Kazakh authorities are still fighting to retrieve millions of dollars in funds allegedly stolen and then stashed in L.A. real estate, two years after a case was first brought against the alleged culprits, The Real Deal has learned.
The City of Almaty, the largest city in Kazakhstan, is continuing its appeal in a case filed in 2014 against Viktor Khrapunov, the city’s former mayor, alleging that he has his family abused his position of political power to systematically steal and loot money from Almaty, then conspired to transfer, launder and hide the money in the U.S.
The family allegedly used the proceeds to buy several L.A. homes, including a $3.65 million home at 2578 Hutton Drive in Beverly Hills in 2010, which it then resold for $4.97 million in 2014.
Other transactions being scrutinized include the $5.45 million purchase and subsequent sale of 606 North Alta Drive and the $6.2 million purchase and sale of 628 North Alta Drive, both in Beverly Hills, and the $5.7 million purchase and sale of 11986 Lockridge Road in Studio City. The Studio City property was later purchased by recording artist Bruno Mars.
Khrapunov allegedly stole the money during his term as mayor — between 1997 and 2004 — by secretly acquiring property owned by Almaty through fictitious, sham entities for a fraction of what they were worth, then selling them for millions in illicit profits. The total takings allegedly tallied up to $300 million. The family allegedly first transferred the stolen funds to Switzerland before eventually moving them to U.S. after hearing word of a potential investigation.
The suit was originally dismissed by a California judge last year after she ruled that Switzerland was the best venue for the suit, said David Schindler, an attorney for Almaty. But the decision was appealed late last year. The case is now pending.
An attorney for Khrapunov did not immediately respond to a request for comment.
The case is just the latest money laundering scandal to hit L.A. Earlier this year, federal authorities moved to seize assets related to a money-laundering scheme that allegedly misappropriated $3.5 billion from the Malaysian investment fund known as 1Malaysia Development Bhd., or 1MDB. The complaint said individuals involved in the scandal used the money to buy homes in L.A. and in New York.
Khrapunov and his alleged partner in crime Mukhtar Ablyazov, the former chairman of Kazakh bank BTA, are also accused of stashing money in several New York City development projects.
Last month, the Treasury Department said it would expand a pilot program requiring title companies to identify the true buyers anonymous, all-cash deals in a bid to weed out bad actors. Buyers of homes valued at more than $2 million in L.A. County will not have to disclose their true identities.