(Bloomberg) -- Russian billionaire Suleiman Kerimov, 56, and his family are set to face a fresh probe in France, with a new team of prosecutors examining how his daughter came to own several luxury villas on the Riviera, and who the ultimate beneficiary is.
A Paris prosecution unit in charge of tackling organized crime known as Junalco is leading the investigation into the financial flows that enabled the acquisition by Gulnara Kerimova, 32, of the companies that own the four villas on the “Billionaire Bay” at Cap d’Antibes, according to people familiar with the matter. The ownership of the villas was the subject of a money laundering case opened several years ago in Nice, in southeastern France.
Junalco prosecutors are now drawing on a June report by France’s anti-money laundering body Tracfin, said the people. According to that document, Gulnara spent €268 million ($279 million) to take over the ownership structure, with funds provided for the most part by her brother Said, investigative news outlet Mediapart reported. In response to Bloomberg questions, Paris prosecutors confirmed that Junalco is taking the lead in investigating the Tracfin memo.
Nikita Sichov, an attorney representing Suleiman, Said and Gulnara, brushed aside any efforts to draw the family back under the French legal spotlight, suggesting that the change of ownership of the properties is well known to French authorities.
“The Tracfin report you refer to concerns a restructuring carried out in complete transparency with the competent bodies in order to comply with all the regulations in force,” Sichov said in response to Bloomberg questions.
The new probe caps a bad month for Kerimov’s family, which until earlier this year held a majority stake in Polyus PJSC, Russia’s largest gold miner. It fully exited the company in May.
Kerimov, who is a senator in Russia and whose net worth is $10.9 billion according to Bloomberg Billionaires Index, has been sanctioned by the US since 2018. Two weeks ago, the US sanctioned Said, Gulnara and the four French real estate firms she acquired as well as Alexander Studhalter, a Kerimov associate who had previously used a Swiss firm for ownership of the villas. The European Union and the UK added Kerimov to their sanctions lists following the invasion of Ukraine. Said has been sanctioned by the EU since April.
While Kerimov is on the EU sanctions list, the four villas don’t appear on France’s list of frozen properties, highlighting the difficulty local authorities have had in tying the luxury homes to him.
Kerimov seemed to be in the clear in France following a 2020 settlement deal between prosecutors in Nice and the Swiss company run by Studhalter for €1.4 million.
That case made global headlines in November 2017 when the Russian billionaire was apprehended at the Nice airport and accused of money laundering. The arrest was dramatic. Kerimov had flown by private jet to Nice planning to head to Cap d’Antibes. Instead, he was met by French police officers. For months after that, he was under virtual house arrest on the French coast, required to check in with police weekly and allowed to return to Russia only with special permission for short visits.
Much of that probe had initially focused on secret payments worth €92 million during the acquisition of the “Villa Hier,” famously used as Michael Caine’s home in the 1988 film Dirty Rotten Scoundrels.
Sichov, Kerimov’s attorney, said the accusations against his client in the Nice case relating to the sale of the Villa Hier have been dismissed and that the billionaire isn’t facing any formal charges in any criminal proceedings.
The Nice prosecutors had stumbled onto Kerimov by accident as an investigation into drug dealers unexpectedly led French police to a secretary working for a Corsican lawyer. As investigators started to wiretap the lawyer’s entourage, they noticed suspicious transactions from one of his clients, the prior owner of Villa Hier. That trail then led them to Studhalter and Kerimov.
Throughout that probe, Kerimov claimed he never bought the villas but was merely renting them from Studhalter. The tycoon was reputed for being something of a Jay Gatsby-type figure because of his glitzy parties on the Riviera, including a bash where Beyonce sang.
Yet there were signs that Kerimov was more than just a renter. Blueprints from London-based architects MMM for renovations at Villa Medy Roc in 2009 showed plans for bedrooms with the names of Kerimov’s children -- Said, Gula and Emina. A lawyer for Studhalter declined to comment.
Now, the Tracfin report and the tasking of Junalco prosecutors to look into the villas’ ownership may put the Kerimov family back in French judicial cross-hairs. Junalco is an elite unit set up recently in Paris and charged with prosecuting “very complex” organized crime cases throughout France, from drug lords to cyber-criminals. It shares competence on certain matters with the Parquet National Financier, another prosecuting unit that operates in France and focuses on white-collar crimes.
Meanwhile, rich Russians, once a noticeable presence on the French Riviera, have all but disappeared since the invasion of Ukraine. They used to be seen vacationing in their vast sea-view villas or on superyachts from Saint-Tropez to Monaco. But many of their mansions are now frozen and their boats immobilized across Europe.
--With assistance from Stephanie Baker.
(Adds Kerimov detail in 14th paragraph)
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