Cypriot President Nicos Anastasiades' family law firm, which helped broker residency permits and European Union passports for a discredited and now closed program, also helped a Russian Senator hide assets on the island, said a secret report filed with Caribbean financial regulators.
The British newspaper The Guardian said that showed a scheme said to have used fake beneficial owners with a Panamanian offshore company broker, Alcogal, complaining the law firm told its officials that the offshore companies it was managing were beneficially owned by its staff.
But the confidential report given to financial regulators in the British Virgin Islands on June 8, 2015 said Alcogal said it was lied to and that the real owner was the Russian businessman and former senator Leonid Lebedev.
He is the billionaire owner of the Sintez Group, a privately-held energy, oil and gas and property development company who fled Russia in 2015 after being accused of failing to declare his assets. He denies the allegations, and is now a Hollywood film producer.
Contacted by the Guardian and the BBC, Anastasiades & Partners denied filing false information to the broker. Anastasides founded the firm but said he has taken no role in operating it since becoming leader of the opposition in 1997.
In a statement to the Guardian, Anastasiades said: “I have no knowledge and it would be impossible for me to know and be in a position to respond to any allegations concerning the handling of the affairs of my ex-law firm.”
The report said there was no suggestion he was involved in the activities of the firm run by his family although it has again raised indirect questions of improprieties by letting the firm retain his name while he is President of the country.
Both the firm and its founder have previously had separate dealings with Lebedev, the paper said it advised him how to get a Cypriot passport under the now-closed scheme selling them to rich foreigners without checking them for criminal activity or money laundering.
The report was disclosed as part of the massive Pandora Papers reported by the International Consortium of Investigative Journalists involving 150 media outlets in 117 countries.
That revealed previously hidden dealings of the elite and the corrupt, and how they have used offshore accounts to shield assets collectively worth trillions of dollars to benefit themselves, the Associated Press reported.
It showed a Suspicious Activity Report (SAR) sent by Alcogal to the British Virgin Island's financial regulator. The SAR, which was not copied to the law firm, names four companies and states: “We believe Mr. Leonid Lebedev to be the UBO [ultimate beneficial owner] of these companies,” The Guardian said.
JUST PERSONAL, NOT BUSINESS
In 2010, Anastasiades’ law firm took over the management of the companies and registered them with Alcogal. According to Alcogal’s SAR, when asked for the identity of their owner the president’s firm cited three beneficiaries.
Two were employees at the legal practice, while a third was an employee of a client of the firm and a legal consultant. Two worked out of Anastasiades’s office in Limassol, a seaside resort popular with wealthy Russians and where Lebedev bought a villa as part of his “golden passport” deal. The legal consultant worked in the same building.
But Alcogal said it later believed the three individuals named by the president’s law firm were not the “real UBOs” and “strongly” concluded that the offshore shell companies actually belonged to Lebedev. It subsequently resigned as registered agent for the four firms, citing a “higher risk” to its reputation.
Anastasides' law firm denied any wrongdoing and said it had no knowledge of the SAR or the questions it raised without explaining if it did due diligence to ascertain the real owners or its work.
It said the staff whose names were cited to Alcogal were never beneficial owners of the offshore companies, but were acting as trustees on behalf of the beneficial owner, entirely in accordance with Cypriot law. The legal consultant told the Guardian she had always been the true beneficial owner of one of the companies.
The firm declined to say if it acted for Lebedev, citing client confidentiality, but said it had always kept “proper records” in accordance with Cypriot law and that Anastasiades had no involvement but that he remained a “silent shareholder” in the firm up until becoming President.
“He was never involved in day-to-day activities of the office or had any conduct with clients and cases,” it said although it wasn't said whether clients use the firm because the President's name is attached and if it could benefit from that.
Lebedev did not respond to request to comment, the paper said but has previously denied doing anything wrong. After repeated criticism from the European Union and media reports showing the residency program didn't scrutinize wealthy foreigners for criminal ties, it was ended in November, 2020.
In a statement to the Guardian, the president described his relationship with Lebedev as “cordial” and official but it wasn't a privileged lawyer-client business tie. He added: “At no time and on no occasion did I handle the affairs of the firm’s clients, including Mr. Lebedev.”
But in June 2013, soon after winning office, Anastasiades borrowed Lebedev’s private jet to fly to France for a meeting with the then French President, François Hollande and admitted he was not charged because of a French air traffic controller's strike then and he flew home on a commercial airline.