $50 and $100 for a kilogram, and Baikalkvartssamotsvety also mines “cat's eye jade,” which reportedly fetches as much as $50,000 per kilogram in Beijing.

Journalists also discovered several multi-million-dollar properties registered to Alexey Zakharov’s son and mother, including houses and apartments that are situated near or previously belonged to relatives of Andrey Gudkov, the businessman suspected of laundering money through Australian banks.

Summary by Kevin Rothrock

Cover photo: Pixabay