Chapter 12: Who Protects the Enablers?

Behind every major financial fraud lies a network of professional enablers—the lawyers, accountants, corporate service providers, and bankers who create and maintain the structures that facilitate illicit wealth flows. The Vneshprombank case illustrates how these professionals not only enabled the siblings' fraud but have largely escaped accountability for their role in a scheme that devastated thousands of lives.

"Until we jail the lawyers and accountants, this won't stop," said anti-corruption activist Bill Browder, who has campaigned extensively for greater accountability for professional enablers. His assessment highlights a fundamental weakness in the global response to financial crime: while direct perpetrators occasionally face consequences, the professional infrastructure that makes their crimes possible remains largely untouched.

In the Vneshprombank case, this professional network spanned multiple jurisdictions and included dozens of firms. Law firms in Cyprus created the shell companies that received fraudulent loans. Corporate service providers in the British Virgin Islands established the offshore entities that obscured beneficial ownership. Accountants in Russia prepared the misleading financial statements that concealed the growing hole in the bank's balance sheet. And bankers across Europe processed billions in suspicious transactions with minimal due diligence.

Court documents from the ongoing litigation against Bedzhamov provide glimpses into this enabling ecosystem. The May 2024 High Court judgment references the complex offshore structures used to hold assets like 17 Belgrave Square in London [1], structures that could only be created and maintained with substantial professional assistance.

These legal arrangements—often referred to as "wealth defense structures"—require specialized expertise to establish and operate. They typically involve multiple jurisdictions chosen strategically for their particular secrecy provisions or regulatory advantages, creating a legal maze that frustrates investigators and creditors alike.

"These structures don't materialize spontaneously," explained one asset recovery specialist. "They represent hundreds of billable hours from highly educated professionals who understand exactly what they're building and why. The claim that they're merely neutral service providers following client instructions isn't credible."

Yet despite their central role in facilitating financial crime, professional enablers rarely face meaningful consequences. The reasons for this accountability gap are both structural and political, reflecting deeper patterns in how financial regulation operates across jurisdictions.

At the structural level, professional self-regulation creates inherent conflicts of interest. In many jurisdictions, lawyers and accountants are primarily overseen by their own professional bodies rather than independent regulators. These organizations, often dominated by practitioners from major firms, have limited incentives to aggressively police their members' conduct or impose severe sanctions for enabling questionable transactions.

"It's a classic case of the fox guarding the henhouse," noted one regulatory expert. "Professional bodies are tasked with both representing their members' interests and regulating their conduct. When these goals conflict, member interests typically prevail."

This self-regulatory approach contrasts sharply with how direct perpetrators of financial crime are treated. While Markus received a nine-year prison sentence for her role in the Vneshprombank fraud, the professionals who created and maintained the offshore structures that facilitated the scheme have faced no criminal penalties and minimal professional consequences.

The case of "Firm L"—the Cypriot law firm that incorporated at least 18 companies used in the Vneshprombank fraud—illustrates this pattern. Despite evidence suggesting active participation in creating backdated documents and concealing true ownership, the firm has faced no meaningful regulatory action. Its partners continue to practice and attract clients interested in offshore structures.

Similar patterns emerge in other jurisdictions involved in the case. The British Virgin Islands corporate service providers who established shell companies that received Vneshprombank funds continue to operate with minimal regulatory scrutiny. The Moscow accountants who signed off on the bank's misleading financial statements remain in good professional standing.

This accountability gap reflects not just structural weaknesses but political choices. Meaningful regulation of professional enablers would require challenging powerful interests that benefit from the status quo. The same offshore services that facilitate fraud and tax evasion also serve legitimate tax planning for corporations and wealthy individuals, creating powerful constituencies opposed to greater oversight.

"The offshore services industry doesn't distinguish between 'respectable' clients seeking tax advantages and criminals hiding stolen wealth," explained one former regulator. "The same techniques, the same jurisdictions, and often the same firms serve both purposes. This creates political resistance to reforms that might limit these practices."

This resistance manifests in legislative carve-outs that protect certain professions from anti-money laundering obligations imposed on other financial actors. In many jurisdictions, lawyers can invoke legal professional privilege to avoid reporting suspicious transactions, creating a significant gap in financial intelligence coverage.

Even when professional enablers face regulatory scrutiny, penalties rarely reflect the scale of their contribution to financial harm. In cases where sanctions are imposed, they typically involve modest fines rather than criminal prosecution or loss of professional licenses. These penalties are often treated as a cost of doing business rather than a meaningful deterrent.

The global nature of enabling networks creates additional accountability challenges. When professional services span multiple jurisdictions, regulatory responsibility becomes fragmented, with each national regulator seeing only a portion of the overall picture. This fragmentation creates opportunities for regulatory arbitrage, with enabling activities strategically located in jurisdictions with the weakest oversight.

Recent efforts to address these issues have produced mixed results. The European Union's Anti-Money Laundering Directives have progressively expanded obligations for lawyers, accountants, and other professionals to conduct customer due diligence and report suspicious transactions. However, implementation remains uneven across member states, and enforcement actions against non-compliant professionals remain rare.

In the United States, the Corporate Transparency Act represents a step toward greater accountability by requiring certain entities to report beneficial ownership information. However, the act includes significant exemptions and places primary reporting responsibility on the entities themselves rather than on the professionals who create them.

The United Kingdom has implemented similar measures, including the overseas entities register established under the Economic Crime Act. While representing progress, these measures contain loopholes that sophisticated enablers can exploit to maintain client anonymity.

For victims of the Vneshprombank fraud, the lack of accountability for professional enablers compounds their sense of injustice. While they struggle to recover their savings, the professionals who helped design and implement the structures that shield these assets continue to prosper.

"The lawyers who helped hide the money probably earned more in fees than I lost in my account," observed one Vneshprombank depositor. "And while I've spent years fighting to recover something, they've faced no consequences at all. How is that just?"

The case also illustrates how professional enabling creates broader social harms beyond direct financial losses. When fraudsters can easily access services to hide illicit gains, the risk-reward calculation for financial crime shifts dramatically. The expectation of successfully sheltering proceeds reduces deterrence, potentially encouraging more individuals to engage in similar schemes.

Additionally, the normalization of aggressive offshore planning blurs ethical boundaries within professional services firms. When creating opaque structures for wealth concealment becomes routine, distinguishing between legitimate tax planning and facilitating fraud becomes increasingly difficult. This normalization process gradually erodes ethical standards across the profession.

"There's a slippery slope from aggressive-but-legal tax planning to enabling outright fraud," noted one legal ethics specialist. "Once you're comfortable creating structures whose primary purpose is concealment, the line between legitimate and illegitimate clients becomes harder to maintain."

The May 2024 High Court judgment highlights another dimension of professional enabling in complex fraud cases: litigation funding arrangements that introduce additional commercial motivations into asset recovery efforts. The judgment notes that "A1 is the litigation funder of VPB and the Trustee and therefore stands to obtain a financial benefit from recoveries obtained by them from Mr Bedzhamov" [1].

This arrangement—where a commercial entity funds litigation in exchange for a share of recoveries—creates a new set of professional interests in the case's outcome. While potentially enabling pursuit of claims that might otherwise lack resources, such arrangements also transform justice-seeking into a commercial venture, with professional intermediaries extracting value from the recovery process itself.

The judgment raises concerns about whether "the funding agreement with A1 is champertous or not" [1], reflecting ongoing legal questions about the proper boundaries of such arrangements. This evolution illustrates how even the process of seeking accountability for fraud generates new opportunities for professional intermediation and profit-taking.

For policymakers concerned with financial integrity, the Vneshprombank case underscores the need for more robust approaches to professional enabler accountability. Meaningful reform would require several interrelated changes:

First, moving beyond professional self-regulation toward independent oversight with real enforcement powers. Self-regulatory bodies have proven inadequate at policing enabler conduct, suggesting the need for regulators with greater independence and stronger mandates.

Second, enhancing transparency requirements for professional service providers. Rather than focusing exclusively on entity-level disclosure, requiring professionals to report on structure creation and maintenance would create more comprehensive accountability.

Third, introducing meaningful personal consequences for professionals who facilitate serious financial crime. When lawyers or accountants enable billion-dollar frauds, they should face penalties commensurate with the harm caused, including potential criminal liability in egregious cases.

Fourth, harmonizing standards across jurisdictions to prevent regulatory arbitrage. So long as enablers can shift activities to more permissive jurisdictions, purely national approaches will remain ineffective.

Finally, changing professional norms and culture through education and awareness. Professional enablers often rationalize their conduct by focusing narrowly on technical legality rather than broader ethical implications. Countering this tendency requires embedding ethical considerations more deeply in professional training and identity.

Until such reforms are implemented, professional enablers will continue to operate with impunity, facilitating financial crimes that cause vast social harm. The Vneshprombank case, with its billions in misappropriated deposits and thousands of victims, stands as a powerful reminder of the costs of this accountability gap.

As one financial crime expert concluded: "We've created a system where stealing a small amount guarantees punishment, while stealing billions guarantees you access to professionals who can help you enjoy your theft with minimal consequences. Until we address the enabler problem, financial crimes like the Vneshprombank fraud will continue to seem like rational choices for those with the resources to execute them."

Sources:
[1] Vneshprombank v Bedzhamov, Kireeva v Bedzhamov [2024] EWHC 1048 (Ch)
[2] "Professional Enablers in Financial Crime: Accountability Gaps", Financial Action Task Force Analysis
[3] "Offshore Legal Services and Illicit Financial Flows", Tax Justice Network Report
[4] "Self-Regulation Effectiveness in Professional Services", Regulatory Policy Review
[5] "Litigation Funding in Asset Recovery: Ethical Considerations", International Legal Ethics Journal