‘Princess of Uzbekistan’ indicted as crime syndicate boss

Receive free White collar crime updates

We’ll send you a myFT Daily Digest email rounding up the latest White collar crime news every morning.

Gulnara Karimova, the globetrotting former billionaire socialite and daughter of ex-Uzbek dictator Islam Karimov, has been indicted in Switzerland on charges of heading an international crime syndicate.

Karimova, 51, who has been imprisoned in Tashkent since 2014, is accused of having plundered hundreds of millions of dollars from Uzbekistan and systematically bribing corporate executives and government officials around the world. She is also accused of having laundered ill-gotten gains through an array of companies and bank accounts centred in Switzerland.

Swiss prosecutors filed a case against Karimova — who for years travelled the world as a UN diplomat, with immunity from prosecution, promoting her fashion brands and hobnobbing with celebrities — in the Swiss Federal Criminal court in Bellinzona on Thursday afternoon.

The case accuses her of heading a criminal organisation known as “the office” which comprised dozens of individuals and more than 100 separate companies — all with apparently legitimate business interests — secretly working in concert to hide stolen money and enrich its members.

Grégoire Mangeat, Karimova’s Geneva-based lawyer, said she “contests all the charges and will fight for her acquittal”. “The criminal organisation theory is totally disputed. It was pulled out of a hat by the Swiss prosecutors only a year ago, 10 years after the start of their investigation,” he said.

He added: “Our client Gulnara Karimova has been held in arbitrary detention for almost 10 years. She has no indication of how much longer she will have to spend in prison in Uzbekistan.”

Shortly after the indictment was filed, the federal prosecutor of Switzerland said: “In view in particular of its size, its mode of organisation, its infrastructures, the scale of the assets that it held and the qualifications of certain of its members, ‘the office’ conducted its criminal activities as a professional business, complying with mandatory regulations and observing a strict allocation of tasks, while also resorting to violence and intimidation.”

The central hub of “the office” was alleged to be the Swiss company Zeromax, which collapsed in 2010, becoming Switzerland’s second-largest ever bankruptcy. Thanks to Switzerland’s opaque corporate disclosure laws, Zeromax’s implosion attracted little attention for more than a decade.

In 2021, the Financial Times revealed that creditors of the company — which was owed SFr2.5bn — were suing auditor EY, which had signed off on Zeromax’s accounts for years despite highly unusual activity at the company. Millions were spent on jewels, luxury medical treatments and properties apparently unconnected with its official activities as the holding company of natural resources and construction enterprises in Uzbekistan.

Thursday’s indictment against Karimova, once dubbed “the princess of Uzbekistan” for her lavish lifestyle, also states that a criminal investigation against one of Switzerland’s most prominent private banks, Lombard Odier, is “ongoing” in connection with the case.

Karimova used safety deposit boxes at Lombard Odier to store diamonds and other gemstones worth millions of francs. More than SFr400mn in liquid assets are still frozen at the bank in accounts in Karimova’s name.

The bank is being investigated “on suspicion of failing to exercise sufficient diligence in financial transactions and aggravated money laundering”, the prosecutor said.

A spokesperson for Lombard Odier said the bank did not comment on ongoing investigations, but pointed out the bank has been co-operating with investigators since 2012 in the case.

For years Karimova avoided investigation in Switzerland thanks to diplomatic immunity granted to her by various roles she performed at the UN in Geneva.

With the waning health and death of her father Islam Karimov — who ruled Uzbekistan as its autocratic president from 1991 to 2016 — Karimova lost her powerful political protection, however. In 2014, amid a shift in political power in Tashkent, she was placed under house arrest and in 2017 was convicted of embezzlement in Uzbekistan.

She has since been subject to torture and deprivation of basic human rights, her legal representatives have claimed.

Swiss prosecutors claim “the office” began operations in Switzerland in 2005, and used the country for the next decade to help salt away stolen money.

The original, and main, source of the organisation’s gains was alleged to be bribes paid by western telecommunications companies to develop Uzbekistan’s communications network in the early 2000s. From that point the organisation grew in its ambitions and scope.

In a leaked diplomatic cable from 2010, the US state department declared her a “robber baron” and noted than she had “bullied her way into gaining a slice of virtually every lucrative business” in Uzbekistan by exploiting her father’s power.

The UK’s Serious Fraud Office said in August it had taken control of three properties worth more than £20mn that were owned by Karimova.