Kazakh millionaire in murder inquiry ‘hosted’ in Malta despite police objections

Maltese government gives former diplomat, deputy head of Kazakh secret service, residence status despite police objections over Interpol alert.

Rakhat Aliyev, the former son-in-law of Kazakhstan's president, claims he is the victim of the government's repressive regime.
Rakhat Aliyev, the former son-in-law of Kazakhstan's president, claims he is the victim of the government's repressive regime.

Background The Nurbank murder case

An investigation by MaltaToday into the criminal inquiries led by Austrian prosecutors on Rakhat Aliyev, 49 - Kazakhstan's former ambassador to Vienna - has established that the Maltese government awarded the millionaire a permanent residence permit, despite objections raised by the police due to a previous Interpol alert issued against him.

The powerful family squabble between the President of the oil-rich nation of Kazakhstan and his powerful, exiled son-in-law Rakhat Aliyev, has boiled over in Malta, with reports of Aliyev's commercial activities now reaching the island's Financial Intelligence Analysis Unit.

And in the Maltese courts, a €2.4 million lawsuit is the subject of a bitter feud between Aliyev - who goes by the name of Rakhat Shoraz, and lives in Mellieha's swank Santa Marija estate with wife Elnara Shorazova - and his former lawyer, Pio Valletta.

Shorazova and Aliyev have sued Valletta for charging exorbitant fees for his services to procure them permanent residence status, and search for a property for them. In a counter-claim, Valletta is demanding €1.5 million for his services.

But the case risks embroiling the Maltese government, as Foreign Affairs Minister Tonio Borg and former Home Affairs minister Carm Mifsud Bonnici have also been summoned as witnesses in the lawsuit.

The big question for Malta's top ministers is why Rakhat Aliyev, the subject of an Austrian criminal investigation since 2007 and with a political past tarnished by allegations of violence, was awarded residence status in Malta in 2010.

Aliyev, formerly the son-in-law of Kazakh dictator Nursultan Nazarbayev (pictured below), lives in self-imposed exile in Malta after he was stripped of his position and immunity in Austria, when he was sentenced in absentia to 20 years in prison by a Kazakh court, on charges of kidnapping bankers Zholdas Temiraliev and Aybar Khasenov.

In Malta, Aliyev might have searched for anonymity under the surname Shoraz from Austrian investigators.

But a legal challenge from the wives of the kidnapped bankers, and the criminal investigations by the Viennese prosecutors, have reached him here.

This is a high-profile case: the European Commission says it is aware of the Aliyev investigations and wants Eurojust to coordinate the cross-border investigation; German MEP Elmar Brok has written to foreign minister Tonio Borg asking about Aliyev; and the Kazakh feud is also being played out in the United States.

Kazakhstan, albeit a repressive Central Asian state, is strategically important to the USA for its enormous oil reserves: embassy cables leaked by Wikileaks reveal requests for US assistance on Aliyev's extradition; the New York Times reports on American political lobbyists employed by both sides of the Nurzabayev-Aliyev divide, appealing to members of the American Congress to either condemn the Kazakh government, or further pro-Kazakhstan causes.

Malta gives Aliyev residence

The confirmation that Aliyev has benefited from permanent residence status - a special residence permit for rich property buyers who come to Malta to benefit from its generous tax rebates for non-domiciles - comes from Elnara Shorazova's court testimony in the lawsuit she filed against her former lawyer, Pio Valletta.

In 2010, Aliyev's Austrian wife came to Malta searching for a property, accompanied by Valletta. The choice naturally fell on Fort Cambridge, the luxury apartments being constructed by Gap Developments in Tigné, of which Valletta happens to be a director.

According to Valletta, her Austrian lawyers had asked him for assistance to procure residence status for Aliyev "due to difficulties related to his political past".

Valletta assisted in wiring €2.4 million for Aliyev's wife from an Austrian company to an account held by his Maltese company A & P Power, and into another company registered in the Caribbean.

But Aliyev's residence permit application ran into trouble. In a list of services he rendered to the couple, Valletta charged them nothing short of a cool €150,000 because of the "difficulties" he encountered in procuring the permanent residence status, "due to the non-approval from the police authorities" on account of an Interpol alert that had been issued against Aliyev.

The Interpol alert has since then been repealed.

Aliyev and Shorazova have also broke off all relations with Valletta, suing him for having cordoned off €700,000 from their cash as payment for his services. The case is ongoing.

But the question to the foreign ministry is why they ignored the police authorities' non-approval.

The ministry's spokesperson Melvyn Mangion (who is summoned in this civil lawsuit as a witness) says both him and Borg never net either Pio Valletta or Alijev to issue the permanent residence status. But the foreign minister has not replied as to why the residence permit was awarded, despite police objections over the Interpol alert.

"Alijev has a residence permit issued by the Austrian government, he is married to an EU citizen, and as such enjoys freedom of movement and residence," Mangion told MaltaToday.

"Should Austrian authorities issue a European arrest warrant this will be executed by the Maltese authorities. Should new irregularities arise other than those on which the extradition request was based, this residence permit will be reviewed."

It is ironic that since the suspension of the permanent residence rules in 2011, the new High Net Worth Individuals tax regime includes a 'fit and proper' test that must be vetted by the Home Affairs minister. Former minister Carm Mifsud Bonnici - another witness summoned in the Shorazova lawsuit - did not return to MaltaToday with a comment on this case.

Neither has the foreign minister provided a reply as to why Aliyev's residence permit was issued when it was known he was the subject of a criminal investigation in Austria; and about the interest from the FIUA in Aliyev's affairs in Malta.

Allegations that Malta was now 'hosting' a person under investigation were also made by Akezhan Kazhegeldin, a former prime minister of Kazakhstan and his lawyer Lothar de Maizière, who was the last democratically-elected East German Prime Minister.

"We were given information that Mr Aliyev is being hosted in Malta, De Mazière had told The Sunday Times. "If this is true, Malta needs to clear its name and bring this person to justice... Mr Aliyev is super-rich and he can get around legalities."

But the foreign ministry says Aliyev, being married to an EU citizen, is exercising a Treaty right.

Aliyev questioned in Malta

Austrian investigators are catching up with Aliyev. Ever since rejecting extradition to Kazakhstan in 2007, Viennese prosecutors have carried out criminal investigations for money laundering and kidnapping, and even pursued the matter with the EU's agency for justice coordination, Eurojust.

Austrian prosecutor Bettina Wallner has already been to Malta, having questioned Aliyev at the Maltese courts for three days in April 2012 over the bankers' murder investigation. Austria has resisted Kazakh demands to extradite Aliyev to Kazakhstan, where he cannot be guaranteed a fair trial under several politically-motivated charges by members of the Nuzurbayev clan.

But the EU's Justice Commissioner Viviane Reding has invited Eurojust to look into the matter and support the investigators to resolve any cross-border differences and render their investigations into the Aliyev case more effective.

"The Commission is aware of the concerns of the victims of the crimes allegedly committed by Mr Rakhat Aliyev," she told German MEP Klaus-Heiner Lehne in February 2012.

Even German MEP Elmar Brok, the former chairman of the European Parliament's Foreign Affairs Committee, has sent a letter requesting information on Aliyev's permanence in Malta to Foreign Affairs Minister Tonio Borg.

And the lawyers in Austria representing the wives of the murdered bankers are pursuing Aliyev, having informed Malta's money-laundering investigators FIUA about his activities.

"We informed the FIUA in Malta because we believe there is a strong suspicion that Aliyev is managing his business activities from Malta," Gabriel Lansky, the head of law firm Lansky Ganzger Partner told MaltaToday.

"The case is a European issue because the European Commission, the European Parliament and Eurojust are already involved in the case, so we are confident the Maltese authorities are going to carry out a serious and efficient investigation."

No smoking gun

There are no indications as to what Aliyev's activities are in Malta or any well-founded suspicion of his commercial interests.

Aliyev has positioned himself as a victim of the Kazakh government and has publicly criticised Kazakh president Nazarbayev and applying Soviet tactics.

Credit records and court documents indicate that Aliyev and Shorazova may have purchased various properties or else moved around a lot since arriving in Malta.

Background The Nurbank murder case

Before divorcing his daughter in 2007, Rakhat Aliyev (Shoraz) married into Kazakhstan's almighty power centre led by President Nursultan Nazarbayev. An influential figure, Aliyev served as chief of the tax police, deputy foreign affairs minister and head of the Kazakh equivalent of the KGB.

But critics say he used his clout to secretly take over private companies for financial gain, often by threatening violence and intimidation.

Things came to a head with the disappearance of two Nurbank managers, Zholdas Timraliyev and Aybar Khasenov, later discovered dead. Under pressure from the public outrage that hinted at Aliyev behind the kidnappings, Nazarbayev kicked his son-in-law out to Vienna as ambassador.

But an international campaign by the bankers' widows (pictured above) pushed the Kazakh authorities to initiate proceedings against Aliyev. While in Vienna in May 2007, Aliyev was sentenced in absentia to 20 years' imprisonment by a Kazakh court and his marriage to the daughter of the Kazakh president officially cancelled.

After being briefly detained by Austrian authorities, acting on an arrest warrant issued in Kazakhstan, Aliyev was released on bail of €1 million. The Austrian government has refused to extradite Aliyev to Kazakhstan but initiated criminal investigations of its own.

On his part, Aliyev has positioned himself as a victim of Nuzurbayev's excesses, publishing the book Godfather-In-Law in which he accused the Kazakh ruler of being behind the murder of former Kazakh ambassador to Russia Altynbek Sarsenbayev.

"My only crime is that I expressed an opinion which deviates slightly from the president's opinion. I hinted that I would like to stand for the head of state's job myself and that I favour reforms," Aliyev told Austria's Profil magazine. "This is what President Nazarbayev does to potential opponents and opposition politicians when they even just think of challenging him."

The Nazarbayev family drama has drawn in the United States as well, because Kazakhstan is a major oil supplier and a critical supply route for the United States military in Afghanistan.

On his part, Aliyev is said to have sought safe passage to the United States. Wikileaks cables shows US ambassador Richard Hoagland warn Washington to stay out of the dispute. "Both sides - the government and Aliyev - seek to manipulate us to their own advantage."

The New York Times says Aliyev has engaged lobbyists to press US House of Representatives members to criticise the Kazakh government's human rights record, citing Aliyev as a victim of his government. In Washington, officials at the Kazakh embassy signed $3.7 million in lobbying contracts to curry favour in the US.

As the saying goes "Birds of the same feather flock together"
Yeap! That is the exact reason by Malta is offering "financial services". Arms'length transactions do not need these "financial services".