VIKTOR KHRAPUNOV

68 years old | Corruption and embezzlement of public funds

 

Born on 24 November 1948 in Kazakhstan, Viktor Khrapunov was the mayor of Almaty, the former capital of Kazakhstan, between 1997 and 2004, before becoming Governor of the region of Eastern Kazakhstan. Nominated as Minister for Emergency situations in January 2007, he resigned on 29 October of the same year, before fleeing to Switzerland following the publication of an enquiry tracking his responsibility in massive embezzlement schemes[1].

 

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From rising star in the Young Communists to politician

 

Trained as an industry and technology technician at the University of Ust- Kamenogorsk, Viktor Khrapunov then moved to Almaty, where he subsequently worked as a repair mechanic, a foreman and an engineer[2].

 

Overwhelmed by ambition and willing to create his own role on the Kazakh political scene, Khrapunov became a member of the Young Communists and of the Komsomol. Through these political networks, he climbed up the administrative and social ladder of Almaty. First, President of Communist Party Committee of the “Lenine” neighbourhood of the capital, Khrapunov then became President of the Executive committee of the Municipal Council of Almaty.

 

Following the collapse of the Soviet Union and the independence of Kazakhstan, Viktor Khrapunov was elected as member of the Kazakh Parliament for Almaty, before his nomination as Minister of Energy and Coal. In 1997, he finally became Mayor of Almaty, a position he kept onto until 2004. Between 2004 and 2007, he was Governor the Eastern region of Kazakhstan, before becoming Minister for Emergency situations in January 2007[3].

 

Mayor and real estate investor: a suspicious combination

 

Shortly after his nomination to the Kazakh government, Viktor Khrapunov flew to Switzerland in August 2008 allegedly for medical reasons, but never to come back to Kazakhstan. For many analysts, this suspicious flight is due to the publication of a highly damaging enquiry by the Kazakh newspaper Vremya at the beginning of 2007[4]. Reporters had uncovered that the then Mayor of Almaty, Viktor Khrapunov, had auctioned public land slots at prices way below market value. The lead buyer of these land slots was VILED International Unlimited, a company chaired by Khrapunov’s wife Leila Kalybekovna. The daily Vremya had also reported that other public figures and doubtful companies could have benefited from these sales, such as the multibillion fraudster and then Chairman of the Kazakh BTA Bank, Mukhtar Ablyazov. 80 real estate properties and land slots were named[5].

 

In June 2010, Iliyas Khrapunov, son of Viktor Khrapunov, founded in Switzerland, the Swiss Development Group, with an initial capital of $10 million USD. For the Swiss newspaper La Tribune de Genève, it is very likely that the company was created thanks to funds embezzled by the Khrapunov family while heading Almaty[6].

 

 

 

Justice finally caught up, opening of an enquiry

 

In 2011, the breadth of allegations against Khrapunov lead the Kazakh justice to open a fiscal investigation, and then a criminal enquiry, for embezzlement of public funds and abuse of power. Khrapunov was suspected of embezzling several billion dollars via the construction company KUAT. This entity worked as a Ponzy scheme, whereby prospective property buyers were obtaining funds from the government of Almaty for unbuilt housing[7].

 

Following the investigation, Viktor Khrapunov and his family were charged with illegal personal enrichment of over $300 million USD[8]. Parts of the funds had been slated under the name of his son Iliyas Khrapunov, himself married to the daughter of Mukhtar Ablyazov, who is now known to be the biggest ever fraudster and mastermind behind a 10 billion embezzlement scheme while he chaired the BTA Bank.

 

 

Worldwide crimes

 

In 2012, the Swiss justice agreed to a judicial cooperation request from Kazakhstan and opened another criminal investigation against Viktor Khrapunov for the laundering of embezzled funds, which had entirely or partially been transferred to bank accounts in Switzerland[9]. In December 2015, the city of Almaty launched another legal proceeding for the recovery of 300 million dollars against the Khrapunov family[10]. Iliyas Khrapunov’s assets in the United Kingdom were frozen on 17 July 2015 by decision of the High Court of London[11]. The competence of the UK justice was confirmed by a judgment of the Court of Appeal of England and Wales in December 2016[12]

 

In addition, father and son, Viktor and Iliyas Khrapunov are now wanted by the US justice and standing trial - in abstentia - under the suspicion of investing embezzled funds in US real estate projects. The competence of US courts was confirmed on 30 March 2017 following an appeal procedure[13]. The case is highly politically sensitive as it also involves property development projects of the Trump Group.[14].

 

Both Viktor and Iliyas Khrapunov are still targeted by Interpol international arrest warrants[15]. However, Viktor Khrapunov continues to reside in a posh Swiss villa, bordering Lake Geneva. He has never stood before a Kazakh or any other court of justice, in spite of the numerous accusations brought against him.

 

 

 

 

CHRONOLOGY OF THE KHRAPUNOV CASE

 

 

Kazakhstan – Switzerland – United Kingdom – United States of America

 

 Kazakhstan

Europe

United States

2007

§  29 October: Viktor Khrapunov resigns from his position as Minister for Emergency situations

     

2008

§  August: Viktor Khrapunov flees to Switzerland, taking with him several millions in assets

 

§  August: Arrival of Viktor Khrapunov in Switzerland

 

 

2011

§  May: Fiscal and criminal investigations are opened against Viktor Khrapunov and he is charged with embezzlement and abuse of power

§  End of 2011: The Kazakh justice sends a request for judicial cooperation to Switzerland

 

 

 

2012

 

§  Febuary: Viktor Khrapunov is listed by Interpol as subject to an international arrest warrant

§  Early 2012: the Swizz justice agrees to the judicial cooperation request of Kazakhstan and opens an investigation for the laundering of embezzled funds against Viktor Khrapunov

   

2014

   

§  13 May: The city of Almaty files a complaint against Viktor Khrapunov in front of a Los Angeles federal court

 

 

2015

 

§  17 July: UK justice freezes the assets of Iliyas Khrapunov

§  Décembre : Daniel Khrapunov and several close allies of the Khrapunov family receive orders to reimburse over 286,5 million Swiss franks

 

 

 

2016

 

§  19 & 20 December: The Court of appeal of England and Wales rules that UK justice is competent on the case of hidden assets owned by Iliyas Khrapunov on behalf of his father in law, Mukhtar Ablyazov

 

 

 

2017

 

 

§  30 March: The US Court of Appeal for the 9th circuit confirms that US justice is competent in the embezzlement case against Viktor Khrapunov

 

 

 

 

 

[1] http://kazworld.info/?p=20316

[2] http://kazworld.info/?p=20316

[3] http://kazworld.info/?p=20316

[4] http://kazworld.info/?p=20316

[5] http://www.courthousenews.com/9th-circuit-revives-kazakh-citys-fraud-case-ex-mayor/

[6] 2010, Le millionnaire qui tisse sa toile à Genève, La Tribune de Genève, 15 juin, p. 21

[7] http://kazworld.info/?p=17946

[8] https://www.letemps.ch/suisse/2016/02/19/nouvelle-offensive-kazakhe-contre-clan-khrapunov

[9] https://www.letemps.ch/suisse/2012/11/30/enquete-khrapunov-repliquent

[10] https://www.rts.ch/info/regions/geneve/7510677-l-affaire-khrapunov-donne-lieu-a-une-nouvelle-procedure-a-geneve.html

[11] http://kazworld.info/?p=56220

[12] http://www.bailii.org/ew/cases/EWCA/Civ/2017/40.html

[13] http://www.courthousenews.com/wp-content/uploads/2017/03/Almaty-Ruling.pdf

[14] http://thediplomat.com/2015/10/why-is-a-kazakh-bank-suing-a-new-york-developer/

[15] https://www.interpol.int/notice/search/wanted/2012-10416