London-based Discreet Law took on Wagner group head Yevgeny Prigozhin as a client
Yevgeny Prigozhin, founder of the Wagner mercenary group, a Russian paramilitary organisation, was able to pass UK anti-money laundering (AML) checks by submitting a utility bill in the name of his 81-year-old mother. The sanctions-hit Russian warlord has been accused of human rights abuses around the world.
In 2021 before taking Prigozhin on as a client Discreet Law requested identification documents from him as part of AML checks. At the time Prigozhin was under sanctions by the US, EU and UK – Wagner fighters have been accused of crimes including mass executions and rape – and had been placed on the FBI’s most wanted list of international fugitives.
In response to the request, Prigozhin’s Russian lawyers forwarded the law firm a copy of his passport and a gas bill in the name of the Wagner boss’s then 81-year-old mother, Violetta, for an address in St Petersburg. Prigozhin’s mother is also under international sanctions for her support of her son’s mercenary activities.
According to the Financial Times, a solicitor at Discreet Law indicated that they were satisfied with the AML documents. Prigozhin hired Discreet Law in 2021 to sue the UK journalist Eliot Higgins for libel for suggesting the Russian was connected to Wagner. Discreet Law, which submitted a High Court claim on Prigozhin’s behalf stating he had suffered emotional distress, applied to stop representing him in March 2022, about one month after Russia’s invasion of Ukraine.
Mercenary groups under Prigozhin’s control have generated about $250M since 2018 despite being subjected to Western sanctions. These groups operate in countries ranging from Sudan to Syria and continue to play a key role in Russia’s ongoing invasion of Ukraine.
London has been increasingly scrutinised as a centre for money laundering and other financial crimes.
According to the Solicitors Regulation Authority, British law firms do have some discretion on the due diligence they need to do on clients based on the level of risk they pose.
“It is ridiculous that a Russian warlord avoided all suspicion of money laundering by simply using his elderly mother’s gas bills,” said Margaret Hodge, a Labour MP. “Our bankers, accountants and lawyers all have a duty to perform robust checks on their customers.”
According to the Financial Action Task Force (FATF) some red flags firms should keep in mind when bringing on a client include:
- If the client is secretive or evasive about who they are, the reason for the transaction, or the source of funds
- If the client uses an intermediary, or does not appear to be directing the transaction, or appears to be disguising the real client
- If the client avoids personal contact without good reason
- If the client refuses to provide information or documentation or the documentation provided is suspicious
- If the client has criminal associations
- If the client has an unusual level of knowledge about money laundering processes
