Image: Kimmo Brandt / AOP

Police suspect Russia was defrauded of several million euros in a 2012 real estate deal in which 58 properties in the Helsinki area were sold off below market value. The National Bureau of Investigation (NBI) completed its preliminary investigation on Thursday, and suspect that the Russian state has been the victim of aggravated fraud.

The investigation relates to a 2012 deal in which Russia decided to sell off many of the largely residential properties it owned in the Helsinki areas. Their new strategy was focused on office blocks, which they viewed as easier to manage, and a suitable block on the island suburb of Lauttasaari was the asset they decided to acquire.

To complete the deal, Russia handed over ownership of the 58 properties to a Finnish company, which in turn purchased and transferred the Lauttasaari property to the Russian state.

Under-valued

On the same day the Finnish firm sold the 58 properties to a real estate firm via a subsidiary. The holdings included many high value holdings in the central districts of Ullanlinna, Töölö and Punavuori, along with the well-to-do island suburbs of Kulosaari and Lauttasaari. Some of them were handed over by Germany to the Soviet Union as reparations after the Second World War.

Police suspect the Finnish company's CEO and his son of aggravated fraud, with the Russian state the suspected victim.

Also under suspicion are the valuer who approved the prices at which the 58 properties were transferred out of Russian ownership, a lawyer based in Finland, and the then-head of the Russian state's property company's Finnish subsidiary.

Exclusive apartments

"It's suspected that the properties were under-valued and transferred on at normal market prices," said NBI detective Jarmo Koistinen. "The buyers and sellers in the deal could have benefited from the deal by transferring a consultancy contract sum, in this case four and a half million euros, to a Swiss bank account."

Koistinen says at least some of the funds in Switzerland have been frozen. He adds that suspicions arose from an internal Russian investigation.

"They noticed that these apartments were located in exclusive districts, and began to wonder how they could have been transferred at such low prices," said Koistinen. "We got a request to investigate and on the basis of that we looked into the case."

The investigation began in 2014, and the preliminary investigation will shortly pass to prosecutors for consideration of charges.