Gemstones for a Prosecutor
Ilya Shumanov, Elizaveta Tsybulina, Roman Romanovsky



This investigation is a collaboration between Transparency International Russia and an Australian TV channel ABC.

15.02.2021
Exporters of Russian jade, who are suspected in money laundering, brought a Russian Deputy Prosecutor General's 21 year old son in as a partner. After this, the prosecutor's relatives acquired property worth millions of dollars, and the investigation has stalled due to inactivity from the Prosecutor General's Office
A mining engineer Evgeny Didikov suddenly died. In 2016, he made a business trip to Buryatia with his colleagues. He had to work roughly 180 kilometers to the west of Irkutsk at a jade mining factory. Jade is referred to as "the stone of life" in China. On that day, Didikov fulfilled all of the Chief Engineer's instructions — the only thing left to do was to check whether boundary pillars were positioned at the border of the forest area on the jade mining factory's eastern side. A local watchman gave him a lift there on a quadracycle. When Didikov was on his way down to the lowland at the forest area's border, an avalanche occured in the mountains. Only Ministry of Emergency Situations' rescue workers managed to find his body. Didikov was just a little over 30 years old. He was survived by his wife, as well as his child, who wasn't even one year old.

Dead mining engineer Evgeny Didikov, via social network Odnoklassniki
The danger of avalanches in the place where the mining engineer died was no secret to his employer, the BaikalKvartsSamotsvety company. However, the company decided to refuse the payment of forty thousand dollars to the relatives of the deceased. The relatives requested this money to at least somewhat compensate for the loss of their breadwinner. The relatives had to seek legal redress in the Irkutsk District Court. However, it bore little fruit: the court ordered the employer to pay the family a sum that was five times smaller than they had requested.

As Transparency International Russia discovered, the BaikalKvartsSamotsvety company was hardly destitute back then; same goes for its managers and owners. At the time, they had more than twenty bank accounts opened in faraway Australia. They could purchase jewelry and watches worth more than 100 thousand dollars during one visit to a shop. Therefore, back in 2013 Australian law enforcement officials suspected the owners of BaikalKvartsSamotsvety of trade-based money laundering due to discrepancies between their official income and their expenditures; they froze the company owners' bank accounts with more than 30 million dollars on them.
What TBML is?
Trade-Based Money Laundering is a popular way of laundering illicit funds through conducting fake deals.

Perpetrators use inflated prices of the goods they import; other popular methods include undervaluing the goods, billing the same goods multiple times, inflating or undervaluing the volume of deliveries, as well as faking declarations. TMBL can be used as a way to launder money received from drug trade, pirated goods, smuggling, corruption or fraud, i.e. TBML is normally just one component of a criminal act.
After several years, Australians still haven't received any help from Russian law enforcement agencies. While Australians were hoping to get help from their Russian colleagues, a Russian Deputy Prosecutor General's son became a co-owner of BaikalKvartsSamotsvety.
A Scandal in Australia
Nine Russians who accused of stashing almost $30 million of dirty money, via The Sunday Mail
A scandal involving nine Russians in Australia became known back in 2014. As Kommersant reported at the time, entrepreneurs from Irkutsk named Andrey Gudkov, Vladimir Strelnikov, Eduard Karmadonov and Eduard Zelinsky, their wives, and Sergey Kostyukov, their business partner, became the focus of attention of the Australian Federal Police. Their problems began after the police noticed how much money they were spending. The sums did not correspond with the incomes they declared when they were receiving Australian visas. In their declarations and accompanying documents, the entrepreneurs indicated that each of them had several thousand dollars of yearly income. Meanwhile, millions were being transferred from China and Hong Kong to their Australian bank accounts (see figure showing money being transferred to Russians' accounts).

The Irkutsk natives led a luxurious life abroad. For example, Karmadonov and his wife alone paid more than 40 thousand dollars for their vacation in Thailand and in Switzerland, more than 30 thousand dollars for a hotel at a resort in Sardinia, and more than 18 thousand dollars for a hotel in Venice.

However, the official yearly income declared by Karmadonov when he was applying for a visa didn't exceed 25 thousand dollars. This was mentioned by a police spokesperson in 2013 during a testimony in the Brisbane District Court, according to the Courier Mail, a local newspaper. The court decided to freeze the Russians' bank accounts.

At the time, their property in Russia included, for example, Angaria, a bankrupt ice cream factory in Irkutsk Oblast that couldn't even satisfy all of its creditors' claims due to "insufficient assets".
How much money Karmadonovs' married couple have spent on luxury hotels
The Russian entrepreneurs spent a long time in court, trying to appeal the actions of the Australian police and the freezing of their accounts. They even managed to stop the trial documents from being disclosed, after which the judicial proceedings disappeared from the public eye for a long time. However, as we have learned, the police resumed their investigation in 2017.

Together with journalists from the ABC television channel, we obtained some documents of that criminal case. In them, an Australian Federal Police officer Anthony Glenn Muller noted that the money on the Russians' deposits in the Australian ANZ bank could not be proven to have legal origin.

For a long time, Australia's law enforcement officials were waiting for their Russian colleagues to assist them. Back in late 2015, the Australian Federal Police intended to conduct a joint investigation with policemen from Irkutsk, but, according to a British newspaper Daily Mail, this plan was never approved by Russian authorities.

According to the Russian law, requests by foreign law enforcement officials that concern Russian citizens must be reviewed by the Prosecutor General's Office. We managed to discover that the family of at least of the Office's employees is connected with an entrepreneur from the Australian case.
Property of the Gudkov family
Andrey Gudkov and his wife, whose bank accounts were frozen in Australia, are the kind of people who avoid the spotlight. They were spending large sums of money not only in Australia, but also in Russia and Europe. The wife, Natalia Gudkova, owns a Porsche Cayenne Turbo off-road vehicle worth roughly 140 thousand dollars, as well as two luxury apartments in a house in Furmanny Lane (126.3 square meters and 78.5 square meters) worth roughly 2 million dollars. Another 108.4 square meter apartment in the same house, worth roughly 1.345 million dollars, turned out to be registered to Valentina Gudkova, who is Natalia Gudkova's mother-in-law. In 2016, it was handed over to another relative.
Andrey Gudkov, via photofisher.livejournal.com
Natalia Gudkova, via Instagram
In 2017, Natalia and Andrey Gudkov purchased an apartment in the Italian part of the French Rivera - in the Ospedaletti commune near Nice and the Principality of Monaco. The seven-room apartment (184 square meters) is located in a small house on the second line from the sea. Transparency International Russia estimates that its cadastral value is slightly higher than 200 thousand euros.

All in all, the Gudkov family has more than 30 pieces of real estate in Russia and abroad. Their overall cost is above 13.4 million dollars. The official income of the Gudkovs, as declared when they were applying for an Australian visa, was several tens of thousands of dollars. This begs the question: how could they afford all of that property?
A Nephrite Boy
As Transparency International Russia discovered, Dmitry Zakharov, a son of Russian Deputy Prosecutor General Alexey Zakharov, is a business partner of the Russians who caught the eye of the Australian police.

In 2015, Dmitry Zakharov became the owner of 16% Deo, the company that owns BaikalKvartsSamotsvety, one of the oldest semi-precious stone mining enterprises (including jade) in Irkutsk Oblast. The majority of the company (84%) is controlled by Andrey Gudkov, one of the nine Russians mentioned in the Australian investigation. Partners of Gudkov, whose accounts were frozen in Australia, were owners of BaikalKvartsSamotsvety until 2015.

Russian Deputy Prosecutor General's son Dmitry Zakharov, via social network Vkontakte
Zakharov Jr. was 21 years old when he acquired his share in the company. At the time, he was into his fourth year of studying at Moscow State Law University (MSAL).
How did a son of Russian Deputy Prosecutor General manage to become a co-owner of a jade business at such young age? Besides, wasn't this connected with the investigation by Australian policemen who hoped to get assistance from their Russian colleagues, but never got it? We reached Dmitry Zakharov on the phone to ask him about it. After we asked him our question, he hung up and stopped answering calls. He didn't answer the voice message as well. Zakharov Sr. also didn't answer our inquiry.
A business that belongs to a Deputy Prosecutor General's son.
Deputy Prosecutor General's son has been involved in business activities since he was twenty. One of his earlier companies - Pervaya Liftovaya Kompaniya - turned out to be registered at the same address as an apartment belonging to Zakharov Jr. Dmitry Zakharov started this company in 2014, after he turned 20. He closed it in 2019, apparently not having carried out a single major project. Zakharov's business partners in this company were, among others, Maxim Chengaev's ex-wife. Chengaev is former head of the Ministry of Defense's construction department.

In another company called Tsifrovye Tekhnologii Logistiki, a banker named Sergey Dolgov was a partner of Russian Deputy Prosecutor General's son. In 2018, his bank called FPK lost its license for numerous violations of anti-money laundering legislation.

Also, Dmitry Zakharov is registered as a sole proprietor. Insurance is stated as his main line of business. Zakharov Jr. obtained his sole proprietor status in March 2018. In April, he already became an insurance broker at the Sogaz company, which is currently headed by Anton Ustinov, a nephew of a former Prosecutor General who used to study at the same faculty of the Saratov State Academy of Law as Dmitry Zakharov's father, except Ustinov graduated three years later).
Stones for China
The BaikalKvartsSamotsvety company is just half an hour drive from Irkutsk; it's located in a small village called Smolenshchina. The history of this enterprise starts in 1966. Back then, it was a survey crew working under the USSR Ministry of Geology. It discovered more than ten deposits of jade, charoite, lazurite and other semi-precious stones. Right now, there are around 56 jade mining factories in Russia. Most of them are located in Buryatia. More than ten of those were discovered by geologists working for BaikalKvartsSamotsvety. The Ospinskoye mining factory where, under a license valid until 2024, BaikalKvartsSamotsvety surveys and extracts mineral resources, is also located in Buryatia. This is also the place of death of Evgeny Didikov, an engineer whose family failed to receive the compensation of forty thousand dollars from BaikalKvartsSamotsvety.

BaikalKvartsSamotsvety's revenue exceeded 3 million dollars in 2019. For example, the company's website offers a jade ring for 161 dollars; and a large writing set with the coat of arms and the flag of Russia for more than 6700 dollars. However, data on BaikalKvartsSamotsvety's international trade show that its chief business is export transactions.

According to an international trade transactions database ImportGenius, eight Chinese companies received more than 200 tons of raw jade worth 5.3 million dollars from 2013 to 2020 under the contracts with BaikalKvartsSamotsvety. It means that the average price was around 27 dollars for 1 kilogram of raw jade. However, jade is usually worth much more than that in China.
The large writing set for more than 6700 dollars, via BaikalKvartsSamotsvety online shop
There are many varieties of jade: from white and pale green to blue and even black. The Ospinskoye mining factory extracts ultramarine green jade, as well as one of the most expensive varieties of jade - cat's eye.
The real price of a generic variety of jade is roughly 50-100 dollars [per kilogram]. However, the Ospinskoye mining factory also extracts so-called cat's eye. I know that a large shipment of cat's eye was sent to Dongning, Heilongjiang (there is a jade exchange in that city) in 2015. The price was 15 thousand dollars per kilogram. It means that in Beijing the cost is going to be from 10 to 50 thousand dollars per kilogram
Evgeny Kislov
head of the Laboratory of Geochemistry and Ore Genesis at the Siberian Branch of the Russian Academy of Sciences
Prosecutor with a cellar
The declaration by ex-Deputy Prosecutor General Zakharov does not include any large real estate objects. According to this document found at the Prosecutor General's Office website, his only property is a 5 meter root cellar. However, thanks to the Australian story that involved BaikalKvartsSamotsvety, we learned some details about expensive property, business and extensive connections of Russian Deputy Prosecutor General's relatives. We learned that his mother and son have millions of dollars worth of real estate registered in their names.

It wasn't only jade business that connected the relatives of Deputy Prosecutor General with Andrey Gudkov, the man who got famous for his Australian assets. There were also luxury apartments.

Russian Deputy Prosecutor General Alexey Zakharov, via epp.genproc.gov.ru
In 2015, Dmitry Zakharov, who at the time was into his fourth year of studying at university, bought a 135 square meter apartment in a Moscow housing complex called Dom Na Smolenskoy Naberezhnoy from Andrey Gudkov's mother-in-law, Larisa Guzhikhina. "This luxury house is located near the Arbat and the Embassy of the United Kingdom. The entrance lobby is a double-height hall with stained glass. Interior of the hall is decorated with onyx and rare types of wood," boasted the real estate agents. On average, an apartment like Zakharov's costs around 1.8 million dollars.
Housing complex called Dom Na Smolenskoy Naberezhnoy, where Dmitry Zakharov bought a 135 square meter apartment, via Stone Bridge Estate
In 2017, Zakharov Jr. became the owner of another, slightly less expensive 100 square meter apartment in the Mosfilmovsky housing complex. This apartment's cost is around 670 thousand dollars.
Mosfilmovsky housing complex, where Dmitry Zakharov bought 100 square meter apartment, via mosfilm.ndv.ru
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Retired person's property
Valentina Zakharova, Deputy Prosecutor General's mother and Dmitry's grandmother, moved from Voronezh Oblast to Moscow Oblast in the early 2000s. It was then that she developed a keen interest in real estate, even though she hadn't been noticed doing any business before that. Since then, she obtained several apartments, which together cost above 6.7 million dollars.
Valentina Zakharova obtained one of these apartments, located in the center of Moscow in Furmanny Lane, via a swap in 2012 with Tatiana Radionova, the mother of Svetlana Radionova, head of the Federal Service for Supervision of Natural Resources (Alexei Navalny told about her in his investigation in 2020). Svetlana Radionova also studied at the same faculty of the Saratov State Academy of Law as Alexey Zakharov. When purchased, this apartment's price was estimated to be around 1.1 million dollars. In 2017, Deputy Prosecutor General's mother sold this apartment to Natalia Gudkova, the wife of Andrei Gudkov, that same man whose accounts were frozen in Australia.

Also, Zakharova, who is a retired person, owns a house in Mitropolye, a luxury community located in Moscow Oblast's Pushkinsky Urban Okrug. This community is located near Sofrino, a village where an enterprise that produces decorative implements for the Russian Orthodox Church is located.

Valentina Zakharova, Deputy Prosecutor General's mother, via Vkontakte
Deputy Prosecutor General's 78-year old mother has a small land lot registered to her in Mitropolye; its area is 1360 square meters. This land lot is almost completely occupied by a four story 707 square meter house. However, one look at the land lot from above shows that Zakharovs' countryside residence is way larger than that. Next to the house, there is another 2700 square meter land lot. On this lot, there is one more house. Rosreestr doesn't show its owner. These two land lots have the same vehicular entrance, there are pathways between the houses, and their territory has a common fence. (The house's address: Mitropolye, ul. Svobody, 57.)
Valentina Zakharova owns a house in Mitropolye, Moscow Oblast, via Transparency International – Russia
Just a couple of houses away from where Valentina Zakharova lives is the residence of her acquaintance — the mother of Tatiana Radionova, head of the Federal Service for Supervision of Natural Resources.

However, this is not all the real estate that this retired woman owns. Deputy Prosecutor General's mother also owns a luxury apartment in an elite housing complex called Knightsbridge Private Park, built four years ago in Khamovniki District of Moscow. According to Rosreestr, Valentina Zakharova owns a 227 square meter apartment that costs around 4 million dollars, as well as three parking spots, costing roughly 100 thousand dollars each.
Knightsbridge Private Park, via housing complex website
By the way, an apartment in the same house was purchased by Valery Voinov, a long-time associate of Zakharov. Voinov used to be the First Deputy Prosecutor of Moscow Oblast, and he currently is the Prosecutor General's Office's chief of staff. He purchased an apartment in Knightsbridge Private Park almost at the same time as Zakharova. However, right now his last name is stated as "the Russian Federation" in Rosreestr.
Family ties and real estate
Valentina Zakharova, a retired person, is so wealthy that she frequently helps her family out. For example, in 2016 her daughter Tatiana Semushkina, who is Deputy Prosecutor General's sister, received an apartment from her as a gift. This 146.5 square meter apartment was located in Dybenko street in Moscow's Khovrino District.

Tatiana is married to Roman Syomushkin, head of the Moscow's Western District Department of the Investigative Committee of Russia. Syomushkin's work is controlled by Grigory Radionov, the prosecutor of the same district, and a brother of Svetlana Radionova, head of the Federal Service for Supervision of Natural Resources. watchdog
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Prosecutor General's Office didn't answer our inquiry about business connections and property of Deputy Prosecutor General's relatives. They also didn't answer why in some cases this property connected the prosecutor's family with the people suspected of money laundering in Australia.

Employees of BaikalKvartsSamotsvety also didn't answer our inquiries about the Australian case and about how Russian Deputy Prosecutor General's son happened to be a co-owner of the enterprise.
In Australia there is a law which stipulates that banks have to report cash transactions of more than 10 thousand dollars to AUSTRAC
Russell Wilson
former jurist at financial intelligence, and a member of the Board of Directors of Transparency International Australia
The expert notes that if the Australian Federal Police noticed this situation, it might mean that cooperation may have started between law enforcement agencies of Russia and Australia. Apparently, this cooperation did not continue - or maybe the investigation concerned a "politically sensitive" issue. Wilson notes that in Australia information about court cases is rarely restricted. In this case, it might have happened due to politics, or maybe because the investigation is still ongoing.
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