The most notorious frauds in the oil sector in the entire history of Russia were plotted by Anatoly G. Loktionov. As the First Vice President of the Rosneft, OAO he has embezzled the Company’s assets worth over USD 1 billion while being involved in the construction of the Naftatrans oil transshipment terminal (a stark violation of law) and using such money laundering schemes that generated him additional profit: one day he has helped himself to his business partner’s USD 4 million. Loktionov is a defendant in a series of judicial proceedings and now is absconding prosecution outside Russia.
Anatoly Loktionov was born in 1947, in 1976 has graduated from the Moscow Aviation Institute. The same year he started his career. He used to work at the Znamya Truda Machine Engineering Plant, Moscow and at the All-Union Research Institute for Physical and Technical Measurements. He used to fill various positions from entry-level employee to top executive. In 1994 he has been appointed Director General of the Petro Trade oil company. In 1998 he has joined the Rosneft state-owned company as a Vice President. Later he has been promoted to the First Vice President. His scope of duties included oil and petrochemical sales of which he has taken advantage for his own profits. The total damage caused to Rosneft by Anatoly Loktionov is estimated at USD 1.3 billion.
Profit Generation: Sales of the State-Owned Oil
As the Rosneft First Vice President Anatoly Loktionov was in charge of the oil and petrochemicals sales. In 2000 he has incorporated the Energo Impex company and set out on his criminal scheme. On behalf of the Rosneft he was selling oil products below market to the Energo Impex under his own control, which in its turn, was selling it to other buyers at full market price. In 2006 he had to rename the company as ‘Highlander International Trading’ and merge it with the Fleming Family & Partners investment fund where he was the primary beneficiary. This way Anatoly Loktionov was fouling his trails which allowed this scheme to last for 10 full years. Over this period he has managed to sell over 30 million tons of oil and approximately 10 million tons of petrochemicals which generated for him USD 1.5 million to USD 18 million of additional income per year.
Making Money: Financial Shenanigans
Being a top executive at the Rosneft, Anatoly Loktionov did not limit himself to mere oil and petrochemical export. He has pulled off a financial scheme that gained him the additional USD 280 Million. He has used a classical buyback scheme with shell companies. It was a three-stage scheme.
As the Rosneft First Vice President, he would sell the Rosneft stock to his shell company Sintez for USD 20 Million. Then this shell would transfer the stock to the Fleming Family & Partners investment fund. The trail is fouled. Then comes the final stage when the fund would sell the stock back to the Rosneft, however for USD 300 million. In a nutshell the scheme looked as follows:
- Stock sold to the Sintez for USD 20 million;
- Stock transferred from the Sintez to the Fleming Family & Partners;
- Final resale of the stock for USD 300 million. The margin between the USD 300 million and 20 million constituted a net profit of USD 280 million.
The Scheme of Laundering Illegal Money
The Swiss bank BNP Paribas undertook to launder Anatoly Loktionov’s illegal money. For this purpose the Bank specialists have developed a money laundering scheme ‘Solutions for Prosperity Planning’. Within the scheme several offshore companies have been set up for Loktionov:
- Boston Manor Ltd;
- Carelink Limited;
- Ranteva Holdings Limited etc.
Each of these companies was investing the client’s ill-gotten money into various business projects with the intent of their laundering. The most headline-making of this projects was the Vysoky Bereg residential project in Anapa. Anatoly Loktionov has not only had his money laundered but also snatched USD 4 million from his business partner and become a defendant in a judicial proceeding.
The money earned from financial schemes and oil and petrochemicals export were spent by Anatoly Loktionov on luxuries and elite properties. To name a few, he has bought a premium-class yacht Verona, a private jet, a palace in Nikolino worth USD 100 million, a villa in Monaco worth Euro 200 million and several residences in England, Geneva and France.