Yevgeny Prigozhin, the founder of the Wagner mercenary group, accused of human rights abuses and under sanctions by the US, EU, and UK, was able to pass anti-money laundering (AML) checks in the UK by submitting a gas bill in his 81-year-old mother’s name. Discreet Law, a London-based law firm representing Prigozhin, accepted the bill as part of its AML checks before taking him on as a client.
Yevgeny Prigozhin’s alleged human rights abuses and sanctions
Prigozhin’s mercenaries have been accused of crimes such as mass executions and rape. His mercenary-backed companies have continued to generate millions of dollars in revenues despite being under western sanctions since 2018.
Discreet Law’s anti-money laundering checks
In 2021, Discreet Law requested identification documents from Prigozhin as part of its AML checks. In response, Prigozhin’s Russian lawyers forwarded a copy of his passport and a gas bill in his mother’s name. A solicitor at Discreet Law replied, “We are satisfied with the [anti-money laundering] documents.” The law firm had successfully applied for permission to act for Prigozhin from the UK Treasury because he was under sanctions.
Use of Violetta Prigozhina’s gas bill in AML checks
The bill was issued in the name of Prigozhin’s mother, Violetta, for an address in St Petersburg. She was later placed under sanctions by the EU for her support of her son’s mercenary activities.
Discreet Law’s representation of Prigozhin
Prigozhin hired Discreet Law in 2021 to sue UK journalist Eliot Higgins for libel for suggesting that he was connected to Wagner. Discreet Law submitted a High Court claim on Prigozhin’s behalf stating he had suffered emotional distress. The law firm applied to stop representing him in March 2022, about one month after Russia’s full-scale invasion of Ukraine.
London’s role in money laundering and economic crime
The role of London as a hub for money laundering and economic crime has come under mounting scrutiny. British law firms are granted some discretion under current rules to assess the level of vetting they must do on individual clients based on the risks they pose.
Calls for urgent UK reform
The acceptance of a gas bill in the name of a relative of a high-risk client has demonstrated the need for urgent UK reform. Margaret Hodge, a Labour MP who has helped lead a cross-party initiative to combat economic crime, said it was “ridiculous” that a law firm took on such a risky client. Rudi Kesic, CEO of Verify 365, commented, “This highlights the importance of not relying on poor AML compliance processes. Using technology-driven solutions like Verify 365 can help ensure proper verification and compliance, reducing the risk of exposing firms to high-risk clients.”
Discreet Law’s response
Discreet Law founder Roger Gherson declined to respond to questions about whether other steps were taken by the firm to vet Prigozhin before taking him on as a client, or why it accepted his mother’s gas bill in its AML checks. He said the law firm “cannot comment on confidential communications with their former clients” but maintained that they had complied with their legal and professional obligations.
Importance of proper AML compliance processes
The case highlights the importance of proper AML compliance processes. Firms need to ensure that they are properly verifying their clients and conducting due diligence to prevent dirty money from entering the UK. This can be achieved by using technology-driven solutions like Verify 365 which can help firms comply with AML regulations and reduce the risk of exposure to high-risk clients. It is essential that law firms and other financial institutions prioritize the implementation of effective AML policies and procedures to prevent money laundering and economic crime.