Panama Papers:

Vassil Bozhkov acquired luxury property and jets through offshore companies

Before fleeing Bulgaria the oligarch would most frequently fly to France

Vassil Bozhkov, “Bulgaria’s richest and most dangerous man” in the words of chief prosecutor Ivan Geshev, owns a staggeringly expensive property in the heart of Paris, in a stately building on the banks of the Seine. The property was purchased for 20.6 million euros in the autumn of 2008. Further information also points to Bozhkov as the owner of another expensive property near the Arc de Triomphe, the price of which is currently yet unknown. According to documents seen by Bivol, the property was bought by a company registered in France and owned by Vassil Bozhkov. The money for the investment came from an offshore firm, which according to the Panama Papers has also been owned by Bozhkov himself since 2003. Files from the offshore business registers show that he used another offshore company he owned in order to invest in aircraft.

Several days ago the Commission for Illegal Assets Forfeiture (CIAF) announced with some fanfare that it had put a lien on Vassil Bozhkov’s properties. There are 17 charges against the oligarch, who is currently in hiding in Dubai. The estimated total worth of the assets is 406,547,219 Bulgarian levs (BGN). Among them are flats in Sofia and Balchik, a house in Greece and real estate in Paris, according to CIAF’s public announcement. In addition, a claim has been filed for the seizure of a yacht worth 1,100,000 BGN and a Bombardier aircraft with an estimated market value of 34,000,000 BGN. According to current market data, the property in the central parts of Paris which we are looking at is worth approximately 70 million euro or 135 million BGN. That would amount to a third of the overall property value sought by CIAF. Bivol has spent the last few months investigating the Paris purchase.

Authorities are guarding the secret over Bozhkov’s Paris mysteries

Six months ago Bivol asked CIAF if a procedure to put a lien on Bozhkov’s Paris properties had been initiated, as information about them was publicly available in the French business registry. Two companies owned by Vassil Bozhkov can be found there:  SCI BO and SCI BOTWO. SCI stands for Société Civile Immobilière, the legal phrasing for a specific type of company established for the purpose of managing real estate. Both companies were founded in the autumn of 2008, just before the purchase of the properties.

SCI BO registration document listing Vassil Bozhkov as the sole owner.

SCI BO was registered on 3 September 2008, initially at 133 boulevard Haussmann. A month later SCI BOTWO was registered at the same address. SCI BO then moved to the building at 27 quai Anatole France. It stands on the bank of the Seine opposite the Tuileries Gardens, a few hundred metres from the French Nassional Assembly.

The building with its imposing facade dates back to 1905 and has listed status as part of the city’s cultural heritage. It was created by the renowned French architect Richard Bowens van der Boijen for the famous bankers of the Lazard family.

Decades ago it was home to France’s Centre for Political, Economic and Social Studies in Aeronautics and Astronautics. This probably means that the building and its infrastructure have been adapted to meet very high standards of security.

No reply was received from CIAF to our inquiry but in the course of our investigation we managed to find the location of the properties and the source of the money for the more expensive one – over 20 million euro as a loan from a secret offshore company owned by Vassil Bozhkov.

The building at the prestigious Paris address of 27 quai Anatole France

These facts have been revealed by documents contained in the Panama Papers archive, which Bivol has access to as partner of the International Consortium of Investigative Journalists ICIJ.  Based on the Panama Papers we also previously managed to reveal that the actual owner of Viafot Limited, the company behind the attack on Emilian Gebrev and his ownership of the Dunarit arms producing plant, is none other than Delyan Peevski’s lawyer Alexander Angelov (read more here).

Offshore companies and fiduciaries

The Panama Papers archive reveals a loan agreement between Panama company Variety Finance SA and the French SCI BO for the amount of 20 600 000 euro, granted immediately after the French company was established. The loan is issued for he expressly stated purpose of purchasing a property at 27 Quai Anatole France in the seventh arrondissement of Paris.

The repayment plan spans 11 years with a 3% annual interest and SCI BO also agrees to pay the offshore company 15% of the profit in the event that it sells the building. No principal repayments or interest from SCI BO would be due over the first three years. A mortgage is established over the building, with Variety Finance SA as the beneficiary.

The timing of the investment at the end of 2008 was significant – property prices were collapsing globally as well as in France due to the financial crisis. The average property price in the particular area, however, never went any lower than 10,000 euro per square meter. For 20 million euro Bozhkov managed to acquire several floors in a prestigious building and most probably the entire building itself. The contracts initially contain the word “apartment” but later on they speak of “the building” as a whole and the “property” at the 27 Quai Anatole France in its entirety. The address is now also registered as the French company’s official seat. According to local real estate companies, the total floor area of the seven-story buildingis around 3500 square meters.

Loan agreement between Variety Finance SA and SCI BO, dated 2008

Property in the 7th arrondissement costs over 16,000 euro per square meter at the moment and for a prime location on the banks of the Seine that price can go up to 25,000 euro. Offers for a single 200-square meter apartment can reach as high as 3.5 million euro. It is not clear if CIAF ever used the services of independent market evaluators for Bozhkov’s Paris properties but rough estimates show that the value of those properties could make up a substantial part of  the 406 million BGN the authority is seeking from the businessman.

Vassil Bozhkov himself is listed as a partner in both companies alongside another Bulgarian – Kaloyan-Dimiter Stoyanov. Bivol’s investigation shows that he is a finance professional providing fiduciary management for a number of companies in Switzerland.

Kaloyan Stoyanov was also the person in contact with Panama company Mossac-Fonseca regarding the registration of the offshore Variety Finance. His Swiss fiduciary services company Ilex Trustees was entrusted by Vassil Bozhkov with the management of Variety Finance S.A. already in 2003. The company was registered on the British Virgin Islands at the time but was later re-registered in Panama. That is how information on Bozhkov’s secretly owned company became part of the official correspondence of Mossac-Fonseca’s Panama office leaked in the Panama Papers.

In adition to Variety Finance S.A., documents reveal Kaloyan Dimitrov also served as Bozhkov’s fiduciary managing two more companies: Houblon Overseas Ltd., Quichain Ltd. and Kirdy Asset. Both were mentioned in publications by the 24 Chassa newspaper, which worked on the Panama Papers in 2016.

“I don’t remember what I needed them for. I must have had some plans but they did not materialise and so I closed them down – Bozhkov commented back then, in reply to 24 Chassa‘s questions.

Mandate signed by Vassil Bozhkov for the management of Variety Finance SA by the Swiss fiduciary.

Panama Papers files show that Houblon Overseas had aircraft investment and management as its main field of business. There is no concrete information about Quichain Limited.

Despite his amnesia regarding his offshore property, Vassil Bozhkov is unlikely to have forgotten why he needed Variety Finance, the company that financed his purchase of one of the most expensive buildings in Paris.

 

Paris as a Sofia neighbourhood

Before his disappearance from the country Vassil Bozhkov would very frequently fly to Paris. In his last few weeks in Bulgaria, when his war with Peevski and Borissov for control over his gambling business had already started, he would travel to Paris and back more than once a week. Bivol checked the flight registers for his private jet LZ-VBE and they show that he travelled to Paris as often as one might visit a weekend home in the outskirts of town. The oligarch also flew to Moscow several times in the last few days before he was given the status of “criminal number one” by the Procecution.

Since the beginning of 2019 SCI BO, the French company in possession of the luxury property in Paris, is no longer managed by a “straw person” as traditionally done in the past. It is now in the hands of one of Bozhkov’s most trusted protegees Miroslav Iliev. He is linked to over 30 companies in the business empire of the Skull, a nickname by which Bozhkov is widely known. Iliev has even been appointed to represent one of the oligarch’s most powerful economic entities – Nove Holding.

Bozhkov’s flight data from the month before he fled Bulgaria for Dubai

All these activities point to the fact that Bozhkov’s secret property in Paris had a growing significance to him, especially over the final year of his business operations in Bulgaria. For the time being, questions about the nature of that significance still remain open.

Investments with a tendency of cleaning up

In 2008 Bozhkov was listed as one of Eastern Europe’s 50 richest people, with his personal wealth estimated at 1.5 billion USD. According to a report by the American embassy in Sofia from 11 September 2009 made public by Wikileaks, he was also “Bulgaria’s most infamous gangster”, who over the years had started cleaning up his business, previously linked with organised crime. The American diplomats in Kozyak street literally say the following about him::

Vassil Bozhkov, a.k.a the Skull – head of Nove Holding. Linked to Intergroup through a company owned jointly with Mladen Mihalev – MadjoBozhkov’s illegal activities include money laundering, privatization fraud, intimidation, and extortion and racketeering.(2005). http://wikileaks.org/cable/2005/07/05SOFIA1207.html#parF

“Bulgaria’s most infamous gangster… Still active in money laundering, privatization fraud, intimidation, extortion, racketeering, and illegal antique dealing. He maintains close relationships with many former government officials. (2009).  http://wikileaks.org/cable/2009/09/09SOFIA508.html#par3

As a partner for Wikileaks, back in 2011 Bivol published the above information about Vassil Bozhkov and other persons considered by US diplomats to have links with organised crime (read more here).

Part of Bozhkov’s attempts to clean up his business went through his investment in the road construction company Patishta Holding in 2007, which marked a move towards large infrastructure projects such as the Trakia motorway. However, Bozhkov’s construction companies went bankrupt and were acquired by persons linked to First Investment Bank in compensation for huge debts owed to the financial institution. This indicates that the “cleaning up” is actually a large-scale operation for laundering money acquired through criminal activities through the use of bank loans. The Paris real estate transaction carries some of the same traits – money from an offshore business secretely owned by Bozhkov is loaned to a “clean” French company in which he is officially a partner.

After exiting the construction business, Bozhkov developed his “National Lottery”, selling scratch cards through the kiosks of the Lafka network, whose ownership has been linked to parliament member Delyan Peevski.

Up until early 2020 Bozhkov enjoyed total impunity and privilege from the state, which provided him with a service passport (read more here), while the GERB administration proposed and voted legal changes in favour of his gambling business through parliament.

It is not clear what caused the abrupt change in attitude towards Bulgaria’s richest man but it was most likely brought about by a business conflict with Borissov and Peevski, whom Bozhkov now calls “Siamese twins” and “a junta”. After positioning himself as a whistle-blower, the businessman has made a foray into politics and has been promising new disclosures of corruption, accompanied by documents and proof, which he has so far not presented.

Bivol reached out to Vassil Bozhkov for comments via email and through his official Facebook profile. No reply was received by the time of publication.

Translation: Vassilena Dotkova 

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