Ex-Russian oligarch seeks release of €100m frozen in Ireland

An Garda Síochána has cast the State in the role of "lapdog" of the Russian president, Vladimir Putin, a Dublin court has been told.

The claim was made in a case where former Russian oligarch Mikhail Khodorkovsky is seeking the release of more than €100 million frozen since 2011 under Irish money-laundering legislation.

Remy Farrell SC, for Mr Khodorkovsky, said funds held by a Guernsey trust that were under the control of an Irish custodian were frozen in 2011 on the application of the Garda, based on convictions handed down by the Russian courts which had been condemned as political across the EU.

The action by the Garda “was the only state action in the free world” based on the Russian convictions of Mr Khodorkovsky, he said.

“The entirety of the free world considers the convictions to have been little more than a show trial, but the Garda seem to be swimming against that particular tide.”

Mr Farrell said that one reading of what was happening was that the Garda wanted the courts to make a decision they were refusing to make. “Pass the parcel,” commented Judge Timothy Lucey.

Penal colony

The court heard Mr Khodorkovsky was pardoned by Mr Putin in 2013 following international pressure and negotiations conducted by the German government on behalf of the EU. His release, after 10 years in a Siberian penal colony, was welcomed in the Dáil by the Minister for Foreign Affairs.

Mr Farrell said the court would hear that Mr Khodorkovsky was convicted in show trials reminiscent of the Soviet era, that the charges were “legal nonsense” and that they were brought because Mr Khodorkovsky was seen as a political threat to Mr Putin. Mr Khodorkovsky has now been given asylum in the UK.

The court was told he believed that if he returned to Russia he would either be jailed for the rest of his life or killed.

Michael McDowell SC, instructed by the Chief State Solicitor, said that under the terms of the Criminal Justice (Money-Laundering and Terrorist Financing) Act 2010, the onus was on Mr Khodorkovsky to show there were not reasonable grounds for the ongoing Garda investigation into suspected money-laundering.

Under Irish money-laundering legislation, the Garda can seek 28-day freezing orders in relation to money suspected of being linked to crime. The orders can be repeatedly renewed, as has happened with the funds which Mr Khodorkovsky says are his.

Mr Farrell said the money came from Mr Khodorkovsky’s oil company, Yukos, which was “corruptly” seized by the Russian state after charges were brought against Mr Khodorkovsky in 2003.

Fraud convictions

He said it seemed the Irish custodian of the funds probably made a report to the Garda after being told the money, which is held by a trust, was beneficially owned by Mr Khodorkovsky, who at the time was in jail in Russia having been convicted of fraud, embezzlement and tax evasion.

Mr Khordorkovsky, in his affidavit, told the court he was the beneficiary of the trusts that held the funds affected by the order.

He said that in 2002 and 2003 there were certain dividend payments and share buy-back schemes that led to multibillion-dollar payments to shareholders. This was the origin of the funds now frozen.

He said he was being asked to prove the money was not the proceeds of crime. It was clear from his dealings with the Garda Bureau of Fraud Investigation that they believed it was for him to prove a negative.

The case is expected to take a number of days.