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TI Georgia: ‘No Proof of Money Laundering’ in TBC Bank Case

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Transparency International Georgia, a local watchdog, released a legal assessment of the money laundering persecution related to TBC Bank , claiming that “there is no basis” in prosecution case, to “prove Mamuka Khazaradze, Badri Japaridze or Avtandil Tsereteli committed a money laundering offense, either individually or as co-conspirators.”

The report, published on May 14, was compiled by Australian barrister Pauline David – an “independent expert on money laundering,” TI Georgia said. Her company bio shows Mrs. David specialized in complex and serious crimes, including proceeds of crime and money laundering, for several respected international bodies, including the Asian Development Bank, DFID and the World Bank, among others.

The legal expert wrote she found no evidence in the case indicating an intention to “launder funds obtained by way of loan,” “to conceal [allegedly] illegal origins of the loan funds,” or “to integrate those funds back into the legitimate economy.”

David drew attention to the distinction between money laundering and money misappropriation as “separate offenses.” The analysis of the evidence, the expert wrote, demonstrated that “whilst the facts in issue in this case are facts which might be capable of supporting a case alleging misappropriation, they do not support a case of money laundering.”

David argued that the facts contained in the case “are not capable of supporting the offense of money laundering under Article 194 of the Criminal Code of Georgia [on money laundering].”

She highlighted that “even if the court found every fact in issue in favor of the prosecution,” existing evidence was not sufficient to incriminate the said three persons in money laundering.

Furthermore, the legal expert considered the appropriate charge for the conduct brought by the investigative authorities as “statute barred,” as – she claimed – the maximum time to initiate legal proceedings from the date of an alleged offense had already lapsed.

The lawyer also noted that prosecuting a person for an “inappropriate or artificially constructed charge” in order to “get around the fact that the appropriate charge for the conduct alleged is statute barred” could lead to a violation of legal process.

David wrote that “[international] courts have and continue to condemn the practice of prosecuting for a money laundering offence when the conduct alleged goes no further than to the prove the existence of the predicate crime and no separate act of money laundering.”

Concluding the assessment, David stressed that any attempt “to circumvent or avoid a statute of limitations by prosecuting someone for money laundering” would constitute “an abuse of process contrary to the fundamental principles protecting the rights of all defendants.”

Mamuka Khazaradze and Badri Japaridze, founders of the TBC Bank and now businessmen-turned-politicians, are facing criminal investigation over money-laundering allegations involving a USD 17 million transaction that took place in 2008.

Avtandil Tsereteli, a businessman and father of the owner of TV Pirveli, a critical voice against the ruling party, was also charged for being complicit in the alleged laundering scheme.

Khazaradze denies the charges, claiming the legality of the said transaction was inspected multiple times by the local and international fiscal authorities and no “red flags” were raised. He said the bank was suffering an “orchestrated” political attack.

Developments around TBC Bank have brought into question the fate of the Anaklia Deep Sea Port project, a USD 2.5 billion investment on the Black Sea coast not far from Abkhazia, where Mamuka Khazaradze’s TBC Holding was the leading partner.

Khazaradze, who now leads a political union “Lelo for Georgia,” has ascribed his “persecution” to his role in the construction of Anaklia port, suggesting that the purpose of the investigation could be to squeeze him and Japaridze out of the project.

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