The Billionaire Who Bought Trump’s Mansion Faces Scrutiny in Monaco

 September 7, 2018

Dmitry Rybolovlev
Just how much influence Dmitry Rybolovlev, a Russian billionaire whose penthouse overlooks the harbor in Monte Carlo, has over Monaco officials is the subject of a judicial inquiry. / Photo: Benjamin Bechet for The New York Times


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Just how much influence Dmitry Rybolovlev, a Russian billionaire whose penthouse overlooks the harbor in Monte Carlo, has over Monaco officials is the subject of a judicial inquiry. – reports The New York Times

There was a time here, in this principality on the Riviera, when Dmitry Rybolovlev could have been mistaken for royalty as he traipsed between restaurants, trailed by up to five bodyguards, more than the monarch himself, Prince Albert II.

Some days the prince would join Mr. Rybolovlev at a luxury box in Louis II Stadium, where they cheered on Mr. Rybolovlev’s professional soccer team, AS Monaco FC, a source of fierce national pride. Afterward Mr. Rybolovlev would retire to his penthouse, the Belle Époque, with its kingly view of Port Hercules and the ancient palace, where he attended the christening reception for the prince’s twins in 2015.

Lately though, Mr. Rybolovlev, a billionaire Russian mining magnate, has been less visible and Prince Albert has maintained a delicate, diplomatic distance from him.

Mr. Rybolovlev is still a force here, of course, owing primarily to his soccer team, whose success drew a recent grateful acknowledgment from the prince.

But for the past year here, a local magistrate has been reviewing whether Mr. Rybolovlev used lavish perks and season soccer passes to enlist Monaco law enforcement officials as allies in his long-running feud with a Swiss businessman, Yves Bouvier.

It’s a quarrel that began several years ago when Mr. Bouvier helped Mr. Rybolovlev buy 38 pieces of world-class art for a startling $2 billion. Mr. Rybolovlev has said in court papers that he believed Mr. Bouvier was acting as his agent and adviser on the transactions, and he earned fees for that service. But he later found, he said, that Mr. Bouvier had bought many of the items in advance, then flipped them to him at a markup of $1 billion.

In 2015, Monaco officials arrested Mr. Bouvier on fraud charges related to Mr. Rybolovlev’s complaint. The magistrate is investigating whether that decision was unduly influenced by Mr. Rybolovlev’s generosity, a premise that his representatives have vehemently denied.

“Monaco Football Club is only continuing the practice of invitations established before the purchase of the club by Rybolovlev,” said Brian Cattell, his spokesman, “and corresponding to the practice of most major clubs in France. It is absolutely legal.”

The dispute is far from the only reason Mr. Rybolovlev’s profile has risen so dramatically in the past year. His purchase of Donald J. Trump’s Palm Beach mansion for $95 million in 2008 has made him a mainstay in recent speculation about Mr. Trump’s Russian “connections.” And his sale of Leonardo da Vinci’s “Salvator Mundi” for $450 million, the most ever paid at auction for a painting, instantly elevated his art market profile.

But here in Monaco, where Mr. Rybolovlev’s flourishing soccer team had already made him a celebrity, he is also known for his role in what Prince Albert refers to as “The Rybolovlev Affair.”

Mr. Bouvier has said that, like any art dealer, he was entitled to charge Mr. Rybolovlev whatever he wished. His case has yet to be adjudicated and Mr. Bouvier, who was released soon after his arrest, continues to live in Switzerland.

The review of Mr. Rybolovlev’s conduct in the matter began with the disclosure that his Swiss lawyer, Tetiana Bersheda, had exchanged nearly 9,000 text messages with Monaco’s top police and justice officials.

Mr. Bouvier’s side says that the messages show Ms. Bersheda was coordinating with the Monaco police to plan the arrest of Mr. Bouvier after she invited him to Monaco for a business meeting.

Monaco’s justice minister, Philippe Narmino, abruptly resigned last year when his own texts to Ms. Bersheda became known, including a grateful acknowledgment from his wife for a 2015 helicopter trip to Mr. Rybolovlev’s Swiss chalet for skiing and a deluxe dinner hosted by a diamond merchant.

For months, the magistrate exploring the accusations of undue influence by Mr. Rybolovlev has been questioning the principality’s elite and exploring bank accounts. In recent weeks the French media revealed how Mr. Rybolovlev’s team had courted the local authorities with perks and tickets. Prince Albert has vowed that no misconduct would be tolerated, and also suggested the reports and leaks about the investigation threaten to damage Monaco’s institutions.

“It’s a story that has all the qualities of a dark, detective novel,” said Renaud Revel, author of “The Mysterious Mr. Rybolovlev.”

“It’s a portrait of a king,” he said, “without a crown, who turned the rock of Monaco into an opaque system of favors.”

Outside of Monaco, Mr. Rybolovlev’s name routinely surfaces in articles about President Trump’s Russian ties. The two men say they have never met. But their real estate deal, in which a Rybolovlev family trust bought Mr. Trump’s estate, has drawn the interest of one United States senator, Ron Wyden, a Democrat, who asked the Treasury Department for any records it might have on the transaction.

The price paid for the 6-acre property was a surprising markup from the $41 million Mr. Trump had paid only four years earlier. But Mr. Rybolovlev is on the way to recapturing the sum after having subdivided the property. Two of the three parcels have together reaped a total of $71 million.

Mr. Rybolovlev also did well with his Leonardo painting. As a matter of public relations, the profits generated by that $450 million sale have undercut the view of Mr. Rybolovlev as victim, since he only paid Mr. Bouvier $127.5 million for the work in 2013. (Mr. Bouvier had paid $80 million for it.)

But Mr. Rybolovlev has continued to pursue civil complaints against Mr. Bouvier in several places, as part of an effort to demonstrate that the Swiss businessman defrauded him by not acknowledging that he often acted as an independent middleman, not a fee-based adviser.

“The record sale of the painting of Leonardo da Vinci was a great success, but it changes nothing in relation to the hidden profit made by Mr. Bouvier,” Ms. Bersheda said. “My clients are entitled to the difference between the misrepresented price and the real price.”

In Monaco, Ms. Bersheda functioned like Mr. Rybolovlev’s ambassador to the local elite and prominent charities, leading the Friends of the Ballet de Monte-Carlo. Russian expatriates are increasingly visible in this microstate of millionaires where there is no income tax and where many luxury stores employ Russian-speaking employees.

But late in 2016 she moved her orbit from Monaco to London, where she continues to represent Mr. Rybolovlev, and has created a boutique law firm. She remains the president of the ballet and a board member of the soccer team.

As part of the influence peddling investigation, searches were conducted last year of the home of Mr. Narmino, the justice minister, and the Monaco Red Cross, where he remains a vice-president.

The investigation is also reviewing whether the soccer team used its popularity to become chummy with the Monaco authorities. A former Monaco policeman has told the investigators that as many as 25 law enforcement officials obtained pairs of free V.I.P. season passes valued at about $16,000 a pair, according to a transcript of his account. Mr. Rybolovlev’s representatives say courtesy passes are an established practice in the league.

The investigation grew out of an invasion of privacy complaint that was lodged against Mr. Rybolovlev and Ms. Bersheda in 2015 by Tania Rappo, a resident of Monaco who was once a close friend of Mr. Rybolovlev. Ms. Rappo accused Ms. Bersheda of illegally recording their personal conversation at Mr. Rybolovlev’s Monte Carlo penthouse in 2015.

Ms. Bersheda insists she was only aiding the Bouvier investigation because Ms. Rappo had assisted on some of the disputed art sales. Ms. Bersheda turned over her phone to the Monaco authorities to confirm that the conversation had not been edited. She objects to the fact that the police then also scrutinized her erased text messages.

“It is shocking that the same authorities subsequently used my phone for unrelated purposes, flagrantly breaching procedural rules, my own privacy and the legal privilege I enjoy as a lawyer,” she said.

Mr. Rybolovlev has challenged the scrutiny of his lawyer’s private telephone in court, but so far the rulings have gone against him.

Mr. Bouvier’s lawyer in Monaco, Frank Michel, said that some people would like the influence peddling investigation to shut down soon.

“I don’t know how powerful Rybolovlev is now,” he said. “This is precisely the reason for the investigation. There are many elements that lead us to believe there is a system of corruption, not only with one official, but a general system.”

Mr. Rybolovlev’s jet-setting absences from Monaco have fueled speculation that he plans to decamp and preside over a team, in another country — perhaps Italy. His representatives steadfastly deny the reports. Mr. Rybolovlev declared his fealty during an interview with a French television channel this summer, “I love this club and the principality.”

Sergey Chernitsyn, an adviser to Mr. Rybolovlev, has said repeatedly that Mr. Rybolovlev is satisfied with his Monaco penthouse, purchased for a reported 300 million euros and newly renovated this year.

“He likes the place. He is happy,” Mr. Chernitsyn said, adding in regard to the penthouse, “As always in business, if somebody comes and proposes — let us say one billion euros — in theory it could be discussed.”

Originally published by Doreen Carvajal at The New York Times

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