The Paris Judicial Tribunal is holding the first hearing on criminal charges of aggravated money laundering against Russian businessman Dmitry Klyuev, the alleged ringleader of a massive tax fraud.
The scheme involved $230 million in funds stolen from the Russian Treasury and siphoned out of the country through a maze of shell companies.
French prosecutors describe Klyuev as “one of the primary organizers” and allege that between 2008 and 2012 he spent at least 2.1 million euros of this money in France.
The indictment claims that Klyuev and related parties used two Cypriot accounts to make these payments. It also states that investigators were in contact with Cypriot law enforcement between 2015 and 2019.
Klyuev has a long history in Cyprus, including investigations by the Unit for Combating Money Laundering and Financial Intelligence Unit of Cyprus (MOKAS) and Cyprus police.
The French indictment references a US prosecutorial complaint that describes how Klyuev met with alleged co-conspirators, including several Russian officials, in Larnaca in April 2007 “to set up a money laundering circuit.” The following month Klyuev purchased a house in Limassol.
In 2009, Klyuev secretly invested in Cap St George, the luxury resort in Paphos, with funds from companies that appear to have received proceeds of the tax fraud, OCCRP and iStories revealed.
In 2014, Klyuev sought and obtained permission to purchase another property in Cyprus from the Ministry of Interior, under the condition that he would immediately transfer it to his son. By then, MOKAS was already investigating Klyuev and his assets.
In a written reply, MOKAS told CIReN that the agency disseminated to the Cyprus police, as from 2014 onwards until 2024, all relevant financial information and analysis for criminal investigation of the case. The agency further noted that it does not have the competency to carry out criminal investigations.
MOKAS confirmed that the Interior Ministry did not consult them on the permission granted to Klyuev. Cyprus police and the Ministry of Interior did not reply to a request for comment by the time of publication.
Eight days after the interior minister’s permission, the U.S. government sanctioned Klyuev for “masterminding” the criminal conspiracy tax fraud and identified him as an “organized crime” figure. The sanctions targeting corruption and human rights abusers were named after Sergei Magnitsky, the lawyer who died from grave injuries in a Russian prison after testifying against the organizers of Klyuev’s scheme.
A document reviewed by CIReN states that Cyprus police searched for Klyuev’s real estate assets in 2018 and determined that all of his properties had been transferred, including to his son. (The OCCRP and iStories investigation into his Cap St George villa found that he appeared to hold on to the property until 2019 by transferring it to proxy owners.)
The complaint that led to the French prosecutor’s office investigation was filed in 2014 by Hermitage Capital Management Limited, a civil party to the case. The investment fund and asset management company was one of the targets of the tax fraud organized by Klyuev.
“It is striking that, although Cyprus opened a criminal case in 2014, it did not pursue Dmitry Klyuev with the same seriousness as the French authorities,” Hermitage Capital founder Bill Browder told CIReN. “Much of the evidence now used in the French case came from Cyprus. Yet the Cypriot authorities, despite having access to the same evidence and despite far larger sums having been laundered through Cyprus, did not prosecute him and appear only to have questioned him.”
The inaction allowed Klyuev “to use Cyprus to channel funds through its financial system, invest millions in real estate, as later documented by journalists, and repatriate proceeds from those property sales back to Russia,” Browder said.
The FBME Bank accounts used to make the purchases in France belonged to two BVI companies, Altem Invest Limited and Zibar Management Inc. The spending spree included 668,517 euros in a Parisian art and antique gallery; 696,015 euros at two high-end French women’s fashion brands; and 96,814 euros at a luxury jewelry store in the exclusive ski resort of Courchevel in the French Alps, according to the indictment.
It also includes a 127,182 euro payment for a Courchevel tour package which, according to invoice and bank records reviewed by CIReN, covered Russian Senator Dmitry Saveliev and his guests. (Investigative media iStories previously reported that Saviliev’s company received almost $8 million from Zibar Management, the same entity that paid for the ski trip.)
Despite other individuals listed as beneficial owners of the accounts, prosecutors allege that they were directly controlled by Klyuev, evidenced by incoming transfers from his personal Swiss bank account and payments for personal family expenses, including tuition for his son’s Swiss boarding school.
FBME Bank was taken over by the Central Bank of Cyprus in 2014, following U.S. allegations of money laundering and facilitation of illicit transactions. The bank went into liquidation proceedings in 2023.
Also in 2023, the global investigative collaboration Cyprus Confidential obtained leaked documents from Cypriot corporate service providers, including ConnectedSky, which managed many of Klyuev’s companies and accounts, both in Cyprus and offshore. The records helped piece together other purchases by Kyuev, including luxury properties on Dubai’s exclusive Palm Jumeirah.
A European Arrest Warrant issued in March 2025 at the request of France’s financial prosecutor states that Klyuev likely resides in Russia, “has probable links to organized crime” and “significant local support.” The warrant was specifically not shared with Russia, which is described as a non-cooperative state from which French law enforcement officials saw no prospects for extradition.
Klyuev, who is being tried in absentia, did not respond to a request for comment. If convicted and arrested, he faces a maximum sentence of 10 years in prison.