From Russia Without Love: Georgy Bedzhamov

Continuing CBIA’s detailed investigation into the international financial crimes allegedly committed by Georgy Bedzhamov, the present entry into the CBIA Files: Georgy Bedzhamov relates his movements across Europe as the Russian authorities closed in on the perpetrators of the fraud that caused the collapse of Vneshprombank, the Russian bank he was contentiously involved with.

Bedzhamov’s role at Vneshprombank

The judges in the 2019 appeal hearing of Bedzhamov’s case to increase his expenditure allowance while living in the UK under the worldwide freezing order described his involvement in the running of Vneshprombank in much more colourful terms than news and media sources have done so: ‘VPB claims that although Mr Bedzhamov was not a director of VPB and held no formal position with it, together with his sister he exercised de facto control until December 2015.’ [1]

Many sources describe Bedzhamov invariably as the president, co-founder, major shareholder and executive of what was then Russia’s fortieth-largest bank, that said, his sister, Larisa Markus, was VPB’s president and the head of its management board from 1995 until its demise in 2016.

First stop, Monaco

It was perhaps the informality of his connection with the bank that his actions helped drive to ruin that allowed Bedzhamov the time and opportunity to plan and implement his escape from Russia. The facts show that it was on 18 December 2015 that the Bank of Russia, formally known as the Central Bank of the Russian Federation and controlling entity of that nation’s monetary system, appointed provisional administrators to control VPB; on the very same day Bedzhamov arrived in Monaco. Markus was arrested for the embezzlement of £1.34 billion on or around the 22 December 2015.

Media sources, such as the New York Times and Forbes Russia, have cited Bedhzamov holding assets, including the Wine Palace wine bar in Monte Carlo, which may have been an initial reason for his choosing to flee to the principality.

Having fled to Monaco, Bedzhamov’s family was to join him for Christmas and it was there that he was informed that armed police had raided and searched his Moscow office. His sister was formally charged soon afterwards and Bedzhamov himself was charged on 1 February 2016. 

A court in Moscow ordered that Bedzhamov should be detained on 5 February 2016 pending trial, which led to him deciding not to return to Russia, instead remaining in Monaco and living aboard the Esther III, his private yacht, with his family. It was around this time that Bedzhamov was diagnosed with an ongoing heart condition and that imminent surgery was necessary and he underwent open heart surgery on 12 February 2016.

The extradition request by the Russian authorities was put into effect by the Monaco police on 21 April 2016 and Bedzhamov was arrested and detained, initially in custody but was then held in hospital but under police guard due to the worsening of his heart condition. He was released four days later on 25 April 2016 to then be contacted by police one month later, on 27 May, when he was informed that they had been given intelligence that he was under imminent threat of kidnapping meaning he was then kept under police surveillance before hiring private security for himself and his family.

Under the laws of Monaco, the ultimate authority on the decision to extradite Bedzhamov to Russia rested with Prince Albert II; there are suggestions that the prince may have connections to the fugitive banker through their mutual involvement in the sport of bobsleigh on international and Olympic levels.

In 2019 the High Court of Justice in London granted permission for Bedzhamov to pay £250,000 in rent for a Monaco apartment that he was renting after his assets were confiscated in April 2019 following a request from the Deposit Insurance Agency (DIA), the state corporation responsible for deposit insurance in Russia.

Additionally, the court ruled that the DIA must cover Bedzhamov's legal fees amounting to 40,000 euros. Following the freezing of his assets, Bedzhamov was restricted to spending no more than £50,000 at once without Vneshprombank's consent and was limited in his overall spending, though the cap on monthly personal and housing expenses has since increased to £80,000.

Reportedly, Bedzhamov’s partner, Alina Zolotova, along with their children, still resides in the Monaco apartment, where they pay £75,000 in monthly rent. Due to the spending limits imposed, Zolotova fell behind on rent payments and was given until September 6 to settle the balance.

Setting up in London

Bedzhamov flew to London for medical treatment in late June 2016, during this initial stay in the UK the attempt to extradite him from Monaco was rejected and his bail terms were lifted. In its 12 July 2016 judgement to reject extradition, the principality's Court of Appeal highlighted Bedzhamov's purported heart difficulties, with his legal team saying that extradition would threaten his life having undergone and would likely necessitate more heart surgery, a decision that created concerns when Bedzhamov was able to depart Monaco for the United Kingdom, presumably well enough to travel overseas and continue his activities.

Several legal advantages are afforded to Monaco in extradition proceedings due to its status as a microstate,including theprovision that affords itsPrince broad discretion in extradition cases. Unlikelargercountries with more robust legal and political oversight, Monaco's system allows for the refusal of extradition applications on health or political grounds, with limited redress for the requesting country.

Sovereign microstates are given more latitude under international law, particularly the European Convention on Extradition and Monaco has consistently used this flexibility in high-profile situations.

Bedzhamov has stated, in the 2019 expenditure appeal case, that he opted to stay in London for a variety of reasons, citing that he felt safer, had to give priority to medical considerations and the prospect of additional business opportunities. His partner and their two youngest children stayed in Monaco, residing in the Monaco flat, but they make frequent visits.

In May 2017 the Russian authorities sought Bedzhamov's extradition from the United Kingdom. Upon being arrested by appointment and attending at Westminster Magistrates' Court, he was released on bail with one of the bail conditions being was that Bedzhamov did not leave the country. The extradition request led to Bedzhamov making a claim for asylum in the UK, as a result of which the extradition proceedings have been adjourned. 

Bedzhamov’s claim for asylum has not yet been determined and has become a major factor in his continued protection from prosecution. Since Bedzhamov was hit by the worldwide freezing order obtained by VBP in 2019, he has been prohibited from leaving the UK and was required to surrender his passport.

Sources

[1]Vneshprombank LLC (a company registered and (in Liquidation) in the Russian Federation) v Georgy Ivanovich Bedzhamov https://justis.vlex.com/vid/839148614

[2]Patrick Reevall, In Mix of Russian Sports, Politics and Business, a Bobsled Leader in Exile, 26 February 2016