AZERBAIJANI LAUNDROMAT

Industry

Government

Corporate Headquarters

Azerbaijan

Summary of Allegations:

Nationality of Foreign Officials: Bulgaria, Germany, Italy

Summary of Allegations:

The Azerbaijani Laundromat is a term for the complex money-laundering scheme and slush fund used by Azerbaijani elites that handled USD 2.9 billion over a two-year period through shell companies to purchase goods and services, and make secret payments to companies and individuals in the European Union. A joint investigation by 17 European media organizations uncovered the operation and reported it in early September 2017.

The four shell companies used in the operation were registered in the United Kingdom: Hilux Services, Polux Management, Metastar Invest and LCM Alliance. The beneficial owner of the firms is unknown at this time. However, Deputy Prime Minister Yaqub Eyyubov allegedly use the Metastar Invest shell company to make medical bill payments and payments to European officials as well as Azerbaijani officials. 

Foreign beneficiaries include several prominent Europeans: Luca Volontè, the Italian former chair of the centre-right European People’s party group in the parliamentary assembly of the Council of Europe (Pace), allegedly received more than EUR 2 million. Volontè was among Pace delegates who controversially voted against a 2013 report criticising Azerbaijan’s human rights record. A foundation run by Eduard Lintner, a former German MP with the Christian Social Union, reportedly received EUR 819,500 between 2012 and 2014. The cash allegedly included a EUR 61,000 payment made two weeks after Lintner visited Azerbaijan as an election observer, praising the poll as up to “German standards”. Cash was also reportedly sent to Bulgarian and Swiss bank accounts belonging to Kalin Mitrev, who was then a private consultant, but now works for the European Bank for Reconstruction and Development in London. According to the Süddeutsche Zeitung on 19 September 2017, Karin Strenz, a Christian Democrat member of German parliament, was paid between EUR 7,000 and EUR 15,000 in 2014 and 2015, sent to her via Line M-Trade, a firm set up by Eduard Lintner. The payments may have impacted Strenz' voting record in Germany and in the Council of Europe on matters impacting Azerbaijan.

Danske Bank's Estonian branch handled the accounts of all four Azerbaijani Laundromat companies, reportedly allowing the billions to pass through it without investigating their propriety.

Approximate Alleged Payments to Foreign Officials:

Business Advantage Allegedly Obtained:

Enforcement Results

Agencies: Bulgaria: Chief Prosecutor

Results:

Year Resolved:

Compliance Monitor:

Ongoing: Yes

Details:

7 Sept. 2017 - Bulgaria's Chief Prosecutor announced an investigation into OCCRP’s findings that Kalin Mitrev, the Bulgarian representative to the European Bank of Reconstruction and Development (EBRD), made $468,000 through the laundromat scheme. 

Agencies: Germany: Frankfurt Public Prosecutor's Office, Germany: the Federal Criminal Police Office

Results:

Year Resolved:

Compliance Monitor:

Ongoing: Yes

Details:

On 31 January 2020, amid the ongoing investigation of Azerbaijan laundromat, the Frankfurt Prosecutor’s Office and the Federal Criminal Police Office of Germany raided the properties of Karin Strenz and Eduard Linter, respectively Christian Democratic party MP and former MP, former members of the Parliamentary Assembly of the Council of Europe (PACE) accused of receiving bribes to lobby for Azerbaijan.

The police with seizure orders searched the officers’ properties including their flats, offices, and business premises.

According to media reports, Strenz accepted bribes of at least $24,200 and Linter $4.4 million, mostly through shell companies, in exchange for speaking favorably of Azerbaijan's elections and political prisoner policies.

Agencies: Parliamentary Assembly of the Council of Europe (“PACE”)

Results: Sanction

Year Resolved:

Compliance Monitor:

Ongoing: Yes

Details:

On 3 July 2018, The Rules of Procedure, Immunities and Institutional Affairs Committee of the Parliamentary Assembly of the Council of Europe (“PACE”) sanctioned 14 members for ethical standard breach and permanently deprived their right to access PACE premises. Investigation reports showed the 14 members accepted bribes provided by Azerbaijani government and reciprocated by lobbying for the country in PACE.

The 14 individuals are current and former members, including Alain Destexhe, Luca Volontè, Agustín Conde, Karin Strenz, Elkhan Suleymanov, Göran Lindblad, Tadeusz Iwiński among others.

Agencies: United States: Department of Justice

Results: Prosecution of Individuals

Year Resolved:

Compliance Monitor:

Ongoing: Yes

Details:

25 September 2018, the Department of Justice disclosed that it had indicted and sought to extradite Houston-based businessman Kemal Oksuz from Armenia for attempts to conceal the source of funding for gifts and trips to Congress members. Oksuz disguised the funds from the Azeri government and state-run firm SOCAR by routing to his Turquoise Council of Americans and Eurasians (TCAE) and claiming TCAE as the original and sole source of funding.

ENTITIES / INDIVIDUALS INVOLVED
  • LCM Alliance
  • Hilux Services LP
  • Polux Management LP
  • Metastar
  • German ex-MP Eduard Lintner (PACE)
  • Line M-Trade (Lintner's company)
  • Italian ex-MP Luca Volontè (PACE)
  • Yaqub Eyyubov (Azerbaijan deputy prime minister)
  • Emin Eyyubov (Azerbaijan’s EU ambassador)
  • Azer Gasimov (Azerbaijan president’s press secretary)
  • Karin Strenz (German MP)
  • Eduard Linter (former German MP)
  • Alain Destexhe
  • Luca Volontè
  • Agustín Conde
  • Elkhan Suleymanov
  • Göran Lindblad
  • Tadeusz Iwiński
  • Kemal Oksuz (Houston-based businessman)
  • SOCAR (Azeri state-run firm)