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Montenegrin Tycoon’s Lawsuit Against Media Highlights a Trail of Controversial Deals

Zoran Bećirović says he’s an ordinary property developer, and he’s suing Montenegro’s two biggest newspapers and a civil society organization for years of reporting “baseless claims” against him in their coverage of his high-profile land deals and connections to political elites.

But leaked bank records and other documents uncovered by OCCRP and its partner in Montenegro, the civil society group MANS, reveal a decade-and-a-half long trail of suspicious business –– including transactions with a firm and two banks involved in Russian money laundering operations.

Separate documents expose details of a complicated land deal for a privatized former military complex that a financial compliance expert described as being “littered with money laundering red flags.”

“My client always complied with the law and regulations in any country,” Bećirović’s lawyer said in response to questions about those deals.

Bećirović’s dealings also highlight his connections to members of Montenegro’s political, legal, and business elite. His associates include family members of President Milo Đukanović, as well as the country’s former top judge, government ally Vesna Medenica.

She vacated her post as head of the Supreme Court while serving a controversial third term that was criticized by the European Union and others for violating the constitutional limit of two appointments to the position. Her final year was also marred by allegations of corruption following her sale of a plot of land to Bećirović –– the deal at the heart of his lawsuit.

Credit:

Courtesy of DAN newspaper

Vesna Medenica and Zoran Bećirović.

Journalists at MANS filed freedom-of-information requests and discovered that Bećirović bought a parcel of land from Medenica for 139,000 euros in 2015. The country’s tax office estimated the land’s value as 10 times lower. And Medenica failed to report the sale, as required by law.

MANS published that information online and on television in late 2019, along with the newspapers DAN and Vijesti. Bećirović then sued all three organizations for libel, and the case is ongoing. His lawyer, Branko Čolović, said the suit was a response to years of unfair reporting about Bećirović.

“The lawsuit is not the consequence of my client’s caprice or personal animosity, but a real need for protection of his business interests and reputation jeopardized by politically motivated activities and the aggressive unfounded campaign the opposite side is continuously directing against him,” Čolović said in an email, accusing the three organizations of publishing “baseless claims.”

But further investigation of Bećirović companies, including one involved in the purchase of land from Medenica, reveal even more suspicious dealings.

🔗Medenica’s Response

Medenica resigned as head of the Supreme Court in December, the same month a coalition of reformist former opposition politicians formed a new government.

Through a statement from her office before her resignation, Medenica said she had declared “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 include the 139,000 euros she earned from selling the land to Bećirović.

Medenica denied that she sold the property for an inflated price. She told OCCRP that she sold the parcel, which she valued at 15 euros per square meter, for just 5. She did not respond to follow-up questions about how she arrived at the 15 euro figure. The tax office evaluated the value of the property at about 45 cents per square meter.

Medenica also rejected accusations that her third term as Supreme Court president was unconstitutional. She said her first appointment did not count because it ended before the constitution was amended to introduce a two-term limit.

Troika Laundromat

When Bećirović purchased the former judge’s land, the company he used was a subsidiary of the Cyprus-registered
Caldero Trading Limited
, which he founded and is a director of. Leaked bank records show that Caldero Trading has conducted transactions with an offshore firm and Baltic banks at the center of two networks that laundered huge amounts of money out of Russia.

In 2006 and 2007, Caldero Trading received $3.4 million from an offshore company called Industrial Trade Corp. The purpose of each of the four transactions that made up this total was listed as “computer equipment,” though Caldero Trading is not known to trade in technology, and annual reports available in later years list it as an “investment holding company.”

While the reasons behind the transfers are unknown, they are noteworthy because they fit a larger pattern: Through similarly suspicious transactions, Industrial Trade channelled hundreds of millions of euros out of Russia through accounts at Lithuania’s Ukio Bankas between 2006 and 2013.

These operations placed Industrial Trade at the heart of a massive money movement scheme uncovered by OCCRP in 2019. Called the Troika Laundromat because it was set up by Troika Dialog, once Russia’s largest investment bank, the system laundered vast quantities of money across the world.

Bećirović did not directly answer questions about those transfers or others made through institutions involved in money laundering, but
Čolović
rejected assertions that they implicated his client.

“Please note that my client doesn’t have a legal obligation to keep records of 15 years old business deals, but he is confident that he has never been involved in any kind of money laundering scheme,” said Čolović.

There is another property deal linked to the Troika Laundromat that involves close associates of Bećirović. Leaked Ukio Bankas records show that another Cyprus-registered company used Industrial Trade to transfer funds of unknown origin when it purchased land in Budva, a city on Montenegro’s Adriatic coast.

The company, called Danebrook Limited, bought the piece of land from the municipality in July 2006. The purchasing contract for the prime waterfront location listed a price of 4.6 million euros, to be paid in two installments. However, leaked bank records show that both transfers were made to the municipality not by Danebrook, but by Industrial Trade on its behalf.

Throughout 2006 and 2007, Danebrook continued buying land in Budva, this time from private owners. The 9.4 million euros it paid for several parcels were again sent by Industrial Trade.

The following year, Danebrook transferred ownership of all of its Budva purchases to a subsidiary called DL Montenegro. In the process, the total value — at least on paper — shot up from about 14 million to 96 million euros.

Because its shares were transferred among shell firms, the owners of the Cyprus-registered Danebrook are hidden.

Čolović had signed the purchase agreement for the 4.6-million-euro-waterfront property on behalf of Danebrook. He did not comment on the origin of the funds, or the reason for the dramatic, sudden increase in the value of the properties Danebrook purchased. He said Bećirović was not involved, but he declined to identify the individuals behind Danebrook.

“Mr. Bećirović has never been a part of either the ownership or the management structure of the company Danebrook Limited,” Čolović said. “I no longer represent that company and have no authorization whatsoever to provide information on its business operations to anyone.”

Aside from Bećirović’s lawyer, another close associate of his was involved in the transfer of Budva properties from Danebrook to DL Montenegro.

The executive director of DL Montenegro was Vukota Popović, who is now a director of several companies ultimately owned by Caldero Trading –– the same Bećirović company involved in his purchase of land from Montenegro’s former top judge. DL Montenegro did not respond to a request for comment.

DL Montenegro listed its headquarters as the Avala, a hotel in Budva acquired by Bećirović and at least one Russian partner when the government privatized it in 2004.

Bećirović’s purchase of the Avala was mired in controversy and became the subject of a legal dispute that was resolved in his favor by Đukanović and his sister.

Bećirović and a Russian national named Igor Lazurenko managed to acquire it from the government for 3.2 million euros. But a Dutch hospitality company filed a complaint, as it had made an offer more than twice as high.

The dispute was settled by the Council of the Montenegrin Supreme Court, which included Ana Kolarević, the sister of President Đukanović. The deal was then formally approved by the country’s privatization council, which was chaired by Đukanović, who was at the time serving as prime minister.

After the deal was finalized, Kolarević left the council and started her own law firm. The British company that was controlled by Bećirović, and had bought the Avala, became one of her first clients.

Russian Laundromat

Caldero Trading also took part in another series of suspicious transactions when it acquired and quickly sold a plot of land on Montenegro’s coast at a huge markup in 2007.

The former military complex had been privatized by the government and acquired by Russian investors two years earlier via their Montenegrin company, Spartak. But though the Russians had paid just 2.3 million euros, Bećirović’s Caldero Trading spent 14.2 million to acquire their company, which held the land as its only asset.

Caldero Trading transferred the funds into an account Spartak’s owners held with Trasta Komercbanka. The Latvian bank was one of the financial institutions at the heart of another money-laundering system uncovered by OCCRP called the Russian Laundromat. The network laundered $20.8 billion in Russian funds between January 2011 and October 2014.

That purchase represented a 500-percent increase in the land’s value in just two years –– but just days later, it would nearly triple once again. A week after buying the land, Bećirović sold it once more. On September 6, 2007, Caldero Trading received 41.7 million euros for the property from a firm registered in the British Virgin Islands (BVI) called Montenegro Real Estate Investment Company Limited.

The sales contract was signed by the BVI firm’s legal representative — Đukanović’s sister Kolarević, who had previously helped resolve the Avala hotel dispute in Bećirović’s favor. The BVI company had been incorporated on August 30, 2007, one day before Caldero Trading agreed to purchase Spartak and its land from the Russians.

Ray Blake, a U.K.-based financial compliance expert, said the series of transactions involving the property was “littered with money laundering red flags.”

Warning signs included the “large increase in apparent value of an asset without a clear reason why, and the opaque corporate/legal structures employed — again without a clear reason why other than to obscure the identity of individuals.”

“The rapidity of transactions that could have been consolidated” should also have raised alarms, Blake wrote in an email.

Čolović did not comment on the large property value increase or the origin of the funds used to make the purchase, but said: “Obviously, my client has nothing to do with the seller’s choice of the bank hosting their bank account to which they requested the payment to be made.”

The true owners of the BVI company that bought the land from Caldero Trading are unknown. But its director was listed as Mohamed Borhan Rachid, a Canadian passport holder who appears to be the same man convicted in 2012 of large-scale corruption in Palestine.

🔗The Palestinian Connection

The PA reportedly sought Canada’s help in tracking down some of the stolen funds. Rashid, who also goes by Khaled Salam, was granted Canadian citizenship in 2003 under mysterious circumstances. His whereabouts remain unknown, although Palestinian prosecutors said at the time that they believed he was living in London.

In 2017, Middle East Eye published a document from the International Criminal Court, which stated that Rashid was under investigation, along with Mohammed Dahlan, for alleged crimes committed during Libya’s civil war. The court said the men were wanted in connection to Saif al-Islam Gaddafi – son of the former Libyan dictator Moammar Gadhafi – who was accused of crimes against humanity, including the murder of civilians.

Like Rashid, Dahlan is connected to both Palestine and Montenegro. Reportedly a “former Palestinian spy chief,” he received Montenegrin citizenship in 2010. Dahlan has been involved in real estate deals in Montenegro and has been photographed alongside President Đukanović.

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Aerial view of the privatized military complex, which Bećirović’s Caldero Trading bought and immediately sold at a huge mark-up. Credit: MANS

Privatization Spree

At around the same time he bought and sold the privatized military complex, Bećirović was involved in another controversial land deal that garnered attention in local media.

In 2006, through a BVI-registered company called Beppler & Jacobson Ltd, he and his partners purchased almost 300 hectares in the northeastern resort town of Kolašin for just 120,100 euros. The property was part of a bankrupt state-owned agricultural enterprise that had been privatized. But four years later, when the property was transferred to another of his companies, a licenced appraiser assessed its value at 9.8 million euros — more than 80 times what he had paid.

Bećirović did not answer a question submitted through his lawyer, Čolović, about why this property increased in value so dramatically over such a short period of time.

Montenegro’s privatization spree coincided with its split from Serbia in 2006, with the new nation’s independence marking the final fracturing of the republics that had formed Yugoslavia. The privatization process was overseen by Đukanović’s Democratic Party of Socialists, which was formed in 1991 from the remains of the communist party that had run Montenegro since the Second World War.

Bećirović and his partners were among those who reaped the rewards of privatization, buying up state properties at discount prices. The period also saw an influx of Russian investors, with many Montenegrins taking out loans to purchase land to resell to them. Bećirović worked with some of these investors.

Bećirović had spent time in Russia, according to Čolović, moving there after a period of living in Cyprus. By the time he returned to his homeland, Bećirović was rubbing shoulders with some of the most powerful people in the country. These included the Đukanovićs, and that relationship proved to be mutually beneficial.

While the Đukanovićs helped him out in deals like the Avala hotel purchase, Bećirović did favors for them too. When First Bank of Montenegro — which is controlled by the president’s brother Aco Đukanović — was struggling to pay its bills and depositors, Bećirović’s Caldero Trading maintained its accounts at an interest rate of only 2 percent, while other depositors received 5 to 8 percent.

According to an audit report obtained by OCCRP, which Montenegro’s Central Bank commissioned from PricewaterhouseCoopers, First Bank flouted anti-money laundering laws by providing loans to Bećirović’s companies and other clients — mainly friends and associates of the owners — without properly assessing them. Montenegro’s government eventually had to bail out First Bank after it stopped allowing customer withdrawals, because it didn’t have funds to cover them due to unpaid loans to preferred clients.

The audit report also shows that Bećirović transferred to Aco Đukanović a total of 5.6 million euros. The purpose of these transfers is unclear, and his lawyer did not provide an explanation, while First Bank did not reply to questions sent to the office of its president.

The loans and bank guarantees to Bećirović companies and their partners were of particular concern to Montenegro’s Central Bank. It ordered First Bank –– which included Bećirović’s brother, Dragan, as a minority shareholder –– to reduce its exposure to the businessman. First Bank did not comply with the order.

Čolović denied that the Đukanovićs or other elites in Montenegro had helped his client in business over the years.

He noted that Bećirović had ended up having “to seek justice through a very expensive and demanding legal case” in the U.K. after he and Lazurenko, the Russian businessman, had a dispute following their purchase of the Avala hotel.

“I want to assure you that contrary to common belief, my client did not benefit from his personal connections in Montenegro, but often it was very much the opposite,” the lawyer said.

Miranda Patrucic (OCCRP) contributed reporting. Amra Džonlić (OCCRP ID) contributed research.

www.occrp.org

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