Viktor Kozeny, who received an Irish passport in 1995, has been arrested on foot of a US extradition request, writes Arthur Beesley, Senior Business Correspondent

The sun always shines in Lyford Cay, a gated community for the super-rich on the Bahaman island of New Providence. Not far from a lake named after Killarney, it was there, where the houses sometimes fetch $30 million, that the controversial Czech businessman Viktor Kozeny (42) set up home some years ago.

Just a short drive from Paradise Island, the luxury life in this wealthy enclave seems a world away from the rampant racketeering that characterised Mr Kozeny's failed attempt to take control of the state oil company of Azerbaijan in the late 1990s.

A fugitive for years, on the run from the Czech authorities, Mr Kozeny's alleged payment of millions of dollars in bribes to senior Azeri officials caught up with him on Thursday when he was arrested on foot of an extradition request from the US government.

There is, of course, an odd Irish connection to this juicy tale of graft and greed. Mr Kozeny was granted an Irish passport by the Rainbow coalition in 1995, after he invested about £1 million in a software company. The price of his Irish citizenship, for that is what it was, was mere petty cash for a man who could charter planes to bring millions of dollars into Azerbaijan.

Michael J Garcia, the US Attorney in the Southern District of New York, stressed in a statement yesterday that Mr Kozeny and his fellow-accused are presumed innocent until proven guilty. But his indictment outlines a litany of alleged corruption, in which backhanders and gifts of jewellery, free holidays and medical care were normal in a brazen effort to take control of the oil supply of a poor country on the shores of the Caspian Sea.

Mr Kozeny and three other men - one of them an official with the giant US insurer AIG - were charged on Thursday with money-laundering and taking part in a massive bribery scheme to ensure that they would profit from the proposed privatisation of the state oil company, Socar.

The US law under which they are being prosecuted makes it a crime to pay or offer to pay foreign government officials in order to obtain or retain business. According to Mr Garcia's indictment, that is exactly what they did.

In the late 1990s, after he was granted Irish citizenship, Mr Kozeny controlled two companies that took part in a privatisation programme in Azerbaijan. Citizens of that country were given government vouchers free of charge which they could use to bid for shares of state-owned industries that were to be privatised. The vouchers were freely tradeable and they were bought and sold using US dollars.

Foreigners could take part in the privatisation, but only if they bought a government-issued "option" for each voucher they held. Kozeny and his associates are charged with directing others to buy vouchers and options for Mr Kozeny's companies, Oily Rock and Minaret. "These vouchers and options were purchased using millions of dollars of cash that was flown into Azerbaijan on Kozeny's private jet and on planes he chartered," Mr Garcia's office said.

Mr Kozeny and others are alleged to have made a "series of corrupt payments and promises to pay to a senior official of the Azerbaijan government, a senior official of Socar, and two senior officials of the state property company, the agency that was responsible for administering the privatisation programme".

These payments and promises were worth some $11 million and the transfers took many forms. In one instance, $6.9 million was wire transferred to accounts held for the benefit of certain Azeri officials while millions of dollars in cash were hand-delivered to one official in his office.

In another, Mr Kozeny was alleged to have arranged for a representative of the London jeweller Asprey & Garrard to travel to Azerbaijan in May 1998 to deliver gifts of jewellery and luxury items worth $600,000 to a man who in turn selected the gifts to present to a senior Azeri official on his birthday.

Mr Kozeny is also charged with arranging for two property officials to travel to New York in 1998 for medical treatment, for which his company paid. He also paid hotel, meals and other expenses for these trips.

In its alleged intent and its structure, this scheme seems remarkably similar to the Czech scam in which Mr Kozeny made his fortune in the early 1990s.

Czech citizens were given vouchers to invest in shares in privatised Czech industries.

Mr Kozeny promised impressive returns to people who gave their vouchers to his company, Harvard Investment Funds. Some 80,000 Czechs duly transferred their vouchers, but they never saw a return.

Unlike them, Mr Kozeny made hundreds of millions dollars in the deal. It was big money. Mr Kozeny had big money to spend in Azerbaijan. Now this Irish citizen is in big trouble.