Crime: Bank’s $4 Billion Fraud Allegations Returns To London Court

Nine years after $4 billion in alleged embezzlement by the chairman of Kazakhstan’s biggest bank nearly caused its collapse, the legal fight over the missing assets is back in court in London.

This time it isn’t just Mukhtar Ablyazov, the former chairman of BTA Bank JSC, being accused of looting the lender. BTA Bank also alleges that his son-in-law, Iliyas Khrapunov, conspired with Ablyazov to conceal his ownership of hotels, shopping centers and other properties in Russia in one of the biggest bank fraud cases in modern history.

BTA Bank won judgments in London that directed Ablyazov to disgorge more than $4 billion in holdings. A Kazakh court earlier in 2017 convicted him in absentia for financial crimes and sentenced him to 20 years, and he’s wanted by prosecutors in Russia and Ukraine. The family’s lawyers argued Monday, November,20,  that the bank’s key witness, a former associate, gave testimony incriminating Ablyazov under duress after being arrested, and now denies the allegations.

Charles Samek, an attorney representing Ablyazov’s son-in-law, said that BTA Bank in Almaty had arranged for Russian law enforcement officials to arrest Elena Tyschenko and charge her with financial crimes in 2013 to press her to provide evidence on how Ablyazov was hiding his assets.

In exchange for amnesty, Tyschenko, a Ukrainian attorney who worked with Ablyazov, told BTA Bank’s lawyers that he used shell companies and family members to conceal his holdings. She said that he’d recruited his son-in-law to lead the effort from Geneva. Samek said that since then, Tyschenko has recanted her testimony.

“The evidence is false,’’ Samek told Judge Andrew Smith in a London court. “It’s clear that the bank was intimately involved in her arrest and detention and in the criminal proceedings against her. The bank hasn’t told the court that there was duress.”

BTA Bank’s lawyers in the London office of Hogan Lovells used Tyschenko’s statements as part of the basis for the lender’s lawsuit against Khrapunov and Ablyazov in July 2015. A U.K. court slapped a worldwide freezing order on Khrapunov’s assets at that time while the case is pending.

Ablyazov, who resides in Paris, says he’s innocent of taking assets from BTA Bank and is being persecuted for opposing the regime of Kazakhstan President Nursultan Nazarbayev. He and Khrapunov have denied the bank’s latest allegations in court papers.

Khrapunov, who lives in Geneva and is wanted on an Interpol arrest warrant for creating an organized criminal group, says BTA Bank hasn’t produced credible evidence showing he’s conspired with his father-in-law. This week, his lawyers are asking the judge to lift the freezing order on his assets.

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