Liechtenstein criminal investigation
At present, a criminal investigation by the Liechtenstein Public Prosecutor is underway in relation to the Liechtenstein trust structure and the transfer of the Artwork and the Monetary Assets.
History
In May 2017, Tatiana filed a criminal complaint with the Public Prosecutor against Farkhad , Cotor Investments SA and persons unknown based on a suspicion that the offence of prevention of enforcement had been committed contrary to section 162 of the Liechtenstein Criminal Code. That section makes it an offence punishable by imprisonment for a debtor to conceal, discard, dispose of or forfeit any part of his assets, or to acknowledge a non-existent liability, or otherwise to actually reduce the appearance of his assets, thereby preventing or reducing the satisfaction of a creditor by way of foreclosure in pending proceedings. Essentially the complaint was that Tatiana and Cotor had transferred the Artwork and the Monetary Assets away from Cotor knowing that enforcement proceedings may take place in view of the pending court proceedings in England. The Liechtenstein courts thus opened a criminal case and, during the course of his investigation, certain orders were granted to the Public Prosecutor.
The first tranche of these orders prohibited another Liechtenstein bank, Bendura Bank AG [“Bendura”] from disposing of funds held in certain accounts held in the name of (a) Sobaldo in its capacity as trustee of the Longlaster Trust and (b) Counselor in its capacity as trustee of the Carnation Trust, in each case up to the amount of £350 million. These orders were made under section 97a of the Liechtenstein Criminal Procedure Code which permits the court, on the request of the Public Prosecutor, to freeze assets where it is feared that, otherwise, steps might be taken which would jeopardise a subsequent order for the forfeiture of assets obtained for or under the commission of a criminal offence.
The second tranche of orders required both Bendura to produce to the court all documents relating to the business relationships with those entities and Counselor in its capacity as trustee of the Genus Trust. These orders were made pursuant to section 98a of the Liechtenstein Criminal Procedure Code which permits an order to be made requiring a financial institution to provide documents to the Public Prosecutor where there is an investigation into money laundering, a predicate offence to money laundering, or an act relating to organised crime.
The complaints showed that both Counselor and Sobaldo appealed against the freezing and document seizure orders but those appeals were rejected on 24 April 2018. Counselor and Sobaldo now challenge those decisions before the Constitutional Court.
Source: the 2 October 2019 Knowles Judgment at [21]-[25].
The criminal proceedings are ongoing and no suspects have been charged to date.