Credit: Colau/Alamy Stock Photo The Senator's Superyacht Spending Spree

DONATE Above: The Yacht Club Costa Smeralda in Sardinia, Italy. Credit: Colau/Alamy Stock Photo Yacht Club Costa Smeralda is an invitation-only marina on the Italian island of Sardinia that caters to billionaires and their superyachts. Russian business tycoon Valentin Zavadnikov, an avid sailor and former senator from the southeastern Saratov region, has been a member for years. Between 2006 and 2012, then-senator Zavadnikov spent tens of millions of dollars to build and maintain two lavish superyachts, the Celestial Hope and the Quinta Essentia. His passion was paid for through a system of dozens of offshore companies OCCRP has dubbed the Troika Laundromat, after the Russian investment bank that created and operated it, Troika Dialog. Zavadnikov was once a shareholder and director of the bank. Zavadnikov’s yachts were paid for by companies within the Laundromat that appear to have been dedicated to his pursuits and pleasures, which even included a wine-scented bedroom and a cinema screen projected onto a waterfall. Because the companies are offshores with opaque ownership, it is not clear whether Zavadnikov or some other party ultimately paid for the yachts and other expenses. Over seven years, the Troika Laundromat companies channeled at least US$137 million into yachting-related expenditures and businesses linked to Zavadnikov. Troika set up at least five offshore companies he owned or for which he appears to have been the primary beneficiary. Money funneled through Laundromat accounts at the Lithuanian bank Ukio also financed a yacht racing team founded by Zavadnikov and made up of wealthy energy-industry executives. The team toured the world and built two racing yachts of its own. Zavadnikov and his daughter Valeria, who owns a vineyard in Tuscany, also used money from the accounts to conduct other private business and pay for personal luxury expenses, including Valeria’s 2011 wedding in Capri. From Spirits to Sailing Credit: Sputnik/Alamy Stock Photo Valentin Zavadnikov Zavadnikov started sailing as a toddler, but his family gave it up after the breakup of the Soviet Union, he once told Russia Beyond, a state-owned magazine. In the ensuing years, he embarked on a successful business career, most notably co-owning Synergy – now rebranded as Beluga Group – Russia’s largest producer and distributor of alcoholic spirits. From 1998 through 2001 he served as deputy board chairman of the sprawling state-owned electric power company Unified Energy System of Russia (RAO UES), and as a senator from 2001 to 2012. In 2004, Zavadnikov rediscovered his dormant passion for competitive sailing. Alongside a small circle of powerful businessmen from Russia’s energy sector, including oil magnate and billionaire Leonid Lebedev, he formed the Synergy racing team. It has scooped up trophies from Oman to Portugal. For years, the team owned its yachts through two Gibraltar-registered companies, Gateway Overseas Ltd. and Scottsburg Manor Ltd. Over that same period, offshore companies belonging to the Troika Laundromat funneled loans totalling almost $22 million into Lithuanian bank accounts controlled by the companies. It was more than twice the amount that the team’s official sponsors contributed to the same accounts. The money went to build the two racing yachts, as well as for training, uniforms, media coverage, and competition entry fees. Zavadnikov and four of his teammates own Gateway; and the team’s CEO, Maxim Logutenko, directs Scottsburg. It was Troika that set up Scottsburg’s Ukio bank account, bringing the company into the constellation dubbed the Troika Laundromat. Gateway and Scottsburg spent 1.6 million euros on Synergy team salaries, plus 250,000 euros on expenses and consulting fees for people who sailed with the team, including Ukrainian Olympian Sergiy Pichugin. 🔗 Most of the salaried sailors on the Synergy team held bank accounts at the Latvian bank Parex, previously investigated for corruption by OCCRP. John Christmas, Parex’s former head of international relations, became a whistleblower and told Bloomberg News that Parex existed solely as a destination for illicit funds. (The bank has since folded.) Gateway and Scottsburg together repaid less than $8 million of the combined $22 million in Laundromat loans. Yet the money kept flowing in. When asked about the loan pattern, Vitalijus Gailius, a member of Lithuania’s parliament and former head of the country’s Financial Crime Investigation Service (FCIS), said Ukio should have reported these transactions to law enforcement. “These transactions should have been treated as unusual,” he said. “The bank should have noticed this and, in my opinion, this information should have been handed to FCIS.” Gailius said he couldn’t recall any investigations into yacht-related spending through Ukio accounts or involving Zavadnikov. OCCRP could find no evidence that Zavadnikov has been accused of any wrongdoing, and it’s not clear whether any laws were broken.

The Floating Hamptons Beach House Credit: Edin Pasovic How the Troika Laundromat paid for some of the Zavadnikov family’s pursuits. Click to enlarge. Confidentiality is serious business in the British tax haven of Gibraltar. Until recently, legislation ensured that the ultimate beneficial owners of companies registered there would remain secret, and it’s these laws that appear to have allowed Zavadnikov to use a shell company from the Laundromat as a proxy. The company was Purus Ltd. In April 2006, Purus contracted a world-famous Dutch shipyard, Heesen Yachts, to build Celestial Hope, a 47-meter, six-cabin motor yacht. After Heesen launched the award-winning vessel two years later, Zavadnikov told the website SuperyachtNews.com that it made a comfortable base for him during regattas. Celestial Hope was meant to feel like a beach house in the Hamptons. Its designers were told to take inspiration from “Something’s Gotta Give,” a 2003 Hollywood romantic comedy starring Jack Nicholson and Diane Keaton. Befitting its Russian owner, however, the designers added a steam bath and art from their client’s home country, including “Blue Birds” by acclaimed modernist painter Andrey Remnev. Over about 18 months, Purus wired Heesen Yachts a total of 13.6 million euros. The shell company also made dozens of payments for various services rendered for Celestial Hope, including purchases of wine and spirits, and cocktail party catering. Purus hired Nakhimov Yachts, a luxury yacht specialist, to develop Celestial Hope’s furnishings. Purus wired the Monaco company at least 2.3 million euros, and sent another 627,064 euros to Nakhimov Management, which oversaw the vessel’s everyday operations and crew selection for charter trips. In just two years, Purus spent more than 20 million euros, mostly on yacht-related expenses, from crew training to “delivery of extra water toys” and even photo shoots. The money arrived as loans from elsewhere in the Troika Laundromat and was spent almost immediately. The complex nature of the system obscures most of the money’s true origin. But in January 2008, Purus received 3,000 euros from Roberta Transit, a Laundromat company used in the enormous tax theft scheme uncovered by the Russian lawyer Sergei Magnitsky. He died in prison a year later after trying to get Russian authorities to investigate. That money was immediately wired to René van der Velden, a renowned Dutch naval architect.