#OPENLUX: All roads lead to Luxembourg - How luxurious properties on the French Riviera, top end hotels in Rome and German office blocks all link back to the Grand Duchy - AML Intelligence
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#OPENLUX: All roads lead to Luxembourg – How luxurious properties on the French Riviera, top end hotels in Rome and German office blocks all link back to the Grand Duchy

Located in the heart of Europe, the country of 650,000 people — only about half of whom are citizens — offers low taxes, economic stability, and an opaque financial system. A Goldilocks zone for money laundering.

By Vish Gain for AMLi

DO YOU KNOW what villas on the French Riviera, heritage German office buildings, and luxury hotels in Rome all have in common? Apart from their sky-high property values, they are largely owned through one tiny European country that has one registered company for every two citizens — the Grand Duchy of Luxembourg.

According to a new investigation by leading European journalists, data in Luxembourg’s UBO registry shows the EU member state is a “favoured destination for oligarchs, tycoons, and royalty looking to snap up some of the continent’s most expensive real estate.”

Located in the heart of Europe, the country of 650,000 people — only about half of whom are citizens — offers low taxes, economic stability, and an opaque financial system. A Goldilocks zone for money laundering.

OpenLux, the new investigation born by the alliance of French newspaper Le Monde and investigative reporting organisation OCCRP, has discovered “dozens of properties worth hundreds of millions of euros” that were bought through Luxembourg companies, from villas on the French Riviera to German architectural gems. Most of these investors were from the UK, Germany and France.

Here are some of the biggest names so far to emerge from the OpenLux investigation into real estate investments in Europe. Spoiler alert: they’re all filthy rich.

Sukanto Tanoto

By far the biggest story till now involves one of Indonesia’s richest and most controversial individuals. Sukanto Tanoto is a lumber industry mogul often criticised internationally for his involvement in large-scale deforestation, human rights abuses, tax evasion, and suspected money laundering practices.

But ripples of his controversial stature may soon be felt far from home, in the middle of Europe, as the investigation found that his iconic €350 million house in Munich bought in 2019 was paid for through companies based in Singapore, the Cayman Islands, and — you guessed it — Luxembourg.

According to the OCCRP, experts say that the transaction was “so suspicious it should have been flagged to authorities.” His son Andre Tanoto bought another iconic building in Dusseldorf the same year using similar payment practices for almost €50 million.

Sergei Toni

Son of Russian Railways deputy managing director, Oleg Toni, Sergey has previously been named in the Panama Papers scandal. This time around, it has been found that Toni owns multiple assets in Europe — a castle near Paris, a villa and house on the French Riviera, multiple properties in the Alicante region of Spain, and a depot and land in Germany.

The investigation claims it is unclear how Toni would have access to such vast amounts of money, but perhaps his father’s position in one of Russia’s most corrupt institutions might provide some leads. By the time Sergey Toni had turned 30, he had amassed a wealth of €66 million from a network of businesses across the continent. One of his houses in France was bought through La Brique Société Civile, a company based in Luxembourg.

Andrey Goncharenko and Antoly Kozeruk

Goncharenko and Kozeruk, former top guns in Russia’s state gas company Gazprom, left their jobs in 2013 after allegations of extortion from contractors. While the findings were not revealed to the public, it was found that both of them had bought ultra-luxury properties in France worth “tens of millions of euros” through companies registered in Luxembourg.

Marouane Mabrouk

Mabrouk, who is the ex-son-in-law of former Tunisian dictator Zine El Abidine Ben Ali, was sanctioned by the European Union and had assets frozen after an investigation into suspected money laundering practices.

One of three brothers to manage Tunisia’s second-largest family company, Groupe Mabrouk, Mabrouk owned a luxury apartment in Paris bought through a company in Luxembourg — an asset that was not frozen when he was sanctioned. OCCRP reports that he was removed from the sanctions list by the European Council in January 2019.

Riad Salamé

Salamé is one of the big incumbent political figures in this list. As the current governor of Lebanon’s central bank, Salamé has been rumoured to possess offshore wealth for years. Last year, OOCRP and Daraj.com revealed that he had overseas assets worth nearly $100 million — including property in the UK, Germany and Belgium, all bought through companies in Luxembourg.

Najib Mikati

Another Lebanese political big gun, Mikati is Lebanon’s former prime minister and one of the country’s six billionaires on Forbes’ rich list. He was involved in a massive national housing loan scandal along with his family members and the country’s biggest bank, Bank Audi.

Brushing the allegations off as “politically motivated”, Mikati later confirmed his ownership of land on the French Riviera through companies in Luxembourg. His spokesperson said of his assets: “Mr Mikati is very transparent, and his source of wealth is a matter of public information.”

Mohammed bin Rashid al Maktoum

Ruler and Prime Minister of the United Arab Emirates, Sheikh Mohammed is widely considered to be the man behind Dubai’s meteoric rise as a global financial and business hub. Owner of a business empire and an estimated net worth of $14 billion, he is undoubtedly one of the world’s richest royals and a regional political force to be reckoned with.

But his public persona has a dark side too. Apart from the Emir’s UK property, valued at £100 million, he also owns several properties in Rome through a company based in Luxembourg. The OCCRP reports that one of these properties is the iconic JK Place Roma Hotel Via di Monte d’Oro.

Anar Mahmudov

Mahmudov is the son of Azerbaijan’s former national security minister Eldar Mahmudov. While in power, the Mahmudov family built a substantial business empire in the country with significant real estate investments in Spain and the UK. While it isn’t clear if any of these properties were bought through Luxembourg companies, the OCCRP mentions him in their investigation, saying that “while the Mahmudov family claims that their wealth is from an ancestor, reporters found no evidence of family wealth prior to Eldar Mahmudov’s career as a public official.”

Hamdan bin Zayed bin Sultan Al Nahyan

Sheikh Hamdan is another Emirati royal politician and the fourth son of the UAE’s founder, who represents the interests of the ruler in the western region of Abu Dhabi. He was famously reported to have attempted a coup in 2011 but was stopped in his tracks by his family.

According to the OpenLux investigation, Sheikh Hamdan is the beneficiary of a Luxembourg company that owns Lacon House in London, “which the investment management fund Blackstone reportedly sold to an unnamed investor for £285 million in 2017.” According to the OCCRP, the Luxembourg company has said it “plans to transfer Lacon House to a Jersey-based structure”.

While these are just some of the big names with questionable real estate investments through Luxembourg revealed by the OpenLux investigation, there are bound to be many more — Le Monde managed to scrape Luxembourg’s registry website and obtain 3.3 million documents, covering over 140,000 companies based in the country. This data was shared with OCCRP which then published a series of investigations into individuals linked to suspicious investments in Luxembourg.

The OpenLux series of investigative articles can be found on the OCCRP website and the data on real estate investments in Luxembourg can be found here.

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