Sanctioned Russian Banker, Head of Putin’s Piggy Bank, Uses Proxy for Vast Holdings

The son of a globe-trotting Canadian communist, Eric Whyte moved to the Soviet Union as a boy in 1966, and was educated at a prestigious school outside Moscow. Those are nearly all of the scant details publicly available about his life –– even “Champagne and Meatballs,” a book-length memoir by Whyte’s late father, Bert, only mentions his birth.

But while Whyte maintains a low profile, leaked corporate documents offer a clue about his activities over the past decade or so: He appears to be a frontman for sanctioned Russian banker Andrei Kostin.

Whyte owns companies registered in secretive offshore financial jurisdictions that hold luxury properties across Russia and Europe. Many of these assets have links to Kostin, a key Kremlin ally and head of the state-owned bank VTB.

A larger corporate network of firms with connections to Eric Whyte’s companies owns more properties, as well as investments and stakes in Russian retailers and restaurant chains — including Burger King and KFC — worth some $130 million.

“It looks very compelling that Whyte has been acting as a proxy for Kostin,” said Tamara Makarenko, a veteran of the business intelligence sector with extensive experience investigating oligarchs.

“The pieces of the puzzle… are reflective of how we know oligarchs have been hiding their wealth,” she said after reviewing OCCRP’s findings.

Kostin has good reason for wanting to disguise any riches he might have accrued during his 20 years as chairman of VTB: He is sanctioned in the U.S. and EU for his support of the ongoing Russian war in Ukraine and the annexation of Crimea in 2014.

Whyte, Kostin, and VTB all declined to comment for this story. But Kostin did give a frank interview to CNBC in 2018 about the impact the sanctions were having on him personally.

He had been unable to travel to Bali for an International Monetary Fund meeting, he said, nor could he go skiing in Colorado. “Which is very unfortunate. The best snow [is] in Colorado –– a very good mountain,” he said.

Whyte Winery

During the Soviet years, members of the ruling elite often had summer houses in the sunny seaside town of Foros, on the Crimean peninsula.

After the Russian annexation of Crimea in 2014, a new breed of elite Russians rushed in. Multiple media outlets at the time reported rumors that Andrei Kostin had snapped up a luxury villa in Foros, along with a winery in the Alma Valley, 70 kilometers to the north.

“Winery executives won’t reveal who it belongs to, although the Russian media have speculated that it’s the president of one of Russia’s most powerful banks,” wrote Meinenger’s Wine Business International in 2015.

A grape vine at Alma had been personally planted by Vladimir Putin, the article reported, before noting that the winery’s Petite Arvine white was a “pleasant surprise.”

While the links to Kostin were never definitively proven, the European Union cited his ownership of the estate and winery when it imposed sanctions on him in 2014, saying he had backed “actions and policies that undermine the territorial integrity of Ukraine” and benefitted from the annexation.

Both the winery and the villa, it turns out, were kept in Whyte’s hands for years. One of Whyte’s offshore companies, Vargas Properties Ltd., controlled the Russian company that owns both the house and the winery.

That’s far from the only example of Whyte’s companies holding assets linked to Kostin. Whyte also owns two British Virgin Islands firms that have been involved in swapping Moscow properties linked to Kostin.

In a blockbuster investigation that made headlines around the world, Russian opposition leader Alexei Navalny showed how two luxurious apartments had been transferred to Kostin’s girlfriend, the glamorous pro-Putin TV host Nailya Asker-Zade. One was gifted to her by a senior VTB executive, while the other came from the bank itself.

But there was a middleman in the VTB transfer.

The year before Asker-Zade received the apartment in 2014, it was transferred to an offshore company registered in the British Virgin Islands, Erelson Investments Ltd.

Erelson Investments, it turns out, was owned by Eric Whyte.

VTB transferred ownership of the property — a luxurious three-story townhouse in Moscow — to Whyte’s Laroy Enterprises in 2006. Laroy then transferred the property to Kostin in October 2015.

Kostin subsequently sold it to yet another offshore company, Angerston Holdings, in April 2016. Angerston financed the purchase by borrowing $7 million from VTB’s former subsidiary in Cyprus, RCB.

“Rental income from a property could be presented as dividend income in Cyprus, and thus non-taxable,” she said.

Cyprus was also a popular option because, until just last month, it didn’t have a publicly available database of ultimate beneficial owners — “so it was easy to hide Russian ownership,” Stylianou said.

Another Cyprus company owned by Whyte owns half of a luxury hotel in the Austrian Alps which has long been linked to VTB bank and Kostin. (Read OCCRP’s story about the hotel.)

And yet another offshore company, Bramsen Trading Limited, provides even more evidence tying Whyte to Kostin.

Bramsen was set up in the British Virgin Islands in 2010 by Kostin’s son, also named Andrei, who died the following year in a quad biking accident on a country road outside Moscow. At some point after that, Whyte quietly became Bramsen’s beneficial owner.

The transfer of the firm strongly suggests that “Eric Whyte is a proxy for Kostin,” said Florian Horcicka, an Austrian anti-money laundering expert.

Whyte’s portfolio also includes two valuable properties in France, one of which also has a tie to Kostin.

He owns a luxury villa near St. Tropez through Cypriot company Gedsea Holdings Ltd and a French subsidiary. Gedsea acquired the property in 2009 from Roger Markus Ingold, a Swiss businessman reported to have been Kostin’s adviser, who also served as a director of the Swiss subsidiary of another Russian state bank led by Kostin.

French corporate records show Whyte owns a Paris property on the banks of the Seine — worth 6.2 million euros in 2010 — through another Cyprus firm, Hundbern Investments Ltd.

And he is the director of a Russian branch of a Cyprus company that owns a centuries-old merchant’s townhouse in Moscow that has been converted into high-end offices.

Article Credit: https://www.occrp.org/en/asset-tracker/sanctioned-russian-banker-andrei-kostin-head-of-putins-piggy-bank-uses-canadian-man-as-proxy-for-vast-holdings