The Harrods mega-spender has lost the Supreme Court ‘McMafia’ challenge

Zamira Hajiyeva was the first big spender to be slapped with an Unexplained Wealth Order. Now the Supreme Court has reject­ed her attempt to over­turn it. What does this mean for those look­ing to splash major cash in London? Chris Stokel-Walker’s arti­cle from the September issue of Tatler explains

Chris Stokel-Walker, Tatler, 22 December 2020

Zamira Hajiyeva had expen­sive tastes. That much was clear to Harrods. Like many of the ultra-high-net-worth indi­vid­u­als who saunter into the Knightsbridge depart­ment store, the 57-year-old Azerbaijani expa­tri­ate spent freely – in her case, very freely, rack­ing up £16.3 mil­lion in pur­chas­es at the store between 2006 and 2016. She had a par­tic­u­lar weak­ness for Cartier and Boucheron: one Sunday in November 2009, she hand­ed over a cred­it card to buy a £48,600 Cartier item, then she was back 12 days lat­er for three pieces of Boucheron jew­ellery worth a com­bined £121,000. It wasn’t just jew­els that caught her eye – one hun­gry day in 2014 she spent £2,000 on cold meats alone.

She had, it seemed, access to mul­ti­ple sources of mon­ey. She bought items on at least 54 cred­it cards – includ­ing 35 American Express, Mastercard and Visa cards issued by the bank of which her hus­band, Jahangir Hajiyev, was chair­man – as well as log­ging the pur­chas­es on the depart­ment store’s loy­al­ty-card scheme. Not one to scorn a bar­gain, Hajiyeva qual­i­fied for the Harrods Black Tier rewards card (reserved for cus­tomers who spend more than £10,000 a year), grant­i­ng her gift box­es, dis­counts and com­pli­men­ta­ry drinks every time she walked through the doors.

But while Harrods was delight­ed with her cus­tom, her expen­di­ture there was a mere bagatelle. Just weeks after her 2009 splurge on jew­ellery, she put down a £4 mil­lion deposit on an £11.5 mil­lion house on Walton Street in Knightsbridge – the pur­chase was made through a com­pa­ny based in the British Virgin Islands. She then also bought the Mill Ride Golf & Country Club in Ascot for a fur­ther £10.5 mil­lion. Yet…

There was a big yet. Where was the mon­ey com­ing from? Her hus­band has report­ed to British courts that he earned less than $71,000 a year in his job as a bank exec­u­tive – which may have sur­prised the Azerbaijani author­i­ties, who in October 2016 jailed him for 15 years for fraud, embez­zle­ment and mis­ap­pro­pri­a­tion of £2.2 bil­lion of pub­lic funds. And Hajiyeva claims to have been a full-time moth­er since 1998.

Christmas at Harrods

For the National Crime Agency (NCA), it was just one exam­ple of her ‘unex­plained wealth’ – and one rea­son why last year Hajiyeva became the first recip­i­ent of an Unexplained Wealth Order (UWO) – a new legal tool the NCA can employ if it sus­pects some­one liv­ing in the UK of buy­ing assets using income illic­it­ly gained. Serve one of these and, if the courts agree with the NCA, a freeze can be put on those assets, ren­der­ing ill-got­ten gains unus­able. On 21 December, the Supreme Court reject­ed Hajiyeva’s attempt to over­turn her UWO and unless she is able to legit­i­mate­ly explain how she became rich, the courts can fast-track the seizure of her flash London home with­out inves­ti­ga­tors hav­ing to even prove a crime.

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This is a game-chang­er. These ‘McMafia’ orders – named after the hit BBC series about Russian cor­rup­tion in London – turn the biggest issue faced by anti-cor­rup­tion inves­ti­ga­tors on its head. Where pre­vi­ous­ly the NCA had to prove malfea­sance on the part of those sus­pect­ed, now an order com­pels those sub­ject to it to dis­prove suspicions.

It’s a huge change that tips the scales towards jus­tice and against klep­to­crats, which nev­er was true in the past,’ says Bill Browder, co-founder of what was once the largest hedge fund oper­at­ing in Russia, and now one of the world’s most aggres­sive anti-cor­rup­tion cam­paign­ers. He’s also the main man behind the UK’s new Magnitsky laws, which make human rights vio­la­tors face finan­cial sanc­tions here, as well as being barred from entry to the coun­try. But the UWOs are, he adds, ‘rev­o­lu­tion­ary in their concept’.

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And they’re need­ed. ‘There is a lot of illic­it mon­ey slush­ing around London, and we need to know where it’s com­ing from,’ explains Prem Sikka, emer­i­tus pro­fes­sor of account­ing at the University of Essex, and co-author of The Accountants’ Laundromat, a book detail­ing the enor­mous scale of mon­ey laun­der­ing in the UK. By the very nature of its murky ori­gins, hard num­bers on illic­it mon­ey are dif­fi­cult to come by, but it’s esti­mat­ed that any­where between 2.5 and 5 per cent of the $86 tril­lion glob­al gross domes­tic prod­uct is illic­it. You only need to cast half a jaun­diced eye on the despots’ wives swan­ning along Sloane Street, laden with shop­ping bags, to guess that some­thing is up. ‘Every dic­ta­tor and klep­to­crat wants to have a place here,’ says Browder, scornfully.

A Van Cleef & Arpels bracelet, one of the 49 items of Hajiyeva’s jew­ellery seized

London is loved by those look­ing to laun­der mon­ey for any num­ber of rea­sons. For devel­op­ing-world despots or oli­garchs on the make, the excel­lent fee-pay­ing schools, lux­u­ry shop­ping and loca­tion at the cen­tre of the finan­cial uni­verse have made the city an obvi­ous choice. The UK’s pro­cliv­i­ty to wel­com­ing mon­ey with open arms – which crit­ics say extends to look­ing the oth­er way when it comes to where cash has come from – is a bonus. ‘I’ve been at the coal­face of mon­ey-laun­der­ing inves­ti­ga­tions all over the world, and the UK is one of the weak­est enforce­ment regimes,’ says Browder.

That lame-duck enforce­ment, cou­pled with a net­work of shad­owy bankers, estate agents and lawyers, has long made the UK a home for the fam­i­lies of dic­ta­tors and out-of-favour klep­to­crats. But their life is get­ting hard­er. In May 2019, Aniseh Chawkat, then 22, the fash­ion-con­scious niece of the Syrian dic­ta­tor Bashar al-Assad, was study­ing for an MA in London.

Her stud­ies were fund­ed by 56 unex­plained cash deposits into her bank account that togeth­er totalled more than £150,000 – then the NCA swooped, and her account was frozen. (Chawkat main­tained she had ‘no knowl­edge or sus­pi­cion’ that pay­ments into her account breached sanctions.)

Luca Filat, the 25-year-old son of the for­mer prime min­is­ter of Moldova, Vladimir Filat (who, in turn, was sen­tenced to nine years for his role in the theft of $1 bil­lion in his home coun­try), was study­ing at City University in London. He’d paid £390,000 up front to lease a pent­house flat in Cadogan Square for a year, bought a £200,000 Bentley Bentayga from a Mayfair deal­er­ship and, per­haps unwise­ly, was pho­tographed par­ty­ing, cham­pagne bot­tle in hand, in St Tropez. Filat was hit with three bank for­fei­ture orders last February. He appealed, pro­duc­ing doc­u­ments show­ing that wealthy friends had lent him the mon­ey, but the court order was upheld.

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But the NCA’s task is not easy. Unsurprisingly, when it comes to big mon­ey, some aren’t keen to be part­ed from it. For instance, 221b Baker Street is known to most as the home of Sherlock Holmes, but the iden­ti­ty of its own­er today is a mys­tery even the fic­tion­al detec­tive would strug­gle to solve. The NCA claims it was bought with mon­ey accu­mu­lat­ed by Rakhat Aliyev, a senior Kazakh offi­cial who died in prison in Austria in 2015. The agency claims that Aliyev was ‘part of a cor­rupt inner cir­cle in the Kazakh regime who enriched him­self at pub­lic expense’; he was await­ing tri­al on mur­der charges when he died.

While 221b Baker Street hasn’t been sub­ject to a UWO, three oth­er Aliyev-con­nect­ed prop­er­ties worth an esti­mat­ed £80 mil­lion were seized in May 2019. They were, the NCA claimed, the prop­er­ty of hold­ing com­pa­nies owned by Dariga Nazarbayeva and Nurali Aliyev, respec­tive­ly the ex-wife and son of Aliyev – and, as it hap­pened, the daugh­ter and grand­son of Nursultan Nazarbayev, the dic­ta­tor run­ning Kazakhstan until 2019. One of the prop­er­ties, a £9.3 mil­lion north London home beside Highgate Golf Club, was giv­en as an address at Harrods for Aliyev’s ex-wife. But Dariga Nazarbayeva and Nurali Aliyev strong­ly deny the NCA’s claims of any wrong­do­ing. The progress of their UWO goes from court to court.

The NCA is cur­rent­ly pur­su­ing four Unexplained Wealth Orders, but has more than 100 poten­tial cas­es on its books. Tip-offs that trig­ger an inves­ti­ga­tion come from var­i­ous sources: some arrive into NCA inbox­es and intrays from wronged staff, wor­ried neigh­bours or angered com­peti­tors. Some alerts come in from banks, who can pass on intel­li­gence and mate­r­i­al that may allow the agency to begin work on obtain­ing an Unexplained Wealth Order against an indi­vid­ual. Mainly, it’s anti-cor­rup­tion NGOs liais­ing with the agency about their research and NCA agents proac­tive­ly search­ing for cas­es using open-source material.

They’re focused on what they call ‘polit­i­cal­ly exposed per­sons’ – peo­ple in high office, or in gov­ern­ment, or who have some con­trol of a state asset, and have alleged­ly embez­zled funds that end up in the UK. It all sounds good: after years of let­ting fraud­sters and despots wash their mon­ey through our finan­cial sys­tem, author­i­ties have been giv­en a laser-tar­get­ed weapon with which to clean up the cap­i­tal. But Browder believes the NCA’s 30 to 40 inves­ti­ga­tors are mis­plac­ing their efforts. He thinks the orders met­ed out thus far have been mis-used, not to pur­sue klep­to­crats, ‘but basi­cal­ly to do the mop­ping- up oper­a­tions of dic­ta­tors against their ene­mies in the UK’.

The NCA, of course, doesn’t agree. The focus so far on exiled ene­mies of unsavoury char­ac­ters abroad is not con­scious, says Andy Lewis, head of asset denial at the NCA – and is based on the like­li­hood of suc­cess in the courts. ‘We only have lim­it­ed resources, like any law-enforce­ment agency,’ he says. ‘We have to make sure we tar­get them at those that will have the biggest impact; the biggest bang for our buck.’

Not a sin­gle UWO case has yet reached a con­clu­sion, with courts alter­nate­ly find­ing in favour of the NCA, then, on appeal, find­ing for peo­ple whose assets the agency is seek­ing to seize. It’s a seem­ing­ly end­less process: high-pow­ered lawyers are employed; points of law raised; com­plex chains of finan­cial trans­ac­tion exam­ined. What politi­cians hoped was a tar­get­ed weapon against mon­ey laun­der­ing has been turned into a game of whack-a-mole, but the NCA is deter­mined to bring to jus­tice peo­ple it per­ceives as doing wrong.

Zamira Hajiyeva’s case has gone the fur­thest. It was on 27 February 2018 that the Hon Mr Justice Supperstone agreed that the NCA could issue an Unexplained Wealth Order against her. Five months lat­er, the same High Court judge was hear­ing an appeal by Hajiyeva’s lawyers to dis­charge the order, which ulti­mate­ly failed. But her lawyers took the case to the Court of Appeal in December 2019, say­ing that the order was based on unsub­stan­ti­at­ed claims about her hus­band ben­e­fit­ing from polit­i­cal cor­rup­tion, and that their client denied all alle­ga­tions of wrong­do­ing. Hajiyeva lost that appeal in February 2020. But her team con­tin­ues to deny that she has done any­thing wrong, and is appeal­ing to the Supreme Court (the Supreme Court announced it upheld its rul­ing on 21 December). In the mean­time, the NCA has alleged that Hajiyeva’s daugh­ter Leyla Mahmudova took £400,000-worth of jew­ellery to Christie’s for val­u­a­tion, which the NCA seized, as well as an 8.9‑carat ‘emer­ald-cut dia­mond’ Cartier ring that was val­ued at £1.2 million.

Ms Hajiyeva’s home in Knightsbridge

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Because the cas­es are ongo­ing, the NCA is unwill­ing to talk about spe­cif­ic indi­vid­u­als; Hajiyeva did not respond to an email sent to her lawyers. But, said Lewis, speak­ing gen­er­al­ly, ‘In the cas­es we deal with, there’s an assump­tion they’ll be fight­ing until the bit­ter end – to the Supreme Court, poten­tial­ly – to say, “This is a legit­i­mate asset.”’

The NCA will also fight all the way, for two rea­sons. ‘First, it’s to take away assets from crim­i­nals, and sec­ond, as a deter­rent effect to stop those that want to invest in the UK by buy­ing prop­er­ty with crim­i­nal mon­ey,’ says Lewis. He wants ‘to make the UK a hos­tile juris­dic­tion for them to invest their ill-got­ten gains’. The fight goes on. And Harrods is as allur­ing, and expen­sive, as ever.

This is an edit­ed ver­sion of an arti­cle that ran in the September 2020 issue of Tatler.

Tatler

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