By Kevin Holland
There have been significant developments in the President Donald Trump SoHo court case involving kleptocratic oligarchs from the former Soviet republic of Kazakhstan. Iliyas Khrapunov, son-in-law of notorious fraudster Mukhtar Ablyazov, used multiple encrypted accounts to hide his business activities while being investigated in the US for laundering money stolen by his father-in-law from Kazakhstan’s BTA Bank. The case in question involves Donald Trump and the sale of multiple condos in the prestigious New York property. Ablyazov himself currently lives in France, and it has been alleged that he is exploiting EU institutions and politicians to clean up his image and cover up his proven crimes.
Recent New York court filings confirm that Khrapunov violated court orders on the preservation of evidence by purging accounts and failing to produce documents in connection with vast sums of money tied to the real estate deals, according to filings from BTA Bank. It is also claimed he hid the location of a key witness in California. Previous filings have said that Khrapunov “played games” with the court, and that the court “[did] not find [his] testimony or affidavit credible”. A filing also said, “His tone and delivery conveyed his “catch me if you can” attitude and, in this Court’s view, demonstrated his lack of credibility.”
The affair around Trump, Ablyazov and Khrapunov’s father, the oligarch Viktor Khrapunov, is a huge case that has caught the world’s attention. Viktor was the mayor of Kazakhstan’s largest city Almaty and stole $300m during his tenure. BTA was the biggest bank in Kazakhstan before it had to be bailed out by the state in 2009. Ablyazov was found to have embezzled many billions of dollars from the bank using fraudulent loan agreements and highly sophisticated accounting, laundering the cash across thousands of offshore companies. Both the British High and Supreme Courts have ruled that Ablyazov embezzled approximately $4bn from BTA, and he has also been convicted in Kazakhstan of organizing the 2004 murder of the BTA’s former chairman Yerzhan Tatishev in a move that allowed him to seize control of the bank. Both Ablyazov and the Khrapunovs are believed to have used the Trump SoHo project to launder approximately $440m.
According to BTA, “Iliyas was living under a constant threat of litigation, on many fronts, from at least 2010 into 2014 … Nevertheless, even when faced with actual litigation by the Kazakh entities, he ignored his preservation obligations and instead destroyed the many records”. Khrapunov now lives in Switzerland and is subject to a court order attaching $70 million of his assets to the case.
Yet Ablyazov, a measured and cunning operator, understands how to push Western buttons. He has restyled himself as a ‘political dissident’ and claimed to be the victim of an elaborate conspiracy by an aggressive Kazakh state. Despite the overwhelming evidence of his guilt, including a judgement against him in London’s High Court, a number of Western figures have been sympathetic to his story. After losing the London court case and being handed a 22-month prison sentence, Ablyazov fled to France, where he currently lives in hiding. London’s High Court also issued a $500m fine to Khrapunov in 2018 for his role in the embezzlement.
When BTA was trying to recover its funds, Ablyazov deployed Khrapunov to hide the assets, according to sworn statements from witnesses. Court documents state that as part of those efforts, three units in the Trump SoHo development were bought. The fixer who negotiated the deal was Felix Sater, a former senior Trump adviser and business partner who is also a convicted criminal. It is alleged by the FBI that his father, Mikhail Sheferovsky, was an underboss for Russian Mafia boss Semion Mogilevich.
According to BTA, in 2013 Sater told Khrapunov that Almaty would sue his family. That suit was filed in 2014, and the city of Almaty is a plaintiff in the current New York case alongside BTA.
There is no suggestion the Trump Organization is guilty of any wrongdoing in connection with the case. Khrapunov’s lawyer, Andrew Solomon, said his client had every right to use encrypted communications, and that some of BTA’s claims have already been dismissed.
Ablyazov’s main PR representative is the Open Dialogue Foundation, a dubious Polish NGO which critics allege operates as an ‘image washing’ and ‘laundromat’ service for convicted criminals such as Ablyazov and Veaceslav Platon, who has been implicated in the notorious Russian Laundromat fraud that went through Moldova. It has been alleged that Open Dialogue have exploited naïve Members of the European Parliament into supporting Ablyazov and Platon. Its chief, Lyudmyla Kozlovska, appears to have been involved in an intimate and longstanding affair with Ablyazov. Despite what appears to be clear video evidence of an intimate encounter, Kozlovska continues to deny her involvement. She is currently on the SIS watch list and her movement in Europe is heavily restricted. The ODF is under investigation in a number of European countries. Critics allege there are clear financial links between ODF and firms involved in money laundering.
It is the cause of some bewilderment that Ablyazov and his associates appear to enjoy fairly comfortable relations with European authorities, and in particular some senior EU figures. Whether these ties are based on complacency or conspiracy remain to be seen. If the EU has not taken warning from a $4bn judgement from one if its own members states, perhaps it will require a further ruling in a case linked to a sitting US president to take notice of the magnitude of Ablyazov’s crimes.
The case is ongoing.