Ex-Mayor faces further money-laundering charges

The new charge could see Ugulava face a prison sentence of nine to 12 years.
Agenda.ge, 03 Jul 2014 - 14:05, Tbilisi,Georgia

The former Mayor of Tbilisi has been slapped with another charge relating to illegally accumulating money for his political party.

The Investigating Service of Georgia's Finance Ministry issued an additional charge against Tbilisi’s ousted Mayor Gigi Ugulava today, who was detained early this morning as he attempted to board a plane bound for Kiev, Ukraine.

The new charge could see Ugulava face a prison sentence of nine to 12 years.

The Investigating Service released a special statement about an hour ago stating Ugulava had been arrested for illegally accumulating election money for United National Movement (UNM).

Ugulava’s relative Giorgi Ghoniashvili has already been detained for the same case.

The authorities claimed Ugualva acted as the head of a criminal group, which included his relative and Alexandre Gogokhia, the former director of the Lottery Company and business partner of ex-Defence Minister David Kezerashvili. The group illegally imported large amounts of ‘black money’ obtained from off-shore companies and used the money to finance UNM’s election campaign for the 2014 municipal elections, claimed the Investigating Service.

The authorities claimed money was transferred from one off-shore business to another based on a fictitious contract. It said money from Virgin Islands-registered Eximus Holding, which is related to Kezerashvili and named Alexander Gogokhia (who is wanted by Georgian authorities) as its company director, was transferred to Brooktrade, which is also registered abroad.

After the money had been transferred to a Georgian company, the money was converted and sent to Ghoniashvili, who gave the money to Ugulava for the purpose of financing UNM’s election campaign, the Investigating Service alleged.

Authorities claimed $1.5 million USD should have been transferred, however only $760,000 USD had been relocated before the scheme was discovered. This money had been used by Ugulava for political purposes, read the Investigating Service’s statement.

The new charges against Ugulava relate to him violating parts of Article 194 of the Criminal Code of Georgia, which could see him face a prison sentence of nine to 12 years.

Ugulava’s political party responded to the latest charges against their leader. In a statement, UNM said the reason for Ugulava’s detainment was to debilitate the party before the runoffs of the 2014 municipal elections.

"UNM believes the arrest of Mr Ugulava ahead of several crucial runoffs of the June 15 local elections, especially in Tbilisi, is aimed at incapacitating Georgia’s main opposition party and marks deepening of the Government’s agenda of political retribution and persecution of the opposition.”

"In his capacity of campaign manager, Mr Ugulava was crucial in achieving runoffs in the capital where the Government insisted on outright victory,” read the statement.

"UNM also believes Mr Ugulava’s arrest is a personal decision of oligarch Bidzina Ivanishvili who remains [to be the] main decision maker of the Georgian Government despite not holding any formal office,” said UNM.

Conversely, Georgia’s Minister of Internal Affairs Alexander Chikaidze said Ugulava’s detainment was not a political prosecution.

"Trust me, [Ugulava] has been engaged in many cases of financial machinations and embezzlement of state money. The Prosecution is on this case and the investigation is going objectively,” he said.

Chikaidze also noted Ugulava was warned not to leave the country. When he attempted to fly to Ukraine this morning he was detained.

"As far as I know he was warned no to leave the country. It seems the Investigating Service of the Finance Ministry had information that Ugulava had decided to cross the border,” he added.

Georgia’s Vice Prime Minister and Energy Minister Kakha Kaladze also commented, and said there were many issues for which Ugulava will have to explain himself and his actions.

"I think [Ugulava’s arrest] should not be news because the investigation … has been continuing for a while. There are many specific topics to which Ugulava will have to respond and provide explanations,” Kaladze noted.

Ugulava is facing several criminal charges. The most recent charges were brought against Ugulava on June 30, which related to unlawfully spending state funds.

He was charged for signing an agreement on behalf of the Government with ‘City Park’, a car parking management firm in Tbilisi in December 2007. It is alleged he squandered 1,086,718 GEL state funds in favour of ‘City Park’, which saw the company gain additional advantages.

Ugulava is also facing charges in several unrelated matters, including alienating TV Imedi in 2008 and Rike, exclusive territory on the Mtkvari riverbank in Old Tbilisi. He is also charged with misspending more than 70 million GEL from the Tbilisi Developing Fund, which was established in 2010 for the capital city’s rehabilitation.