Businessman Georgy Bedzhamov, who is on the run from an embezzlement investigation in Russia, used the law firm Demetrios A. Demetriades LLC, known as Dadlaw, to hide assets and money transfers.
Corporate documents and contracts reveal that he was moving tens of millions of dollars around the world around the same time that his sister stole several billion dollars from Vneshprombank, which he controlled.
Leaked documents have revealed that Russian banker Georgy Ivanovich Bedzhamov, on the run from the authorities, used companies and trusts registered by a Cypriot law firm to hide and move assets.
Demetrios A. Demetriades LLC, a Nicosia-registered firm and affiliated companies collectively known as Dadlaw, helped to retroactively transfer Bedjamov’s company to his sister Larisa Markus. According to experts, in this way they wanted to keep the assets out of the reach of the Russian authorities.
Larisa Markus, who together with Bedzhamov owned the Russian Vneshprombank, was arrested in December 2015. In May 2017, she confessed to embezzling $1.8 billion from a bank and received a nine-year prison sentence, which was later reduced by six months. The Russian authorities are still trying to seize the assets of Markus and Bedzhamov, who was also involved in the fraudulent scheme.
Larisa Markus, Bedzhamov’s sister and ex-president of Vneshprombank, at the Moscow court in May 2017
Bedzhamov left Russia in December 2015, shortly before his sister’s arrest. The businessman was detained in Monaco on the basis of a Russian extradition request, but was later released and traveled to London. In June 2021, Yuri Isaev, CEO of the Russian Deposit Insurance Agency (DIA), said that the authorities were still looking for hidden assets to satisfy the claims of Vneshprombank’s creditors – the amount of debts is 218 billion rubles (about three billion dollars).
An analysis of documents from the Pandora Archive, a massive leak of files from 14 companies shared with partners by the International Consortium of Investigative Journalists, revealed that Bedzhamov and Marcus turned to Dadlaw to hide some of the assets.
Documents from the Pandora Archive also reveal how Bedzhamov withdrew part of the funds stolen from the bank. The businessman and partners used a complex scheme to move tens of millions of dollars around the world. Apparently, affiliated companies issued loans to each other with dubious details: the terms and conditions of repayment were not indicated in the contracts, and the names of the enterprises were spelled with errors.
According to an anti-fraud expert, such transactions raise many questions and can be used to hide the identity of the borrower.
“Loans with no clear maturities or no repayment required at all, which front men take out for someone else, contain clear signs of money laundering,” says Ilya Shumanov, head of Transparency International in Russia.
Moscow branch of Vneshprombank
Army of beneficiaries and partners
From the Pandora Archive, it follows that the brother and sister began working with Dadlaw in 2010, and ended in the summer of 2019 – a few years after they published evidence of Bedzhamov and Markus’ involvement in the Vneshprombank scandal.
Dadlaw, who previously worked with clients involved in fraud, refused to cooperate with Bedzhamov only after a London court issued an international warrant to freeze his assets. In mid-2019, employees of the law firm resigned as directors of all companies associated with ex-bankers, and in April 2021, all enterprises were finally excluded from the corporate register of Cyprus.
The leak also reveals what the brother and sister went to to hide the financial fraud.
So, a few days after the arrest, Marcus transferred her company Stanferme Asset Management Inc, registered in the British Virgin Islands (BVI), to her brother. Bedzhamov confirmed the receipt of the shares only 13 months later and asked Dadlaw to formalize the deal retroactively – allegedly Marcus rewrote his share in the company earlier than a month before the arrest. Apparently, the company did as he asked.
Marcus wrote instructions to Dadlaw on December 28, 2015, nine days after her arrest on suspicion of embezzling funds from Vneshprombank. However, Bedzhamov contacted Dadlaw to confirm receipt of the share more than a year later, on January 16, 2017. By that time he had already left Russia and lived in the UK.
He noted that the deal needs to be done retroactively:
“Please be careful and indicate in the documents that the transaction was concluded on November 2, 2015 – I want the transfer to be processed on the same day.”
“Often, transactions are backdated to prove ownership of a company or asset on a particular date,” says Shumanov of Transparency International. “It looks like the parties agreed in advance to retroactively formalize the transfer of the company’s shares so as not to lose control of the assets.”
In his opinion, this date – November 2, 2015 – was chosen to minimize the risks of confiscation of Markus’ assets.
Numerous loans and LLPs
Georgy Bedzhamov (right), then head of the Russian Bobsleigh Federation, receives an award from Vladimir Putin (left) in gratitude for the success of the Russian team at the Sochi Olympics. March 2014
Files from the Pandora Archive and corporate documents reveal that in 2012 and 2013, when the Vneshprombank withdrawal scheme was in place, Bedzhamov received over $50 million in loans from a non-transparent Cypriot firm in the name of his partner.
Apparently, Felarco Management Limited was needed only to process loans: it received large sums from dubious British enterprises and transferred them to Bedzhamov.
For example, Felarco Management received a loan from two British limited liability partnerships (LLP) – Tradeberg United LLP and Silverrow Invest LLP, which, in turn, belonged to companies in two “tax havens” – the Marshall Islands and Belize.
- On December 10, 2012, Tradeberg United provided Felarco with a $20 million loan, and ten days later Felarco Management issued a loan of the same amount to Bedzhamov.
- On December 17, 2013, Silverrow Invest provided Felarco Management with a $10 million loan, and three days later Felarco issued a loan of the same amount to Bedzhamov.
- On November 27, 2013, Silverrow Invest provided Felarco Management with a loan of 17 million euros, and 16 days later Felarco Management issued a loan for the same amount to Bedzhamov.
It is not known who owns Tradeberg United, but the company appears to be linked to Bedzhamov and Markus. In mid-2011, she made a $14.3 million loan to Cypriot Saferio Investments Limited, which was then owned by Marcus. Six months later, Tradeberg United forgave the debt.
According to the financial expert, such complex arrangements are probably needed in order to give legal form to funds from a dubious source.
According to Lakshmi Kumar, director of policy at Washington-based nonprofit Global Financial Integrity, such loan chains can be used to “move funds between jurisdictions in order to obscure the trail and make it difficult to identify the source.”
“Sooner or later, money passes through jurisdictions where it is quite difficult to get information. The meaning of these schemes is to create the appearance of the legality of what is happening.”
The owner of the Cypriot Felarco Management was Veronika Chelyabi, Vice President of Vneshprombank. We were unable to reach Chelyaby, but according to Russian court documents, Bedzhamov and his sister repeatedly used the names of their bank employees to set up shell companies without their knowledge.
Chelyabi also acts as a shareholder in other companies associated with Bedzhamov in Cyprus and the BVI – apparently, she only played the role of an intermediary for moving shares between companies and transferring them to Bedzhamov. So, in November 2011, Chelyaby transferred a controlling stake in the Cypriot shell company Beraford Holdings Limited to the control of Bilow Investments Ltd in the BVI. Two months later, her shares in Bilow Investments were transferred to Bedzhamov – Chelyaby herself allegedly sent instructions to Dadlaw.
Using false names is another way to create the appearance that questionable cash flows are in fact transactions related to legal activities, Kumar said.
“When you transfer funds to companies on behalf of other people – such firms are often issued to partners – it looks like the money is moving and working.” “They really are moving, but they are not working – they are simply withdrawn.”
Double Discount Debt
The mysteries surrounding Felarco Management do not end there.
In the early summer of 2017, Chelyaby allegedly sold the company for 2,000 euros to a New Zealand citizen, Vladimir Yuryevich Dobrov. At that time, Bedzhamov had not paid a single ruble and still owed Felarco Management over $50 million, at least on paper.
Less than two months later, Felarco Management sold the debt to another BVI shell company, Clement Glory Limited, for just over $8 million.
It is not clear what could be the basis for such a deal. The name of the owner of Clement Glory could not be found out due to the high level of financial secrecy in the BVI.
Probably, the businessman hoped that this debt would stop the Russian authorities from confiscating his London mansion. In January, the Russian Agency for Legal and Judicial Information (RAPSI), an organization founded by three Russian high courts and a state news agency, reported that a Moscow court intended to seize Bedzhamov’s London property.
In 2019, Bedzhamov said he owed “heaps of money” to Clement Glory, so according to a London High Court ruling, the company could lay claim to his London property.
According to court documents, Vneshprombank is trying to challenge the legitimacy of Clement Glory’s claim to these assets. The Russian prosecutor’s office appears to support the bank. She believes that upon arrival in the UK, Bedzhamov “organized a scheme to protect [имущества] from potential creditors by fictitious transfer of property under the control of Clement Glory Limited.
Bedzhamov and Dadlaw did not respond to requests for comment. The Russian Deposit Insurance Agency, which is responsible for the return of the stolen assets of Vneshprombank, also did not respond to journalists’ questions.
As part of a new advertising campaign, Russian asset recovery firm A1 has placed a mobile billboard in London’s Knightsbridge asking citizens to provide information about the assets of Georgy Bedzhamov and Larisa Markus.
Russia does not stop trying to find Bedzhamov’s assets. In September, the British High Court indefinitely postponed the trial of the embezzlement of funds from Vneshprombank (the trial was due to begin in January 2022) due to uncertainty about Russian charges and the possibility of using assets to pay debts to creditors.
Bedzhamov himself, who applied for asylum in the UK, lives in London. His assets are frozen, but it is unlikely that he is in poverty. In 2019, the court raised his monthly allowance to £120,000 (about $160,000) for maintenance, rent, personal security and other expenses.
