The message to Russia that was sent on April 13 with the missile attack on Syria’s Scientific Studies and Research Center chemical weapons complexes at Barzah and Homs was more pointed than most people realize.
That is because the sites appear to have been supported with money stolen from the American investment firm Hermitage Capital, then laundered from Russia’s Ministry of Finance via a complex path to a flock of shell companies backed by the Russians, according to reports made available to Asia Sentinel.
According to news media, the sites were for research, development and testing of both chemical and biological weapons. The raids, a joint operation with the UK and France, were in revenge for a chemical gas attack on the Syrian town of Douma last week in which 42 people reportedly died and many others were debilitated.
It’s uncertain just how much damage was done by the raid. The Syrians and Russians may have had warning that the missile strikes were coming, possibly by allies to foreclose the accidental start of a major war. In any case, the buildings were apparently evacuated and only three were reported killed. It is also uncertain if any nerve gas or chlorine was actually destroyed, since the ruptured tanks would have spewed their contents into the air. The BBC, however, quoted intelligence sources saying the government was indeed making chemical weapons at the three sites.
Funding for the sites turned up in reports by the US Treasury Department’s Financial Crimes Investigating Network (FinCEN), which beginning in 2014 opened an investigation into FBME Bank, an infamous Tanzanian bank which operated primarily in Cyprus until the US moved to shut it down by denying it access to the US financial system. Almost all global capital movements flow through the US SWIFT system.
One of the companies that is alleged by investigators to have received funds from the Russians and moved them through FBME from the Russians is Tredwell Marketing Ltd., a company registered in the British Virgin Islands that according Kroll International, a New York-based corporate investigations and risk consulting firm engaged to evaluate suspicious transactions by FBME, “was specifically identified in FinCEN allegations as being potentially linked to funding of Syrian military equipment.”
The amount poured into the shell companies is unknown. Kroll discovered that US$52.2 million passed through Tredwell’s account at FBME to multiple offshore companies with US$3.1 million of receipts passing through SWIFT although: “Further investigation of these transactions would be necessary to form a conclusion as to the business purpose behind those transactions according to Kroll’s confidential 52-page report, titled “Project Ritchie.”
Tredwell shared a post office box in the British Virgin Islands with 406 companies that were clients doing business with FBME, according to a similar confidential report by the Big Four accounting firm Ernst & Young dated Dec. 5, 2014, which was hired to evaluate FBME’s questionable transactions.
Ernst & Young quoted a notice of finding by FinCEN that FBME “facilitates US sanctions evasion through its extensive customer base of shell companies. For example, at least one FBME customer is a front company for a US-sanctioned Syrian entity, the Scientific Studies and Research Center, which has been designated as a proliferator of weapons of mass destruction. The SSRC front company used its FBME account to process transactions through the US financial system.”
“The outrageous claims that the Bank acted for chemical-weapons manufacturers, or knowingly acted for any sanctioned individuals are utter nonsense," said a spokesman for FBME in an email to Asia Sentinel. "These are false and deliberately damaging claims."
Nonetheless, according to a wide range of other sources, the story started when the Moscow Tax Office allegedly created trumped-up tax charges that allowed the government to seize the assets of Hermitage Capital, headed by investor William Browder, who was forced to leave Russia.
The US government alleged that the stolen assets were routed to Prevezon Holdings Ltd, owned by Russian businessman Denis Katsyv. Katsyv is the son of Pyotr Katsyv, vice president of the state-run Russian Railways and a former deputy governor of the Moscow Region. According to reports, Katsyv is also said to be a business associate of his former boss, Vladimir Yakunin, a former president of Russian Railways and a confidant of Vladimir Putin.
In any case, it is believed that the money was then moved on to several FBME depositors and transferees including Tredwell, which passed the funds on to the Syrian Scientific Research Center. Another is Balec Trading, described as a front for the research center into which via Prevezon funds flowed. Others sanctioned by the US are Piruseti Enterprises and Frumineti Investments Ltd., which also received funds from Prevezon.
The Ernst & Young report indicates that Balec Ventures Inc., which in turn was linked to the Syrian Scientific Research Center, was also linked to the Hermitage theft through Quartell Trading Ltd., which is registered in the British Virgin Islands, and the UK-registered Nomirex Trading Ltd. All were involved as “intermediary offshore companies” in moving the funds out of Russia.
Bank records and a contract show that a Russian mafia front called the Klyuev Group, consisting of high-level Russian businessmen who were involved in the Hermitage theft, agreed to pay Balec US$3 million, allegedly for high-end furniture. Balec is headed by Issa al-Zaydi, who was sanctioned by the Americans for his connection to the Syrian gas factory and was listed as one of FBME’s highest-level clients.
Individuals said to be connected to the Russian Mafia hold accounts for Altem Investment Ltd., and Zibar Mgt. Ltd. Another was said to be Joseph Karam, identified as a “financial advisor for a major transnational organized crime figure who banked entirely at FBME Cyprus (and who) maintained a relationship with the owners of FBME.”
Karam was said to be close to Oleg Deripaska, a Russian billionaire who in turn is said be a member of Putin’s inner circle. Deripaska did business in the previous decade with Paul Manafort, formerly President Donald Trump’s campaign manager. Deripaska has offered to testify before congressional committees in exchange for immunity but has been turned down.
There is no indication that anyone connected to Trump has had anything to do with the Hermitage scandal, Browder told Asia Sentinel. However, Prevezon, which was sued by the US government of laundering stolen millions into Manhattan real estate, was represented in the United States by Natalia Veselnitskaya, the Russian lawyer whose meeting with members of the Trump family in Trump Towers in June of 2016. That meeting has become a central focus of the office of the special prosecutor headed by Robert Mueller.
Prevezon has continued to deny all wrongdoing and hasn’t commented on what Veselnitskaya was doing in the meeting with the Trump group. In May of 2017, the company agreed to settle the money-laundering case with the US Justice Department without admitting guilt for a fine of US$5.9 million, a fraction of what the US had originally demanded. However, the US is rumored to be leaning toward reopening the case.