Bogus Deals Involving Russian Property: Did a Berlin Dentist Swindle Moscow Out of Millions?
The Russians were alarmed. A diplomat rushed to the Lichtenberg district court and found that the Russian Federation was no longer listed as the owner in the land register. The Embassy immediately took action, filing an official objection and justifying it on the grounds that the powers of attorney used by the seller had been “forged.” The criminal complaint filed by Klupp, who had grown suspicious, is also likely to have averted further damage.
The Russians also called in the German Foreign Ministry. In the finest diplomatic parlance, the embassy assured the Foreign Ministry of its “excellent regard” and was honored to announce that Russia had “not sold” the properties and had “not issued any powers of attorney in this regard.” Russian representatives asked that all measures be taken to “restore” the “integrity” of the properties.
An Unprecedented Disgrace
The Foreign Ministry replied just as politely that the diplomatic note had been immediately forwarded to the Berlin authorities. Moreover, they had asked the administration to guarantee the protection of the properties, regardless of the “possibly incorrect land register entry.”
Panic must have broken out in the Russian representation during those weeks in March. Diplomats were already under pressure because of the Russian invasion of Ukraine. Now, there was also the threat of losing property. An unprecedented disgrace. The lines to Moscow were so busy that the real estate scandal even drew the attention of Western intelligence agencies.
The embassy engaged the services of a Leipzig lawyer who sought to reverse the sale of the Karlshorst properties. On March 21, the lawyer turned to the district court in question. The subject line of his letter: “EXTREMELY URGENT!!! FRAUD!!!”
In the letter, the lawyer explained why the deal was invalid. He repeated the accusation that the powers of attorney had been forged and he also lodged serious accusations against the Lichtenberg District Court. The lawyer noted that the court should have realized that an incorrect address had been entered for the responsible Presidential Administration in Moscow. Moreover, it stated that the court had “not applied Russian law correctly.”
Seized Mobile Phones and Storage Devices
But the district court rejected the embassy’s objection at the end of March. It stated that the alleged violations had “not been sufficiently substantiated.” The district judge involved doubted in a memo that the land register was “incorrect at all.” When reached for comment, a court spokesman continues to insist that the necessary documents had been requested from the notary and that, “based on the findings at the time,” there had been no irregularities. In particular, the usual international certifications for documents had also been provided.
At the behest of the Berlin Public Prosecutor’s Office, the properties were nevertheless seized as a precautionary measure – and officials froze most of the purchase price.
Prosecutors quickly recognized the explosive nature of the case and initiated investigations into several suspects. Among them, dentist Jefim B. and his alleged mistress Olena G., the purported colonel in the Russian intelligence service reserves. Prosecutors have accused them of having jointly committed fraud and jointly committed forgery of documents, among other infractions. Like the dentist’s lawyer, Olena G.’s defense attorney also declined to comment.
In the final week of March, Berlin prosecutors had several apartments and offices searched and confiscated numerous documents, mobile phones and storage devices. Concurrently, they also secured land registry files, purchase agreements and bank statements to trace the money from the real estate transactions.
Money Transfers To Moscow
Some the 13.5 million euros paid for the four plots of land in Karlshorst apparently ended up in the hands of a man with a Russian name who allegedly lives in Moscow. In chats, the dentist asked his paramour if he had recorded the man’s data correctly. She corrected the street name. Investigators found that Jefim B.’s real estate company transferred 1.8 million euros to the man.
Investigators do not currently consider it likely that the alleged fraud was politically motivated. At the moment, they say, there are no reliable indications of the involvement of intelligence agencies, and “general criminal motivation” is suspected.
Over the past few weeks, real estate mogul Klupp has been doing everything in his power to try to get his money back. It is said that the dentist has apparently signed a contract promising Klupp a refund of the purchase price and the reimbursement of most incidental expenses. When contacted, Klupp declined to comment on the deal and its consequences, citing the ongoing investigations. The Russian Embassy said it was supporting the prosecution “within the scope of its competencies.” The issue of “restoring the Russian Federation’s ownership rights to the real estate is currently being resolved,” it added.
What is clear is that this story has many losers: a disgraced embassy that allowed real estate worth 13.5 million euros slip through its hands, allegedly defrauded investors and an alleged representative of the Kremlin who was likely just a normal dentist and now has to pay for the damage.
The only thing that hasn’t changed is the state of the Russian properties in Karlshorst. They are still empty. And crumbling.