U.K. Donor Said to Have Funneled Russian Money to Tories

LONDON — One of many greatest donors to Britain’s Conservative Get together is suspected of secretly funneling tons of of 1000’s of {dollars} to the celebration from a Russian account, in response to a financial institution alert filed to Britain’s nationwide regulation enforcement company.

The donation, of $630,225, was made in February 2018 within the identify of Ehud Sheleg, a rich London artwork seller who was most not too long ago the Conservative Get together’s treasurer. The cash was a part of a fund-raising blitz that helped propel Prime Minister Boris Johnson and his celebration to a landslide victory within the 2019 common election.

However paperwork filed with the authorities final 12 months and reviewed by The New York Occasions say that the cash originated in a Russian account of Mr. Sheleg’s father-in-law, Sergei Kopytov, who was as soon as a senior politician within the earlier pro-Kremlin authorities of Ukraine. He now owns actual property and resort companies in Crimea and Russia.

“We’re capable of hint a transparent line again from this donation to its final supply,” Barclays financial institution wrote in a January 2021 alert to the Nationwide Crime Company. The financial institution, which maintained among the accounts used within the transaction, flagged the donation as each suspected cash laundering and a probably unlawful marketing campaign donation.

A lawyer for Mr. Sheleg acknowledged that he and his spouse acquired thousands and thousands of {dollars} from his father-in-law within the weeks earlier than the donation. However they mentioned that was “solely separate” from the marketing campaign contribution.

“There may be completely no foundation for suggesting that Mr. Kopytov’s reward for his daughter was supposed as, or for the aim of creating, a political donation to the Conservative Get together,” the lawyer, Thomas Rudkin, wrote in response to questions from The Occasions.

It’s unlawful for political events to simply accept donations of greater than 500 kilos from overseas residents who will not be registered to vote in Britain. Mr. Kopytov will not be listed on the nationwide voter register, information present. It’s not clear why the Barclays alert arrived three years after the donation, or whether or not the authorities had investigated it.

It’s no secret that rich Russian industrialists have given closely to the Conservative Get together over time. Mr. Johnson once played a game of tennis with the spouse of a Russian former minister in alternate for a $270,000 donation. However these donors had been British residents, whereas paperwork filed in Mr. Sheleg’s case say the cash got here from a overseas supply.

For many years, Russian wealth has poured into the London financial system, enriching the attorneys, accountants and actual property brokers who ironed out the main points. British leaders seemed the opposite method, even because the Kremlin sowed disinformation, meddled in elections and tried to co-opt politicians.

Now, as President Vladimir V. Putin of Russia lays siege to Ukraine, Mr. Johnson and his authorities are vowing to vary course and get tough on Russian money. The donation, and Mr. Sheleg’s subsequent ascent within the celebration, reveals simply how troublesome that might be.

Banks in Britain are required to alert regulation enforcement officers to suspected legal habits. They achieve this by means of the Nationwide Crime Company, which receives more than half a million suspicious-activity reports annually. Most come from monetary establishments, however regulation companies, actual property brokers and casinos additionally contribute.

Alerts can embrace stories about suspected terrorist financing, romance scams or profit fraud. Former officers say they obtain so many alerts that some by no means get learn — a truth that may be an obstacle to the federal government’s crackdown on Russian oligarch cash.

There isn’t a indication that the Conservative Get together or Mr. Johnson knew in regards to the supply of the donation as outlined within the alert. However beneath English regulation, political events are answerable for guaranteeing that their donations come from authorized sources.

Attorneys for Mr. Sheleg mentioned that the celebration made no requests for extra data or documentation when he made the donation.

A spokesman for the Conservative Get together mentioned that it accepts cash solely from permissible donors and that each one donations “comply totally with the regulation.” He wouldn’t say whether or not the celebration ever investigated the donation or whether or not it deliberate to maintain the cash.

Mr. Kopytov, whom the alert recognized as the final word supply of the donation, is the daddy of Mr. Sheleg’s spouse, Liliia Sheleg. He served in Ukraine’s pro-Kremlin authorities of Crimea till Russia annexed the realm in 2014. Since then, he has largely disappeared from public view.

Company filings present that he owns two motels in Crimea. The supply and extent of Mr. Kopytov’s wealth on the time of the donation, nevertheless, is unclear. Firm filings from that interval present enterprise connections solely to nonprofit organizations, small or inactive companies, together with his most dear shares price lower than $300.

Mr. Kopytov, in a press release supplied by Mr. Sheleg’s lawyer, mentioned he was a Ukrainian citizen and had not donated to any British political celebration.

“I’ve no real interest in British politics by any means,” he mentioned. “Any donations made by my son-in-law to a British political celebration don’t have anything to do with me or with the cash I gifted to my daughter.”

The alert mentioned that $2.5 million was transferred from Mr. Kopytov’s checking account in Russia in January 2018. That cash pinged throughout Europe between empty financial institution accounts belonging to Mr. Sheleg and his spouse.

Subsequent, the cash landed in an offshore account linked to Mr. Sheleg’s household belief.

5 weeks later, it bounced again into the couple’s joint account in Britain, the information say. The following day, $630,225 was wired to the Conservative Get together’s checking account. The transactions had been made in {dollars}, the information present. The celebration recorded it as a £450,000 donation.

“Kopytov may be said with appreciable certainty to have been the true supply of the donation,” the alert reads.

Mr. Sheleg’s lawyer mentioned that’s not the case. He mentioned the $2.5 million was a present, derived from a property sale, which was transferred to the household belief to repay a mortgage. Mr. Sheleg then borrowed cash from that belief to donate to the Conservative Get together, he mentioned.

Financial institution investigators had been suspicious, nevertheless, as a result of the entire Shelegs’ private financial institution accounts used within the transactions had a stability of zero earlier than the cash from Mr. Kopytov arrived, the report mentioned. All returned to zero when the cash left. This “would make it very troublesome to argue that the donation was in some way from Ehud or Liilia Sheleg’s private wealth,” the alert mentioned, misspelling Ms. Sheleg’s first identify.

Requested in regards to the zero balances, Mr. Sheleg’s lawyer mentioned account balances fluctuate. What’s necessary, he mentioned, was that Mr. Sheleg didn’t depend upon the cash from his father-in-law in an effort to make the donation.

Fast transfers out and in of a number of financial institution accounts, notably between totally different international locations and offshore jurisdictions, are typically indicators of what anti-money-laundering officials call “layering.” The method is meant to cover the supply of the funds, and officers have urged banks to be looking out for such transfers, which can assist clarify why the donation was flagged.

Suspicious-activity stories are confidential by regulation. A spokeswoman for Barclays and a spokesman for the Nationwide Crime Company refused to debate the matter. The crime company typically refers these stories to different companies to analyze. A spokeswoman for the Electoral Fee, the lead company for investigating marketing campaign finance, mentioned it was unaware of any allegations in opposition to Mr. Sheleg.

Mr. Sheleg made a number of extra donations within the following months, together with considered one of £750,000, making him the celebration’s largest donor that 12 months. The paperwork reviewed by The Occasions say nothing about these subsequent donations.

Warnings about Mr. Sheleg’s monetary background and connections to Russia surfaced quickly after the donation and did nothing to sluggish Mr. Sheleg’s political ascent — or to cease the celebration from accepting thousands and thousands extra from him.

Months after the donation, the British political and investigative journal Non-public Eye reported that Mr. Sheleg had hosted Russia’s ambassador in London on the top of the fallout from the annexation of Crimea. Round that point, Mr. Sheleg grew to become companions with a businessman in Cyprus accused of connections to organized Russian crime teams, the journal reported. Photographs confirmed Mr. Sheleg and his enterprise accomplice assembly the president of the Russian republic of Tatarstan.

Attorneys for Mr. Sheleg mentioned he had met the businessman accused of connections to Russian organized crime teams solely “three or 4” instances and was not his accomplice. Mr. Sheleg met with the president of Tatarstan for “enterprise functions” solely, the attorneys mentioned.

By the point these revelations had been revealed, Mr. Sheleg was not only a donor. In fall 2018, he grew to become a treasurer of the Conservative Get together, a place answerable for fund-raising and guaranteeing that the celebration follows campaign-finance guidelines.

The warnings got here on the top of issues about Russian affect in Britain. Kremlin brokers had simply been accused of poisoning a former Russian spy, Sergei V. Skripal, on British soil, igniting livid requires extra sanctions in opposition to Russia.

But when a British opposition lawmaker referred to as for an investigation into Mr. Sheleg’s donations and his “troubling connections” to Russia, the chairman of the Conservative Get together on the time mentioned Mr. Sheleg should not need to reveal the source of his wealth and raised the specter of libel.

And when Mr. Johnson became prime minister in July 2019, he instantly appointed Mr. Sheleg because the celebration’s sole treasurer. Mr. Sheleg conceived of and helped create a secret advisory board, later revealed by the Times of London, made up of ultrawealthy Conservative donors. He was knighted quickly after.

Throughout his time as treasurer, the celebration acquired a surge in Russia-linked donations. Mr. Sheleg additionally donated generously himself: a complete of £3.8 million from 2017 to 2020.

In September 2021, seven months after Barclays alerted regulation enforcement officers to the donation, Mr. Sheleg quietly left his function as celebration treasurer. There isn’t a indication that his departure is linked to any investigation into him, the donation or the supply of his wealth.

Legislation enforcement officers have by no means contacted Mr. Sheleg in relation to his donation, his attorneys mentioned.

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