Court of Appeals upholds fraud verdict against founders of TBC Bank, Lelo party

Mamuka Khazaradze (l) and Badri Japaridze were charged with laundering $16.7 million in 2019. Photo: RFE/RL, 26 Jan 2023 - 18:46, Tbilisi,Georgia

The Tbilisi Court of Appeals on Thursday upheld last year’s verdict of the Tbilisi City Court against Mamuka Khazaradze and Badri Japaridze, the founders of TBC Bank and Lelo opposition party, confirming their fraud in a case dating back to 2008.

The ruling upheld the City Court’s decision that found the two guilty of group fraud with businessman Avtandil Tsereteli and sentenced them to seven years in prison. Japaridze and Khazaradze however avoided imprisonment through expiration of the statute of limitations by the time of the ruling.

Last year’s Court ruling itself followed a 2019 money laundering charge against the two, in which they were charged with laundering nearly $17 million in 2008.

The prosecution had argued TBC Bank had loaned the money to Tsereteli’s companies in the spring of 2008 and latter funnelled the sum back to Khazaradze and Japaridze, with the bank writing off the loan in 2012.

The 2022 ruling eventually replaced the laundering article with fraud, a move that was appealed both by the prosecution and the defence. The former requested the article on money laundering be reverted in the case, while the latter claimed the changing of the article by the Court had meant no crime had taken place. 

Khazaradze, who in 2019 switched from banking activity to politics and founded the party in response to legal proceedings against him, said he would appeal the latest verdict in the Supreme Court.

In earlier comments, Khazaradze had accused Bidzina Ivanishvili, the founder of the ruling Georgian Dream party and the former Prime Minister, of orchestrating a “baseless case” against him with the objective of hampering his large-scale business projects.