Sunday, 19 December 2010
Russian billionaires oligarchs favourite fixer and English lawyer met his horrifying death
It is 6.56pm on March 3, 2004. A brand new, six-seater, £1.5million Agusta A109E helicopter lands under an overcast sky at Battersea heliport in South London. Waiting impatiently and clutching his two mobile phones is a broad-shouldered lawyer named Stephen Curtis.
The 45-year-old climbs aboard and manoeuvres his bulky frame into a rear seat. At 6.59pm the helicopter lifts off, bound for Dorset. Flying conditions are reasonable with visibility of four miles. The lawyer turns off his phones and sits back. After a stressful day fielding a string of calls at his £4million penthouse apartment in Battersea, he is looking forward to a relaxing evening at Pennsylvania Castle, his magnificent retreat on the island of Portland.
Boris Berezovsky, was among the clients of lawyer Stephen Curtis. By the time the helicopter approaches Bournemouth airport, it is raining lightly and the runway is obscured by cloud. The pilot, Captain Max Radford, who regularly flies Curtis to and from London, radios air traffic control for permission to land. ‘Echo Romeo,’ replies Kirsty Holtan, the air traffic controller. ‘Just check that you are visual with the field.’
‘Er, negative. Not this time.’ Holtan increases the runway lighting to maximum intensity. This has the required effect and a mile from the airport the pilot radios: ‘Just becoming visual this time. ”Do you require radar?’ asks Holtan. ‘Yes, yes,’ replies Radford, his voice now strained; he repeats the word 11 times in quick succession. Suddenly, the helicopter descends sharply to the left. It then swings around almost out of control. Within seconds it has fallen 400ft.
‘Is everything OK?’ asks Holtan. ‘Negative, negative,’ replies Radford. The helicopter is less than a mile east of the threshold of Runway 26 when the height readout is lost on the radar. For the next 56 seconds, the pilot confirms he has power but then suddenly, frantically, radios: ‘We have a problem, we have a problem.’ As the chopper loses power, at 7.41pm Radford shouts down the open mike: ‘OK, I need a climb, I need a climb. Radford can be heard struggling to turn out of a dive but he has lost control. ‘No! No!’ he shouts.
The helicopter nose-dives into a field at high speed and explodes on impact, sending a fireball 30ft into the air. Curtis and Radford die instantly. The news of Curtis’s dramatic death was not only deeply traumatic to his wife and young daughter, it also sent shockwaves through the shadowy world of Russian oligarchs, the Kremlin and those working in the murky offshore banking world where billions of pounds are regularly moved and hidden across continents. But alarm bells were also ringing in the offices of Britain’s intelligence and law enforcement agencies – because Stephen Curtis was no ordinary lawyer.
Blessed with remarkable intellect and a prodigious memory, Stephen Langford Curtis was born in Sunderland on August 7, 1958, the son of an accountant. Graduating with a law degree from Aberystwyth University, Curtis’s career took off in the early Eighties when he was a tax solicitor at City law firm Fox and Gibbons. In 1990 he set up his own firm, Curtis & Co, specialising in commercial and property transactions. In 1997 he started working for Bank Menatep, set up by Mikhail Khodorkovsky, then Russia’s richest man.
Stephen Curtis, who died in a helicopter crash in March 2004
Menatep – registered at a PO box in Gibraltar – was at the centre of all Khodorkovsky’s business operations. The former mathematician owned the £15billion Siberian oil company Yukos: the potential flow of money from it was huge and required a complex set of arrangements. Curtis set about masterminding the restructuring of Yukos and its offshore network. Khodorkovsky trusted the sociable Curtis. He liked the way the lawyer kept most of the details in his head and the paper trail to a minimum. This helped maintain secrecy.
Like an absent-minded professor, Curtis often carried about him scraps of paper with scribbled notes relating to hundreds of millions of pounds. And on the rare occasions when he could not recall data, he would telephone his staff at 3am for the answers. Sometimes minutes were kept. The scale of the operation was revealed in the leaked minutes of a meeting in June 1999 at Curtis’s offices in Park Lane, Mayfair. These showed complex and impenetrable financial networks that stretched across the globe. Hundreds of millions of dollars of Russian oil profits from Yukos were spirited away via offshore accounts in Gibraltar, the Cayman Islands and the Isle of Man. However, exactly how much will never be known.
In 1998, Curtis advised the American defence and communications contractor Lockheed Martin when it was looking for a Russian-based partner to help establish a satellite company for direct broadcasting in Russia. Menatep recommended Boris Berezovsky and that is how he and Curtis first met. Berezovsky was another wealthy Russian – he had made his fortune from car dealerships, oil and a media empire. At this time, Berezovsky, Khodorkovsky and another tycoon, Roman Abramovich, were unknown in Britain, as was the phenomenon of the Russian oligarchs, which they were to spearhead.
The term oligarchs to describe Russia’s new breed of super-rich came to prominence in the early Nineties. On October 13, 1992, Bank Menatep announced plans to provide banking services for ‘the financial and industrial oligarchy’ – clients worth at least $10million. However, Russia proved an uncomfortable place for these millionaires and billionaires. There were too many people pointing fingers in Moscow restaurants, too much scrutiny by the tax authorities, and the constant fear of assassination.
Russia’s rich could not go anywhere without bodyguards and bullet- and bomb-proof cars. Even wearing bespoke suits attracted attention. But in Britain they found they were able to travel around freely and mostly unrecognised, spending their gains without fear of censure or investigation. And their earnings from their homeland were tax-free. In Britain, foreigners can claim they are ‘domiciled’ abroad even though they may have lived here for years and have British passports. Under this rule, ‘non-domiciles’ would pay tax on only their UK income and not on overseas income, which usually made up the bulk of their earnings.
From the turn of the 21st Century, the oligarchs scattered their wealth around like confetti, helping to transform London into the world’s leading playground of the super-rich, contributing to runaway property prices and soaring profits for the retailers of luxury goods. The oligarchs soon became famous but the untold story of ‘Londongrad’ is one of greed, excess, secret business deals and political intrigue. After talking to associates who have never spoken before and drawing on new material, we have managed to build up the most comprehensive account so far of one of the most pivotal figures in the life of the oligarchs – the powerful and mysterious Stephen Curtis.
The fast-talking Curtis loved the complex and often unorthodox structure of the Russians’ business and finances, but his colleagues had been less than happy when he first started to work for them. Late one evening in 1998, sitting in the back of his Mercedes, Curtis told a confidant: ‘I need to tell you something. We’ve got some major new Russian clients. ‘The friend was dismayed. ‘That’s crazy,’ he replied. ‘Why are you getting into bed with the Russians? It will be a disaster. They play by different rules. If you fall out with them, they will come after you. You are dealing with the Devil.’
Curtis laughed. ‘Well, I will jump on their backs and ride all the way down to hell.’ He was mesmerised by the high-rollers and high stakes. This was his chance for the big time. After one particular trip to Moscow, he told his staff breathlessly: ‘It’s like the Wild West out there. A few businessmen own everything. It’s amazing.’ The Russians – by nature often sceptical, fearful, and paranoid – trusted Curtis with hundreds of millions of their money.
He protected their wealth from scrutiny by the Russian authorities. He was the guardian of their secrets, the only person who could identify and unravel the opaque ownership of their assets – property, yachts, art, cars, jewellery and jets, as well as their bank accounts, shareholdings, companies and trusts. He revelled in the circles in which he now moved. A source who was present recalled how, during one business meeting at a bank attended by Curtis, Berezovsky, Abramovich and their associate Sheik Sultan bin Khalifa bin Zayed Al-Nahyan, brother of the ruler of Abu Dhabi, the bank’s compliance officer told the Sheik: ‘We need your passport and a utility bill as proof of identity.’
The Sheik’s aide was stunned. ‘He is the son of the Crown Prince of Abu Dhabi,’ he said. ‘He does not carry around copies of his electricity bills. ‘An amused Sheik responded by taking out his wallet and handing over a pile of dirhams – the currency of Abu Dhabi. The bank’s official was shocked. ‘Why are you offering me cash?’ he asked. ‘Well, you asked me for proof of identity,’ he replied. ‘My face is on these bills.’ The meeting dissolved into laughter. On one occasion, Curtis was given an inexpensive-looking Russian doll. His young daughter nonchalantly played with it and later discarded it in her toybox. Curtis did not realise its value until he saw the same doll on sale in a Moscow store – inside the toy was a diamond necklace worth thousands of pounds. The lawyer immediately retrieved it from his daughter’s playroom on his return from Russia.
Stephen Curtis’s castle in Dorset
By now, Curtis had amassed a sizeable personal fortune, enough to enable him to acquire his own helicopter, a private aircraft and his London penthouse as well as the 19th Century Pennsylvania Castle. The sudden wealth, however, was accompanied by intense pressures. He was no longer easy-going but quick-tempered and impatient instead, behaving more like a typical oligarch himself. He started tipping doormen £20 every time he walked into a hotel, and entertained lavishly at London nightclub Chinawhite, where he was given a special VIP room. During one epic night at another club, Stringfellows, he spent £20,000 on the best table, vintage champagne, dinner, lap dances in private rooms and tips.
He also hired executive boxes at Manchester United for Berezovsky and Yukos executives, and for Abramovich. It was at one such match that Abramovich decided to buy a football club – in 2003, he became the owner of Chelsea Football Club. In November 2002, Curtis became a tax exile in Gibraltar, managing Khodorkovsky’s global business empire from his hotel suite. But events were to take a turn for the worse: in October 2003, Khodorkovsky was arrested at gunpoint in central Siberia for alleged massive tax evasion and fraud. ‘The s*** has hit the fan,’ Curtis told colleagues. ‘I cannot go back to Russia now. I will be arrested immediately.’
A month later Curtis found himself further embroiled in the conflict when he took over the running of Menatep following the arrest of its chairman, Platon Lebedev, on suspicion of fraud. Russian newspapers began referring to a ‘mystery man’ in Gibraltar who controlled Russia’s second-biggest oil producer. Billions of pounds were at stake, the political survival of Russian President Vladimir Putin was in the balance (many Russians felt the oligarchs were sucking the nation dry and wanted Putin to bring them into line), and Curtis was billed to play a crucial role in the forthcoming trial of Khodorkovsky.
He feared that sooner or later the Russian authorities would come knocking on his door asking questions about his role in alleged tax avoidance and the filtering of cash out of the country. He also feared that he might become the target of commercial enemies – rival oil companies and minority investors of Yukos who claimed that they were being defrauded. Curtis also knew contract killings in Russia were commonplace. ‘I have dug myself into a hole and I am in too deep,’ he told a colleague. ‘I am not sure that I can dig myself out.’
Investigators study the remains of Stephen Curtis’s helicopter
A few weeks before his death, Curtis had returned to Britain and was under constant surveillance by private investigators acting for disgruntled minority shareholders in Yukos subsidiaries, and by Russian state investigators. He even moved his office desk away from the window because he was convinced someone would shoot him in the back of the head. In early 2004, Curtis’s security consultants, ISC Global, discovered a small magnet – the type used to secure listening devices – at his Dorset castle. According to Curtis’s uncle, Eric Jenkins, the lawyer received numerous anonymous threats and intimidating phone calls, and took them seriously enough to hire a bodyguard.
‘There certainly were death threats against Stephen,’ confirms Nigel Brown, head of ISC Global, which also provided security for Berezovsky and Khodorkovsky. ‘The timing of his death was very suspicious and there were people out there who had a motive to kill him. He just knew too much. At first Curtis dismissed the threats, but when one phone call mentioned his wife and 13-year-old daughter, he decided to act. In mid-February 2004, deeply worried, he approached the Foreign Office and National Crime Intelligence Service and offered full but covert co-operation.
As he was legally obliged, Curtis had always been scrupulous in reporting ’suspicious transactions’ to NCIS, which investigates money laundering and organised crime. In May 2003, for example, he had filed a suspicious transaction report about one of his Russian clients. Now, he told close friends, he offered to provide information about Russian commercial activities in Britain and the oligarchs’ assets in return for protection for himself and his family. For NCIS, Curtis was a prized informant with insider knowledge of controversial Russian business activities in London. He was immediately assigned a controller, but after only two meetings the NCIS officer was transferred to another operation. Curtis asked to be assigned a different controller, but before this was done, he was dead.
A week before the fatal crash Curtis told a friend: ‘If anything happens to me in the next few weeks, it will not be an accident.’ He had laughed, but he was not joking. He had played the messages left on his mobile phone to colleagues. ‘Curtis, where are you?’ asked a voice with a Russian accent. ‘We are here. We are behind you. We follow you.’ The threats convinced some of Curtis’s colleagues and relatives that he was murdered. ‘Definitely,’ one former employee of his law firm claims. ‘It was done by remote control. They knew about his flight plans in advance because they were tapping his phones.’
Captain Radford’s father, Dennis Radford, told the subsequent inquest that he did not think that the Air Accidents Investigation Branch had properly investigated the possibility of foul play. ‘The lack of security at Bournemouth airport is such that had anybody wished to sabotage the aircraft, they would have unchallenged and unrestricted access for that purpose,’ he said. Witnesses say that they heard an unexplained and extremely loud bang just before the crash. ‘I heard a kind of thump and the dog started barking, so I came outside and I heard another couple of bangs. It made a particularly harsh noise, as if the engine was malfunctioning,’ Jack Malt, who lives near the crash site, told the inquest.
But deteriorating weather conditions and pilot inexperience were blamed for the crash. According to the AAIB inspector: ‘The most likely cause of the accident was that Captain Radford became disorientated during the final stages of the approach to Bournemouth airport.’ Yet flying conditions were not especially hazardous. As Dennis Radford later claimed: ‘Max had flown many times in considerably worse conditions than that. And if he became disorientated, why was he on the radio describing the runway and talking to the control tower 29 seconds before the crash?’ The inquest jury at Bournemouth Town Hall took just over an hour to reach a verdict of accidental death. Curtis’s former security advisers remain sceptical.
Nigel Brown is adamant that it was an assassination and is highly critical of the police. ‘What I cannot understand is why there has never been a proper murder investigation,’ he said. There was a just cause of suspicion because Stephen had received death threats, there was a motive because of what he knew and there were suspicious circumstances. But the police did not interview me or my colleagues or Stephen’s clients or his employees. Usually, the police would interview the last person to speak to him and I was that person. We may not know for sure what happened to Stephen, but I think there could have been a more thorough inquiry.’
Curtis’s funeral was held on April 7, 2004 at All Saints Church in Easton on the Isle of Portland. Most of Curtis’s clients attended, as did Boris Berezovsky, with his girlfriend, two bodyguards and an entourage. When Berezovsky and his colleagues left at the end of the service, the remainder of the congregation, who felt uneasy at the sight of these stern-faced Russians, moved out of the way to let them pass.
The death of Stephen Curtis, the lawyer who knew too much, remains a mystery. Roman Abramovich’s purchase of Chelsea Football Club gave him access to two of the executive boxes that sit on the halfway line at their Stamford Bridge ground. Others cost up to £1million a season to rent. As he often invites a crowd of friends to watch Chelsea games, Abramovich tried to hire another box, offering the owner considerably more than £1million. The owner refused and so Abramovich upped the price several times. The answer was still no. So money can’t buy absolutely everything, it seems, although for Russia’s London-based oligarchs, it does come pretty close.
There are an estimated 300,000 Russians in the capital. Most are ordinary middle-class professionals, but dominating the group is the tiny subset of oligarchs with their apparently limitless wealth. On arrival in London, an oligarch’s first port of call is an estate agent, where deals are typically cut at high speed. As one agent recalls: ‘A buyer wanted to spend £64million on three properties – two in Central London and one in the country or in Scotland. I asked him for a banker’s reference, and he said, “No need, I’ll pay cash.”‘
In 2006, a fifth of all houses in the UK that sold for more than £8million went to Russians. And members of their inner circle are able to indulge in extravagant purchases, too – Stephen Curtis owned a castle in Dorset. Size is necessary for the essentials of the oligarch lifestyle – an indoor pool, gym, and staff accommodation. According to estate agents Knight Frank, some clients spent up to £400,000 on advanced electronics alone: ‘One had a system that enabled him to see who was knocking on his door in London from anywhere in the world, via a video clip sent to his phone.’
Most oligarchs also acquire their own jet. Roman Abramovich has three, including a Boeing 767 nicknamed the Bandit. Then there’s the yacht. Billionaire property magnate Vladimir Doronin used his luxury Lady In Blue to whisk fiery model Naomi Campbell off on a romantic cruise last year. In 2003, Abramovich bought Pelorus, the tenth largest private yacht in the world. It has a swimming pool with an artificial current and an owner’s cabin with panoramic views. Valerie Manokhina, a former friend of Abramovich, says Russian men are obsessed with competition.
‘It is size that matters,’ she explained. ‘The ladies go to a restaurant with the latest bag, the boys do it with boats and planes.’ This influx of high-spending Russians has changed the profile of many of London’s top retailers. Most luxury department stores and boutiques now hire Russian-speaking staff to help the wives and girlfriends of oligarchs shop. The obsession with spending stems from a fatalistic approach to life. Russians have no concept of saving, just as they have no concept of tomorrow,’ says Marina Starkova, a director of Red Square PR company. Such fatalism may explain Russia’s age-old reputation as a nation of enthusiastic vodka drinkers. But those who move to London quickly acquire a taste for fine wine.
One dealer admitted that some of his clients were spending enough to support a small wine merchant single handedly, though money can’t buy sophistication. Wine writer Tim Atkin remembers watching four cigar-smoking men at the Michelin-starred Hakkasan restaurant ordering a £1,560 bottle of 1996 Chateau Petrus – which they then diluted with Diet Coke. Abramovich is teetotal, although he’s developed an expensive taste for sushi. Late one afternoon he was in Baku, Azerbaijan, and remarked that he fancied sushi for dinner. Baku isn’t known for its Japanese cuisine, so the aide ordered £1,200 of sushi from Ubon in Canary Wharf. It was collected by limousine and then flown 3,000 miles by private jet to Azerbaijan. At an estimated total cost of £40,000, it must surely rank among the most expensive takeaways in history.