Assessment of Money Laundering Prosecution of Mamuka Khazaradze, Badri Japaridze and Avtandil Tsereteli
Today on may 14th, 2020, Transparency International Georgia is releasing the assessment of the money laundering prosecution related to the TBC Bank case. The author of the report is independent international expert Mrs. Pauline David. According to the report, there is no basis to prove Mamuka Khazaradze, Badri Japaridze or Avtandil Tsereteli committed a money laundering offence, either individually or as co-conspirators.
After an assessment of Georgian and international laws, the Indictment, the facts in issue, and accepted international jurisprudence in money laundering cases, key findings are as follows:
- There is no evidence from which to infer an intention:
o to ‘legalise’(launder) any funds obtained by way of loan;
o to conceal the ‘illegal origins’ of the loan funds; or
o to integrate those funds back into the legitimate economy.
- Even if the court found every fact in issue in the case in favour of the prosecution, those facts are not capable of supporting a money laundering charge.
- 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.
- Internationally 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.
- In many jurisdictions, where the court has determined a prosecution is an abuse of process, the court has used its inherent power to protect the court by terminating those proceedings.
International Expert Selection Process and Methodology
In November 2019, Transparency International Georgia announced an international open competition for an anti-money laundering expert. The job description requested the assessment of the criminal prosecution related to the money laundering charges against businessman 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.
As a result of the competition, in January 2020, Mrs. 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.
He was provided with all the materials of the case in English. She also visited Georgia from February 4 to 7, 2020, where she held meetings with various experts and agencies familiar with the details of the case, including defendants, practicing lawyers, and business circles. It is noteworthy that Mrs. David also met with the representatives of the Public Defender and the National Bank of Georgia. The meeting request was sent to the Prosecutor's office, who declined the request, but provided Mrs. David with a report prepared by foreign experts hired by them.