© Itziar Barrios
Dutch trust office sneaked Russian bankers and a Playboy model into the Netherlands
According to the Dutch Public Prosecution Office, Vadim Blaustein’s Amersfoort-based trust office set up offshore companies for wealthy Russians. The firm also abused the Dutch so-called skilled migrant regulation: it helped clients get fake jobs in the Netherlands. The court case against Blaustein starts today. Who were his clients? Follow the Money and the OCCRP uncovered bankers, a controversial financial services firm, a Playboy model and even a Russian spy.
What is this series about?
- At first glance, Vadim Blaustein, who rose from Russian would-be asylum seeker to owner of a trust office, appeared to be a successful businessman. His office had branches in numerous countries, and he increasingly mingled with the jet set. He even had his own brand of cognac.
- But according to the Public Prosecution, Blaustein’s empire hinged on trickery and deceit. He set up over a hundred companies in a basement storage unit, registered companies and credit cards in the names of unsuspecting third parties, and the ‘highly skilled migrants’ he brought to the Netherlands were wealthy Russians who came here to work for fake companies (and even paid their own salaries).
Why is this relevant?
- Blaustein Lawyers managed to maintain the appearance of being an above-board trust office for a long time. It even received the seal of approval from the industry body, Holland Quaestor. The accreditation was supposed to help clear the industry’s bad name. Six months later, the fiscal police (FIOD) raided numerous premises owned by Blaustein.
- Today, a major trial starts against Blaustein, who is believed to be residing in Dubai. The prosecution suspects him of human trafficking, fraud, forgery and money laundering, among other things.
- However, the prosecution has barely investigated which clients Blaustein catered to. But Follow the Money did, together with the OCCRP: Blaustein’s clients are featured in detail.
How did FTM investigate this?
- We used the case file compiled by the Public Prosecution (which contains more than 14 thousand pages), as well as hundreds of other documents obtained from sources and public records. We also drew from interviews with people who worked with or for Vadim Blaustein.
- In the research for this article, Follow the Money collaborated with the Organized Crime and Corruption Reporting Project (OCCRP), which is very well-versed in the ins and outs of Russian oligarchs.
When Vadim Blaustein, the director of a trust office in Amersfoort, received a call from Sergey Sukhich in the autumn of 2016, he was unaware he was being tapped. Sukhich runs a coal and grain export company in Russia.
‘I have run into a bit of trouble with certain people,’ Sukhich tells Blaustein. ‘It’s possible that criminal cases are being filed against me. So things are a bit tense. That is why I decided to stay here for a while and monitor my business remotely.’
‘Here’ is in the Netherlands, where Sukhich resides on a tourist visa. He wants to know from Blaustein whether there are ‘any legal grounds’ on which he could stay in Amsterdam longer.
According to Vadim, setting up a holding company is the best approach: ‘If you take a look at the Dutch trade register, you will see that practically all renowned Russian companies choose the Netherlands to locate their holdings: from Gazprom to Rosneft, and from Vimpelcom to Yandex.’
The grain and coal trader is pleased with this information. He has one more question: can he use such a Dutch company to allow others to work here? ‘Yes, you can arrange as many residence permits as you want through this company,’ Blaustein assures him.
Blaustein was concealing a large part of his income. The fiscal police also suspected that he was abusing the so-called skilled migrant regulation
Their conversation is intercepted by the Dutch Fiscal Intelligence and Investigation Service (FIOD). The latter launched a criminal investigation in late 2015 after the tax authorities discovered that Blaustein was concealing a large part of his income.
The FIOD also suspected that Blaustein was abusing the so-called skilled migrant regulation, intended to aid Dutch companies in need of highly skilled non-European workers, such as ICT professionals. To hire them, a company must first apply to the Dutch Immigration and Naturalisation Service (IND) for ‘preferential status’. Once a company has obtained this, it can easily recruit workers from non-European countries.
Confidential information shows that Blaustein flouts the rules. He arranged fake jobs for wealthy Russians at one of his own companies for which he had obtained preferential status.
The case file contains dozens of Blaustein’s clients interviewed as witnesses. Their own background – what they were doing in Russia and why they came to the Netherlands – is hardly ever discussed. Reason enough for Follow the Money, in cooperation with the Organized Crime and Corruption Reporting Project (OCCRP) research network, to find out who Vadim Blaustein’s clients were.
Friends in high places
Olga Rodionova’s employment adventure makes it clear how the misuse of the skilled migrant regulation has been orchestrated. In December 2012, she joined Completor, a Blaustein company, as a senior account manager, with a gross monthly salary of over four thousand euros. In April 2013, she was granted a residence permit based on her employment contract.
But when the FIOD questioned Rodionova in December 2016, she could hardly tell them anything about her colleagues or her work at Completor. She had never had any performance reviews. Yet she insisted she worked there.
Sergey is a banker and publisher. He describes himself as ‘one of the poorest oligarchs’
Confiscated documents, including bank statements, show that her wages were transferred in a circuitous manner: the Panamanian entity Woodgate Enterprises SA paid a Hong Kong company owned by Blaustein a total of about 300 thousand euros. Emails show that this amount was made up of four annual salaries for Rodionova plus a 15 thousand euro annual ‘remuneration’ for Blaustein.
The name behind Woodgate Enterprises is Sergey Sergeevich Rodionov, Olga’s partner.
Hence, the FIOD suspected Rodionova was abusing the skilled migrant regulation. But as the investigation was focused on Vadim Blaustein and his trust office, the investigators only questioned her as a witness. Nor did they investigate the Rodionov couple. It was a missed opportunity: the Rodionovs have friends in the highest places in Russia.
Sergey is a banker and publisher. He describes himself as ‘one of the poorest oligarchs’. In 1991 – then employed at the Central Bank of Russia – he joined the top holding company in oligarch Mikhail Khodorkovsky’s emporium at the latter’s request. In 1992, he moved again: this time to the Imperial bank. In 1996, in addition to his work as a bank director, he established a magazine publishing house. From 2000 to 2010, he owned Slavyanskiy bank, a subsidiary of Imperial.
Economist and erotic photo model
Sergey and Olga met in 1994: she is a Playboy model and graduated in economics and banking from Moscow University. After working for the Central Bank and a private bank, she opened up a clothing shop in Moscow. About a decade later, she decided to move to the Netherlands.
In Russia, the couple is notorious for their hobby: Sergey hired famous photographers to take naked pictures of his wife. In 2008, he published The Book of Olga, a book of photographs that The Guardian described as ‘extraordinarily explicit and shockingly pornographic’. The photos were taken by Bettina Rheims, well-known for her work for Chanel and Lancôme and her portraits of famous women.
The article in The Guardian reveals that Sergey and Olga lead a luxurious life: a grand apartment in Moscow, a house near Zagreb, shopping trips to Paris and Milan, and a plane trip to Dubai to buy furniture.
When the FIOD questioned her in December 2016, Olga had been living in the Netherlands for four years. She rents an expensive apartment on one of Amsterdam’s canals. When the FIOD asked her why she came to the Netherlands, she replied: ‘I did not want to live in Russia anymore and tried to find a job here in the Netherlands. My boyfriend was working in Luxembourg at the time. I wanted to change my life. I don’t have any problems in Russia.’
She ended up with Vadim Blaustein through an acquaintance in the Netherlands. He would arrange work so she could qualify for a residence permit. She confessed to FIOD that she did not need the job for the money: ‘I have sufficient money because I worked before and sold a piece of land. Besides, my boyfriend supports me financially.’
That she is well-off is evident from her 2014 tax return. In Moscow, she has an apartment worth more than 1 million euros. An account at HSBC in Luxembourg has a balance of 235 thousand euros, and at HSBC in Cyprus, another 447 thousand euros.
In the summer of 2013, Blaustein set up a foundation for Sergey and, in 2016, a private fund in Curaçao
Olga Rodionova did not have to work in the Netherlands to earn a living. Yet she does, or at least on paper. The residence permit seems to be very important. After five years, she can qualify for a Dutch passport, a document that allows you to easily travel across almost the entire world.
Her partner is also one of Blaustein’s clients. In the summer of 2013, Vadim set up a foundation for Sergey and, in 2016, a private fund in Curaçao. Such a legal entity is the perfect way to hide assets from prying eyes. The couple refrained from answering questions by Follow the Money and the OCCRP about the hows and whys of these entities.
In July 2017, Olga Rodionova opened the Vivienne Westwood Boutique, named after the legendary British fashion designer, on PC Hooftstraat. In 2018, her residence permit expired. The boutique has since closed, and Olga now lives in Dubai.
From bad to worse
The file on the Blaustein case features more Russian bankers.
In 2013, Elena Volkova and Igor Kravchenko, a Russian couple living in the Netherlands, knocked on Vadim Blaustein’s door. They were looking for a Russian-speaking lawyer: they had been defrauded by a business friend. Blaustein promised to help them.
In the course of two years, the couple paid Blaustein over 635 thousand euros. That money was gone
The couple’s troubles went from bad to worse. Not only did Blaustein’s legal advice and services prove worthless, but he also failed to honour his promise to set up an offshore firm for them. In the course of two years, they paid Blaustein over 635 thousand euros. That money was gone. In November 2015, they filed charges of fraud, embezzlement and forgery. They also launched a series of civil cases against Blaustein.
These court cases and the FIOD investigation do not address who Volkova and Kravchenko are. The answer to that unasked question lies in Russia, more precisely: in Moscow.
Bankers at a scandalous bank
In 2010 and 2011, media reports emerged about fraudulent loans within the Bank of Moscow, the country’s fifth-largest bank at that time.
‘There were two banks,’ a regulator later said. ‘Downstairs, there was a normal and successful commercial bank, but upstairs in some small offices, we found a loan factory.’ Hundreds of millions were lent to companies that existed only on paper. In the end, the bank’s balance sheet showed a nine-billion-dollar deficit.
Moscow Mayor Yuri Luzhkov used the Bank of Moscow for years to finance all sorts of large real estate projects in and around the city. For instance, the bank paid five times the market value for a plot belonging to a company heavily in debt. The owner of that company: Luzhkov’s wife. It is suspected that the Bank of Moscow used this land transaction to bail out the mayor’s wife’s company.
The vice president of the Bank of Moscow was Elena Volkova, who later became Blaustein’s client. She was responsible for all dealings with the authorities. In 2005, Luzhkov awarded her the honorary title ‘Honorable Economist of Moscow’. In February 2011, Volkova resigned unexpectedly; no reason was given for her sudden departure.
Her former boss, Andrey Borodin, fled to London two months later; he did not want to stick around for the criminal investigation into the Bank of Moscow. Other former directors also fled the country or later ended up in a Russian prison.
In November 2009, Volkova bought a country estate in Aerdenhout for 5.3 million euros. The purchase price was paid in one lump sum
Volkova had found refuge in the Netherlands almost a year and a half before that. In November 2009, she concluded a purchase agreement for the Nijenberg country estate in Aerdenhout. The purchase was completed in early 2010. A mortgage was not required; the purchase price, over 5.3 million euros, was paid in one lump sum. In August 2010, almost half a year before she suddenly left the Bank of Moscow, Volkova officially moved into the country estate with her husband and daughter.
Igor Kravchenko, her husband, is also a banker. In the summer of 2004, he was appointed president of the Russian National Commercial Bank (RNCB), a subsidiary of the Bank of Moscow.
While the money at the Bank of Moscow disappeared by the tens of millions, Volkova set up two offshore companies in the British Virgin Islands and Panama in the summer of 2009. Documents in possession of Follow the Money and the OCCRP show that the Panamanian company has a portfolio of at least five million dollars plus 900 thousand euros. In late 2009, Volkova also became the owner of an offshore company in New Zealand.
Colleagues are on Interpol’s most-wanted list
Shortly after they arrived in the Netherlands, the couple loaned 4.5 million euros to their business friend Jossiv Kim. Six months later, in August 2010, the couple began working for Kimnet Holding, Kim’s cosmetics import company, and they continued working there until the end of 2012.
The acquisition of their villa and their loan to Kim had already cost the couple almost 10 million. Where did they get that money? As vice president of the Bank of Moscow, Volkova earned around 500 thousand euros annually. A decent amount, but that doesn’t explain their wealth.
The money came from their Panamanian company. Kim was supposed to use the loan to invest in bonds, but he failed to do so. He then refused to repay the loan.
The Russian Central Bank stated that via Kravchenko’s bank over 10 billion roubles had been siphoned off from the Bank of Moscow
Shortly after Volkova left the Bank of Moscow, the Central Bank of Russia concluded that the bank’s management committed a series of violations between 2008 and 2011. In September, the Central Bank also stated that over 10 billion roubles had been siphoned off from the Bank of Moscow through RNCB, Kravchenko’s bank. In November 2011, two of his co-directors were put on Interpol’s most-wanted list.
As far as Follow the Money and the OCCRP were able to ascertain, there are no investigations or criminal cases pending against the Volkova-Kravchenko couple. They refrained from answering questions about the origin of their assets.
In late 2012, it became clear to the couple that the more than 4.5 million euros they lent to their business friend Kim had vanished into thin air. They enlisted Blaustein’s help, but when he too failed to keep his promises and withheld money, Volkova and Kravchenko filed fraud and embezzlement charges in September 2015. The couple also launched civil cases against Kim and Blaustein. They won all of them.
In November 2019, the couple sold their country estate to their daughter. At the notary, the couple identified themselves with a Dutch passport. Information from the IND contained in Blaustein’s case file indicates they have a residence permit. Like Olga Rodionova, Elena Volkova joined Completor, which again turned out to be a fake job. According to Volkova, Blaustein had put her on the payroll for ‘tax purposes’ and not to obtain a residence permit.
Red flags and a spy
Blaustein also has business dealings with Sergey Mayzus, who owned a financial services company. His criminal record is a mile long, ranging from a ‘high-tech money laundering machine’ that caused hundreds of thousands of users to lose their money, to fines and sanctions in Cyprus and Azerbaijan. US regulators had already raised red flags in 2010 regarding bitcoin transactions by MoneyPolo, likewise owned by Mayzus.
Blaustein’s case file shows that his Hong Kong branch sent Mayzus hefty bills for ‘tax & legal services’ rendered during 2009-2011. That included Blaustein setting up a Dutch charity foundation for him, with an address in Gurievsk, Russia.
The vice president of this foundation is 80-year-old Arne Treholt. This Norwegian was exposed as a Russian spy in 1984 and received a 20-year prison sentence. After his release, he moved to Russia, where he started a company together with a former KGB spy.
Tip of the iceberg
It is unclear exactly how many clients Blaustein had and who all of them were. The FIOD did not conduct an in-depth investigation into this.
After conducting an inventory, Follow the Money and the OCCRP counted at least five hundred companies and foundations linked to Blaustein’s global letterbox firm empire. So far, we found about two hundred people, mostly Russians, who were (co-) directors of an LLC or foundation set up by Blaustein. An overview in the case file shows that the IND has found a total of 52 so-called highly skilled migrants who can be linked to a Blaustein company. Eight of them have since acquired Dutch nationality.
Investigations by the research platform Investico already revealed in February 2021 that the highly skilled migrant regulation is susceptible to fraud. Every year, this construction enables around 14 thousand non-European migrants to obtain a Dutch residence permit in less than two weeks.
The Blaustein case shows that the status of a ‘highly skilled migrant’ is for sale to those who come bearing a bag of money
The Dutch Inspectorate of Justice and Security had already concluded in 2017 that the IND does not run checks on whether someone has a criminal past. Experts told Investico that this makes the Netherlands vulnerable to espionage and unwanted political influence. The Blaustein case shows that the scant test also encourages fraud: the status of a ‘highly skilled migrant’ is for sale to those who come bearing a bag of money.
In July 2020, the IND filed charges against Blaustein. The IND names five highly skilled migrants, including Olga Rodionova, who blatantly abused the scheme. It furthermore names seven people who wrongfully received residence permits: they were on the payroll of a company of which they actually were directors or major shareholders.
Whether the IND will revoke the residence permits of those mentioned in the report is unknown. Last week, the department could not answer questions about the matter.