Dirty money: how Australia’s biggest banks are being used to clean millions in Russian mafia funds

It seems impossible that Vladimir Putin, the President of Russia, would use Australia as a location to launder mafia money, but Bill Browder has the proof – and it’s made the billionaire businessman Putin’s public enemy number one.

Sunday Night’s Matt Doran meets Browder in a secret location in London, flanked by bodyguards. He’s always in fear of his life – it’s not just paranoia; Russia has a history of executing its enemies on foreign soil.

“They don’t forgive, they don’t forget, and they will track you down anywhere in the world,” Browder explains. “They’ll kill you and they’ll kill your family if necessary.”

If there was any doubt about Browder being a marked man, Putin took the extraordinary step at last month’s summit with President Trump of naming Browder as one of Russia’s most wanted.

He also receives death threats almost daily.

Yet Bill Browder wasn’t always a target. In fact, he was once the largest foreign investor in Russia, with $4 billion in funds. He fell out of favour when he began to protest the corruption that was making Vladimir Putin a rich man.

“I think he is worth about US$200 billion,” Browder tells Sunday Night. “All his money is the proceeds of crime. Putin is not only the richest man in the world, he is the most powerful crime lord in the world as well.”

In 2005, Bill Browder was expelled from Russia, escaping with most of his considerable fortune and re-establishing his investment business in London. He was determined to continue exposing corruption, even though he knew being in another country was no guarantee he’d be safe from Putin’s henchmen.

On Christmas Eve, 2007, two petty criminals with stolen documents arrive at Moscow Tax Office Number 28, falsely claiming they own three of Bill Browder’s Russian companies. They meet the corrupt head of the department, ask for a $230 million tax refund – and are swiftly given the money.

It was the largest tax refund request in the history of Russia, and it was approved and paid out the next day, no questions asked.

From his London hideaway, Browder hires a gutsy young Russian lawyer named Sergei Magnitsky to find out how they pulled off the monumental fraud and what happened to the money. Yet within a few months, Sergei Magnitsky is arrested and thrown in jail.

“They wanted to get him to sign a false confession to say that he stole the $230 million and he did so under my instruction,” Browder reveals. “He was under extreme pressure, and it got worse. His health completely broke down, he went into a terrible downward spiral and instead of putting him in the emergency room, they put him in an isolation cell.”

They eventually chained Magnitsky to a bed, and eight guards with batons beat him to death.

Heartbroken but resolute, Bill Browder is determined to find out what happened to his friend. Unexpectedly, he gets a tipoff that will break open the case – a mysterious informant wants to speak.

The informant turns out to be Alexander Perepilichny, a rich Russian hiding out with his wife in a grand mansion outside London. The informant turns out to be Alexander Perepilichny, a rich Russian hiding out with his wife in a mansion outside London. He confesses that he helped launder the stolen $230 million, and reveals to Browder the corrupt tax official received a bribe worth more than $30 million that included villas in Moscow and Dubai.

Alexander Perepilchny has supplied Browder with proof of exactly how the $230 million had been stolen – and more importantly, how the money has been hidden, with millions of it laundered in Australia.

Perepilichny made one big mistake – he thought he was safe in England, out of reach of the Russian mobsters he was bringing down. Just weeks before Perepilichny was to testify about the money laundering, he dropped dead on a country road in England – victim, or so it seemed, of a heart attack.

But Browder believes it was something more sinister. “I believe he was poisoned.”

Alexander Nekrassov is a former Kremlin advisor, who says he doesn’t speak for Russian President Vladmir Putin, but does deny any Kremlin involvement in the deaths of either Sergei Magnitsky or Alexander Perepilchny.

“A lot of people die all over the world for strange circumstances,” he rationalises.

These suspicious deaths tied to the Kremlin could possibly be dismissed if they weren’t happening with such frightening regularity. The most notorious – the execution of former Russian spy Alexander Litvinenko by his own colleagues at the FSB, the successor to the dreaded KGB – still resonates today.

It was an audacious killing – one that could have claimed thousands of lives.

Alexander Litvinenko arrives at the Millennium Hotel in London to catch up with men he thinks he can trust: two old colleagues from the Russian spy service.

At some point during their meeting, Litvinenko is distracted, and the radioactive poison Polonium 210 is dropped into his tea.

His wife, Marina Litvinenko, remembers how he declined that evening. “He came back, he was absolutely normal, and we had dinner together. Only at midnight he started to feel extremely sick and it was so powerful and I couldn’t believe it.”

Marina says her husband, who she calls Sasha, signed his own death warrant when he publicly called out President Putin for presiding over a mafia state.

It took two weeks for Litvinenko to die. His body was so contaminated with radiation he had to be buried in a lead-lined coffin.

“Litvinenko was not poisoned by the Russian state, was not even poisoned by the Russian agents – he was poisoned because he was part of a smuggling ring who smuggled polonium into Europe,” Nekrassov tells Sunday Night. “They were handling these materials but they didn’t know how, so there was an accident obviously. Alexander Litvinenko was of no interest to anyone; nobody even knew him in Russia. If you have a hit and you want to get rid of somebody and this somebody is absolutely irrelevant, you do not poison him with a very sophisticated, very expensive nuclear material. You push him under the train.”

Despite the fervent denials, the bodies and the evidence against Putin and the Russian State keep piling up. In March, the Russians unleashed their deadliest toxin yet in the quiet English town of Salisbury.

Ex-Russian spy turned informant Sergei Skripal and his daughter Yulia were targeted as they left their home with a military-grade nerve agent Novichok.

Again, Nekrassov denies any Russian involvement. “It was somebody else, but it was used against Russia. One KGB general said to me once, ‘If you can trace the hit immediately to the country of origin, that means it’s a provocation. It’s done by the enemy to slander you because the professionals don’t work like that.’”

Despite more than a dozen of Putin’s enemies dying in Britain, Bill Browder is undeterred. He’s now traced some of the stolen $230 million from the Kremlin all the way to Australia via a maze of international companies.

“We’ve had investigators working on this for eight years,” Browder reveals. “Step by step, we’ve been able to build up the picture of what the $230 million that Sergei Magnitsky discovered and was killed over, and who got the money.”

The Australian angle involves hiding the origins of the mafia money by funnelling it through a series of bogus companies. One company hides another, which in turn hides another and another, until it’s almost impossible to find out who the real owner is. This was how the $230 million in Russian blood money was hidden. And shockingly, it was an Australian-based family who helped set up some those shell companies.

That family is behind an obscure operation called The GT Group. “It’s one that’s notorious and well known for doing this type of work,” Browder explains.

Documents obtained by Sunday Night show the GT Group set up a company called Bristoll Export, which was one of several shell companies used by the Russians to launder the stolen $230 million.

“It’s not illegal, of course, to set up shell companies,” Browder tell us. “[But] a good proper company formation agent would do their due diligence on their clients.”

Some of the GT Group’s other clients have also been questionable, including the aiding of smuggling of weapons into Iran and ties to Mexican cartels.

The GT Group was headed up family patriarch Geoffrey Taylor. Taylor advertised he can “act as Director and Shareholder for clients without arousing suspicion… he can act as your front man and attract attention away from you.”

Geoff Taylor claims to have retired, but son Ian is still in the business. Tracking him down in Mooloolaba on Queensland’s Sunshine Coast, Matt Doran confronted him over the allegations.

“In the course of the last 15 or so years, we’re talking about thousands of company registrations. You register a company, you provide a basic service, you sell it to a client or you know you set it up for a client. [It’s] no different from an accountant – an accountant might monitor the books for a client but they don’t run their business.”

Sunday Night are not suggesting that Mr Taylor has committed any crime – in fact, it appears everything the GT group did was perfectly legal.

As for Russian money that arrived in Australia, what made that possible was the lax security of our major banks that took the money without questioning where it came from.

Bill Browder’s documents show a total of nearly $5 million paid into 11 Australian bank accounts, ranging from sheepskin exporters and aluminium manufacturers to a company specialising in travel to Russia.

Most of these companies have since gone out of business.  Those still operating say the payments were legitimate – and they had no suspicions about the source of the money.

Browder has tracked the money from its origin, the largest of which was a massive sum paid to an Australian sheepskin company. “What is very suspicious about this is they got more than a $1 million, and it comes from a company, an Estonian bank account of a company called Megacom Transit Limited and Everfront Sales – and these two companies are not in the sheepskin business. These are in the money laundering business. These are major transit companies for money laundering.”

Bill Browder’s exposé of money and murders has triggered government crackdowns around the world. The United States, Britain and Canada have all passed legislation named in honour of the late Sergei Magnitsky, aimed at stopping organised crime figures from siphoning dirty money out of Russia into foreign banks.

So far Australia has failed to act, but Browder is insistent that will change. “I think that [for] politicians and government officials in many countries it’s easier to avoid action, but we’re going to hold the government to account and we’re going to make this thing happen in Australia.”

Sunday Night provided the banks with details of each transaction that Bill Browder alleges should have created a reasonable suspicion of money laundering.

We asked for the banks’ response to the allegations and what action, if any, they intended to take regarding these issues.

We received the following responses:

HSBC

“HSBC is committed to implementing the highest and most effective global standards to combat financial crime. The Bank has systems and processes in place to identify suspicious activity and report it to the appropriate government authorities.”

NAB

“This enquiry relates to transactions that date back to 2008. Then, and now, we take our anti-money laundering obligations extremely seriously, and we monitor, investigate and report suspicious activities to AUSTRAC.  “We are not able to comment on specific transactions or customers.  “As always, we would assist authorities and regulators with any investigations they may undertake.”

Wespac

“Westpac takes its anti-money laundering and counter-terrorism financing obligations seriously and where it detects suspicious matters, reports those matters to AUSTRAC”.

Commonwealth Bank

“Banks play a critical role in combating financial crime and ensuring the integrity of the financial system and we take our responsibilities in this area very seriously. This requires us to work closely with regulators and the relevant authorities. Due to the confidential nature of this work, we don’t comment on such matters.”

ANZ

“We are prevented by law commenting on either individual customers or suspicious activity reported to AUSTRAC. This extends to taking any action that could alert criminal groups their activity is being monitored. We have processes and systems in place to ensure we comply with all relevant Anti-Money Laundering and Counter-Terrorism Financing laws, including monitoring and reporting suspicious activity to AUSTRAC.”

 

Reporter: Matt Doran

Producer: Stephen Rice