Episode 6: Sanctioning an Oligarch is Not an Easy Task - Searching for Usmanov’s Millions

As Russian forces escalated their war of aggression against Ukraine in 2022, Western governments scrambled to sanction oligarchs connected to Putin’s war machine.

Yet the task is far from simple when Kremlin-connected tycoons hide their billions in offshore trusts and Swiss bank accounts — and even behind the names of their family members.

In this episode of Dirty Deeds…

In this episode, Nick Wallis talks with OCCRP editing duo Miranda Patrucic and Ilya Lozovsky, discussing how billionaire Alisher Usmanov concealed his fortune via secretive companies, business associates and family members — including Swiss bank accounts in his sister’s name despite her seemingly modest trade as a gynecologist.

Read the investigations:

Host Nick Wallis talks to…

Miranda Patrucic - @MirandaOCCRP

Miranda is OCCRP’s editor-in-chief and worked on the investigation that exposed Alisher Usmanov’s secretive methods for storing his wealth.

“The way that oligarchs and their children are seen in the West is that they’re celebrities, that they’re very successful businessmen. But I think the question that always persists is where did their first million come from?”

Ilya Lozovsky - @ichbinilya

Ilya is a staff writer and senior editor at OCCRP and worked with Miranda on piecing together Usmanov’s vast offshore wealth.

“The reality is that criminals are so clever, they hire so many experts, some of the greatest minds are hired by criminals. And basically they can come up with new ways to launder money, commit crime.”

Kevin Hollinrake - @kevinhollinrake

Kevin is a British Member of Parliament for the ruling Conservative Party who launched an “Economic Crime Manifesto” alongside an opposition MP in a bid to tackle the flow of dirty money through the UK.

“So I think what should happen is if somebody’s sanctioned, any U.K. organization that’s dealt with that individual should have to open their books to the enforcement agencies.”

Show Notes

  • [0:00] Introduction
  • [2:04] Miranda Patrucic explains why she is interested in investigating oligarchs — and Alisher Usmanov in particular
  • [3:50] How did the investigation into Usmanov come about?
  • [6:16] What are the FinCEN Files — and what did they reveal about Usmanov?
  • [7:55] An explainer of suspicious activity reports and how they’re supposed to stop financial crime
  • [10:36] How Usmanov’s family is connected to the story
  • [13:04] Ilya Lozovsky explains how OCCRP told the story via the Russian Asset Tracker
  • [15:36] Did Western sanctions against Usmanov work against him — and Vladimir Putin’s war effort in Ukraine?
  • [19:00] Why have there been so many large-scale data leaks in recent years?
  • [22:07] Kevin Hollinrake on whether tackling money laundering in the U.K. would harm the nation’s economy
  • [25:45] Updates on how the U.K. is tackling flows of dirty money
  • [27:33] What needs to be done to clamp down on dirty money in the U.K.?
  • [33:55] Kevin Hollinrake on whether Western sanctions have been effective against the Russian invasion of Ukraine

Check out other episodes on the Dirty Deeds main page.

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Nick Wallis: Coming up, tracking assets of the oligarchs, linking sources from multiple investigations, and dirty money in the U.K.

Miranda Patrucic: The way that oligarchs and their children are seen in the West is that they’re celebrities, that they are very successful businessmen. But I think the question that always persists is basically where did their first million come from?

Ilya Lozovsky: Two different leaks having her in them and showing that she is actually moving vast amounts of money in suspicious ways.

Kevin Hollinrake: I don’t think we’d have had two economic crime bills by now had it not been for Vladimir Putin’s illegal invasion of Ukraine.

Nick Wallis: My name is Nick Wallis and this is Dirty Deeds: Tales of Global Crime and Corruption, a podcast from the global journalism network the Organized Crime and Corruption Reporting Project, or OCCRP as it’s known.

In this episode, we speak to Miranda Patrucic and Ilya Lozovsky, two OCCRP journalists who have been tracking Russian oligarchs, their wealth, and their assets for years. This story is a clear example of how some investigations can happen completely coincidentally. In February 2022, a massive leak from one of the world’s biggest private banks, Credit Suisse, exposed the hidden wealth of clients involved in money laundering, corruption, and other serious crimes.

While studying the data, Miranda came across a name she’s never seen before: Saodat Narzieva. Carefully,Miranda and Ilya pieced together all the information they could find about her until they discovered she was the sister of one of the world’s richest men: a Russian oligarch, Alisher Usmanov, who’s been sanctioned since the invasion of Ukraine.

Miranda and Ilya’s investigation is part of a wider study which led to the creation of OCCRP’s Russian Asset Tracker, an interactive web tool which links specific villas, yachts, and other expensive toys like helicopters to the wealthy people who own them. I started by asking Miranda about her interest in the Eastern European super-rich and how they control and move their wealth.

Miranda Patrucic: The way that oligarchs and their children are seen in the West is that they are celebrities, that they are very successful businessmen. They draw attention because they have so much money and such a display of wealth. But I think the question that always persists is basically, where did their first million come from? And as a journalist, for me, it’s good to see that people are now asking this question and that they see beyond the billions and the millions that these people have.

Nick Wallis: So tell me about Alisher Usmanov. Why is he so significant to you guys?

Ilya Lozovsky: To me, I would say, first of all, he’s one of the top 100 wealthiest people in the world. He’s been said to be close to Putin. He has a bit of involvement in journalism in Russia because there was a business daily called Kommersant, which is a pretty highly respected Russian publication, and he became its owner. This was years ago. And then there was a whole episode where the paper reported on election violations committed by the ruling party, and then he was fired. They’re still active in Russia and publishing at a time like this, which means that they’re toeing the line because the independent publications are not toeing the line. So Usmanov is involved in that, which for us feels very important and personal.

Nick Wallis: So how did he make his money after being fired?

Ilya Lozovsky: Gazprom, the Russian gas giant, or at least a large portion of his money. That wasn’t the only thing he did by any means. So he’s someone who is intertwined with this regime, even though he’s not really in policymaking circles, as far as I’m aware. It’s a huge fortune and it’s really hard to get at that fortune and understand where it is even once you decide to sanction him.

Nick Wallis: Miranda, you talked about Usmanov’s first millions, that basically he grew his wealth from selling off Russian state assets, built them up into becoming one of the richest men in the world, but your article is something of a scoop, not just because it looked down into how you’d managed to connect some of his extraordinary array of companies, but the way he utilized people around him, particularly his sister. Tell us, Miranda, about putting that particular investigation together. How did it come about?

Miranda Patrucic: The story came about as an accident, really. I was in Barcelona with my colleagues as we were discussing the Credit Suisse investigation and as I was going through the data, I saw a name and I saw that this person is listed as controlling 27 accounts. And some of these accounts at a certain point in time had over a billion in them. And of course, I was shocked. It was like: “Wow, what’s going on here? Who is this woman? And I’ve never heard of her before.”

Nick Wallis: Saodat Narzieva, is that right?

Miranda Patrucic: Saodat Narzieva.

Nick Wallis: So you’ve never seen this name before?

Miranda Patrucic: I’ve never seen this name before. I’ve never heard of her before. It came as a complete shock because, like a lot of these people with large amounts of money in their accounts, I knew about it because I’ve spent the past decade reporting in Central Asia, and we’re all pretty familiar with all the important people there. And yet suddenly there’s this woman and we’re like: “Who is she? What kind of business does she have?” And then we got an even bigger shock when we Googled her and it turned out to be a gynecologist from Uzbekistan. And you can imagine… [laughs]

Nick Wallis: Presumably they’re not that well paid over there or certainly not enough to have billions of pounds in accounts under their control.

Miranda Patrucic: Definitely. So that came as a little bit of a shock, and then I remember I told it to other reporters in the room and they were all like: “Wow, how is this possible?” And then after we realized who she was, I was basically obsessed with figuring out what these bank accounts were. Was this a company bank account? Which company? What I was doing was basically Googling the account number and suddenly one of them popped up in files that came in a different leak, this was a FinCEN File.

Nick Wallis: Just to interrupt for the listener, the FinCEN Files are documents from the U.S. Treasury’s Financial Crimes Enforcement Network, FinCEN, that had been leaked to BuzzFeed News and the International Consortium of Investigative Journalists in 2020, when the documents revealed how global banks were contributing to industrial scale money laundering. So you’ve got this unknown woman in the Credit Suisse leak controlling 27 accounts, and then…

Miranda Patrucic: Basically one of those accounts showed up there and it turned out to be an account that belonged to a company that is actually owned by Alisher Usmanov. And then once we knew this connection, it was obvious: “Who is she? How is she related to him?” And it turned out to be his sister.

Ilya Lozovsky: And this is a rare case when you have information coming from two very different sources that confirm [each other], because her name appeared in the Credit Suisse leak, her name was listed in the Swiss bank accounts, and in a totally separate leak of documents coming from a completely different source, her name appeared in connection with him again, and they showed some of the money moving in suspicious ways. So it’s sort of like this totally unknown person, as Miranda said, two different leaks having her in them and showing that she is actually moving vast amounts of money and her brother is this world famous billionaire.

And it just goes to show you, when you are as big as Usmanov, you can move money all over and it actually will appear in different places. And that doesn’t necessarily mean that it’s still easy to track down or to sanction it, but it is nice in this investigation. I really like how we were able to combine different — this is kind of nerdy investigative journalism stuff — we were able to combine very different sources in one investigation to get at the same theme.

Nick Wallis: And what’s interesting about this is the denials that come from Alisher Usmanov about ever having transferred money to his sister for anything other than legitimate reasons. And yet they appear in things called suspicious activity reports, which are the documents that financial institutions and those associated with their business must file with the Financial Crimes Enforcement Network whenever there’s a suspected case of money laundering or fraud. So when does something go from being suspicious to potentially unlawful?

Miranda Patrucic: When it comes to suspicious activity reports, the banks are basically looking for certain signs of potential wrongdoing. So one of the signs can be that they see unusual, large-numbered transactions which end in “000”. So like a clean five million, 100,000, 200,000. That’s not how normal business transactions work.

You usually have a bill and it’s going to be 500,339. There’s going to be more than zeros on the bill. And then it’s also who these transfers are made to. For example, are they made to unknown entities? Are they made to people who, when you Googled them, you cannot find an actual relationship with the person who is wiring the money? There was also another sister of Alisher Usmanov who also was receiving and sending money from him and to him.

Ilya Lozovsky: And I think even as far as this explanation [that] he’s a generous, wealthy man and he’s generous to his sister, and of course there’s nothing illegal about giving money to your sister if you are a wealthy person, it’s a separate question of how many villas one person needs, but if you look at some of the transactions that are highlighted in these suspicious activity reports, there’s stuff there that even a non-professional [would find suspicious].

I’m not a financial analyst or accountant, but you can see that this stuff is very questionable. We’ve got one report showing Alisher Usmanov transferring $3 million to his sister and it was just marked as a gift. And then a few months later, she sends 100,000 back to him and in the explanation it says: “To the brother for current expenses.”

There’s no way that she’s helping her brother out with expenses because he is the multibillionaire, and why is he sending her money and she’s sending money back to him? And in another case, he sent her money and then she sent it to her son-in-law who’s a director of a steel company. So it’s clearly more than just a gift going on here. And of course these are just little pinpricks of information that we have about vast movements of money, most of which we probably will never see.

Nick Wallis: But they are forensic, and you do spell these out alongside denials from Usmanov saying that his sister had any possession or control of any accounts in Swiss banks on behalf of her brother, and furthermore that she’s never had any formal or informal role in any of his businesses.

And yet the evidence seems to point in the other direction and in fact when this article came out, it was before she was sanctioned and shortly after this article was published she was sanctioned by Western governments, which does suggest that they think at least there’s something suspicious going on here. You obviously have to be very careful about what conclusions you can draw from the evidence that you’re bringing out, but there’s a pattern here, isn’t there?

Miranda Patrucic: We see that there is a pattern and we see even in his responses that, if you think about the 600 million yacht that everybody in the world knew was his…

And that turned out to belong to a trust [whose] beneficiaries are his sisters. So that basically shows you that the family members are very much connected to the business empires of the people. And very often they’re the holders of significant wealth.

Ilya Lozovsky: It doesn’t mean that the sisters are going around deciding what to do with the money. It could just be that their names are held there as beneficiaries or for whatever reason. So it’s not that we can allege that they are personally deciding how that money will be moved around or what’s going to happen to it.

But their names do appear there and even something like, he’s got an estate in England called Sutton Place, which is a historic estate in the countryside, and it’s a Tudor manor house, and even if you look at the Wikipedia page of this estate, you’ll see that Usmanov is the owner, there’s no question, as with the yacht that bears his mother’s name. And yet it’s very hard to actually sanction these things once a government makes the decision to do so, because it’s very hard to connect it, because it’ll go back to that trust which goes back to families.

Another example, a helicopter that appears on that yacht. We made a goal in this project of trying to identify every asset that these various oligarchs own, and we were looking at this helicopter and it was connected to some offshore company that we couldn’t trace to him. The only reason we could trace it to him is because it kept sitting on his yacht.

Nick Wallis: I must admit I’m having great fun looking at the Russian Asset Tracker as we speak, which has informed me that the superyacht is called Dilbar, is that right, the mother’s name?

Ilya Lozovsky: Yes, that’s his mother.

Nick Wallis: And it’s actually a very smooth and fun website to have a play with. How conscious and aware do you have to be that you’ve got to tell an entertaining story when you’re putting all this together?

Ilya Lozovsky: I’m always thinking about the storytelling, I often lead trainings for various investigative journalists on how do you actually tell a story that makes sense, how do you make it not only interesting, but how do you just make it coherent and have meaning? You can list companies and accounts all day, but for an audience, I want my buddy in the bar to understand my story. I want my grandmother to understand my story.

You sometimes have to pull your head out of the spreadsheets and ask yourself of all the thousands of pieces of data and lines of spreadsheets and documents I’ve read, what is it that actually made my heart beat faster when I read it? When you’re writing the story you’re only putting down on paper a tiny, tiny fraction of all the information you find, so you put in the information that conveys the facts, but you remember those moments that made your heart beat faster and you make sure that those are what’s stringing the story together.

And I think that’s why my collaboration with Miranda that’s been going on for years now has been so successful because between the two of us, we really have covered all the sides of this that make both for something substantive but also something that has emotional impact and can convey to casual readers, non-expert readers, why this is important and why we’re telling these stories in the first place.

Miranda Patrucic: I remember when we were covering the angle of the Italian coast and all these properties, it was so fun to watch drone footage of the place.

Ilya Lozovsky: It’s such a rush when you see somebody’s Facebook photo and there’s a corner of a building or a certain outline of a mountain or rock in the background, and then you match it with a drone that drone footage that your colleague took or with a Google map or something. And it’s really fun. They’re having so much fun posting their Dolce & Gabbana outfits and their multiple villas, so why shouldn’t we have some fun connecting that to their offshore companies?

Nick Wallis: Yeah, you know you’re going a bit mad don’t you? I picked up a journalist on Twitter the other day, I was interested in the work that they were doing and I got their profile photo up. The first thing I looked at was the building behind her to see if I recognized it and where exactly that photo was meant to be taken.

Ilya Lozovsky: Yeah, I think we’re all becoming open source investigators soon, so it’ll be an interesting world.

Miranda Patrucic: If you have a collection of dresses that you would like somebody to identify, I can see Dolce & Gabbana prints in my dreams.

Nick Wallis: I guess it’s the untouchability of these people, isn’t it? The fact that even though Alisher Usmanov has been sanctioned, I’m sure he’s still living a very nice life, and the authorities in Germany can’t even impound his superyacht named after his mother.

Miranda Patrucic: With the amount of money that these kinds of people have stashed offshore, I don’t think we need to be worried about them being poor.

Ilya Lozovsky: Just as an example, the villas that we found in Italy, I think it was six that we identified for sure as connected to Usmanov, and he only owns one of them directly. His sister Gulbakhor owns another two and the rest are owned through various corporate structures, and our Italian colleagues actually did a whole separate investigation into some of the people who provide the security, who provide the really secure Internet access to this compound of villas.

And there’s a whole industry of lawyers and accountants and everybody else you can think of who will set up these companies for you, set up these bank accounts, who will move this money for you. So it’s kind of a self-perpetuating industry that’s part of what makes these people so untouchable.

This topic has been on the world agenda much more since the Panama Papers came out in 2015 and there have been repeated investigations since then. So I think the public understands this problem better than in the past and there is more pressure. And whenever I’ve ever spoken with members of the European Parliament or anyone like that, they always say the thing that helps us the most [to] keep this on the agenda and push for reforms is when there are more investigations that come out.

Nick Wallis: Are the sanctions actually hurting, Ilya? Not just Alisher Usmanov and his family, but as a whole, do they make a difference to Putin’s war effort?

Ilya Lozovsky: Well, I think there’s a somewhat naive view that the oligarchs control Putin and once you sanction the oligarchs, that will cripple him. I think that Putin has effectively cleared the field at home, so the only oligarchs that are left at home are those that are willing to not interfere with him politically. As far as the oligarchs specifically, I don’t think it’s so much about forcing Putin’s hand in some way as it’s about what we were just talking about, about making sure that the corruption they represent does not continue to infect or even exacerbate the corruption that we already find in our societies.

As far as the whole separate question of sanctions on Russia itself and whether that affects the war. I think it’s slow-moving. I think the Russian economy is accruing more and more damage, and that’s a slow process, and I think for Ukraine, it’s not fast enough. But I think that in the long term, this is clearly not going to be a short war. So the pressure hopefully will grow more and more on the Russian side relative to the Ukrainian side so that time will be on Ukraine’s side, essentially.

Nick Wallis: Where do you see this going? What will Putin listen to?

Ilya Lozovsky: Oh boy, if I could answer that question. I think nobody really knows what can convince him because so far nothing has. I think his ability to wage war has to be degraded and that is affected by ability to import high tech components from the West and the ability to evade the technological sanctions that are in place. And I think that’s another aspect of this work of when you have bank transactions where the true purpose isn’t indicated or ships where the true nation that is behind that ship or the true cargo isn’t being indicated, that is corruption, but that also can lead to actual evasion of sanctions that are meant to stop the war machine.

Nick Wallis: Just one final thought on the source of a lot of this information coming from leaks, large-scale leaks, whether it be the Credit Suisse leak, the Panama Papers, the FinCEN Files, whatever. Does there seem to have been a rash of them recently because they all come from quite mysterious sources.

Given that you wouldn’t have been able to pinpoint exactly Saodat’s relationship with her brother without being able to triangulate from the various leaks that are coming on, where do you see all that going? Do you see more and more people hacking into foreign states or foreign banks for for political gain? Or do you see more whistleblowers coming forward? How easy or hard is it getting to get information out there for someone who has a conscience about this or thinks it’s an important thing to do?

Miranda Patrucic: We definitely see we’re in the golden age of leaks and with the Russian invasion, one of the things we’ve noticed is that there have been so many attempts to hack different governmental bodies and agencies in Russia and even companies in Russia, and so many new leaks have come that it’s almost impossible to keep up with them and go through them and figure out what the stories are there.

So we can see that there is more and more of that, and I think whistleblowers have been encouraged by the Panama Papers whistleblower. I think what is different is that the collaborations in the media sphere have really shown the power of journalism and the power of how we can change the world if we work together.

I think in global law enforcement, there’s so much corruption, there’s so much lack of interest sometimes to prosecute different powerful companies or individuals, that basically people are seeing that they need to turn to the media to bring something to the attention of the public. And we are seeing even individually people reaching out to journalists and basically sending different documents, reports, confidential information that otherwise would not see the light of day.

Ilya Lozovsky: And of course leaks can be very damaging as well. If they’re just released and without a process of working through them and double-checking everything, making sure it’s legitimate, leaks can also be very powerful in a dangerous way. So I think there is a need for the media to play this kind of, no pun intended, mediating role of interpreting the data and understanding it and applying professional standards of journalism to the leaks that are pouring out of all these secretive places.

Nick Wallis: It does feel like a decent journalistic active cohort is a functioning bellwether of democracy, but at the same time it’s also depressing that the law enforcement authorities are effectively delegating the job to journalists to do what they should be doing in the first place.

Miranda Patrucic: The reality is that criminals are so clever, they hire so many experts, some of the greatest minds are hired by criminals, and they can come up with new ways to launder money, commit crime than law enforcement can keep up [with].

Ilya Lozovsky: And they pay a lot better than we get paid.

Nick Wallis: OCCRP’s Miranda Patrucic and Ilya Lozovsky. After my discussion with Miranda and Ilya, I spoke to the British Member of Parliament Kevin Hollinrake. who has launched a non-partisan economic crime manifesto aimed at stemming the flow of dirty money through the UK.

The City of London has long been seen as a place where rich people with illegitimate wealth from all over the world can launder their cash or use it to buy assets and influence.. Kevin joined forces with a senior opposition party member, Dame Margaret Hodge, to launch their economic crime manifesto. In a piece for The Times newspaper, Kevin said the UK has a $100 billion money laundering problem. I asked him if it were eradicated, what the consequences might be for the UK economy.

Kevin Hollinrake: Well, frankly, I think that’s probably the tip of the iceberg to businesses where there’s various estimates [but] nobody really knows how big the problem is. Quite frankly, I don’t care if it affects the UK economy or not, I don’t want dirty money here and I don’t think anybody else should want that money here.

We know the scale of the problem internationally, roughly, it’s just frightening. The amount of money that’s stolen from Africa by kleptocrats and corrupt politicians is twice the amount of the international aid budget for Africa. All this money’s coming in, you can say it’s coming in at one end and going back out the other twice as fast. So I think whatever the benefits to the UK in terms of this dirty money, I don’t care, we’ve got to clamp down on it. I do not think it will hurt the economy.

I think our economy, one of the reasons people invest in the U.K. is it’s got a trusted system and we observe the rule of law and property rights and our courts are world renowned. So I think for us to clean up our act I think ultimately is a good thing. And the thing about all this is any dirty money, if the wider British public think that we’re willing to countenance a system that tacitly endorses dirty money within that system, I think they lose faith in the entire system.

And that’s really bad for the economy. It’s really bad for politics. It’s really bad for the U.K. PLC generally. The devastating consequences of dirty money, because we know this stuff funds all the most nefarious activities on the planet, be it drug dealing, be it people trafficking, be it terrorism, be it the destruction of states. Look at Russia. Their entire economy has been torn apart by people stealing money out of their economy and also it’s funded Putin’s war efforts in Ukraine.

Nick Wallis: To what extent are we reaping what we sow when it comes to the war in Ukraine with the way that we’ve essentially welcomed a lot of Putin’s cronies into the U.K. and their money?

Kevin Hollinrake: I think we have played a part in it, there’s no doubt. We’ve done this for decades and it isn’t a political point, it shouldn’t be. I think we thought “Russian money, it’s not for us to decide whether that money is ill-gotten or not,” and some of it won’t be, and it’s very difficult I think for anybody to say, “that money has been stolen” or “that money has been extorted,” or whatever else it is if it’s in a foreign jurisdiction, but nevertheless I think we know so much more now about the whole Russian system that it’s time to act.

Nick Wallis: What’s the difference between the Economic Crime Act and the more recent Economic Crime and Corporate Transparency Act? How much further does it go and how much more effective could it be?

Kevin Hollinrake: It goes a fair bit further, it does some things we all want, particularly around the transparency of a company. So we know that lots of money is moved around the world by using shell companies, just companies that are layered like one of those Russian dolls, layers upon layers upon layers, and the money’s hidden in these companies.

The actual ownership of those companies is uncertain so it means you can move money around. Money’s no good if you can’t spend it, and dirty money, because of money laundering rules, is more difficult to spend, so they have to clean it up. If you’re gonna show how this stuff works, just watch a program on Netflix called Ozark, which explains exactly what all this is about.

Nick Wallis: A good drama, that.

Kevin Hollinrake: Fantastic, but it really is an eye-opener in terms of how the world of money laundering works and what it’s there for. So you need to hide the money, you use these shell vehicles, but also you need advisors and a regime that facilitates and the U.K. does that pretty successfully for a number of reasons.

It’s got a huge expertise here in terms of financial services, the ease of setting up corporate vehicles, and it’s got all these crown dependencies and overseas territories where you pay very little tax if you move your money into them. So if you see a lot of money, you don’t want to pay tax on that money, so A) you don’t want that money to be tracked and B) you don’t want to pay tax on it. So we kind of make the perfect destination to launder the money through the U.K. from foreign jurisdictions and indeed from the U.K. itself out into other jurisdictions, tax-free jurisdictions, and then that money can be spent on yachts, villas, whatever else these rich people want to spend it on.

Nick Wallis: What is the one thing you would do if you had the opportunity that would change things at a stroke?

Kevin Hollinrake: If I can say two things, one thing is what we know happens, and there’s phenomenal examples of this, Danske Bank is a case you’ll be aware of, but there was money laundering of around £200 billion through Danske Bank.

Nick Wallis: This is a Danish operation, isn’t it.

Kevin Hollinrake: A Danish operation. Money coming out of Russia, out through these Danish banks, the money comes out clean and then can be spent. £200 billion. Now, you cannot tell me that somebody within Danske Bank didn’t know what’s going on at a senior level. It went through a relatively small outpost of Danske Bank, I think actually it was in Estonia, the actual bank, the branch that dealt with this, and you could see that that bank made huge profits from Estonia.

So somebody knew about this and when they knew about it, instead of just turning a blind eye and taking the money — because the banks make a huge amount of money on this — they should have reported it and they should have stopped it.

What I think we need is a “failure to prevent” offense. If you should have reasonably understood what was going on in your bank and you’re at a senior level, then you personally are held to account and you personally can go to jail. So this is personal liability for some executives. It’ll send shivers up their spine, quite rightly.

And when we did this in the construction sector in the U.K. in 1974, the Health and Safety at Work Act, and made directors personally responsible if they didn’t at least try to prevent accidents in the workplace — so giving hard hats out, like proper shoes and signage up, all this kind of stuff — and workplace accidents, serious accidents in the following year dropped by 90%.

So you need personal culpability so they personally can have their collars felt and go to jail if they don’t do the right thing. That’s the number one thing.

The number two thing is the regulators and law enforcement agencies will always be playing catch up because this stuff happens. Nobody goes around talking about this when it’s happening, but some people are willing to and they’re called whistleblowers. So these are people in organizations who spot something that’s going on, they’re within the organization. And this is what happened in Danske Bank, just a very middle-level branch manager saw this going on, blew the whistle on it, and this all came to light. So we should protect whistleblowers more effectively and we should compensate them for any loss they experience as a result of blowing the whistle.

Nick Wallis: What authority or what global authority is there to leverage fines on rogue institutions? Is there enough enforcement and coordinated enforcement by the likes of America, the E.U., the U.K., to actually ensure that banks do toe the line when it comes to examining where their money’s come from?

Kevin Hollinrake: The short answer is no. It’s all done at a national level. In the U.S., which is far more successful than we are at this, it’s a combination of the Securities and Exchange Commission who regulate the banks and the Department of Justice. So they work together very well and they’re very well-resourced. So even per capita I think their level of fines is something like nine times higher than the fines in the U.K., despite very similar offenses going on in both jurisdictions, both nations.

So there needs to be more joined-up working and thinking, but also fundamentally a thing which absolutely we’ve got to get right here in the U.K., which we haven’t got right, is the resources for our enforcement agencies which are woefully underfunded, woefully. The Serious Fraud Office has a terrible record in terms of prosecuting any kind of financial crime. We need more joined-up thinking within the U.K. and more resources to tackle financial crime.

Just generally across the U.K., financial crime makes up about 40% of all crime, yet it attracts less than 1% of the resources. There’s a fundamental mismatch in terms of the scale of the problem and the scale of the resource.

Nick Wallis: Does not looking too closely at these institutions serve independent territories or large jurisdictions? It doesn’t seem like it.

Kevin Hollinrake: Yeah, absolutely, there’s no question about it. I think that actually the situation is improving, and I think Putin’s helped drive our agenda forward. I don’t think we’d have had two economic crime bills by now had it not been for Vladimir Putin’s illegal invasion of Ukraine.

But one thing we always come up against in politics, and the vast majority of people in politics are trying to do the right thing and trying to improve things, but you come up against vested interests time and time again. And that can be certain sectors, it can be the financial services sector. It could also be international issues such as Crown dependencies and overseas territories.

We’d like them to stay part of the U.K. family, so if we’re too heavy-handed they’ll say: “Right, we’ll go independent, we’ll please ourselves.” And they resist it of course. So all of these powerful influences. We should be proud of the City of London and the financial services sector in the U.K., but it’s very, very powerful, and if it doesn’t like something, it pushes back and the Treasury listens.

The Treasury does have a mandate to make sure the wheels keep turning and music keeps playing in terms of the economy and it’s bound to worry about anything. The banks come along and say: “Oh my God, we’ll stop lending, we’ll stop doing this, we’ll take our headquarters abroad.” And you can understand why people take those threats seriously. But we can’t let that deter us from doing the right thing.

Nick Wallis: How effective do you think sanctions have been?

Kevin Hollinrake: Effective to some extent. Usmanov, I think is one of his villas in a very nice part of Europe has actually been impounded, although it’s frozen, not taken off him, of course, which [is a] very difficult conversation we need to have to try and find ways of actually stripping these assets and then redistributing them. So it has had some effect, but we need to go much further.

One thing I would really like to do, which I think could help unlock a lot of this: you can sanction an individual and it makes you feel good, but if you don’t know where their assets are, it’s pretty pointless. So you’ve got to be able to follow the money. So I think what should happen is if somebody’s sanctioned, any U.K. organization that’s dealt with that individual should have to open their books to the enforcement agencies.

So they should have to say: “Those are all the dealings we’ve had with Mr. Usmanov over the last 20 years.” And then the authorities have got something to go on and they can look and track this money. So it’s not just a case of catch me if you can. You’ve got some actual evidence of how to track this money down, which [has] two benefits. You can find the money. Also, you can find the origins of the money to find out if it’s been stolen or ill-gotten by other means, and then you can potentially confiscate it off them completely and use it to pay reparations to Ukraine, for example.

Nick Wallis: To what extent do you think there is appetite within the British government, at the very least, to really tackle this, perhaps in light of the Ukraine war, but perhaps just because it’s the right thing to do, because this has been going on for well over a decade, hasn’t it, the issue of offshoring money and lack of transparency.

Kevin Hollinrake: Yeah, and we have made progress. I think there is appetite, but it always comes up against a vested interest. So we can’t let that deter us from doing the right thing.

Nick Wallis: The British MP Kevin Hollinrake, finishing this episode for us. My thanks to him and to Miranda Patrucic and Ilya Lozovsky for their time.

We tried to reach Alisher Usmanov, his sisters Saodat Narzieva and Gulbakhor Ismailova, and his son-in-law Shokhrukh Nasirkhodjaev to ask them about the allegations in the podcast, but none of them responded to our emails.

Saodat Narzieva’s spokesperson responded to OCCRP saying that she doesn’t recall the specific details of these transactions as they were many years ago, nor does she know why a suspicious activity report was sent to the Financial Crimes Enforcement Network.

When asked about these transactions, an Usmanov representative previously denied that Mr. Usmanov has ever distributed his wealth amongst his relatives in order to conceal it from any governments and said that this allegation is baseless and unsubstantiated.

In December 2022, Danske Bank reached final coordinated resolution with the U.S. Department of Justice, the U.S. Securities and Exchange Commission and the Danish Special Crime Unit following the investigation into failings and misconduct related to the non-resident portfolio at Danske Bank’s former Estonian branch.

They stated: “We offer our unreserved apology and take full responsibility for the unacceptable failures and misconduct of the past which have no place at Danske Bank today. We’ve learned from our mistakes and we’ve taken the steps necessary to ensure that Danske Bank has robust measures in place to do everything possible to prevent these failures from taking place again.” That statement came from Martin Blessing, chairman of the board of directors.

We contacted Credit Suisse and put to them to the allegations in this podcast. They said: “As a matter of law, Credit Suisse cannot comment on potential client relationships including closed relationships. Credit Suisse is committed to operating its business in strict compliance with all applicable laws, rules and regulations within the markets in which it operates, and we have stringent control mechanisms in place to combat financial crime-related activities with a series of significant measures taken over the last decade in line with financial market reforms. Our strategy puts risk management at the very core of our business.”

If you want to read the OCCRP report into Alisher Usmanov and his sister, Saodat Narzieva, or you want to play with OCCRP’s Russian Asset Tracker, head to the OCCRP website and search “Alisher Usmanov.” The specific piece we discussed in this episode is called: “Sanctioning an Oligarch is Not So Easy: Why the Money Trail of Alisher Usmanov, One of Russia’s Wealthiest Men, Is Difficult to Follow.”

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Dirty Deeds: Tales of Global Crime and Corruption was produced by Lindsay Riley, with research by Phoebe Adler-Ryan and Riham Moussa at Rethink Audio. Check out the growing number of OCCRP podcasts which you can find on your favorite podcast platform. My name is Nick Wallis, and this has been a Little Gem production for the Organized Crime and Corruption Reporting Project.

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