The UAE, which draws investors with permissive residency regulations and a “few questions asked” attitude to regulation, is home to Russian leaders under Western sanctions, financial crooks, and corrupt European officials.
Dubai, a Middle Eastern financial powerhouse regarded as a playground for the global elite, is recognised for its spectacular buildings, lavish lifestyles, and sunny beaches.
However, the gorgeous emirate has a less desirable image as a tax haven, a favourite destination for illegal funds, and a favoured money-laundering centre, frequently via real estate.
A recent breach of Dubai property data has shown how many foreigners have invested in the city’s flats and villas.
The Center for Advanced Defense Studies (C4ADS), a non-profit organisation located in Washington, D.C. that studies international crime and war, received the data from 2020. It was subsequently shared with E24, a Norwegian financial news source, who organised a real estate probe.
The information provided by the leak is the first thorough public account of persons who purchased property in this significant Middle Eastern financial hub. Reporters concentrated on the European names on the list in the project’s early stages.
Many of them are actual residents or investors. However, reporters found many Dubai real estate owners who have been charged with crimes, convicted of them, or are subject to international penalties. Others are public figures who have not reported their assets or whose wealth is difficult to reconcile with their known earnings.
A haven for the Russian ruling class
There are over 100 members of Russia’s political elite, public officials, and businesses connected to the Kremlin on the list and dozens of Europeans accused of money laundering and corruption. Several European politicians and legislators have been accused of misusing public money, and others have neglected to report their Dubai residences.
Ruslan Baisarov, a Russian businessman close to Chechen dictator Ramzan Kadyrov, and Alexander Borodai, a sanctioned member of the Russian Duma best known internationally for becoming «prime minister» of the self-proclaimed Donetsk People’s Republic during Russia’s 2014 invasion of Ukraine, are among the notable figures who own Dubai real estate.
Roman Lyabikhov, a US-sanctioned Communist Party politician, and Dmitry Rybolovlev, a notorious tycoon, are two other Russians holding Dubai homes.
Daniel Kinahan, an accused member of an Irish criminal gang engaged in cocaine trafficking and other crimes, is among the Europeans. He is believed to live in Dubai, and the US sanctioned him last month.
Cryptocurrency exploited
Another is Tibor Bokor, a Czech citizen who is the executive director of a cryptocurrency exchange sanctioned by the US Treasury last year to allow criminals to transfer money earned via ransomware.
Another suspected criminal holding Dubai real estate is Miroslav Vboh, a Slovak fugitive facing corruption allegations. He’s thought to be hiding somewhere in the emirate.
Requests for comment from Baisarov, Borodai, Bokor, and Lyabikhov were not returned. Vboh’s lawyer acknowledged that he has a Dubai flat.
The presence of these individuals in Dubai’s real estate market registries highlights the risk that the emirate’s lax residency requirements and regulatory approach of “no questions asked” allows questionable figures to use it as a home away from home, a place to launder illicit gains through real estate, or simply to store their wealth.
When it comes to money laundering, real estate is unique because, unlike any other type of money laundering, you can really live in and conduct business through it, says Jodi Vittori, a Georgetown University professor and expert on illicit finance.
On The Palm and near the Marina, Dubai’s most costly homes and apartments can be found. In these two locations, foreigners are recorded as owners of more than 40.000 properties:
According to The Tax Justice Network, Dubai is one of the world’s most secretive offshore jurisdictions, owing to a lack of financial openness.
According to the advocacy organisation, the United Arab Emirates, which includes Dubai, is one of the top 10 supporters of corporate tax evasion and financial secrecy in the world.
“Dubai’s attitude to commercial and financial regulation and international financial crimes is ask-no-questions, see-no-evil,” the organisation stated in a 2020 assessment. “As a result, it has attracted enormous money flows and some of the world’s most notorious criminals.”
The European Union, the United States, Germany, and many other countries do not have extradition treaties with the United Arab Emirates. This implies that sought criminal suspects may seek refuge in Dubai to escape prosecution.
Requests for a response from the Foreign Office of the United Arab Emirates and the Dubai Land Department were not returned in time for publication. However, E24, OCCRP, and its media partners received a statement from the UAE Embassy in Oslo.
“The charges made against Dubai property ownership records are false and misleading. According to the Embassy, the UAE has “clear regulatory structures that conform with international laws and norms to prevent financial crime.”
“A cornerstone of these initiatives is the Dubai Land Department’s procedures and activities.”
A Real-Estate Ignorance
Dubai is a sheikhdom in the United Arab Emirates with internal sovereignty. However, it has established its economy because it is a popular destination for expats.
The emirate’s oil income dropped in the 1990s, and its leadership started searching for investments overseas. It found its way ahead in real estate, developing a slew of new residential buildings, the world’s tallest skyscraper, and two palm-shaped artificial peninsulas. (One was never completed because of the 2008 financial crisis when numerous real estate projects were halted owing to credit constraints.)
Since then, real estate development has been a major source of revenue for the emirate, drawing international investors and high-net-worth individuals from all over the globe. Dubai now boasts a population of three million people, although only half of them are Emiratis.
A total of 800,000 Dubai properties held by 274,000 private people and organisations from throughout the globe are included in the property data breach investigated by reporters. It reveals that the typical Dubai property owner owns more than three properties.
No one has ever had this level of knowledge on the whole real estate market in such a well-known tax haven before, says Annette Alstadsaeter, professor of tax economics and head of the Skatteforsk Centre for Tax Research at the Norwegian University of Life Sciences.
Alstadsaeter is leading an international group of academics who are now investigating the leaked information and will publish their results in the near future as part of this study.
The researchers estimate that foreign individuals and corporations have spent over $145 billion in Dubai’s housing market based on publicly accessible data on property pricing. In comparison, the value of the offshore-owned real estate in London, which is also a major hub for international property investors, was estimated to be $66 billion in 2019.
More than $31 billion of this sum is owned by people and corporations linked to Europe and Russia, which is the subject of this study.
Individuals do not own all of the properties in the leak. Shell entities registered in various tax havens possess a significant percentage. As a result, the beneficial proprietors of these assets are often unknown.
Estimates for certain nations and areas only include properties for which the owner has been assigned to a country. According to Andreas Kland, doctorate fellow at NMBU and one of the experts working on the Dubai leak, a significant fraction of the properties – worth a total of USD 99 billion – belong to owners whose country of real and beneficial owners is yet unknown.
According to Kland, this accounts for 7% of owners and over 20% of the property market in terms of net worth.
According to Gabriel Zucman, an associate professor at the University of California, Berkeley, “this is the first time we have an actual obvious amount of net value of both offshore and locally held assets in a tax haven.”
Zucman is regarded as one of the world’s foremost authorities on tax havens. He is the director of the EU tax observatory at the Paris School of Economics, where he has been following the investigation into the stolen data from Dubai and is a co-author of a forthcoming study on the matter.
We couldn’t confront this type of hidden riches with precise statistics until recently, but this leak has changed that. Because of a paucity of data, it hasn’t been researched much previously, according to Zucman. As part of larger globalisation, this research is a first step toward casting light on the increase of real estate investments in tax havens.
Russian Emirate
Last year, the team of imprisoned Russian opposition leader Alexei Navalny presented a fascinating look at Russian property ownership in Dubai.
His Anti-Corruption Foundation launched a thorough investigation into Russian senator Alexander Borodai, who purchased a 104-square-meter property in the opulent Grandeur Residences-Maurya complex on Palm Jumeirah, an exclusive man-made peninsula in the form of a palm, in December.
Borodai purchased the flat, which is valued at over $400,000, in 2015, at a time when his political career was growing in Russia.
He was appointed «prime minister» of the Donetsk People’s Republic, a self-proclaimed and internationally unrecognised pro-Russian statelet in Ukraine’s eastern Donetsk region, in January 2014. He lasted almost four months in that position before handing it up to a Donetsk native and became his deputy.
In 2021, he returned to Russia and was elected to the State Duma, the Russian parliament’s lower chamber, as a governing United Russia party member. In his necessary asset disclosure, he failed to include his Dubai flat.
The data in the C4ADS breach backs up Navalny’s conclusions, demonstrating that Borodai owns the flat despite being sanctioned by the US, EU, UK, Swiss, Canadian, and Australian governments.
It also contains the following: Russians are among the biggest groups of foreign real estate investors in Dubai, with around 5,300 nationals and persons related to the Russian Federation reported as owning over 9,700 properties.
Others include important politicians, state officials, and oligarchs. However, most are little-known private persons.
Another Duma deputy, Roman Lyabikhov, is listed as the owner of a 109-square-meter apartment in the Amwaj 4 building, part of an earlier construction in the Dubai Marina region. It is estimated to be worth $430,000. He, like his colleague, did not include it in his asset statement.
The United States, the United Kingdom, the European Union, and Canada have imposed sanctions on him.
Dmitry Rybolovlev, a Russian tycoon, is identified as a $3.5 million mansion owner on Palm Jumeirah’s al Khisab frond.
Rybolovlev, unlike several other billionaires, has kept out of Russian politics. He is said to have been living in Europe since 2010, when he was compelled to sell his controlling stake in Uralkali, a Russian mineral fertiliser company, to three well-connected Russian businessmen.
Rybolovlev is AS Monaco’s primary stakeholder and president, a Cypriot soccer team. In 2018, a court in Monaco labelled the Russian tycoon a formal suspect in a corruption inquiry, saying that he bribed local police enforcement in a dispute with an art dealer with gifts and football tickets.
That wasn’t Rybolovlev’s first brush with the law. In 2008, he paid $95 million for a house in Palm Beach, Florida, from Donald Trump, generating a profit of $54 million for the future US president. After Trump was elected president, Russia was accused of conspiring to assist him win the election, which drew more inquiry. Rybolovlev subsequently sold the property.
Ruslan Baisarov, another notable Russian, is named as having five apartments in the Tiara Residences, a series of premium high-rises on the Palm Jumeirah’s trunk, and a home on the Palm’s al Bumaan frond in the leak.
The six properties have valued a total of $8.5 million.
Baisarov is notorious for his links to Chechen leader Ramzan Kadyrov, who has been accused of horrific human rights abuses, including torture, and has given troops and military equipment to Russia’s invasion of Ukraine this year.
Baisarov has sponsored Kadyrov’s famed Veduchi ski resort north of Grozny, backed the Chechen leader’s somewhat bizarre ideas, and appeared with him in public, notably at the St. Petersburg International Economic Forum. Baisarov has been dubbed “Kadyrov’s pocketbook” because of their tight friendship.
In an interview with Vedomosti, Baisarov discussed his acquaintance with Kadyrov. He refers to Kadyrov as a buddy but denies that he is the Chechen leader’s pocketbook. Some of Kadyrov’s initiatives have been supported by him.
Sanctions on Kadyrov have been imposed by the United States, the United Kingdom, the European Union, Switzerland, Canada, Australia, and Japan.
Other Dubai property owners include international criminal characters like accused cocaine trafficker Daniel Kinahan, who is said to have taken up residence in the city.
Kinahan is named as the owner of a large 115-square-meter office in the premium Jumeirah Bay Tower 3, which is 15 minutes drive from the beach, in the data dump. According to corporate documents and a recent report in the Irish Times, two firms Kinahan co-founded throughout the years have claimed the same unit, number 3005, as their workplace.
According to information in the leak concerning Kinahan’s passport and Emirates ID, he purchased this home between the spring of 2017 and January of 2018. His suspected participation in drug trafficking had been well publicised for years at the time.
Kinahan was identified and characterised as “an Irish businessman active in narcotrafficking across Europe and presently the object of a large investigation” in a diplomatic cable sent from Sierra Leone to Belgium in 2009, and released two years later by Wikileaks.
The Kinahan Organized Crime Group (KOCG) has been active in Ireland, the United Kingdom, Spain, and the United Arab Emirates for many years. According to Irish and UK courts, the gang is suspected of being engaged in international narcotics and gun trafficking, as well as international money laundering.
The US Treasury Department claimed last month in a statement that Kinahan and other members of the gang “often utilise Dubai as a facilitation centre for their criminal operations,” adding that the action has resulted in “many deaths.”
The declaration came after a multi-agency probe, and the US ambassador to Ireland has offered a $5 million reward to anybody who can assist apprehend Kinahan, his father, or brother, who have all been sanctioned.
Kinahan has said that he is not a crime lord.
Guilty Owners
Journalists from a number of countries have acquired and analysed court data on persons identified as Dubai real estate owners in the leak.
Journalists in Norway discovered that convicted criminals and persons facing criminal charges possess almost 20% of all properties registered to current and past Norwegian citizens and some former inhabitants who departed Norway for Dubai to avoid prosecution at home.
Large-scale drug smuggling, bank fraud, tax and VAT fraud, repeated robberies, violence, and illegal weapon ownership are among the crimes. The owners in the leak who are related to crimes in Norway, on average, possess more than two properties, which is much higher than other owners.
It’s a large figure when almost one out of every five properties belongs to crooks. According to State Attorney Petter Nordeng of the Norwegian National Authority for Economic Crime Investigation and Prosecution, it’s concerning.
According to Nordeng, this raises the possibility that funds from illegal activity in Norway were utilised to purchase property in Dubai.
Dodging taxes
Individual taxpayers in Norway and Denmark are obligated to register foreign property ownership to their respective governments. Both nations impose taxes on foreign real estate.
Journalists in Norway and Denmark have discovered that few registered owners of Dubai homes are compelled to declare the property to their national tax authorities.
By the end of 2019, 214 of the registered owners of real estate in Dubai were tax residents of Norway.
According to aggregated data obtained via a freedom of information request, just 39 Norwegian taxpayers acknowledged owning property in the UAE to the Norwegian tax authorities in that year.
According to department chief Erik Nilsen of the Norwegian Tax Administration’s task force on criminal activities, “These are highly fascinating discoveries and big figures that shed light on a sector and networks in which we are very interested.”
In the Dubai data dump, 507 of the owners are Danish citizens or have links to Denmark. According to information submitted in response to a request for information, just 38 Danish taxpayers reported owning property in Dubai on their tax returns at the end of 2019.
As a result, the government might be losing millions of dollars in tax collection every year.
Property ownership is not prohibited in Dubai. Journalists’ unique observations, on the other hand, demonstrate that the majority of properties are not reported. According to professor Alstadsaeter, this shows that these properties are disguised and that taxes are avoided.
Meat and cryptocurrency go hand in hand
Francesco Giordano, a meat-industry mogul from Milan, is another colourful figure that shown in the data.
Larisa Andreea Hangiu, Giordano’s business partner, is listed as co-owner of three apartments in Dubai. They’re also stated as each having their own residence. These properties are valued a total of $550,000.
Giordano’s meat-selling firm in Italy may explain the assets, but it isn’t the full story.
Giordano, along with 27 other persons, was detained by Italian anti-mafia police in 2018 and accused of tax evasion.
According to investigators, he set up a complicated network of businesses in northern Italy to avoid paying taxes on his commercial income. With the aid of a local mafioso, he then laundered the money to enterprises in Apulia, his native area.
They took money out of the bank and stored it in different areas, including the walls of villas, via a network of nominees. Hangiu was also arrested when police discovered cash at her property outside of Milan.
The authorities confiscated 27 businesses, as well as expensive houses and automobiles. At the time, no Dubai assets had been discovered. However, in 2015, while on his way to the Emirates, Giordano was detained by customs authorities at an Italian airport carrying over 200,000 euros in cheques and cash.
Two years later, the police learned that a dishonest detective had tipped Gioradano off that he was under investigation for money laundering and that the police knew he was laundering his earnings into restaurants in Rome and Dubai due to a wiretapped discussion.
Italian authorities accused Giordano, Hangiu, and 73 other persons of 180 million euros in international tax evasion in February 2022. Giordano is now being held at a pre-trial detention centre.
A request for a response from his lawyer and Hangiu went unanswered.
It seems that avoiding taxes on meat earnings is a bygone era. However, another European with a Dubai home was said to be involved in a much more contemporary criminal business.
Tibor Bokor, a Czech venture entrepreneur, is identified as the owner of three homes in Dubai valued at $455,000.
He was once the executive director of a Moscow-based sanctioned Czech-registered bitcoin exchange. Last year, the US Treasury sanctioned the exchange, known as SUEX OTC, claiming that 40 per cent of its transaction history was linked to illegal activities. It was the first time the United States sanctioned a bitcoin exchange.
A Slovak businessman sought on corruption charges is said to be hiding out in the emirate. Miroslav Vboh was a well-known lawyer and lobbyist who served as the honorary consul of Monaco in Slovakia.
Slovak police have been looking for him since two of his accused co-conspirators in a fraudulent scheme involving IT service orders for a government agency were detained in August 2021.
Vboh was nowhere to be seen at the moment. However, supporters of Monaco racing car driver Charles Leclerc shared an image of Leclerc at a Dubai restaurant a few months later. Vboh was among those seated around the table who appreciated racing and had competed in the Ferrari Challenge.
Vboh is identified as the owner of a roughly $2.7 million condominium in the Alef Residences project on Palm Jumeirah in Dubai.
Vboh’s lawyer, Ladislav Smejkal, told OCCRP that Vboh bought the flat in 2017, when the building was still being built, but never intended to reside there. The apartment was just finished in 2021, and it is now in “shell and core” state.
Vboh is currently attempting to sell the apartment due to the rise in UAE real estate prices, according to Smejkal.
Extradition
Many nations have bilateral or multilateral extradition treaties with other countries, allowing them to extradite their own citizens or those of other countries accused of criminal offences.
Several European nations have lists of persons resident in Dubai who want to be tried and imprisoned for major crimes, but deporting them, in reality, is unlikely.
Europol’s efforts to extradite a number of foreign crime lords, dubbed “high-value targets,” were revealed in a leaked dossier last year. The list included many drug gangs and dangerous criminals from Dubai. Dubai has emerged as a “key destination for major organisers and money-laundering operations linked with the cocaine trafficking in the EU,” according to the paper.
Police from nine EU member nations and Norway, Switzerland, and the United States were working together to discover and extradite “untouchable” expat offenders and seize their illegal assets.
