Finnish authorities were investigating the money transfers of Russia’s former long-time communications minister, Leonid Reiman
Finland’s National Bureau of Investigation (NBI) has opened a criminal investigation into suspected money laundering by the bankrupt Finnish company, Sekom Group, Finland’s leading daily, Helsingin Sanomat, reported. The suspicion stemmed from the alleged crimes of Russia’s former communications minister and Vladimir Putin’s advisor, Leonid Reiman.
Police said up to USD 100 million (EUR 75 million) per year was transferred to Finland through Sekom over a period from 2002 until 2009. In all, the total sum that may have been laundered through Sekom could have reached as much as EUR 600 million. The police opened the investigation in late 2008 after it received a request for legal assistance from German authorities. The police’s preliminary investigation into the case is 14,000 pages long.
Police suspected Sekom’s founder, Andrei Titov, of various financial crimes, including money laundering, tax fraud, and bribery. Finland’s Tax Administration has submitted a police report on suspected tax fraud against him. The Tax Administration suspected that Mr Titov had received hidden dividends amounting to EUR 2 million from Sekom in 2002 and 2003. Mr Titov, a Finnish citizen, has denied his culpability.
Police alleged that Sekom laundered money using customer reserve accounts, which are bank accounts that are separate from a company’s bookkeeping and are used to deposit a client’s money temporarily before the funds are transferred to the client’s own account. Mr Titov said Sekom used the funds on customer reserve accounts as collateral in major deals.
NBI said that more than USD 11 million of funds were transferred through Sekom to the Cypriot-registered company, Albany Investment. According to information obtained by Helsingin Sanomat, police suspected that Mr Reiman had obtained the funds transferred through Sekom using dishonest means from Russian state-owned companies.
The funds would have been transferred from Albany Investment to the Bermuda-registered investment company, IPOC International Growth Fund. According to a 2006 Swiss arbitration court ruling, IPOC’s owner was Leonid Reiman. The arbitration case was related to a protracted ownership dispute involving Russia’s MegaFon mobile operator.
NBI has concluded its preliminary investigation and handed over the case to the prosecutor. While not commenting the allegations against him, Mr Titov lambasted the actions of the Finnish police. “I came to Finland together with my wife in December 2008 voluntarily after we heard about the police raid into our company’s premises and our home. We were detained at the airport, and the police refused to tell us what we were suspected of,” he said.
Mr Titov said 40 police officers and the police’s special operations unit, Karhu Team, took part in the raids on his company offices on Helsinki’s Erottaja Street and on his home. “They entered our home brandishing machine guns,” he recalled. Several people were detained and later arrested in the raids.
Mr Titov said there were many other problems with the police’s handling of the case. The police spoke poor English, and the police interpreter struggled with business terminology, he said. “I had demanded that all interrogations be recorded. Later I learned, however, that some of the tapes had disappeared. How is something like this even possible in Finland?” Mr Titov wondered.
In 2011, NBI’s lead investigator on the case, Sirpa Laakso, decided that Mr Titov’s lawyer, Kai Kotiranta, could no longer take part in his client’s interrogations. Ms Laakso referred to the Finnish law on pretrial investigation, which stated that a lawyer would have to be barred if his/her presence hindered the investigation. Mr Kotiranta represented Mr Titov’s wife as well.
Mr Titov asked why the court acceeded to the police demand to limit his right to meet with his children. His wife was kept in solitary confinement for more than 300 days. Mr Titov himself was kept in custody for around a year. He was released from pretrial detention in 2009. Moreover, the police demanded that Mr Titov could only speak with representatives of the Russian Embassy in the presence of police officers.
On 9 October 2013, border guards again detained Mr Titov at Helsinki Airport — less than two hours after he had given an interview to Helsingin Sanomat. Mr Titov said the border guards did not indicate the reason for his detention. Instead, he was informed that he would be arrested, and he was denied a call to his lawyer.
Mr Titov said the border guards informed him that the order to detain him came from the NBI. Soon afterwards, however, he was allowed to go on his way, and was told that the incident was just a “misunderstanding.” Mr Titov said he had crossed the Finnish border dozens of times before with no problems whatsoever until now.
Andrei Titov said he was born into an ordinary Soviet family in 1958. His father worked in the Soviet army, and his mother was a teacher. Mr Titov studied economics and international law in Moscow. In December 1988, he moved to Finland to work at a Soviet trade promotion organisation in the Russian Embassy in Helsinki.
When the Soviet Union fell, Mr Titov had two choices: either return to Russia or go into business in Finland. He said he borrowed USD 5,000 from a friend to set up Sekom Group in 1990. Initially, the company sold shoe manufacturing equipment from Finland to Russia. Soon the company’s business expanded to oil trade, network equipment, and chemicals. Sekom’s business partners were mainly Russian companies.
At its highest, Sekom’s annual turnover was more than FIM 1 billion, which in euros would equal to around EUR 200 million. Later on, Sekom was divided into five separate companies. Soon after the split-up, the group’s overall turnover reached more than EUR 700 million. Many of the company’s partners had bank accounts in offshore tax havens, including in BVI, Cyprus, Liechtenstein, and Monaco.
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