Oleg Rubnikovich
30 May 2021
Investments Transferred Offshore: Police Uncover Financial Pyramid
Investments Transferred Offshore: Police Uncover Financial Pyramid
As reported by "Kommersant," top managers and a lawyer of a significant financial pyramid operating under the guise of the investment company QBF have been arrested in Moscow. The alleged fraudsters transferred the received funds to offshore accounts, providing clients with fake reports claiming their investments were channelled into substantial financial portfolios. Preliminary estimates by investigators suggest embezzlement of around 5 to 7 billion rubles. Law enforcement agencies believe that part of these funds may have been laundered through development projects, such as constructing the "Gribovsky Forest" residential complex in the Odintsovo District of the Moscow Region.
Tverskoy District Court of Moscow has remanded in custody the 30-year-old co-founder of LLC QBF, formerly the head of the company's Cypriot branch, Zelimkhan Munaev, and the 47-year-old lawyer of this structure, Yevgeniya Rossieva. Both are defendants in a criminal case initiated by the Investigative Department of the Ministry of Internal Affairs (MVD) in April 2021 concerning particularly large-scale fraud (Article 159, Part 4 of the Criminal Code of the Russian Federation).
According to "Kommersant," law enforcement officials had been investigating the unlawful activities of QBF representatives for over a year. Last week, as part of the investigation, personnel from the Main Directorate for Economic Security and Anti-Corruption (GU EBiPK) of the MVD, in conjunction with colleagues from the Moscow Police Department's Western Administrative District and the Moscow Directorate of the Federal Security Service (FSB), conducted more than 30 searches in Moscow and St. Petersburg. In the course of these operations, Messrs. Munaev and Rossieva were detained. The first resides on Mykolaiv Street, not far from the Government House.
When law enforcement officers arrived at his residence, he barricaded himself in his apartment and refused to open the door for three hours. He surrendered only after special forces began to break down the door using tools.
Ironically, at this moment, another problem of a different nature arose. Zelimkhan Munaev, who had now decided to surrender, couldn't open the partially broken metal door from the inside—it got jammed due to anti-seizure pins. Ultimately, the door had to be demolished.
Yevgeniya Rossieva, who resides on Udaltsova Street, encountered no such difficulties. Following this, the investigation-operational group proceeded to the QBF head office, which occupies several floors in the "Capital City" complex in Moscow City (Presnenskaya Embankment, 8, Building 1). Documentation and electronic media were seized there. Among other things, investigators discovered guidelines for managers on how to behave in case of visits by law enforcement agencies. Notably, several companies under the abbreviation QBF are registered at the same address on Presnenskaya Embankment, which are also mentioned in the investigation materials.
Simultaneously, operatives detained the director of the QBF company's branch network in St. Petersburg, Vladimir Pakhomov. He has already been charged with fraud, but the investigation did not seek his arrest.
According to GU EBiPK employees, during operational and search activities, citizens' funds were attracted by the company under the guise of investing in financial portfolios not only in Moscow and St. Petersburg but also through the branch network in the Sverdlovsk, Tyumen, and Murmansk regions, as well as in Bashkortostan. Moreover, according to some reports, the main focus was on affluent clients who had access to budgetary funds. Allegedly, some QBF managers stated that these individuals wouldn't turn to the police if they lost their money since they couldn't prove the legality of their receipt.
However, among the official victims, "Kommersant" reports, there are those who allegedly transferred around 200–300 million rubles to the supposed fraudsters, and one individual even entrusted 1 billion rubles to their "trust management."
Moreover, such individuals usually learned about the possibility of earning around 20% on investments through word-of-mouth. Reportedly, these people did receive dividends, mostly from subsequent investors' funds. This maintained the company's reputation and ensured an influx of new affluent investors.
Positive online reviews about the company typically influenced ordinary clients who entrusted QBF with relatively small amounts. Their problems started when they attempted to withdraw their invested funds from QBF. Until then, they were confident that their money was working and yielding profits, as managers sent them fictitious monthly and quarterly reports via email.
"Extremely negative impression of QB finance. Everything is fine as long as you're giving them money. As soon as you try to withdraw, problems start. They don't return the money. Managers stop answering calls. If you want to lose your money, QBF is for you," clients allegedly told "Kommersant." "It's a typical pyramid scheme that accepts funds under trust management. They might let you withdraw a certain percentage, but you won't get anything when you want to take out all your money. They've been withdrawing money for a year; the manager always disappears, and no one answers the call."
In the end, many deceived depositors concluded that the praising reviews about QBF were either written by the company's managers or on their behalf. In this case, dozens of people, including citizens of Ukraine and companies from Liechtenstein, are considered victims. The damage inflicted on them is estimated at around 2 billion rubles. The total amount of debt owed to clients is calculated to be between 5 billion and 7 billion rubles.
As police investigators determined, the primary investment agreement between individuals and the Cypriot QB CAPITAL CY LTD (QCCI LTD) involved transferring funds under "trust management." This was done to circumvent Russian legislation in investment activities, as such services are not subject to licensing or supervised by the Central Bank. Clients were also convinced investing in foreign jurisdictions was the most attractive and profitable option. The investigation reveals that until 2017, the alleged fraudsters used LLC QBF, which had all the necessary licenses from the Central Bank, as a front. Clients signed supplementary agreements for brokerage services, trust management of funds, etc., with this LLC, believing they were dealing with a legally operating organization. Meanwhile, investors' funds immediately ended up in the QCCI LTD account, from where they were subsequently transferred to the accounts of other non-resident companies, as well as FFIN BROKERAGE SERVICES INC (Belize), LA CASA INTERNATIONAL LTD (Marshall Islands), and NOA Circle LTD (Nicosia).
In August 2018, when Cypriot authorities began questioning the activities of QCCI LTD, then headed by Zelimkhan Munaev, the organization was liquidated. New non-resident companies replaced it: White Lake Management Ltd (Cayman Islands) and Hong Kong-based Simtelligence Company Limited.
All funds ostensibly attracted for investment remained under the control of the alleged pyramid organizers. Real estate development projects actively legalized Some of these funds in Russia. One of these projects, investigators believe, could have been the construction of the "Gribovsky Forest" residential complex in the Odintsovo District of the Moscow Region. The building is managed by the company "M1 Development," founded by 33-year-old Roman Shpakov, the beneficiary and founder of several companies under the QBF abbreviation. However, questioning him by investigators shortly is unlikely.
According to "Kommersant," in January 2021, when clouds began to gather over his creation, he left for the UAE, where he currently resides.
However, it is currently Mr Shpakov who is being considered by the investigation as a possible organizer of the criminal scheme.
The criminal case against QBF is linked to the disputes of certain former officials in Yekaterinburg and the Sverdlovsk Region. The former officials are allegedly accused of embezzling budget funds, while they claim to have invested them in one of the investment companies. "Thus, the attention of law enforcement was drawn to the company 'KueBiEf.' It was taken under development; searches were conducted. They are attempting to pressure to obtain funds in amounts that the company never had. We are talking about sums of several billion rubles," stated QBF's press secretary, Nikolay Stepanov. "By Monday, May 31, the technical equipment of the company's operation should be fully restored. Client operations and the functionality of departments will not be affected—transfers of funds, transactions, and settlements will be carried out within the timeframes specified in the regulations and contracts. The company's and clients' accounts are operational, and there are no disruptions in the company's financial activities.
It's worth noting that just a month ago, in the neighbouring "Empire" tower in Moscow City, a similar investment platform, LLC "Shumakov and Partners," was shut down by the police. Its co-founders, Georgiy Gats and Denis Shumakov, are under arrest for similar manipulations. Moreover, Denis Shumakov, before launching his own business in 2016, was the senior financial advisor for the same company, QBF.
Oleg Rubnikovich
Kommersant published the article on May 30 2021
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