Europe’s richest man Bernard Arnault in money-laundering probe

The world’s second richest man, Bernard Arnault, is at the center of an alleged money laundering scandal.

The Paris prosecutor’s office is investigating financial transactions involving the boss of luxury goods giant LVMH and a Russian billionaire, Nikolai Sarkisov, whose brother Sergey founded one of Russia’s largest insurance companies Reso-Garantia.

The investigation concerns their activities in Courchevel, an exclusive ski resort in the French Alps that was known as a playground for ultra-rich, especially wealthy Russians before the war in Ukraine.

Sarkisov, 55, reportedly acquired more than a dozen properties in the Alpine luxury hotspot in 2018 in a complex deal in which Arnault, through one of his companies, reportedly provided a loan.

According to reports from Le Monde newspaper, Arnault’s loan was worth an estimated £16 million, and the scheme – which involved companies in France, Luxembourg and Cyprus – allowed the Russian oligarch to pocket a profit of around £1 million .

Arnault, 74, the founder, CEO and chairman of Louis Vuitton and Moet Hennessy owner LVMH, has earned the nickname “the wolf in cashmere” during his decades at the top and is worth an estimated £134 billion, according to Bloomberg. Billionaires Index.

He and his family own 41 percent of the group, whose luxury brands also include jeweler Tiffany’s and watchmaker Tag Heuer.

But the Frenchman appears to have run into trouble when an unidentified official from Tracfin, the French finance ministry’s financial intelligence agency, told Le Monde that the Sarkisov deal could have been aimed at uncovering the origins of the money paid for the property was used well, to hide.

The Paris prosecutor’s office said a preliminary investigation had been launched last year and confirmed to Reuters that transactions involving Arnault and Sarkisov were part of the probe.

Arnault is said to have a special bond with Courchevel because he learned to ski there as a child. Meanwhile, Sarkisov’s wife, Ilona Kotelyukh, has described Courchevel as “my oasis,” according to reports from The Times last year.

A spokesperson for Reso-Garantia said: ‘The transaction was managed by a small investment unit that invests professionally in European real estate.

‘It consisted of acquiring apartments in an old building in Courchevel from various private owners, with the intention of later selling them to a developer once the whole building had been bought up. All transactions were carried out by French companies, through French notaries and by French lawyers on all sides. This was a typical real estate transaction.”

LVMH could not be reached for comment, but Le Monde cited a close contact with Arnault as saying the deal fell within the scope of French law.

But the investigation is undoubtedly a major blow to Arnault, who in February lost a high court case against French tax inspectors over the legality of a 2019 raid on LVMH’s headquarters. The raid was related to a tax fraud investigation related to activities in Belgium.