TI Georgia hired int’l expert: ‘no basis to prove TBC Bank founders Khazaradze, Japaridze committed money laundering’

  • TBC Bank founders Mamuka Khazaradze (L) and Badri Japaridze, who later founded a civic movement and a political party, were charged with money laundering in July 2019. Photo: RFE/RL.

Agenda.ge, 14 May 2020 - 12:10, Tbilisi,Georgia

Independent international expert Pauline David, selected in open competition by Transparency International Georgia, says in her report released today that there is no basis to prove TBC Bank founders Mamuka Khazaradze and Badri Japaridze or businessman Avtandil Tsereteli (connected with the case) committed a money laundering offence, either individually or as co-conspirators.

David says that after an assessment of Georgian and international law, the indictment, the facts in the case, and accepted international jurisprudence in money laundering cases, the key findings are as follows:

There is no evidence from which to infer an intention:  

  •  to ‘legalise’ (launder) any funds obtained by way of loan
  • to  conceal the ‘illegal origins’ of the loan funds or
  • to integrate those funds back into the legitimate economy

Avtandil Tsereteli is accused of complicity in the money laundering case concerning TBC Bank founders Mamuka Khazaradze and Badri Japaridze. Photo: 1TV.

The expert says that the prosecution has no evidence to prove money laundering. 

Money laundering and the underlying predicate crime (misappropriation in this case) are separate offences. Proof of a predicate the crime of misappropriation alone is not proof of money laundering. Even if the prosecution proved misappropriation, the subsequent conduct alleged could only support the use of misappropriated proceeds, not the laundering of those proceeds,” David said. 

The report reads that international courts condemn the practice of prosecuting for money laundering, when the conduct alleged extends no further than conduct capable of proving the predicate crime.  

Because of the statutory time limitation, the crime of misappropriation cannot now be prosecuted as a stand-alone offence, nor can it be proven as a predicate crime.It can be an abuse of process to circumvent a statute of limitations by prosecuting a person for an inappropriate or artificially constructed charge (money laundering) to get around the fact that the appropriate charge for the conduct alleged (misappropriation) is statute barred,” the report said. 

In November 2019, Transparency International Georgia announced an international tender for an anti-money laundering expert. 

The Georgian Chief Prosecutor’s Office stated that it started an investigation into money laundering involving TBC Bank in August 2018.

The job description requested the assessment of the criminal prosecution related to the money laundering charges against businessmen Mamuka Khazaradze, Badri Japaridze and Avtandil Tsereteli. 

In order to determine the extent to which their financial transactions in 2008 contained elements of money laundering in accordance with international standards and Georgian law.

TI Georgia says that  in January 2020, Pauline David, a practicing lawyer (Sydney, Australia) with 30 years of experience, a member of the Australian Bar Association and an expert in anti-money laundering, was selected.

Khazaradze and Japaridze are charged with laundering $16.7 million back in 2008, an accusation they say is ‘absurd,’ backed by ruling party officials. 

A Tbilisi City Court has set 700, 000 GEL bail each for  Khazaradze and Japaridze last year.  They also have been banned from leaving the country without the consent of the prosecutors.

The ruling Georgian Dream party members say that the government never interferes in the activities of the court.