Independent expert finds no proof of money laundering in TBC bank case
Friday, May 15
On 14th of May 14th, a local watchdog Transparency International Georgia (TIG) released the assessment of the money laundering prosecution related to the TBC Bank case. The report was compiled by Australian lawyer Pauline David – an ‘independent’ expert in money laundering. According to the report, there is no basis to prove Mamuka Khazaradze, Badri Japaridze or Avtandil Tsereteli committed a money laundering offence, either individually or as co-conspirators.
After an assessment of Georgian and international laws, the Indictment, the facts in issue, and accepted international jurisprudence in money laundering cases, key findings show that there is no evidence from which to infer an intention: to ‘legalise’(launder) any funds obtained by way of loan; to conceal the ‘illegal origins’ of the loan funds; or to integrate those funds back into the legitimate economy.
According to the information, published by TIG, even if the court found every fact in issue in the case in favour of the prosecution, those facts are not capable of supporting a money laundering charge.
David argues that money laundering and the underlying predicate crime (misappropriation in this case) are separate offences. Proof of a predicate the crime of misappropriation alone is not proof of money laundering. Even if the prosecution proved misappropriation, the subsequent conduct alleged could only support the use of misappropriated proceeds, not the laundering of those proceeds.
Internationally courts condemn the practice of prosecuting for money laundering, when the conduct alleged extends no further than conduct capable of proving the predicate crime. Because of the statutory time limitation, the crime of misappropriation cannot now be prosecuted as a stand-alone offence, nor can it be proven as a predicate crime.
“It can be an abuse of process to circumvent a statute of limitations by prosecuting a person for an inappropriate or artificially constructed charge (money laundering) to get around the fact that the appropriate charge for the conduct alleged (misappropriation) is statute barred,” reads the release.
In many jurisdictions, where the court has determined a prosecution is an abuse of process, the court has used its inherent power to protect the court by terminating those proceedings.
Note, that in November 2019, TIG selected David in an international open competition for an anti-money laundering expert to assess the criminal prosecution related to the money laundering charges against businessman Mamuka Khazaradze, Badri Japaridze and Avtandil Tsereteli in order to determine the extent to which their financial transactions in 2008 contained elements of money laundering in accordance with international standards and Georgian law.
In January 2020, Pauline David, a practicing lawyer with 30 years of experience, a member of the Australian Bar Association and an expert in anti-money laundering, was selected, who visited Georgia this February for meetings.
Khazaradze and Japaridze, founders of the TBC Bank and now politicians, are facing criminal investigation over money-laundering allegations involving a $17 million transaction that took place in 2008. Tsereteli, a businessman and father of the owner of TV Pirveli, a critical voice against the ruling party, was also charged for being complicit in the alleged laundering scheme.
Khazaradze denies the charges, claiming the legality of the said transaction was inspected multiple times by the local and international fiscal authorities and no ‘red flags’ were raised. He said the bank was suffering an ‘orchestrated’ political attack.
Developments around TBC Bank have brought into question the fate of the Anaklia Deep Sea Port project, a $2.5 billion investment on the Black Sea coast not far from Abkhazia, where Mamuka Khazaradze’s TBC Holding was the leading partner.
Khazaradze, who now leads a political union Lelo for Georgia, has ascribed his ‘persecution’ to his role in the construction of Anaklia port, suggesting that the purpose of the investigation could be to squeeze him and Japaridze out of the project.
Ana Natsvlishvili, one of the leaders of the political union Lelo for Georgia stated yesterday, that in the end, everyone unanimously says that the case of Khazaradze-Japaridze-Tsereteli is ‘not about the administration of justice, but about political motivation.’ According to her, this report is further evidence that the Georgian Dream has not kept its promise of a justice system that would be fair and free from political pressure.
According to Khazaradze, all the conclusions indicate the same fact that this case is politically motivated and there are no crimes in the case. He emphasized that Lelo’s growth is frightening the ruling party, however, the results will be shown in October elections. He reiterated that Georgian Dream has reached the point where international partners have talked out loud about what’s happening in Georgia; the ruling party tried to discredit him and Japaridze, ‘main actors of Anaklia project’, which he promised to start right after winning elections.
At a press conference, Japaridze said that the government was using a pandemic, trying to use it to gain political incentives and to continue repressing political opponents. He also spoke of the March 8 deal between the ruling party and opposition, saying “We should not allow the government to lead the opposition parties to radical steps and undermine the agreement reached with so much effort and the great involvement of our foreign friends.”
According to him, it is important that both agreements are implemented to have a peaceful electoral environment: accepting constitutional changes and releasing political leaders from prison.
