Former Ukrainian President Poroshenko Secretly Controlled Offshore Firms that Banked at Austria’s Raiffeisen
The shell companies handled extravagant transactions on behalf of the former president while the bank turned a blind eye.
A Cypriot shell firm accused of funnelling bribes on behalf of a notorious Serbian weapons dealer deposited $1.7 million into a secretive trust fund set up for a prominent Saudi, leaked bank records show.
That fund’s Qatari parent company was subsequently fined by regulators for a string of regulatory offenses, and a criminal investigation has been launched that could lead to charges against its directors.
Though the purpose of the substantial payment is unknown, Saudi Arabia has become a major buyer of weapons from Serbia’s state-owned factories since the start of the Syrian civil war. Slobodan Tešić, the arms broker who allegedly controls the shell firm that made the transfer, has been a key benefactor of this upsurge in business.
Tešić had already spent nearly a decade under United Nations sanctions after he was caught selling weapons to former Liberian president and convicted war criminal Charles Taylor. Powerful Serbian politicians helped him get off the U.N. blacklist in 2013.
Less than five years later, in December 2017, the United States also sanctioned Tešić, saying he had paid “large bribes” to secure contracts for weapons deals. The U.S. also said that Tešić controls a Cyprus shell firm, Grawit Limited, that was used as a conduit to pay politicians. (He denies this.)
It has never been made public what exactly Tešić did to earn the new sanctions. But reporters from OCCRP and its Serbian member center KRIK have now found transaction records showing that several months before the U.S. ruling, in June 2017, Grawit sent $1.7 million to a Qatari trust. It was flagged to U.S. authorities as suspicious.
The FinCEN Files is a 16- month-long investigation by the International Consortium of Investigative Journalists, BuzzFeed News and more than 400 international journalists in 88 countries, including those from OCCRP and its network of member centers.
The investigation is based on more than 2,100 secret bank reports filed to the U.S. Treasury Department’s intelligence unit, the Financial Crimes Enforcement Network, other documents and dozens of interviews.
One of them is a spreadsheet detailing 77 suspicious transactions flagged to U.S. authorities that originated at Serbia’s AIK Banka, and passed through its correspondent institution, VTB Bank in Moscow. Most of the transactions are tied to Serbia-based arms dealers, including the $1.7 million payment from Grawit Limited. The only firm of that name at the time was based in Cyprus and was secretly controlled by Slobodan Tešić, according to U.S. authorities.
That trust fund is part of a wealth management firm called Horizon Crescent Wealth, which is run by Swiss bankers but is based in the Gulf emirate of Qatar. In marketing itself to customers, it touted Qatar’s “light-touch approach” to money laundering regulations.
Horizon Crescent also opened six “special-purpose companies” to carry out specific types of financial transactions. One of them was Crescent Middle East LLC, which was set up as a trust for the benefit of a man identified in legal filings only as a “prominent Saudi.” It was this company that in June 2017 received the $1.7 million payment flagged as suspicious.
Eight months later, the Qatar Central Bank froze the accounts of the entire Horizon Crescent network, and Qatar’s financial regulator launched an investigation into the wealth management firm, according to court documents.
A number of suspicious payments involving Horizon Crescent were discovered, and in March 2020 the regulator fined the company 30 million Qatari rials (about $8.2 million) for a string of regulatory offenses, including not carrying out proper money laundering checks. An investigation into “money laundering and/or corruption” that could lead to criminal charges against the firm’s two directors is ongoing, its lawyer told OCCRP.
This year, Horizon lost an appeal against the decision. During the appeal hearings, regulators argued that the firm’s customers used its network to obscure suspicious payments to officials in the Middle East and Africa — including one called “Mr. A.”
The regulators said they had found evidence that Horizon Crescent received “substantial funds” on behalf of Mr. A, whom they identified as a public official from a Middle Eastern country. The money was then transferred to Switzerland.
The fee was supposedly a commission for “consulting in the sale and management of ambulance aircraft(s) and medical equipment” — but it was paid “by a well-known arms dealer,” according to the court documents.
The Qatari officials did not name the weapons trader, but the FinCEN Files raise the possibility that it could have been Tešić or one of his associates.
Serbian arms dealer Slobodan Tešić first gained infamy for violating United Nations sanctions by selling weapons to Liberia’s former president, the warlord Charles Taylor. Those deals landed him on a U.N. blacklist in 2004.
Tešić’s luck changed with the election of the Serbian Progressive Party, which took power in 2012 and gave his daughter Danijela a job in the Ministry of Foreign Affairs.
Her boss, Foreign Affairs Minister Ivan Mrkić, gave the green light for Tešić’s removal from the U.N. sanctions list, according to documents reviewed by OCCRP’s Serbian member center KRIK.
In December 2013, less than a month after the U.N. dropped sanctions against him, Tešić was granted a five-year diplomatic passport, a privilege usually reserved for high-ranking state officials.
“I gave him a diplomatic passport because he is, together with few others, very successful in exporting Serbian products,” Mrkić told KRIK.
Since then, Tešić’s business has boomed. Announcing U.S. sanctions against him in 2017, the Treasury Department called Tešić one of the “biggest dealers of arms and munitions in the Balkans.”
In another case, Horizon Crescent acted as an intermediary for payments to a diplomat, “Mr. H,” from an unnamed African country.
“There was no explanation why there needed to be such a middleman arrangement, why the payments were received and made in [Horizon Crescent]’s name, or why Mr. H. was entitled to any, let alone such a sizable, commission,” the court report said.
“The possibility of corruption was obvious. [Horizon Crescent] turned a blind eye to it.”
Through lawyers, the Swiss directors of Horizon Crescent Wealth told reporters they had done nothing wrong. They said that transactions related to Grawit had been managed by a different director.
The suspicious money transfer is not Tešić’s only link to the network of companies spawned by Horizon Crescent Wealth.
Of the six subsidiaries of the wealth management firm, two are directed by Yemeni businessman Khaled Hamed, who has a number of other ties to Tešić. Hamed also transferred $40,000 to Horizon Crescent in 2017 in a transaction flagged to U.S. authorities as suspicious, the FinCEN Files show.
Hamed was granted Serbian citizenship in 2016 by the country’s then-prime minister, Aleksandar Vučić, under unusual circumstances.
In February 2016, Serbia’s official gazette announced that Khaled Hamed had become a citizen following a decision by Aleksandar Vučić, who was prime minister at the time and is now the country’s president.
Born in Yemen, Hamed had bypassed the usual application process and was granted citizenship based on Serbia’s "national interest,” according to the announcement.
It is not clear how the national interest was served by the decision. All government institutions contacted by OCCRP’s Serbian member center KRIK refused to comment.
"This government's right [to grant citizenship] is often abused for political and personal benefit, or benefit of some interest groups,” said Milica Švabić, a lawyer with the civil society organization Klikaktiv.
Hamed’s relationship with Slobodan Tešić may have helped. The arms dealer has close ties to the ruling party, which got him off a United Nations sanctions list.
Hamed uses the same address that Tešić listed for two of his companies. Partizan Tech was until 2017 based at a state-owned villa in Belgrade that still bears the company’s name out front, and a subsidiary remains registered there.
The phone and fax number listed for the company Hamed directs, Stallway Ltd., are identical to Partizan’s former numbers. But reporters were unable to find any official trace of Hamed at the address.
Hamed and Tešić’s key proxy, Andrić, are directly linked through HK Komerc, a Bosnian firm registered in 2015. Hamed gave power of attorney to a Sarajevo lawyer in a document signed and witnessed by Andrić.
Hamed’s website, Sanus Investment, explains that Stallway is “more or less ... acting as a key supplier to governments, Interior and Defence Ministries to be specific, providing aircraft fuel, armoured vehicles and riot control gear.”
The website boasts that his other businesses have “heavily invested on multiple real estate projects in Hamburg and Dusseldorf,” with plans for expansion to more German cities.
A Stallway Limited registered in Qatar with HCW was, according to HCW’s lawyer, providing a “IT solution to the government of Saudi Arabia”.
The reality of Hamed’s purported business empire appears decidedly less glamorous. The address listed for his “European HQ” is a tavern in Bonn, closed for many years according to the local press’s latest report from May, while his two other known projects in Germany are fast-food joints.
When asked for comment, Hamed replied with a two word email: “get lost.”
Another of those “special purpose companies” listed Goran Andrić as director. That’s the same name as a Serbian man who Treasury sanctioned in December 2019, calling him “one of Tešić’s closest associates.” Andrić did not respond to a request for comment.
Responding in writing through his firm Partizan Tech, Tešić said he could “categorically confirm that he has never participated in any corrupt activities,” and that he had “initiated a delisting process” to be removed from U.S. sanctions.
“Unfortunately, Mr Tešić notes that because of this nature of the industry, he was in the past and still is, frequently faced with unfair competition, with distorted facts and untrue allegations made against him, especially from regional competition and states which rely on significant resources to harm Partizan Tech and more broadly the Serbian defense industry,” the company said.
The final two special-purpose companies were linked to Latin Americans who ran a call center in Costa Rica, referred to as Ms. EA and Ms. IA in the Qatar court documents. While unrelated to Tešić’s arms-dealing network, these companies were at the heart of the case against Horizon brought by the Qatar Financial Center Regulatory Authority.
Qatari regulators discovered that the Latin Americans were Horizon’s biggest clients. The companies that Horizon created and managed for them held around $14 million.
In court submissions, regulators said they were suspicious about the true origin of the funds. They pointed to an unorthodox setup in which Horizon received direction from email addresses that did not appear to be connected to the Latin Americans. They noted that Horizon “did not enquire into this quite plainly questionable means of receiving instructions.”
Regulators told the court they were “concerned that the funds transferred to [Horizon] on behalf of the claimants are part of a sophisticated attempt at money laundering and an attempt to evade tax.”
Responding through a lawyer, the Swiss directors of Horizon Crescent Wealth, Patrick Baeriswyl and Jean Marc Mantegani, said they “vigorously contested” the allegations against them.
They said all transfers from Grawit Limited were handled by a Qatari director at the firm called Mohamed Abdulaziz Mohamed Al Emadi, who was also the contact point for Hamed.
Al Emadi describes himself as a “prominent Qatari businessman” in court documents lodged in Qatar against Horizon Crescent for unpaid salary and expenses.
The firm rejects the claims and countered with their own allegations against Mr. Al Emadi, the nephew of Qatar’s finance minister, according to court papers seen by reporters.
“My client notes further that Mr. Al-Emadi unlawfully removed substantial sums that belonged to trust beneficiaries,” the firm wrote. “He did this via credit card withdrawals at various casinos in London.”
Mr. Al Emadi did not respond to a request for comment.
As for Tešić, the Qatari regulator’s crackdown on Horizon Crescent Wealth may have little effect on his business as he finds new ways to overcome restrictions.
The U.S. Treasury noted that blacklisting him in 2017 had failed to halt his business: “Following his designation, Tešić continued to engage in the arms trade and operate as a silent partner in companies he indirectly owns and manages.”
In the latest round of sanctions against the irrepressible arms dealer, the U.S. added another firm, newly registered in Cyprus, that he uses to conduct business: Tardigrade Limited, named for the microscopic water-borne creatures known for their resilience under extreme conditions. Like Tešić, the tardigrade is famous for being a survivor.
The Center for Investigative Reporting (Bosnia), Tamedia (Switzerland) and Daniela Castro (OCCRP) contributed reporting.