Oligarchs and ‘unexplained wealth’: London’s rich Russians

Poisoning of ex-spy Sergei Spkripal has renewed scrutiny of Russian money in London

Tucked behind Kensington Palace and protected by armed police at checkpoints on either end is the street known as Billionaire’s Row, the most expensive in London and perhaps the world. A private road owned by the Crown Estates, traffic is light and slow here, and a prohibition on photography is enforced by the private security guards who watch over every other house.

Halfway along, at number 16, is the 15-bedroom Victorian mansion that Chelsea Football Club owner Roman Abramovich bought in 2009 for a reported £97 million. Across the street at 15a lives Britain's second richest man, Ukrainian-born businessman Len Blavatnik, who was knighted last year for services to philanthropy.

Other neighbours include steel magnate Lakshmi Mittal, Formula One heiress Tamara Ecclestone, and the Sultan of Brunei.

Worth an estimated €9 billion, Abramovich is the most celebrated Russian oligarch to make his home in London but he is not short of company.


A mile away in Belgravia, aluminium magnate Oleg Deripaska owns 5 Belgrave Square, the former home of the mid-20th century Conservative politician, diarist and social climber Henry "Chips" Channon.

Both Abramovich and Deripaska appear on a list of Russian oligarchs published by the US Treasury last January in connection with new sanctions legislation (although officials stressed that their presence on the list did not imply that they were being targeted for sanctions).

The attempted murder in Salisbury of former Russian spy Sergei Skripal and his daughter Yulia has increased pressure on the British government to investigate the source of Russian wealth in the country.

London has become the home of dodgy money and we need to change that

British prime minister Theresa May has taken diplomatic action, expelling 23 Russian diplomats and suspending high-level political engagement with Moscow. But she has until now held back from targeting the wealth of Russians close to the Kremlin who have invested heavily in London's property market.

Labour MP Chris Bryant, chairman of the All Party Parliamentary Group on Russia, has long been pressing for Britain to crack down on dubious Russian money in London.

“The first thing we could do is we could make sure that the illegal money laundering, the dodgy sideways moving of money from Russia to here, the buying of exorbitant properties comes to an end,” he says. “Unfortunately, London has become the home of dodgy money and we need to change that.”

Belgravia’s Eaton Square has become so popular among rich Russians that it has become known as Red Square. Many properties there were bought through anonymous companies so that the ultimate beneficial owner remains unknown.

Expensive properties

Rachel Davies, head of advocacy at Transparency International, says the group has found £4.4 billion worth of UK property that is owned with suspicious wealth, a fifth of it owned by Russian individuals.

“We’re a global financial centre, we have close ties to secrecy jurisdictions such as the British Virgin Islands, the Cayman Islands. We also have a blanket of services which are on offer to corrupt individuals who may be wanting to spend a lot of money.

For seven years from 2008, checks on the source of the money coming into Britain under the scheme were lax

“So, for example, they can buy expensive properties here, they can pay money to PR firms who can help launder their reputations, there are estate agents, lawyers, accountants, trust and company service providers that will help them spend their cash,” she says.

Between 2008 and 2015, about 3,000 high net-worth individuals, about a quarter of them Russians, took advantage of the Tier 1 Investment Scheme established by Gordon Brown.

This meant that if you had a spare £2 million, you could invest it in the UK, get temporary residence and then apply for permanent residence within five years. For £10 million, the wait shortened to two years.

For seven years from 2008, checks on the source of the money coming into Britain under the scheme were lax, with the Home Office believing that the banks were checking it out, while the banks thought the Home Office was doing so. Since the safeguards were tightened up in 2015, the number of applications has dwindled to a trickle.

Roman Borisovich, founder of ClampK, the Committee for Legislation Against Moneylaundering in Properties by Kleptocrats, runs "kleptocracy tours" identifying properties in London bought by Russians with links to the Kremlin.

Borisovich says London’s Russian oligarchs should not be mistaken for conventional, self-made businessmen. “Their riches come from transactions with the Russian government. They either sold something for a fortune to the state of Russia or they bought something for pennies in some sort of privatisation from the state of Russia. Some of them managed to do both, to buy for pennies and sell for fortunes. Some of them never did any of that and they just worked all their life as government officials and somehow in the process became immensely rich,” he says.

Their money leaves Russia to be laundered, usually through Cyprus and then on to the British Virgin Islands, where offshore companies are set up, often owned by offshore trusts based in places such as Gibraltar. Thoroughly washed, it arrives in London to be invested in the property market, with Russians often prepared to pay well above the odds for a prestigious property.


The Salisbury attack has reopened questions about more than a dozen suspicious deaths of Russians in London in recent years, many of them linked to organised crime. Even before the attack on the Skripals, the relationship between Russian money in London and international crime came under renewed attention with the success of the BBC television series McMafia.

Based on a book by former BBC central European correspondent Misha Glenny, the series tracks the moral descent of a young, Russian-born banker in London who gets sucked into the criminal world.

Putin flipped the system when he came to power in 2000, so that the intelligence services now controlled the oligarchs

Glenny traces the origins of the relationship between the Russian state, oligarchs and organised crime to the shock of the market economy that hit the country after the fall of communism.

“Russia had no institutional instruments for regulating this new commercial environment. The courts didn’t function. They didn’t know what dispute resolution in business actually was. And so everyone engaging in the new commerce had to employ their own security force in order to ensure the integrity of their business contracts. These guys were called privatised law enforcement agencies by sociologists but they are quite simply the Mafia,” he says.

Initially, the oligarchs used intelligence officers as their personal security guards but Vladimir Putin flipped the system when he came to power in 2000, so that the intelligence services now controlled the oligarchs. The men who had made their fortunes through the privatisation of Russia’s infrastructure and natural resources now faced a choice – to share their cash with Putin’s circle or face the consequences.

Meanwhile, London was competing with New York to be the financial capital of the world, and Gordon Brown insisted on light-touch regulation for the City.

“You could either invest in New York or you could invest in London. So they were doing everything they could to ensure that people came to London, and that meant no questions asked,” Glenny says.

“And this doesn’t just apply to the Russians. This is a general cultural thing whereby anyone with money is encouraged to come here. You can effectively buy residency. You’ve got non-dom status, which is very attractive, you’ve got the anonymous companies where beneficial ownership remains hidden, so to this day we have around 100,000 properties in this country whose owners are unknown.”

Britain recently introduced Unexplained Wealth Orders, which allow the authorities to confiscate assets but Glenny says the measure will prove ineffective as long as companies and ownership can remain anonymous. Although May has suggested that she is considering financial sanctions targeting individual Russians, Glenny is sceptical.

“If you say, I’m going to go after Putin’s cronies, then the Saudis, the Chinese, everyone else who’s investing here can say: ‘she has a spat with us, then we’re the targets. We’re moving our money’. She has to protect the City because she’s about to undertake what I consider to be one of the most misguided steps any government could take, Brexit, which is to threaten above all the City,” he says.

“Let us be transparent about all the money that is coming into this capital. That is what we need to do because you can’t go around interfering in the City against a specific group of people without it having political ramifications for others.”

Criminal gang

Mikhail Khodorkovsky, once Russia's richest man, was one of the oligarchs who defied Putin's ultimatum, paying for it by spending 10 years in Russian prisons. Now living in London, Khodorkovsky funds Russian opposition movements from his headquarters in Mayfair's Hanover Square.

He is sceptical about the suggestion that Putin ordered the attack on Skripal, who had come to Britain as part of a spy swap in 2009. He believes it is more likely that elements within the intelligence services acted without direct presidential authority, a theory Glenny shares.

Khodorkovsky says the British government should be cautious in its response to the attack, avoiding direct action against the Russian government.

“The British government has been operating according to the wrong paradigm. They think they’re acting against the Russian government but this is not an issue with the Russian government. It’s with a criminal gang,” he says.

The “criminal gang” Khodorkovsky refers to is a group of wealthy figures around Putin who he claims are operating independently of the government.

You just have to acknowledge that you are dealing with a criminal gang

The former oligarch, who fought a successful battle in the Irish courts to unfreeze more than €100 million of his assets, opposes blanket financial sanctions, which he says could hurt people like him who oppose Putin.

He says Britain should investigate Putin’s circle and their wealth and allow any action against them to follow from that investigation.

“There are plenty of tools. You have tools to fight against dirty money. You have tools to fight against the corruption of politicians. You have tools to fight against the corruption of the media. You’ve got plenty of tools,” he says.

“You just have to acknowledge that you are dealing with a criminal gang. You should find out who is part of it and use those tools against them.”