News

Wagner Inc: a Russian warlord and his lawyers

In April 2020 a cargo flight took off from Zhukovsky airport outside Moscow heading towards Khartoum. According to the documentation, the aircraft was carrying 28,000 kilos of Russian gingerbread cookies being flown to the Sudanese capital by an obscure company registered in St Petersburg called RN Trading.

At the time, the flight passed largely unnoticed. In fact, the cargo — which weighed almost as much as 12 Range Rovers — was sent on behalf of Yevgeny Prigozhin, the Kremlin-backed catering entrepreneur who has transformed himself from an ex-convict into the founder of a private mercenary operation that offers muscle to dictators around the world.

The paramilitary outfit, known as the Wagner Group, has waged war in the Middle East and Africa as an unofficial foreign policy tool of the Kremlin — even though Prigozhin spent years denying the group’s very existence. In recent months, as Russian forces have suffered significant setbacks in Ukraine, units operated by Wagner have become an increasingly important part of the Russian invasion.

Prigozhin’s reward has been a series of natural resources concessions. He in effect now runs a mining multinational that includes, according to the US government, gold, diamonds, oil and lumber operations across Syria, Sudan and the Central African Republic.

These activities have made Prigozhin one of the most sanctioned individuals on the planet and over the past five years, western governments have scrambled to shut down his companies.

Anyone facing such pressure needs a good lawyer.

A Financial Times investigation based on leaked emails and documents, as well as corporate records, export certificates and interviews, demonstrates how Prigozhin has used leading corporate lawyers around the world to try to keep western governments at bay.

Having instructed a leading firm in Moscow, he established a string of shell companies that have allowed his mercenary operations in Africa and Syria to keep functioning. The documents provide an unprecedented insight into Wagner’s business operations, revealing a group of front companies connected to Prigozhin, such as RN Trading, that have managed to operate unsanctioned up until this day.

At the same time, he hired high-profile lawyers in London and Washington and spun an elaborate lie about his innocence and sued journalists reporting on his activities. In one case, lawyers were given special authorisation by the UK government to represent Prigozhin in a libel claim.

Since Putin launched his all-out invasion of Ukraine, western governments have issued sweeping sanctions on a series of oligarchs and other figures close to the Russian leader. But even among the individuals that the west has tried to isolate and marginalise, Prigozhin is a special case.

In every combat zone Wagner mercenaries have appeared, allegations have quickly surfaced of human rights abuses, including summary executions, torture, rape and the murder of journalists. On Friday, the White House said it would designate Wagner as a “transnational criminal organization” and would introduce further sanctions.

Two years ago a video emerged of Russian-speaking mercenaries brutally murdering a Syrian man by beating him with a sledgehammer, beheading him, severing his arms with a trowel, and setting him on fire as his torturers laughed. The individuals, who were later identified by the Russian independent news outlet Novaya Gazeta as Wagner mercenaries, kicked his severed head on the floor like a football.

In November, a new video appeared on a Wagner-affiliated Telegram channel of a deserter from the fighting in Ukraine who appeared to be killed with a sledgehammer. Prigozhin later released a statement joking about the killing, calling it “excellent directorial work that’s watchable in one sitting”.

The hidden network of Prigozhin companies underlines the challenges faced by western governments in trying to use sanctions to stifle the activity of key figures in Vladimir Putin’s war machine.

The documents also raise ethical questions about the law firms that have represented Prigozhin. Some of the lawyers have emphasised that the legal system depends on the principle that everyone is entitled to representation. Critics, however, say they have ended up representing a gangster who has tried to use western courts as a tool of asymmetric warfare on behalf of the Russian state.

“The publicly available evidence was abundantly clear that he was the head of a terrorist organisation, Wagner Group. Yet they agreed to represent him anyway,” says Matthew Jury, the solicitor for a journalist sued by Prigozhin. “This is a red line any ethical lawyer should refuse to cross.”

Prigozhin did not respond to a request for comment. However, when the FT requested comment from an employee of the Wagner founder, Prigozhin himself replied on Telegram: “If [the FT] thinks that my employee will respond to this endless chewing of shit in his mouth, in turn I would like to respond to the Financial Times . . . Spit that shit out, breathe some fresh air.”

Project Shakespeare

In April 2018, a man called Evgeniy Burleev emailed Pavel Karpunin, a partner at Capital Legal Services, one of Russia’s top law firms, from his personal Mail.ru account to inquire about setting up an external server for them to communicate securely. The email from Burleev was forwarded to the law firm’s IT team.

“From my side everything is ready,” the IT worker replied. “The server is set”. The work CLS was doing was codenamed “Project Shakespeare” and its employees were aware that it required the utmost discretion.

Burleev’s boss was Prigozhin and Project Shakespeare had a very specific function. According to a cache of emails seen by the FT and released by the non-profit transparency collective Distributed Denial of Secrets, it was a secret, multiyear legal campaign co-ordinated by CLS to help Prigozhin overcome an avalanche of western sanctions imposed on the Russian businessman that have been in place since well before the 2022 invasion of Ukraine.

Karpunin, the CLS partner, referred to Prigozhin as his “favourite client”.

Prigozhin began his career selling hot dogs on the streets of St Petersburg in the early 1990s, having served time in a Soviet prison for taking part in a robbery where a knife was held to a woman’s throat to steal her handbag. By the turn of the millennium, Prigozhin had set up a string of fashionable restaurants, and won the attention of the new Russian president Vladimir Putin, who asked him to cater dinners for visiting foreign leaders including George W Bush.

Concord Catering group, Prigozhin’s company, soon began to win lucrative contracts from the Russian state, making its founder rich and earning him the epithet “Putin’s chef”.

From catering, he moved into providing mercenaries for hire. Wagner was founded in 2014 and quickly began to gain international notoriety.

UN investigators documented how Wagner mercenaries had been involved in human rights violations in Central African Republic including torture, disappearances, summary execution and rape. In June 2019, Sudanese paramilitary fighters, who had been trained by Wagner mercenaries, killed more than 100 protesters in the country’s capital Khartoum.

Prigozhin was indicted by the US Department of Justice in 2018 for financing so-called troll farms used to interfere in the 2016 US elections.

Western governments also started to focus on the companies connected to Prigozhin that had been awarded valuable concessions in return for the military support Russia was providing.

In April 2020, the US Department of the Treasury, which had in 2018 already sanctioned a company belonging to Prigozhin that had been awarded an oil contract in Syria, moved to shut down his African network. The US imposed sanctions on Meroe Gold, the Sudanese gold mining operation. Washington said the company was “owned and controlled” by Prigozhin and served as “as a cover for Wagner forces operating in Sudan”, which it called “a designated Russian Ministry of Defense proxy force”.

At the same time as new sanctions were being introduced, the emails and other records show that CLS was working with other new entities that appear to have been secretly controlled by Prigozhin and remained unsanctioned.

In February 2020, lawyers at CLS began working for a Russian entity called RN Trading. The company has no visible connection to Prigozhin through shareholders or directors and lists its business purpose as engaging in activities including mining and oil extraction outside of Russia. However, in CLS’s billing records it is listed as belonging to Prigozhin’s Concord group of companies.

RN Trading has left behind a trail of links to Prigozhin’s sanctioned companies. According to Russian export data, the vast shipment of goods labelled as gingerbread cookies, sent by RN Trading on April 30 2020, went to a company in Khartoum called Meroe For Agricultural & Animal Production, which shares a similar name and the same address as Meroe Gold, a sanctioned company.

It is not possible to ascertain whether the 2020 shipment did contain only gingerbread.

CNN reported last year that Sudanese officials had inspected a Russia-bound plane in Khartoum and found gold in boxes that were labelled as cookies.

The CLS emails contain details of other companies that appear to be part of Concord. CLS was doing legal work for a company called Profit Group, which was listed in billing records as being part of Concord and whose functions are described as overseas oil extraction and mining, among other activities.

CLS has also done work for a company called Astrea, which is listed by the law firm as belonging to Prigozhin. This company shares a Russian director with “Velada LLC”, which was granted a concession by the Assad regime in Syria to explore for oil and gas. Velada was sanctioned by the UK government in 2022 for being connected to Prigozhin and benefiting the Syrian government.

None of these companies uncovered by the FT have been formally confirmed as being controlled by Prigozhin or being currently under western sanctions.

By using export data, it is possible to connect the Prigozhin companies listed in CLS records to the natural resources operations that are the subject of sanctions.

For several years, for instance, these companies have shipped large quantities of industrial materials and equipment on ships from Russia through the port of Douala in Cameroon.

In April, in the early stages of the Ukraine invasion, a Prigozhin company sent a shipment of tractors through the Douala port on their way to his logging operation in Central African Republic. The month before he shipped welding electrodes, insulation silicone and generators to his base in CAR.

Allen Maggard, an analyst at the Washington-based conflict analysis firm C4ADS, describes Prigozhin’s use of a “nebulous collection of different legal entities and shell companies” combined with offshore secrecy jurisdictions as critical to his and Wagner’s ability to operate.

“Even with a sanction (or two or three) lobbed against them, illicit actors of all kinds tend to use all of this — the shell companies, the nominee directors, the overseas secrecy jurisdictions, and more — to their advantage in order to maintain access to global systems of trade, finance, and transportation,” he says.

‘Stand up for your values’

During the same period prior to the 2022 invasion of Ukraine when it appears the CLS lawyers were providing legal services to Prigozhin’s companies, they were also engaged in a parallel legal effort to use western courts to protect his reputation.

CLS instructed a series of prominent lawyers in London and Washington to work on cases where they claimed that any alleged connection between Prigozhin and mercenaries was false. For CLS, this branch of their work for Prigozhin was known as Project Hamlet.

Leading law firms were eager to work with CLS on behalf of Prigozhin. One partner at Reed Smith, an international law firm, wrote in June 2020 to congratulate Vladislav Zabrodin, CLS’s managing partner, on the joint work by their respective firms in fighting the US Department of Justice’s failed attempt to prosecute Prigozhin for interfering in the 2016 US elections.

“I was very pleased to see the outcome of the joint efforts of your team and ours in relation to the Concord case — well done to everyone,” he wrote. “Separately, are you still considering Winchester College for your son? I was thinking of you yesterday when on a call (connected with old school golf/bursaries) the Headmaster suddenly came on the line!”

Several months later, in October 2020, Prigozhin was sanctioned by the EU for having “close links, including financially, to the private military company Wagner Group”. CLS reached out to Martin Lewis, a solicitor at Phillips Lewis Smith in London, to try to overturn the decision. This process was described by CLS as “shifting the narrative” about Russian mercenary activity.

In November 2020, Karpunin wrote to Lewis that “we need to try and prove the falsity of the allegations”, but accepted that he didn’t see any “realistic possibility of disproving the allegations attributed to Wagner”. “We need to move from the metaphysical discussion of whether it is possible to prove a negative and now discuss the physical reality of how to do it.”

After consulting with solicitors Phillips Lewis Smith, CLS prepared an application the following month to the General Court of the European Union to overturn the sanctions against Prigozhin. The application claimed: “He has no knowledge of an entity known as Wagner Group . . . He has no and has never had any links whether close or otherwise and whether financial or otherwise to any entity known as Wagner Group . . . The Council has not identified any entity known as Wagner Group.”

Yet to succeed in overturning the sanctions against their client, CLS needed to also show that the increasingly detailed reporting by Russian and western media organisations about Prigozhin’s mercenary activities around the world was false.

In 2021, CLS lawyers contacted Roger Gherson, a London-based solicitor well known for representing high-profile Russian clients, to begin pursuing a defamation case against Eliot Higgins, the founder of the investigative website Bellingcat which had published multiple articles about Prigozhin.

To sue someone on behalf of a sanctioned individual, Gherson first needed the approval of the British government. He applied for a special licence from the UK Treasury, which was granted.

Gherson, through a sister firm called Discreet Law, issued a libel claim against Higgins that claimed the British journalist had defamed Prigozhin by linking him to the activities of Wagner and the murder of the three Russian journalists in the Central African Republic. CLS also enquired about launching legal action against the BBC, but did not take the matter further.

Discreet Law in a filing in early December 2021 to the English High Court said that Higgins’ suggestion that its client was “centrally involved in the Russian state’s unlawful, clandestine and deadly military and paramilitary operations in countries around the world” had resulted in Prigozhin being “gravely damaged in his character and reputation and [suffering] great distress” for which he was seeking aggravated damages.

By the end of 2021, with the libel claim under way, Karpunin prepared to send a gift to Prigozhin to mark the new year. Inside the package was a small transparent bauble filled with fake snow, a pair of socks, and a note reading: “Stand up for your values”.

‘I represent a private military company’

That confident mood was before the invasion of Ukraine. Now, faced with the international revulsion at Putin’s war, the western lawyers who had acted for Prigozhin began to pull back. In March, Discreet Law, the firm which was suing Higgins, formally requested to stop working for Prigozhin. The court session was held in private, with the press excluded. This prompted a furious press release from Prigozhin, who maintained his innocence and, unable to get legal representation, accused the UK of “Russophobia”.

Suddenly lawyers in London found themselves under renewed scrutiny for the work they had done for Russian clients close to the Putin regime.

In May, a group of barristers and solicitors was asked to submit evidence to a UK parliamentary select committee over whether English defamation law needed urgent reform to stop it being abused by Russian oligarchs to silence reporting on their wealth and activities.

One member of the panel was Justin Rushbrooke KC, one of England’s leading media barristers who had acted for Prigozhin in his case against Higgins. He told MPs that abusive defamation cases were highly unlikely because “that essentially requires a claimant to base their case on a lie”. He added: “Such cases, in my experience and in the law books, are almost vanishingly rare, although they do happen.”

Four months later a video emerged online of a squat, bald man delivering a pitch to prisoners standing in a courtyard in Russia. “I represent a private military company,” he tells the inmates in black uniforms surrounding him in a circle. “You must have heard of Wagner?” The speaker in the video was quickly identified as Yevgeny Prigozhin — the man who had spent the past four years pursuing every legal option to hide his mercenary operations.

Within days of the video appearing, Prigozhin made another stunning statement — he admitted to founding the mercenary group. “I cleaned the old weapons myself, sorted out the bulletproof vests myself and found specialists who could help me with this. From that moment, on 1 May 2014, a group of patriots was born, which later came to be called the Wagner Battalion,” he said. He later also admitted to attempting to interfere in US elections.

In effect, he was publicly confessing that the cases brought on his behalf in the UK and US had been based on lies. In November, Prigozhin took the final step in giving up the pretence: he opened a glass-fronted, multistorey headquarters for Wagner in St Petersburg embossed with the mercenary outfit’s logo.

“It was very clear that this was an act of revenge by Prigozhin,” says Higgins of the libel action against him. “He was given relief from sanctions to sue me, and I find that particularly aggravating. All the evidence since then has shown this was a clear abuse of the English legal system.” Higgins says he was left £70,000 out of pocket for costs he will not be able to recover. “His lawyers knew what they were doing, and we have had to bear the financial cost.”

Pavel Karpunin, the CLS partner, said he could not comment on the details of confidential client work, but said the firm was “shocked” when Prigozhin admitted to founding Wagner. He said a lawyer is a “neutral party” who must advance a client’s position in a professional manner. “None of our services could be considered being facilitation of evasion of any sanction regime,” he added.

Reed Smith declined to comment. Roger Gherson, for Discreet Law, said the firm had “at all times complied fully with their legal and professional obligations”.

Justin Rushbrooke declined to comment. Unlike solicitors, who can choose freely whether to represent a client, barristers in England operate under the so-called cab-rank rule, where they are obliged to take a case if they are available, regardless of the identity of the individual. Prigozhin’s lawyers in London all stopped acting for him well before he admitted that he did run Wagner.

Martin Lewis at Phillips Lewis Smith said sanctioned individuals should have the right to defend themselves under the rule of law. “A valid legal system is not there only to serve the fragrant and unchallenging. And being a lawyer is not a passport to popularity,” he said.

Jury, the lawyer who defended Higgins, remains highly critical. “Prigozhin, a man whose organisation has murdered journalists, sought to use the English courts to silence and intimidate our free press. His lawyers facilitated that,” he says. “That should be a cause for deep shame and concern.”

​Letters in response to this article:

Questions raised by the Wagner vs Bellingcat case / From Michael Winckless, Bangkok, Thailand

Let’s cap fees for Russian work at legal aid rates / From Charlie Geffen, Former Senior Partner, Ashurst, London SW17, UK

Articles You May Like

Trump’s FCC pick sends stern letter to Bob Iger ripping Disney-owned ABC News for role in ‘erosion in public trust’
Falling demand leaves Mexico with a 500mn-litre tequila lake
McDonald’s demands ex-StreetEasy CEO demolish his Tribeca penthouse in $10M legal feud
Biden launches new Chinese chips trade probe, will hand off to Trump
Zuckerberg addresses rumors of a massive ‘Doomsday bunker’ under his $270M Hawaii compound