The District Court of Nicosia issued the rare worldwide freezing order against Valentin Vinogradov, a Russian businessman who was convicted of fraud in 2020. The freezing order covers assets worth up to $16.8 million and means that the businessman and companies associated with him cannot sell, transfer or dispose of any assets up to that value.

Valentin Vinogradov was granted the right to appeal the freezing order but his petition was rejected at a hearing on 26 November 2021.

Freezing orders are injunctions that are used to prevent criminals from hiding stolen money. It is unusual for a court to issue an injunction that covers worldwide assets unless there is a legitimate concern that the victims of the crime will be unable to recover their money.

The freezing order issued against Valentin Vinogradov comes as Cyprus is stepping up efforts to tackle financial crime. Worldwide freezing orders have only been part of the judicial system in Cyprus since 2007 when the Cypriot Supreme Court ruled they were legal and enforceable but they are becoming a more widely used tool to combat fraud and other white-collar crimes.

Angelos G. Paphitis, managing partner of the law firm AGP, said: “As Cyprus companies are frequently used as worldwide holding structures and tax structures, there has been an increase in applications for asset protection to the Cyprus courts.”

Cyprus’s efforts to tackle white-collar crime are part of a broader effort among European nations to make it harder for criminals to hide their ill-gotten gains. The number and size of freezing orders have increased in recent years with victims seeking restitution through respected court systems, for example in the UK.

An investigation by the New York Times last year found that the number of foreign litigants bringing claims in the UK courts had risen dramatically.

Among the high-profile freezing orders issued by the UK High Court was a record $5 billion injunction granted in 2020. That freezing order was against Bulat Utemuratov, a Kazakh oligarch who was publicly close to the country’s former President Nursultan Nazarbayev. According to the Wall Street Journal, court papers alleged that Utemuratov had helped hide money stolen from BTA Bank in the 2000s. Utemuratov allegedly denied the allegations and the freezing order was withdrawn after a private settlement.

The freezing order issued against Valentin Vinogradov is thought to be the first time that a Cypriot court has granted such an injunction based on a Russian criminal conviction.

Valentin Vinogradov was sentenced to four years in prison by a District Court in Moscow in December 2020 and the businessman’s assets in Russia were seized . These assets included several properties and luxury cars, including an Aston Martin and Porsche Panamera.

Vinogradov fled Russia in 2017 and initially lived as a fugitive in Cyprus before he moved to Slovakia , where he has claimed political asylum. The Slovakian Government has rejected an extradition request from the Russian courts.

The case has raised concern in Russia because it is unusual for an extradition request to be turned down in a commercial criminal case. This has led to media speculation over why Slovakian politicians have been willing to protect Vinogradov.

The veteran Russian investigative reporter Andrey Karalov said : “A question arises for the Slovakian authorities: who is Valentin Vinogradov to you? Why did he receive political asylum in Slovakia? A fraudster who stole RUB 250 million and with another case ongoing for RUB 100 million. Why Slovakia?”

According to the case brought against Vinogradov, the businessman was running a real estate business called Midland Development in the 2000s.

The company was part of a larger entity called Midland Group, which had interests from steel to property and even a Formula 1 team.

Vinogradov reportedly identified a shopping mall in Moscow as a potential acquisition and told his employers that the seller was called Rosinternet Consulting, based in the British Virgin Islands (BVI). The price was to be $89 million.

However, it emerged in court that Vinogradov was the secret owner of Rosinternet and he had already agreed to buy the shopping mall for a lower amount. As a result, Vinogradov was able to steal at least $15 million from his employers at Midland and they are attempting to get the money back.

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