Authors: Dejan Milovac (MANS) and Jared Ferrie (OCCRP)
Zoran Bećirović says that he is just an ordinary construction entrepreneur, and is suing the two largest Montenegrin daily newspapers and a civil society organization due to long-term reporting on his large real estate deals and connections with political elites, to which he refers as “unfounded claims”.
Zoran Becirovic
However, leaked banking data and other documents discovered by OCCRP and NGO MANS, their associate in Montenegro, reveal a decade-long trail of suspicious transactions – including transactions with a company and two banks involved in Russian money laundering operations.
Various documents reveal details of a complex land purchase contract from a privatized former military complex, for which a financial expert said was “full of red flags indicating money laundering.”
“My client has always complied with the laws and regulations in every state,” Bećirović’s lawyer said when questioned about those businesses.
However, further investigation of Bećirović’s companies, including the one that participated in the purchase of land from the former president of the Supreme Court, Vesna Medenica, reveals businesses that are even more suspicious.
Troika Laundromat
Bećirović used a company founded by his other company, Caldero Trading Limited, registered in Cyprus, to buy the land from Medenica. Leaked banking data indicate that Caldero Trading was conducting transactions with an offshore company and two Baltic banks that found themselves at the centre of two networks that laundered huge amounts of money from Russia.
During 2006 and 2007, Caldero Trading received 3.4 million dollars from an offshore company called Industrial Trade Corp. The purpose of each of the four transactions that made up this total amount was recorded as “computer equipment”, although it is not known whether Caldero Trading engaged in the trade of technical equipment, while in the available annual reports for the following years it is listed as an “investment holding company”.
Although the reasons behind the transfer are unknown, they are noteworthy because they fit into a broader pattern: between 2006 and 2013, through similar suspicious transactions, Industrial Trade took hundreds of millions of euros from Russia through the account of Lithuanian bank Ukio Bankas.
Documentation of the Ukio Bankas’ bank also indicates that Industrial Trade paid Bećirović’s lawyer Branko Čolović about 26,000 euros for legal representation costs during 2007 and 2008. Čolović declined to comment on that, citing the confidentiality of the relationship between the client and the lawyer.
Those operations placed Industrial Trade at the centre of a massive money transfer operation, discovered by the OCCRP in 2019. Under the title Troika Laundromat, because it was initiated by Troika Dialog, once largest investment bank in Russia, the system laundered huge amounts of money around the world.
Bećirović did not directly answer questions about those transfers or other transfers made through institutions involved in money laundering, but his lawyer, Branko Čolović, dismissed claims that his client may had ties to them.
“My client has no legal obligation to keep documentation on 15-year-old business, but he is convinced that he was never involved in any money laundering scheme,” Čolović said.
“My client only controls his business and his business decisions”, he said. “Your attempts to establish links between my client and the alleged inappropriate activities of other persons, companies and banks are unfounded.”
Offshore money on the account of the Municipality of Budva
There is another real estate business tied to the Troika Laundromat, which includes close associates of Bećirović. Leaked documents from Ukio Bankas bank show that another company registered in Cyprus used Industrial Trade to transfer funds of unknown origin when buying land in Budva.
In 2006, Danebrook Limited purchased a land lot from the Municipality of Budva. The purchase contract for a valuable location in Reževići stated the price of 4.6 million euros, which had to be paid in two instalments. However, leaked banking data shows that both payments to the Municipality were not made by Danebrook, but by Industrial Trade on their behalf.
Purchase agreement with the Municipality of Budva, worth 4.6 million euros, was signed on behalf of Danebrook Limited company by lawyer Branko Čolović.
During 2006 and 2007, Danebrook continued to purchase land in Budva, this time from private owners. In this case as well, the money was paid by Industrial Trade, in the total amount of 9.4 million euros.
The following year, Danebrook transferred ownership of its purchased property in Budva to its subsidiary, DL Montenegro. In that process, the total value – at least on paper – rose from about 14 million to 96 million euros.
Since its shares were transferred between so-called “fictitious” companies, the owners of Danebrook company, registered in Cyprus, remained hidden.
As then Danebrook’s legal representative, Čolović also did not wish to answer questions about the origin of the funds or the reason for the sharp, sudden increase in the value of the property that the Cypriot company bought.
He denied that Bećirović was involved in this business, but also refused to say who was behind the Danebrook company.
“I no longer represent that company and I do not have the authority to disclose information about its business to anyone”, Čolović said.
In addition to Bećirović’s lawyer, another of his close associates was involved in the transfer of real estate from Danebrook company to DL Montenegro.
The Executive Director of DL Montenegro was Vukota Popović, who is now the director of several companies whose ultimate owner is Caldero Trading – the very Bećirović’s company that was also involved in his purchase of land from the former president of the Supreme Court of Montenegro.
Back then, DL Montenegro’s headquarters were in Avala, a hotel in Budva bought by Bećirović and at least one other Russian partner, when it was privatized by the government in 2004.
Russian Laundromat
Caldero Trading also took part in another series of suspicious transactions, when in 2007 it bought, and soon after sold, a land lot on Montenegrin coast, with a large profit.
Privatized former military complex in Reževići was bought in 2005 by Russian investors through Spartak, their company registered in Montenegro. However, although the Russians paid only 2.3m euros, two years later, Bećirović’s Caldero Trading spent 14.2 million for the purchase of their company, which had this land lot as the only property.
Caldero Trading transferred funds to the account of the owner of Spartak in the bank Trasta Komercbank. Latvian bank was one of the financial institutions at the centre of another money laundering mechanism discovered by the OCCRP, called the Russian Laundromat. The network laundered 20.8 billion dollars from Russia between January 2011 and October 2014.
That purchase represented a 500% increase in the value of the land in just two years – but only a few days later, the value rose once more, this time almost threefold. A week after buying the land, Bećirović sold it once again on September 6, 2007. Caldero Trading received € 41.7 million for these assets from a company registered in the British Virgin Islands called Montenegro Real Estate Investment Company Limited.
The purchase contract was signed by the company’s legal representative – Ana Kolarević, sister of Milo Đukanović. The company from the British Virgin Islands was founded on August 30, 2007, the day before Caldero Trading agreed to buy Spartak and their land from the Russians.
Ray Blake, a financial expert from the UK, said the series of transactions involving real estate was “full of red flags indicating money laundering”.
Warning signs included “a large increase in the apparent value of the property without a clear reason, as well as a non-transparent corporate/legal structures – again without a clear reason, except to disguise the identity of certain persons”.
In his email, Blake said that “the speed and manner in which the transactions were carried out were also supposed to trigger alarms”.
Bećirović’s legal representative did not comment on the sharp increase in the value of the property and the origin of the funds used for the purchase, but he stated that Bećirović had nothing to do with the choice of the bank that the land buyer chose to transfer the funds.
The real owners of the company from the British Virgin Islands, which bought the land from Caldero Trading, are unknown. However, Mohamed Borhan Rachid, a Canadian citizen, who appears to be the same man convicted of large-scale corruption in Palestine in 2012, is listed as its director.
Privatization fever
Privatization fever in Montenegro coincided with the separation of Montenegro from Serbia in 2006, when gaining of independence meant the final split of the republics that once made up Yugoslavia. Privatization process was overseen by Đukanović’s Democratic Party of Socialists, which was founded in 1991 on the remnants of the Communist Party, which ran Montenegro since World War II.
Bećirović and his partners were among those who reaped the fruits of privatization, buying state property at very cheap prices.
Around the same time he bought and sold the privatized military complex, Bećirović was involved in another controversial land deal that attracted attention of the local media.
In 2006, through a company registered in the British Virgin Islands, called Beppler & Jacobson Ltd., Bećirović and his partners bought nearly 300 hectares of state-owned land in Kolašin in north-eastern Montenegro for just 120,100 euros. The assets were part of a bankrupt state-owned agricultural enterprise that was privatized.
However, four years later, when the assets were transferred to one of his companies, a certified appraiser estimated the value of the land at 9.8 million euros, which is more than 80 times the value he paid.
Bećirović did not respond to the question that was submitted to him through his lawyer Čolović on why the value of this property increased so sharply in such a short period of time.
Additional reporting Miranda Patručić (OCCRP), and investigation Amra Džonlić (OCCRP ID)
Ties with Đukanović family
According to Čolović, Bećirović lived in Russia for some time, moving there after spending a certain period in Cyprus. When he returned to his homeland, Bećirović worked closely with some of the most powerful people in the country. Đukanović family was among them, and that relationship proved to be mutually beneficial.
While Đukanović family helped him with businesses such as the purchase of the Avala Hotel, Bećirović did them favours as well. When bank Prva banka Crne Gore – controlled by the President’s brother Aco Djukanovic – had problems paying bills and depositors, Bećirović’s Caldero Trading kept its accounts in that bank, at an interest rate of only 2 %, while other depositors received from 5 to 8 %.
According to an audit report into which OCCRP had an insight, commissioned by Montenegro’s Central Bank from PricewaterhouseCoopers, Prva Banka violated anti-money laundering laws by giving loans to Bećirović’s companies and other clients – mostly friends and associates of the owners – without previously analysing them thoroughly. Montenegrin government eventually had to bail out Prva Banka after the bank prevented clients from withdrawing their funds because it did not have the funds to cover it due to unpaid loans it gave to privileged clients.
The audit report also shows that Bećirović transferred a total of 5.6 million euros to Aco Đukanović. The purpose of these transfers is not clear, Čolović did not provide an explanation, while Prva Banka did not answer the questions sent to the office of the bank’s director.
Loans and bank guarantees to Bećirović’s companies and their partners were the subject of attention of the Central Bank of Montenegro. Central Bank ordered Prva banka – in which Bećirović’s brother Dragan was also a minority shareholder – to reduce its exposure to this businessman. The first bank did not comply with that order.
Čolović denied that Đukanović or other elite in Montenegro had been helping his client in business for years.
He emphasized that Bećirović eventually had to “seek justice through a very expensive and demanding court process” in Great Britain, after there was a disagreement between him and the Russian entrepreneur Lazurenko after the purchase of Avala Hotel.
“I can assure you that, contrary to popular belief, my client did not benefit from his personal connections in Montenegro, instead, it was often just the opposite,” his lawyer said.
Business with Vesna Medenica
Vesna Medenica left the leading position in the Supreme Court during her controversial third term, which was criticized by the European Union and others, because it was a violation of the constitutional limit on two appointments to that position. Last year of her work is also overshadowed by allegations of possible corruption after she sold the land to Bećirović – a deal that is the backbone of his lawsuit.
MANS submitted requests based on the Law on Free Access to Information and revealed that in 2015, Bećirović bought a land lot from Medenica for 139,000 euros. The Tax Administration of Montenegro estimated that the value of the land is 10 times lower. Medenica did not report the sale, although it is required by the law.
At the end of 2019, MANS published this information online and on television, together with the daily newspapers Dan and Vijesti. Bećirović then sued all three organizations for defamation, and the case is ongoing. His lawyer, Branko Čolović, said that the lawsuit was a response to years of unfair reporting on Bećirović.
“The lawsuit is not a consequence of my client’s caprice or personal animosity, but a real need to protect his business interests and reputation, which are endangered by politically motivated activities and an aggressive unfounded campaign, which is continuously directed against him by the opposing side”, Čolović said in an e-mail, accusing the three organizations of publishing “unfounded claims”.
In a statement given before her resignation, Medenica said she reported “all changes in income and assets … in accordance with the Law on Prevention of Corruption”. However, her report to the Agency for Prevention of Corruption did not mention 139,000 euros she earned by selling the land to Bećirović.
Medenica dismissed allegations that she sold the property at an inflated price. She told OCCRP that she sold the land plot, whose value she estimated at 15 euros per square meter, for only 5 euros per square meter. She did not answer further questions on how she came up with the figure of 15 euros. The Tax Administration estimated the value of the property at about 45 cents per square meter.
Medenica also dismissed allegations that her third term as the president of the Supreme Court was unconstitutional. She said that her first term does not count since it ended before the constitution was amended, and a two-term limit was introduced.
