OCCRP

Sons of Azerbaijani Strongman Vasif Talibov Received Millions From
Money Laundering Systems

Feb. 20, 2022

[Having opened bank accounts with Credit Suisse, Barclays, and other
foreign banks, Rza and Seymur Talibov received over $20 million in
suspicious wire transfers, even as the people of the Azerbaijani
exclave of Nakhchivan suffered under their father’s dictatorial rule.]

Key Findings

    The Talibov brothers’ bank accounts received dozens of wire
transfers from shell companies that were part of the Azerbaijani and
Troika Laundromats, two massive money laundering systems previously
uncovered by OCCRP.

    A financial crime expert who reviewed the transactions found
multiple red flags for money laundering that he said banks should have
noticed.

    In subsequent years, the brothers bought up properties in Dubai
and Georgia worth an estimated $63 million.

In late 2007, two young Azerbaijani brothers received an infusion of
cash just in time for the holidays.

But this wasn’t pocket money. Nineteen-year-old Seymur had $40,000
transferred to his personal bank account on December 27. On the same
day, his 25-year-old brother Rza got $95,000 of his own.

As an explanation, both transactions listed simply the word “textile.”
This was strange, since these were not corporate accounts — and the
brothers had no known connection to any textile business.

It didn’t end there. Within months, Seymur and Rza both started to
receive more cash, in much larger bank transfers — up to $500,000 at a
time, often in implausibly round figures. The listed reasons for the
transfers expanded to include “metal,” “metal parts,” and “electrical
equipment.” By the end of 2012, they had received over $20 million in
total.

Clearly, these weren’t ordinary transactions. But then, these were not
ordinary brothers.

Seymur and Rza are the sons of one of Azerbaijan’s top officials:
Their father, Vasif Talibov, is the ruler of Nakhchivan, an autonomous
exclave located between Iran, Turkey, and Armenia.

Talibov has led Nakhchivan with an iron fist for more than 26 years.
Under his rule, detainees have been subject to beatings and vicious
torture. Dissidents have been forced into psychiatric hospitals. He
has also used his power to silence independent media: Journalists and
activists who criticized his rule have faced pressure, arrest, and
exile.

Now, through an analysis of several leaks of banking data and property
records, OCCRP can show that the Talibov family enriched itself from
questionable sources even as Nakhchivan’s people suffered.

Leaked banking records show that the millions Talibov’s sons received
came from shell companies associated with the Azerbaijani and Troika
Laundromats, massive money laundering schemes discovered by OCCRP.
Previous investigations showed that Azerbaijani elites, including a
cousin of President Ilham Aliyev, benefitted from one of these
systems. Now the powerful Talibov family — which is also connected to
the president by marriage — can be added to the list.

The data obtained by reporters doesn’t show what the Talibovs did with
the money they received. But soon after the transactions began, they
started spending.

In 2008, the elder Talibov brother, Rza, his mother, a cousin, and
several businessmen founded a bank together.

Four years later, just as the Laundromat transactions reached their
peak, Rza bought two adjacent buildings in the Georgian resort town of
Batumi that he converted into a five-star hotel. Rza, Seymur, and
their sister Baharkhanim — who also received nearly a million dollars
from Laundromat companies — have also acquired about a dozen
properties in Dubai, including a luxurious villa, a 12-floor apartment
hotel, and multiple individual apartments. In total, their properties
are worth an estimated $63 million.

Azerbaijan's Totalitarian Fortress

In Nakhchivan, Vasif Talibov’s word is law. He has ruled over the
isolated territory through fear and violence for years — and hardly
any news gets out.

This is despite Vasif Talibov’s official salary of less than $26,000
per year and his sons’ own low-paying government jobs. (Rza is a
migration service official and Seymur is a member of the Nakhchivan
parliament.)

In fact, their family’s political status should have subjected their
financial transactions to greater scrutiny. The bank accounts where
they received their millions were held with major financial
institutions in multiple countries, including Emirates NBD, Barclays,
and Credit Suisse. It is unknown whether any of the transactions were
flagged as suspicious.

Graham Barrow, an independent financial crime specialist who reviewed
the transactions, said the brothers’ accounts should have been flagged
given their questionable origins and the Talibovs’ status as
politically exposed persons.

“[The banks] should do what’s known as adverse media screening,” he
said. “They should see whether their client has been involved in any
potential criminal activity or suspicious activity and they should
monitor them. It’s called enhanced monitoring.”

“It’s ridiculous. Those round figures, it’s just stupid. I mean,
nobody does business that way.”

In response to inquiries from OCCRP and Süddeutsche Zeitung, Credit
Suisse said it could not comment on individual client relationships
and rejected “allegations and inferences about [its] purported
business practices.” (Click here to read the bank’s full response to
the Suisse Secrets project).

Two other banks where the Talibovs held accounts that received
questionable funds, Vontobel and Emirates NBD, said that they could
not comment on client relationships but that they complied with the
law.

Barclays and members of the Talibov family did not respond to requests
for comment.

“A World Upside-Down”

Vasif Talibov has ruled over Nakhchivan for so long that it’s hard to
imagine the territory without him. But his beginnings were modest: In
the late Soviet years he was the head of a department at a local
garment factory.

His ticket to power turned out to be his marriage to Sevil Sultanova,
whose mother’s uncle was a senior Soviet official named Heydar Aliyev.

As the country neared collapse in 1990, Aliyev returned from Moscow to
his home region of Nakhchivan. Having nowhere else to stay, he
temporarily lived with Talibov in his two-bedroom apartment.

He returned the favor the following year. After being elected chairman
of Nakhchivan’s parliament, Aliyev made Talibov, then in his early
30s, his head assistant.

“When I chose Vasif Talibov for this position, I knew many of his
characteristics,” Aliyev said later. “He was very young. Inwardly, I
thought for a while that it would be difficult because of his youth.
But he proved that a person who is loyal to his homeland, nation and
people, regardless of age, can do great things.”

In 1993, Aliyev became president of newly independent Azerbaijan. And
with his backing, Talibov’s star continued to rise. In 1995, not long
after being elected to both the Azerbaijani and the local Nakhchivani
parliaments, he became chairman of the latter.

This position, to which he has regularly been “reelected” every five
years, makes him the republic’s absolute ruler, able to appoint
ministers, push laws through a pliant parliament, control the justice
system, and run the security agencies.

He has now ruled for nearly three decades, outlasting his original
patron, Heydar Aliyev, and now enjoying a similarly close relationship
with his son, Ilham, who succeeded him to the presidency.

The local media in Nakhchivan heaps praise on Talibov’s rule. “Today
is HIS day,” wrote the local news agency Nuhcixan on his 60th
birthday, describing him as “the great patriot, resolute, courageous,
as well as humanist,” but also “extremely humble.”

Internationally, the headlines are somewhat different, often focusing
on the draconian rules Talibov has imposed — like his instruction for
local citizens to read Hemingway, or his bans on hanging laundry on
balconies or civil servants wearing patterned tights. Foreign outlets
have also reported on his crackdowns on journalists and dissidents.

This has earned Nakhchivan a variety of nicknames: Opposition
activists call it the “North Korea of Azerbaijan,” while the Norwegian
Helsinki Committee described it as “Azerbaijan’s Dark Island.”

On visiting the territory, a U.S. diplomat wrote to his superiors in
Washington that the region was Talibov’s “fiefdom.”

“Nakhchivan is a world upside down,” the diplomat wrote.

The Talibovs’ Tight Grip

The Talibovs’ stranglehold on Nakhchivan is not just political. It is
widely assumed in Nakhchivan that the family dominates the local
economy, and experts have described them restricting imports, driving
competitors out of business, and even putting residents to work
harvesting their produce.

According to an exiled Nakhchivani, many products in the territory are
sold under the brand Gamigaya, a group of companies widely assumed to
belong to the family. The Gamigaya holding has also built or renovated
dozens of public facilities across Nakhchivan, including ministry
buildings, hospitals, universities, and a mosque.

Little documented proof of the Talibovs’ connection to this group of
companies — or to Cahan Holding, another omnipresent local
conglomerate — has ever emerged. In 2014, Rza Talibov described
himself on Facebook as Gamigaya’s chairman. But no company ownership
records are available to show who actually owns either conglomerate.

Instead, the Gamigaya and Cahan holdings are run by two businessmen
associated with the Talibovs named Vugar Abassov and Emin Uchar.

Abassov and Uchar partnered with Rza Talibov, his mother, and a cousin
in the only business in which they have ever been documented to be
shareholders: Nakhchivanbank, a local financial institution founded in
2008. The bank has since stopped disclosing its shareholders, leaving
it unclear whether the family is still involved, though Rza’s sister
Baharkhanim is a member of its supervisory board. If they are still
part owners of the institution, it is unclear how much they may be
earning.

The Laundromat Millions

But despite this lack of public records, leaked bank data from
Switzerland — part of the international Suisse Secrets investigation —
allowed reporters to document some of their wealth for the first time.
At their maximum in March 2011, the records show, Seymur’s Credit
Suisse account held $7.3 million, and Rza’s held $9.3 million.

The Suisse Secrets Investigation

Suisse Secrets is a collaborative journalism project based on leaked
bank account data from Swiss banking giant Credit Suisse.

The data was provided by an anonymous source to the German newspaper
Süddeutsche Zeitung, which shared it with OCCRP and 46 other media
partners around the world. Reporters on five continents combed through
thousands of bank records, interviewed insiders, regulators, and
criminal prosecutors, and dug into court records and financial
disclosures to corroborate their findings. The data covers over 18,000
accounts that were open from the 1940s until well into the last
decade. Together, they held funds worth more than $100 billion.

"I believe that Swiss banking secrecy laws are immoral,” the source of
the data said in a statement. “The pretext of protecting financial
privacy is merely a fig leaf covering the shameful role of Swiss banks
as collaborators of tax evaders. This situation enables corruption and
starves developing countries of much-needed tax revenue.”

Because the Credit Suisse data obtained by journalists is incomplete,
there are a number of important caveats to be kept in mind when
interpreting it. Read more about the project, where the data came
from, and what it means.

Because these figures only show the account balance at one point in
time, it’s impossible to know how much money passed through the
accounts over the years. But both brothers’ account numbers also
appear in two other leaks of banking data previously obtained by
OCCRP.

They show that, between 2007 and 2012, Rza and Seymur’s accounts at
Credit Suisse and several other banks received over a hundred separate
wire transfers worth a total of $20.5 million from two shell
companies, Murova Systems and Continus Corporation.

How much the Talibov children received from the Laundromat companies.

Both companies were identified as money laundering vehicles by Bosnian
prosecutors who looked into them as part of a human trafficking
investigation.

The leaked records from Credit Suisse also suggest an intriguing
connection to Cahan Holding: The powers of attorney on both Seymur and
Rza’s personal bank accounts were held by two Cahan employees.

These shell companies, which never did any substantive business, were
part of the Azerbaijani and Troika Laundromats, two massive money
laundering systems uncovered in previous OCCRP investigations.
Laundromats are essentially groups of connected shell companies that
send money around and around to each other, using many separate fake
transactions to obscure its origins.

“That’s incredibly unusual,” said Barrow, the financial crime
specialist who reviewed the transactions, explaining that they
contained multiple warning signs.

Most obviously, he said, was the origin of the money: shell companies
that registered no real business activity.

“Second problem, every single one of those payments is a round
figure,” Barrow said. “Business isn’t conducted that way. … Banks are
supposed to have monitoring in place that picks up on round figure
sums and flags them as suspicious.”

“And the other [suspicious] thing is when somebody is apparently doing
a massively wide variety of different businesses,” he said. “We saw
textiles and electronics going through the same company accounts. What
company does that? It makes no commercial sense whatsoever.”

For politically connected people, Barrow said, banks have a “legal
duty to do enhanced due diligence. Enhanced due diligence to establish
the source of wealth.”

But the money kept flowing, with the three Talibov children receiving
more and more until 2012, the last year that appears in the records.

An Inner Circle with Laundromat Access

Rza and Seymur Talibov weren’t the only members of the family to
receive money from the Laundromats. In 2012, an account held by their
sister, Baharkhanim Talibova, received $900,000 from Murova Systems
and another offshore shell company. Vasif Talibov’s nephew, Elnur
Talibov, received $77,000 from Murova Systems in his own Credit Suisse
account. The shell company also paid his tuition at College Du Leman,
an international boarding school in Geneva. And Vugar Abassov, the
Talibovs’ business partner, received $5.8 million from Murova and
Continus.

“Getting Acquainted” with Batumi

That January, Vasif Talibov paid a three-day visit to the seaside
Georgian resort city of Batumi, in the autonomous republic of Adjara.
According to the press office of the local government, his goal was to
“get acquainted with the economic and tourist[ic] potential of the
region.”

His elder son Rza, who accompanied him on the official trip, soon made
a personal real estate investment in the city, buying a historical
building just a few blocks from the beach for $1.5 million.

A few months later, Adjara representatives visited Nakhchivan and
signed a memorandum of economic cooperation between the two regions.

Afterwards, Rza wasted no time snapping up an adjacent 19th-century
building from the government through a special agreement with the
Adjara economic ministry. Though it was valued at over half a million
dollars, he was charged only a symbolic amount of sixty cents to
acquire it, in the interests of redevelopment. Rza also bought out
several people who already owned space in the building for another
$1.2 million.

He then merged the two buildings together to open a five-star hotel,
Divan Suites Batumi. According to an announcement by the city
administration, he would spend $10 million on its construction.

Rza also paid over $6 million to have a company owned by Emin Uchar,
who co-founded Nakhchivanbank with the family, build him an elite
villa in the city’s exclusive Green Cape neighborhood.

But the bulk of the family’s acquisitions were in Dubai.

By 2020, Vasif Talibov’s sons had acquired 11 properties in the
Emirate worth a total of at least $45 million today, including a
12-floor luxury hotel. According to a leak of real estate data
obtained by the non-profit research organization C4ADS, both brothers
held Emirati identification cards, indicating that they had residency
there.

None of these extravagant properties appear on the brothers’ social
media accounts. Unlike some other children of authoritarian rulers,
Seymur and Rza avoid displays of conspicuous wealth on their social
media pages, posting instead about their love for their country, their
father’s achievements, and their devotion to President Aliyev.

In one Twitter post last year, Rza shared a quote from Aliyev in large
block letters, apparently designed to underscore the regime’s
frugality.

“Our traditions, values, and lifestyle are our assets,” he wrote.

He didn’t mention the other ones.