https://pressway.org.uk/news/300563-britich_lawyer_fined_for_financial_monitoring_breach_in_case_involving_funds_of_azerbaijani_officialefs_family

British lawyer Rory Fordyce has been ordered to pay £32,500 (approximately $42,000) for failing to adequately vet funds linked to the family of Azerbaijan’s former security chief, which were used to purchase expensive property in southern England, according to a ruling by the U.K.’s Solicitors Disciplinary Tribunal (“SDT”). 

The tribunal fined Fordyce for misconduct related to his dealings with Anar Mahmudov, the 41-year-old son of former Azerbaijani national security minister Eldar Mahmudov. In addition to the fine, Fordyce was barred from holding any legal management or compliance roles for five years and was ordered to pay £50,000 (about $64,000) in legal costs.

The SDT described Fordyce’s efforts to verify the source of wealth and funding as “rudimentary, piecemeal and naive.” The tribunal noted that the anti-money laundering breaches occurred between 2013 and April 2015 and involved two high-value transfers from members of the Mahmudov family into a client account at Taylor Fordyce, the law firm where Fordyce was a director.

One payment — a transfer of more than £1.9 million (nearly $2.9 million) received on April 17, 2015 — was “recorded on the ledger for Continental Properties Limited in their purchase of a property,” according to the tribunal. The SDT didn’t specify the property.

Fordyce, who did not respond to OCCRP’s request for comment before publication, retains the right to appeal the tribunal’s decision at London’s High Court.

OCCRP has reviewed land registry documents showing that Continental Properties — a company registered in St. Kitts and Nevis — purchased the commercial real estate in Newbury, in southern England, for over £1.85 million (nearly $2.9 million) on May 22, 2015. The company was listed as being “care of” Taylor Fordyce in the records shortly after the transaction.

The property includes several commercial units such as Pizza Hut, a tutoring center, the bakery chain Greggs, and a Salvation Army donation store.

As of early July, Continental Properties remained the owner of the real estate, according to public data on overseas property holdings.

Because the company is held through an overseas trust, the U.K.’s offshore ownership register does not list its ultimate beneficiaries. British laws exempt trust-held firms from public disclosure, though beneficial ownership details must be submitted to government authorities. Transparency campaigners have warned that this exception can be exploited to obscure ownership.

It remains unclear whether Anar Mahmudov or other family members are the beneficial owners of Continental Properties. OCCRP reached out to Mahmudov for comment but received no response by publication time.

According to the SDT, Fordyce told regulatory authorities that Continental Properties was ultimately owned by Continental Trust, which was “created by [Anar Mahmudov] as settlor.” He also stated that Mahmudov was not “a director, shareholder or beneficial owner of Continental Properties Ltd,” and that both Mahmudov and his wife were “excluded as beneficiaries of the trust.”

The tribunal found, however, that the funds used to purchase the property originated from Nargiz Mahmudova, Anar Mahmudov’s sister.

The tribunal concluded that Fordyce relied too heavily on “contradictory” information provided by a U.K. accounting firm representing Mahmudov — as well as by Mahmudov himself. “Mr. Fordyce, in the knowledge that more information was required, had prioritised the transaction over his regulatory obligations,” the judgment stated.

Dr. Helen Taylor, deputy director of the anti-corruption watchdog Spotlight on Corruption, told OCCRP by email that the case warranted “urgent scrutiny of how these funds were used,” particularly given “a string of scandals” involving Azerbaijani-linked money in U.K. real-estate.

“This case highlights the vulnerability of small outfits who may avoid asking tough questions of a major client keeping them afloat,” Dr. Taylor added.

In 2020, OCCRP and Finance Uncovered reported on a trove of leaked documents from an offshore bank, revealing that the Mahmudov family had built a European business and real estate empire worth at least €100 million. Neither Continental Properties nor the Newbury property were mentioned in that earlier investigation.

A lawyer for Anar Mahmudov and Nargiz Mahmudova previously told OCCRP that the family’s wealth stemmed from a 19th-century ancestor and that the siblings’ “assets and business interests are properly registered and declared in accordance with legal and regulatory requirements.”