Fabrications, fraud and false accounting: how Deloitte helped Abramovich hide $10bn

• Deloitte Cyprus and its spin-off Meritservus falsified at least 1,000 corporate papers on behalf of Roman Abramovich

• Deloitte staff used fake timestamps to rewrite the historical record before the firm acted as “independent auditor” to sign off the accounts

• The scheme helped Abramovich hide billions of dollars in assets and evade millions in tax

The accountancy giant Deloitte fabricated corporate documents to help Roman Abramovich conceal at least $10bn in assets and dodge large amounts of tax, the Bureau can reveal.

Our forensic analysis of leaked documents shows that senior staff at Deloitte and later Meritservus, the firm spun out of it, falsified paperwork for the oligarch as a matter of routine for over a decade. We found more than 1,000 corporate records that had been “backdated” – given a fake earlier timestamp – sometimes by as far as five years.

This created a false paper trail of contracts, payment orders and correspondence for more than 100 companies. Deloitte then signed off many of these companies’ accounts as “true and fair”, relying in some cases on the documents it had helped fabricate.

All this was a regular feature of the service offered to the oligarch by Deloitte’s Cyprus branch. It enabled Abramovich to keep his immense wealth hidden from the authorities and dodge tens of millions of dollars in tax. One leading expert told us it amounted to “straightforward and blatant” tax evasion.

The backdating by Deloitte and Meritservus that we were able to identify occurred between 1999 and 2013. We don’t know whether the practice continued beyond that.

The revelations are part of a joint investigation by the Bureau and BBC Panorama, alongside the Guardian and the Organized Crime and Corruption Reporting Project (OCCRP). Our investigation was part of the Cyprus Confidential project, organised by the International Consortium of Investigative Journalists and Paper Trail Media, based on data originally shared by the US non-profit Distributed Denial of Secrets.

Our findings raise huge questions, not only about the ability of the super-rich to hide their wealth and avoid paying what they owe but about how world-leading white-collar companies help them do it.

Deloitte Cyprus told us it could not comment on specifics as it did not have access to correspondence “from more than 20 years ago”. It said: “Deloitte Cyprus acts in compliance with applicable laws.”

Deloitte operates as a network of independent firms around the world where each office is only liable for its own work. There is no evidence of involvement from any Deloitte entity beyond its Cyprus branch.

Andrew Mitchell KC, a leading financial crime barrister who reviewed our findings, said: “What you take away from it is that there are professionals who are prepared to bend and break the rules of their profession and therefore the law.

“And it looks that they will stop literally at nothing in terms of creating documents.”

The inner circle

The huge trail of fabricated paperwork can be traced back to the very origin of Abramovich’s fortune: Sibneft, the giant Russian oil company that he acquired through a series of controversial auctions in the 1990s following the collapse of the Soviet Union.

His original stake in Sibneft cost him roughly $250m (and as little as $19m of his own money) but by the time he sold his last shares in 2005, he had amassed over $16bn.

As his net worth ballooned, Abramovich set about moving much of his wealth offshore – primarily through Cyprus, a country that offered attractive tax rates to Russian companies.

Once in Cyprus, his money could be shuffled around more easily, for example to holding companies in the British Virgin Islands (BVI), where tax bills could be cut further and Abramovich’s name be kept out of it altogether.

But running an operation of that size – and keeping it all hidden – required the help of first-rate experts. And who better than Deloitte, the biggest professional services group in the world? So in 1999, its Cyprus branch was enlisted by Abramovich’s team and the two parties began working hand-in-glove to manage and manipulate the Russian’s offshore wealth.

Documents we’ve seen show leading figures at Deloitte and Meritservus – including Antonis Taliotis, who was tax and legal leader at Deloitte Cyprus until earlier this year – helping to devise various fraudulent schemes in league with Abramovich’s closest advisers.

That inner circle consisted chiefly of four people: Eugene Tenenbaum, who ran a London company called Millhouse Capital UK that managed much of Abramovich’s empire, and was a director at Chelsea FC; Andre De Cort, who acted as legal counsel to Millhouse; Irina Panchenko, a former member of Russian parliament who served as Millhouse’s finance director; and Natalia Khudyk, head of accounting for Millhouse’s Russian branch.

These four were involved time and time again in the fabrications, at times explicitly drafting or authorising them.

A final key figure was Demetris Ioannides, who worked first as chairman for Deloitte Cyprus, then as managing partner for Meritservus, and would become the effective gatekeeper to Abramovich’s fortune.

Lawyers for Abramovich told us he denied any knowledge of, or involvement in, “unlawful backdating”, as well as concealing assets or evading tax. They said companies linked to him had relied on professional advisers including “Deloitte, one of the ‘Big Four’ accounting firms”.

Abramovich himself is largely absent from the leaked files and denied knowing that any agreements had been backdated. However, in at least one scheme, he signed documents to extract almost $100m on the back of consultancy agreements that had been backdated.

Through his lawyers, Tenenbaum denied participating in, authorising or knowing of improper backdating, helping Abramovich conceal assets or evade tax and involvement in false or misleading accounts. His lawyers said he could not recall the context or detail of documents dating back 20 years, and that he relied on specialist advice from Deloitte and Cypriot corporate advisers.

They added that a backdated document was not necessarily “improper”, for example if it recorded a deal that had already been agreed but not formally documented.

But Rachel Sexton, an independent forensic accountant experienced in fraud and financial crime who reviewed part of our evidence, said this did not appear to be the case here.

“Supporting documentation should not have been backdated if the structures and arrangements were not in place and the related decisions did not occur on those dates,” she said.

There could be legitimate reasons to document an earlier transaction later, she explained, but the document should bear the date it was actually signed while recording the earlier effective date.

Lawyers for Ioannides, who is 83, said he was currently unable to read or respond to the questions.

Irina Panchenko denied any wrongdoing, saying that she had always relied on professional advisers in carrying out her duties as a trustee. She disputed our findings and accused us of taking documents out of context.

De Cort declined to comment. Our attempts to contact Khudyk for comment were unsuccessful.

Deloitte Cyprus said its “no comment” extended to Taliotis, who did not respond to our questions.

Building a smokescreen

The operation began at a relatively small scale, with Deloitte’s offices in Cyprus and the Isle of Man working in 1999 to route Sibneft’s ownership through their respective islands to a Liechtenstein trust. Soon afterwards, the Cyprus branch took full control of the project, cutting out the Isle of Man companies and rerouting ownership through the BVI and back to a Cypriot trust.

In the ensuing years, Abramovich ploughed his profits into new businesses, mansions, hedge funds, superyachts, artworks – and Chelsea FC. As the Russian’s profile increased around the world, Ioannides became personally involved in the work his firm was carrying out for this A-list client.

By 2005, Deloitte was helping administer dozens of Abramovich entities, all owned by a single Cyprus trust, of which Abramovich was beneficiary and Ioannides a trustee.

That was also the year that Meritservus, led by Ioannides, was spun out of Deloitte as a separate business. The two firms remained close, however, and Deloitte acted as accountants and tax advisers to the Abramovich group as his offshore empire continued to shift and expand.

Part of the task, in effect, was to create a giant smokescreen – and it worked to great success. In 2011, when making disclosures for a Russian election, Abramovich declared stakes in seven companies he held directly. But he didn’t mention the 100 or so more he controlled through his offshore network, collectively worth billions. The entire construction had been kept away from public view. Lawyers for Abramovich said he denied deliberately withholding information from, or misleading, the Russian parliamentary authorities in his 2011 declaration.

The two firms’ work for Abramovich went on for more than two decades in total, ending only when the oligarch was sanctioned by the UK and EU in 2022. Until then, Deloitte and Meritservus acted as nominee directors and shareholders, administrators and independent auditors for the oligarch’s companies.

And they were falsifying documents from the get-go.

The leaked files show how Deloitte began falsifying papers even with some of the first Sibneft share transfers from Russia to Cyprus. This manipulation then continued unabated under Meritservus, with the files making clear just how commonplace the practice was.

“It’s not that this is something Deloitte reluctantly went along with,” said Alex Cobham, chief executive of the Tax Justice Network, after reviewing our findings.

“They appear very much to have been part of the design process on multiple occasions, and indeed from their relationship with Meritservus, they are probably in the driving seat in terms of the overall management of issues.”

In some instances, the backdating was done to paper over the cracks caused by tax and audit headaches. In others, its exact purpose is unclear. Deloitte and Meritservus appear to have simply signed whatever was put in front of them.

Their signatures were needed because, on paper at least, Deloitte and Meritservus staff sat as directors of these offshore companies. In practice, however, they ceded vast decision-making power to Millhouse employees in Moscow and London – a wholesale abdication of fiduciary duty that often reduced the firms’ work to a simple rubber-stamp of legitimacy.

The files trace an elaborate flow of funds that moves through dozens of companies and jurisdictions.

Here are four of their trickiest schemes:

1. Making $2bn disappear

Cyprus-based Kravin Investments was one of the original offshore companies Abramovich used to hold his Sibneft stake. In 2003, Kravin received a windfall of $3bn, the first instalment of a sale of his Sibneft shares.

Around $2bn of that sat in Kravin’s bank accounts, quietly accruing considerable interest – and with it, considerable tax liability. Passive income of this kind should have cost Abramovich millions of dollars.

But Abramovich’s associates did not want to pay it. So they worked with Deloitte and Meritservus to backdate their way out.

It wasn’t straightforward: bank ledgers would already show the deposits and transactions had taken place in Kravin’s name, and those couldn’t be erased. What could be rewritten was the context around them.

In the files, we can see months of correspondence in which senior Abramovich associates including Tenenbaum, Khudyk and De Cort discuss how this could be done with Meritservus’ Ioannides and Deloitte’s Taliotis. Eventually the group settled on a plan.

From 2005, they began producing paperwork, backdated to 2003, making it appear that the $3bn had been transferred by Kravin almost immediately to another Abramovich company in the BVI. Then they created a second backdated agreement claiming that Kravin had simply been holding and investing the money on that company’s behalf all along.

The result was simple: though the billions had sat in Kravin’s accounts for years, they could now claim it had never really belonged to the company at all and so shouldn’t be taxed.

To add to the illusion, they drafted a backdated set of back-and-forth correspondence between the two companies. They even produced fabricated annual reports detailing how “trustee” Kravin had managed the money in the intervening years. Some of these backdated documents appear not to have been created until 2008 – half a decade after the event.

Reviewing the findings, Mitchell concluded the arrangement amounted to tax evasion: “It’s a straightforward and blatant move to protect from legitimate taxation assets which should otherwise have been subject to tax.

“If it happened in England and it was in the millions, HMRC would be thinking about a prosecution.”

Three other experts agreed that the backdated transactions were devised to evade tax.

The result was worth it: five years after the fact, $2bn disappeared from Kravin’s balance sheets – and with it, any tax liabilities. The exact sum evaded is impossible to calculate, but we think it will have been millions of dollars.

2. The case of the disappearing château

In 2005, Deloitte circulated some draft accounts for an Abramovich-owned Cypriot company called Amiscan Investments Ltd.

On its balance sheet was over $600m in luxury assets including a $38m Sussex estate, an $8m London flat and a French château, as well as several helicopters, private jets, superyachts and a supercar.

When the audited accounts for Amiscan were finally published, though, something curious had happened – every one of those assets had vanished.

But how do you make $600m disappear in a flick of a pen? Deloitte and Meritservus had quietly shifted the assets’ ownership from Cyprus to the BVI, making it look as though this had happened years in the past.

Amiscan’s original list of assets included itemised real estate, aircraft and yachts

… but they were wiped from the record thanks to backdated papers

The problem had arisen due to new disclosure rules that meant Amiscan would have to publicly reveal its assets.

In an email chain between Ioannides, Tenenbaum and De Cort in late 2005, Ioannides refers to a previous “meeting of the Trustees”, in which they “considered whether it will be more prudent not to disclose the above information, to which there was consensus”.

The files show how Deloitte, Meritservus and Abramovich’s associates created backdated agreements to shift all the assets on Amiscan’s balance sheet to its shareholder, Kelvedon Worldwide, in the BVI, meaning they would no longer need to be made public.

The Château de la Croë in the French Riviera, which was erased from Amiscan’s assets list

Gamma-Rapho via Getty

… along with Abramovich’s Pelorus superyacht

Universal Images Group via Getty

They fabricated trust agreements and share certificates too, since Amiscan had previously held the shares in its subsidiaries through a nominee trustee. And the deal was structured in a way that meant no actual cash needed to change hands, because of course no payment had been made in 2003.

The deception was far from watertight: no one appeared to notice, for instance, that Kelvedon had not even owned Amiscan at the time of the “agreement”.

De Cort, a qualified solicitor in Belgium and the US, helped draft the fabricated documents and Tenenbaum approved the plan.

Deloitte knew the agreements were fiction because the firm had already made draft accounts for Amiscan which detailed the assets it held. Nevertheless, it scrubbed the draft and signed off its replacement as giving “a true and fair view” of the company’s financial position.

“That is just not truthful,” according to Lord Prem Sikka, emeritus professor of accounting at the University of Essex.

“Companies are required to publish true and fair accounts. And if the transaction dates are being misrepresented that is not being truthful. That is a violation of a statutory duty. So I think it is pretty scandalous really.”

Three other tax experts who reviewed our findings concluded that there did not appear to be any legitimate reason to justify the backdated transaction and that Deloitte appeared to have deliberately misrepresented the accounts.

3. Pick a company, any company

Electus Investments Ltd, yet another Cyprus-based company, sat at the top of Abramovich’s offshore empire. It was the holding company that held all the other holding companies – and by extension his Sibneft stake, worth billions.

In 2003, like Amiscan, it faced Cyprus’s new disclosure rules. And Amiscan’s fix wasn’t available to Electus: there was no company above it to shuffle its assets to. But what if there was another Electus Investments Ltd?

From late 2002, the files show that Deloitte had reserved the name for an identically titled company, this one in the BVI.

Then in November 2003, Deloitte decided that it was time to formally incorporate the company, to be initially held by a nominee shareholder. The leaked files say virtually nothing more about this Electus doppelganger until over two years later, when it became central to their backdating deception.

Rather than disclose or transfer the assets, the group opted to simply swap one Electus for the other, hoping no one would notice. For two decades, it seems, no one did.

The plan was conceived almost three years after the fact; the paperwork wasn’t finalised until 2008, nearly half a decade on. Electus BVI was simply subbed in for Electus Cyprus. At a stroke of a pen, over $10bn worth assets disappeared from one company and reappeared in the other.

Abramovich (centre) with Tenenbaum (left) aboard his superyacht in 2004

Graeme Robertson / Getty

“The amounts are very significant, very material and they are being backdated – retrospectively being moved,” said Lord Sikka.

“What we appear to have here is a fiddle factory. In a fiddle factory, you fiddle the transactions, you backdate them and that is what appears to have been happening here regularly.”

Three other tax experts who reviewed the leaked documents concluded that there appeared to be no justification for the retroactive switch.

Before going ahead, the group needed to be sure there were no recorded ties between Electus Cyprus and Abramovich. Combing through their records, they found one reference: a footnote in the UK accounts of Millhouse Capital, naming the company as its ultimate owner.

In one candid email, Ioannides suggested that they could simply pretend the Millhouse accounts had made “an oversight” in namechecking Cyprus, or else quietly change it for BVI in its next set of accounts.

Ultimately, the group decided on a third option: Electus Cyprus would be kept active, retained solely to own Millhouse UK, the last visible trace of a multibillion-dollar deception.

In response to questions related to the first three case studies, lawyers for Abramovich and Tenenbaum denied involvement in, knowledge of or authorisation of improper backdating or falsification of documents, the concealment of assets, tax evasion or the preparation or approval of false or misleading accounts.

4. Pulling $100m out of the hat

In 2000, Tenenbaum met Deloitte’s Ioannides in London to discuss a sensitive issue they wanted solving. Abramovich, it seemed, wanted to extract just shy of $100m from his Sibneft companies, by this time owned through Cyprus holding companies.

However, according to an email from Ioannides, it was essential that the transaction couldn’t reveal the Cyprus-based part of the network and instead had to appear “earned”. The logic of the deal isn’t explained further.

Deloitte’s solution was a set of backdated, falsified consultancy agreements directly involving Abramovich. The transaction Ioannides proposed was as complicated as it was bogus.

Abramovich’s Sibneft-owning companies would pay an intermediary company, PB Mediapower Enterprises Ltd, $98m for “consultancy services” and the intermediary company then paid Abramovich 99.9% of this in “commission” for having acted as its “agent”. The consultancy services were supposedly recommendations on buying and selling Sibneft shares from other Abramovich-owned companies.

The catch: those share transactions had already happened around a year earlier, so Deloitte needed a company that already existed at the time. Ioannides found a suitable Cyprus shell company, having recommended steering clear of jurisdictions like the Isle of Man, where questions might arise over the need for an old company.

The Deloitte Cyprus headquarters

Kostas Pikoulas / NurPhoto via Getty Images)

With Tenenbaum’s authorisation, Deloitte’s nominee directors signed the falsified documents and incorporated them into the annual accounts. Abramovich’s commission was then converted into promissory notes – effectively IOUs – which he cashed in over the following three years. The leaked files contain 50 such notes, all certified by his signature.

Regarding the $98m withdrawn through PB Mediapower, Abramovich’s lawyers said he denied taking part in a scheme to enrich himself through sham agreements and backdated documents.

The lawyers said he could not recall the context or detail of the arrangements but said: “Deloitte is a respected professional services firm. Reliance on its advice by any relevant entity was entirely proper and legitimate.”

Tenenbaum’s lawyers said he denied knowingly taking part in a scheme using sham agreements and backdated documents to extract $98m for Abramovich.

• Jersey has been running a money-laundering and corruption investigation since 2022 into whether billions of pounds worth of Abramovich-linked frozen assets are proceeds of crime. It is ongoing. (Abramovich filed a challenge to the European Court of Human Rights in April calling the probe unfair and abusive.)

• The roughly £2.5bn from Abramovich’s 2022 sale of Chelsea is still frozen in a UK bank account after a long-running dispute with the UK government over the beneficiaries of the funds, which had been pledged to charity. The government has said it is preparing to take him to court, which Abramovich’s team has said it will contest.