When a nephew of Uzbekistan’s president bought two hotels in the Latvian capital of Riga, he couldn’t have foreseen that the acquisition would turn into something like the plot of a thriller, reminiscent of the early 1990s of eastern European capitalism, featuring attempted murder, a bribed judge and accusations of larceny. Like a detective novel, this saga shines a light on the darker corners of the Latvian legal system — from the police to the courts.

What happened to Latvian businessman Uldis Skudra five years ago sounds like the opening chapter of a thriller–or a murder mystery.

One weekday morning, Skudra got a phone call from his neighbor, who had spotted a man asleep in a meadow near Skudra’s home in the small town of Lielvarde, an hour from Riga, an area not often frequented by outsiders.

Skudra and the neighbor decided to find out what the stranger was up to. Just in case, Skudra brought along a gun: a precaution he’d taken since he was beaten by unknown assailants 18 months previously near his home.

The neighbor called the stranger to come out. A 35-year-old man with a shaved head, dressed in a tracksuit, slowly stood up and tried to open a small bag that was hanging over his shoulder. Skudra took out his gun and yelled at the man to lay back down and not to move.

While they waited for the police to arrive, the stranger begged the two men to let him go, saying someone had ordered Skudra’s assassination. Skudra said police took the man, later identified as Guntars Miliņš, to police headquarters, where they found a gun in his bag.

Skudra’s account is confirmed by documents in the subsequent criminal case of attempted murder, seen by “Re:Baltica”. The court sentenced Miliņš to nearly 11 years in prison.

Five years have passed since the incident, but who ordered the hit remains unknown. Police say the investigation is continuing.

Skudra believes that both the beating and the murder attempt stem from his former connection with Akbar Abdullaev,  who bought two hotels in Riga, only to lose control of both in 2012.

Abdullaev is a nephew of Uzbek President Islam Karimov.

The battle for the hotels quickly turned into legal disputes in multiple jurisdictions, criminal investigations and arrests and allegations of judicial bribery, revealing deep cracks in the functioning of the Latvian criminal justice system and raising troubling questions about the ability of the state to protect private investment.

What complicates the situation further is the fact that Abdullaev himself is now in prison in Uzbekistan on charges of corruption on a massive scale: collecting proceeds from state enterprises in Central Asia’s Ferghana Valley.

Latvian police also launched a money-laundering case against Abdullaev in November 2012, but there has been no conclusion. Police say they haven’t had time to wrap it up due to the large number of international assistance requests which have slowed their Abdullaev investigation.

Shopping in Latvia

Abdullaev was only 23 when he arrived in Latvia in the spring of 2006 along with his cousin and her family. His cousin is Lola Karimova, the Uzbek president’s younger daughter, who settled into a home in Jurmala, a beach resort town popular with the rich and famous of the former Soviet republics. Lola Karimova drove around in a BMW and a Hummer with vanity license plates. After the birth of her son in August 2006, she spent a few more months in Latvia and then she and her family left the country for good.

Abdullaev stayed, and went on a bit of a spending spree. He bought a new house complete with swimming pool and guest house at an estimated cost of € 1.42 million. Next came an apartment across the Daugava River with a beautiful view of Riga’s picturesque Old Town for at least €300,000, according to data from the Land Registry. He bought a luxurious Bentley, one of the most expensive cars registered in Latvia that year, at an estimated cost  of € 200,000.

The following year, he branched out into the hotel business. In 2007, Abdullaev and the wife of Gulam Gulami, a family friend and Latvian citizen of Afghan origin, bought a five-star hotel called “Royal Square Hotel & Suites” in the heart of Riga for € 10 million. Six months later, they purchased another hotel in the Old Town, “Garden Palace Hotel”, for at least € 8 million, according to deal documents seen by “Re:Baltica”.

Abdullaev was not the only Uzbek who used property investment in Latvia to gain access to the Latvian banking system or to launch a business in the country. More than 1,500 Uzbeks took advantage of a Latvian government “golden visa” scheme that offered a European Union (EU) residency permit allowing free movement in the Schengen zone in exchange for investment in real estate or banks. Of all the former Soviet republics, Uzbeks make up the third largest contingent to take advantage of the “golden visa” scheme. In Latvia, Uzbeks can freely communicate in Russian and they also find friendly banks who are willing to do business.

“Transparency International”, a global anti-corruption watchdog, says that Uzbekistan is the second-most-corrupt country in Central Asia. It says the Uzbek elite often expropriates revenue from state-run companies and invests the money abroad.

An integral part of many Uzbek business deals abroad is the use of offshores, or companies formed in various tax havens around the world, that allow the real beneficiaries (the true owners of a company) to remain in the shadows.

That was to become Abdullaev’s first stumbling block in this crime-novel worthy tale

Introductions

A decade ago, Uldis Skudra had just left his post as the head of the department for non-resident clients at the Latvian subsidiary of a Swedish bank, Swedbank. He was drinking his morning coffee when the phone rang. It was Gulami, a former client, who was in the business of exporting cotton from Uzbekistan through Latvia.

“Listen, Uldis, this very respected man is visiting me. I’d like to introduce you,” Gulami said.

At a “TGI Friday’s” restaurant in Riga, Gulami introduced Skudra to “Akbar from Uzbekistan” and Akbar’s right-hand man, Boris Raimischer, a Moldovan who lives in Germany. A few days later the trio met again, this time without Gulami.

Abdullaev said he wanted to buy some businesses in Latvia and needed a local man to help him do so. Abdullaev sounded like someone who wielded a lot of money and influence back in the clan-based nation of Uzbekistan. When Skudra asked him which clan he belonged to, Abdullaev said that he was connected to the family of Uzbek President Karimov.

They met a few times. But ultimately, the Gulami family took care of Abdullaev. Only through the grapevine did Skudra learn that Abdullaev and Gulami’s wife, Valentina, had bought two hotels together in Riga.

A life-changing phone call

Three years later, Skudra received another phone call.

In May 2009, Abdullaev called Skudra and told him he didn’t know where his money was going. Abdullaev said he had already paid his share for the two hotels, but Gulami continued to demand more cash without showing any profit, Skudra claims.

The financial reports of the “Royal Square Hotel & Suites” showed it was suffering losses. They bought the “Garden Palace Hotel” in the summer of 2008, so no financial report was yet available.

Records also showed that for the “Garden Palace Hotel”, they had already paid € 5 million and if they didn’t pay the next installment of € 700,000, the seller of the property could end up keeping both the building and the money they had already paid.

It also became clear that to get a € 5 million loan from “DNB Bank” to purchase the “Royal Square Hotel & Suites”, Valentina Gulami had used the company and the hotel building as collateral, data from the Latvian Business Registry shows.

Skudra says that Abdullaev claimed he had not previously known anything about this. He said Abdullaev decided to buy out Gulami’s hotel shares in order not to lose the money already invested.

In June 2009, Abdullaev became the sole owner of the four-star “Garden Palace Hotel”. Skudra formed his own company called “Garden Palace”, which began managing the hotel. The agreement stipulated that Skudra’s company would receive 25 percent of the hotel’s profits.

One month before the buy-out deal was finalized on the “Royal Square Hotel”, two men assaulted Skudra near his house. The automatic gates did not open and when Skudra got out of his car in the dark to check on them, he was attacked. The police never found the assailants. He says that on the following day, at the advice of Abdullaev, he hired a bodyguard.

In February 2010, Abdullaev became the sole owner of the “Royal Square Hotel”. “On the day of the signing of the agreement, Boris [Abdullayev’s associate] and I were in the hotel’s lobby, laughing about something. Gulami, who was speaking to Akbar at that time, looked at me and said, ‘I will kill that queer,’” says Skudra. He told police the same story during the investigation of the murder attempt 18 months later.

Gulami, however, told “Re:Baltica” that nothing of the sort occurred. He denied threatening Skudra and said he had no connection to the attack on him. He claims Abdullaev had never invested in the hotels, neither initially or later when Abdullayev claims he bought out Gulami’s wife’s shares. Gulami said he designated Abdullaev an owner out of the goodness of his heart so that Abdullaev could tell people back in Uzbekistan that he owned a business in Europe.

Gulami says he had helped Abdullaev start his business and even financially supported him at the request of Lola Karimova. Gulami’s attorney, Egons Rusanovs, claims that Abdullaev spent US$ 12 million of Gulami’s money on entertainment, clothes, and cars. Gulami transferred money to Abdullaev through offshore companies or simply handed over cash, trusting the “eastern cultural traditions and business practices where a given word holds much more power than a written document,” Gulami wrote to the prosecuting attorney’s office.

When asked to comment, Karimova-Tillyaeva’s lawyer stated that Lola never asked Gulami to help her cousin financially or otherwise.

Hotel “larceny”

In the fall of 2012, Skudra’s phone rang yet again. By then he was working in a bank in Moscow, Russia. The caller was a co-owner of a large real estate company in Latvia, who wanted to know if Skudra’s friends from Uzbekistan wanted to sell another hotel.

He had heard that the “Royal Square Hotel” had already been sold and he had a client who was interested in buying the “Garden Palace Hotel”.

By this time, Skudra had left the hotel business. In 2010, Abdullaev’s Uzbek schoolmate, professional wrestler Elyor Yunusov, had bought the “Royal Square Hotel” through yet another company, this one registered in Scotland: “Brook Organization”. Later, Yunusov also bought Skudra’s service company “Garden Palace”, which managed both hotels.

Skudra promised the realtor he would contact the Uzbeks to find out if they were willing to sell the “Garden Palace Hotel”. Abdullaev had changed his phone number, which was why Skudra wrote to Raimischer, Abdullaev’s associate.

The response came several days later: “What do you mean, ‘sold the hotel’?” (“Re:Baltica” could not reach Raimischer to confirm the story).

The documents tell quite a story.

According to the Latvian prosecutor:

– In September 2012, Gulami contacted Uldis Feldmanis, an acquaintance in Latvia whose business  is to register offshore companies. Gulami somehow convinced Feldmanis that he was an owner of the “Brook Organization” and wanted, ultimately, to change the company’s representative in Latvia.

– “Brook Organization” actually belonged to Yunusov, who had served as representative of the company in Latvia up to this time and who bought the “Royal Square Hotel” through  “Brook Organization”.

– Feldmanis told Gulami what he needed to do to change the representative, including sending documents to the Scottish agent.

– Working through Feldmanis, Gulami sent scanned documents to Scotland, making structural changes to “Brook Organization”. The end result? Gulami was named as the new representative to do what he wanted with “Brook Organization” (and ultimately, the “Royal Square Hotel”) in Latvia.

– First Gulami, as a representative of “Brook Organization”, replaced the board members of the “Royal Square Hotel”. After that, the hotel was sold to another Belize-registered company, whose owners were not known, but whose representative was–Gulami.

– As a result, the prosecutor says, Gulami is suspected of “massive fraud” and forgery. An investigation is continuing, the prosecutor says.

By doing this, Gulami had also gained control of the “Garden Palace Hotel”, since  “Brook Organization” controlled “Garden Palace” company–Skudra’s former business–that was contracted to manage it. Even though Abdullaev owned the building, the management company had the legal right to run the hotel.

Endless litigation

Legal battles began in Latvia, Uzbekistan, and Scotland. All the plaintiffs, defendants and companies in this legal war could be split into two opposing sides: Gulami vs. Abdullaev.

The legal battle began in arbitration, intended to resolve business disputes quicker than Latvia’s clogged legal system. If a party to the lawsuit does not follow the rulings of the arbitration, the case goes before a traditional court.

Both sides turned to arbitration. The Abdullaev side demanded an end to the contract with the “Garden Palace” management company. That demand was granted.

Abdullaev was not in the country at the time, but had provided his people with a power of attorney. But when the Abdullaev side came to take possession of the building in January 2013, they found Gulami at the hotel, along with Ivan Haritonov, a famous Latvian underworld figure who had been sentenced in 1998 to eight years in prison for racketeering.

Gulami refused to vacate the hotel, saying that the power of attorney was a forgery.

Gulami told “Re:Baltica” that Haritonov was not present at the meeting though he admitted that he knew the former racketeer. He said Haritonov offered discounts for hotel guests to watch boxing matches he organized.

The state police launched an investigation into the alleged forged power of attorney. The expert analysis and Uzbekistan’s response to the official request from Latvian law enforcement confirmed that the power of attorney was genuine and given by Abdullaev. Eighteen months later, the power-of-attorney case was closed.

Riga City Central District Judge Imants Dzenis rejected the arbitrator’s decision to break the contract because he believed the arbitration exceeded its authority. Abdullaev appealed the decision to a higher court where Judge Iveta Berzina reaffirmed the lower court’s ruling.

Eighteen months later, Latvia’s anti-corruption agency (KNAB) detained Judge Berzina on suspicion of corruption. In January 2016, KNAB turned the case over to prosecutors. The judge has been charged with accepting a bribe of more than € 45,000; Gulami has been charged with bribery.

Law enforcement sources told “Re:Baltica” that Gulami and Berzina met in the two hotels before bribes were allegedly exchanged in a woman’s bathroom in the Spice shopping mall and again in its parking lot.

Gulami allegedly was introduced to Judge Berzina by former prosecutor Irina Bogdanova. The judge got out of his car with flowers and CD cases, which contained € 7,000, according to the law enforcement sources (Bogdanova could not be reached for comment as she was convicted of extorting bribes in a different case and is now in prison).

Gulami says he never bribed anybody. He said he met Berzina with Bogdanova while having a lunch at “one of our restaurants.” He couldn’t recall an episode in the car since Bogdanova often asked him to give her a ride. He couldn’t remember Bogdanova’s friend’s name. He trusted Bogdanova since she was introduced to him as “a good lawyer” by the former racketeer Haritonov, Gulami said.

“He gave… he had no other choice because he was fighting for his business the best way he knew how,” says Gulami’s attorney, Egons Rusanovs. “Yes, this is no justification from the legal standpoint, but one can understand him as a businessman.”

As of April 2016, only the case in Scotland has concluded. Abdullaev’s side went to court in Scotland to challenge Gulami’s rights to act on behalf of the “Brook Organization”. However, he didn’t expect legal costs to be so high in Scotland, which Skudra says reached half a million euros. Barristers in Scotland quit the case because of unpaid fees.

Yusunov, who owned “Brook Organization”, couldn’t get a visa to enter the EU and therefore could not appear in court, according to the documents obtained by “Re:Baltica”. Abdullaev’s side was left without representation and the court dismissed the case against Gulami, which he announced as a victory showing that he had rights to represent “Brook Organization”.

In Latvia, the case continues. Abdullaev’s side has petitioned the state police several times to open a case regarding the expropriation of property, worth at least € 10 million. It took the state police six months to launch an investigation, in May 2013; they took another three months to notify the principals.

By comparison, when the Gulami side complained about the allegedly forged power of attorney, it took police just two weeks to open a case (it was later closed).

Abdullaev’s side complained to the Latvian government in 2013, asking it to protect his  investments. It also asked Latvia to place an asset freeze on the “Royal Square Hotel & Suites”, so that the hotel couldn’t be sold again. The investigator, Oksana Zujeva, did so only after Skudra complained  to the prosecutor’s office.

Zujeva also decided in favor of Gulami to freeze the assets of the “Garden Palace Hotel” because Gulami claimed the power of attorney was a forgery. The court later lifted the property freeze (state police told told “Re:Baltica” that the investigator “acted according to her beliefs in the given situation”).

The criminal case about the hotel ownership is now at the prosecuting attorney’s office. The case has only one suspect: Gulami. He is suspected of major fraud, use of forged documents in order to gain property rights at “Royal Square Hotel & Suites”. Gulami denies any wrongdoing.

Uzbek service journalists from Radio Free Europe/Radio Liberty cooperated with Re:Baltica for this report.
Edited by Sanita Jemberga and Jody McPhillips (OCCRP)
Translated from Latvian to English by Aleksis Tapins

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