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LONDON, ENGLAND – OCTOBER 18: Alexander Lebedev and Evgeny Lebedev attend the Big Up Uganda fundraising gala for Save The Children hosted by Adwoa Aboah & Felix Cooper at Wild By Tart, Ecclestone Yards, on October 18, 2018 in London, England. (Photo by David M. Benett/Dave Benett/Getty Images)
The Lebedevs and sanctions

The Lebedevs and sanctions

LONDON, ENGLAND – OCTOBER 18: Alexander Lebedev and Evgeny Lebedev attend the Big Up Uganda fundraising gala for Save The Children hosted by Adwoa Aboah & Felix Cooper at Wild By Tart, Ecclestone Yards, on October 18, 2018 in London, England. (Photo by David M. Benett/Dave Benett/Getty Images)

A leak of documents seen by Tortoise reveals Alexander Lebedev’s businesses in Russian-occupied Crimea breached EU sanctions for years – his son Evgeny appears to have been in personal breach for a shorter period

After Tortoise reported that Boris Johnson had given Evgeny Lebedev a seat in the House of Lords despite objections from the security services, MPs questioned the chair of the Lords appointments commission, Lord Bew. He responded that it was “a case of particular complexity with many wrinkles that are so obvious to everybody: how much is somebody responsible for their father, etcetera”.

Alexander Lebedev, Evgeny’s father, worked for the KGB and its successor agency, the FSB, leaving with the same rank as Vladimir Putin: Lieutenant Colonel. Alexander became rich thanks to his links to other former KGB officers. He is the source of his son’s wealth, which paved a path to the heart of Britain’s establishment and made Evgeny attractive to Johnson. 

Evgeny is now known, thanks to Johnson, as: Baron Lebedev, of Hampton in the London Borough of Richmond upon Thames and of Siberia in the Russian Federation. He has disputed that his financial interests are connected to his father’s businesses, which include large hotels and resorts in Russian-occupied Crimea. 

But a leak of corporate filings and internal memos seen by Tortoise reveals that the interests of father and son in the Ukrainian region overlapped – at times, in breach of European Union sanctions, which from December 2014 prohibited EU citizens and companies from providing tourism services in Crimea.

  • Evgeny Lebedev was, in 2016, the ultimate beneficial owner of Herschel Consultants (Overseas) Limited. This shell company was registered in Cyprus, an offshore haven in the EU that is popular with Russian oligarchs. It owned another company – Almond Grove – in Crimea.
  • Almond Grove lends its name to the large hotel complex on the Alustha coast that Alexander bought and then expanded. It includes a water park, restaurants, baths, a large children’s entertainment centre, different hotels, seaside apartments, and villas. Almond Grove’s expansion continued after Russia annexed Crimea.
  • In response to the annexation, the EU prohibited its companies and citizens from providing tourism services in Crimea. This meant that the Cypriot company, as an EU entity, was in breach of the sanctions – as its then owner Evgeny appears to have been. He became a British citizen in 2010, and, by extension, he was also an EU citizen from that point until Brexit took effect a decade later, his period of ultimate ownership of Almond Grove, through his ownership of the Cypriot company, appears to have put him personally in breach of EU sanctions.
  • The EU allowed member states to set their own penalties for sanction breaches. In the case of the UK, the penalties for breaches included potentially unlimited fines, as well as up to two years in prison. The UK’s own sanctions prohibiting the provision of tourism services in Crimea came into force in December 2020.

A spokesperson for Evgeny says: “Lord Lebedev has never invested into or benefited financially from the aforementioned companies and no EU sanctions have been breached at any time.”

In any case, Alexander’s lawyers in Cyprus, Vassiliades & Co., noticed the problem before any authorities did. They transferred ownership from Evgeny back to Alexander, who as a non-EU citizen, was not subject to the sanctions. Still, the Cypriot company itself – Herschel Consultants (Overseas) Limited – remained in breach of the sanctions. The Cypriot finance ministry didn’t seem to care. Neither did Alexander.

“The sanctions do not bother me,” Alexander said in May 2017. “I have a thousand people working in Crimea. It would be strange if I fired everyone and listened to the sanctions stories.”

But a source with knowledge of the company’s affairs says that by last year all Alexander’s assets in Crimea had been decoupled from companies in Cyprus. They are now owned by his holding company, the National Reserve Corporation, in Moscow, where he resides.

Alexander is trying to sell his Crimean assets and, the source suggests, he is in negotiations with Alexander Udodov, a property developer whose father-in-law is the Russian Prime Minister Mikhail Mishustin, who was appointed by Putin two years ago.

For many years, Alexander claimed to be a Russian dissident. But Tortoise’s reporting has shown how he supported Putin’s annexation of Crimea, argued against sanctions on Russia, and enjoys Putin’s favour and friendship.

Under his dissident guise, Alexander once criticised the West’s “empire of offshore jurisdictions”. He described the people who exploit the shell companies and lawyers that it provides as “parasites”.

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Photographs Getty Images and booking.com