Cyprus abolishes citizenship through investment programme
Cyprus officials implicated in plan to sell passport to criminals
How I exposed the politicians willing to sell passports in Cyprus
An inside look into undercover operations on Cyprus’ golden passport scheme.
13 Oct 2020 | 29 min read
Hi, I’m Angie. I am an entrepreneur, personal assistant, millionaire heiress, party girl, anything I need to be. In truth, I am an undercover reporter.
A year ago, I was sitting down to a late lunch by the waters of the Mediterranean in Ayia Napa, on the southern coast of Cyprus. Conversation and drinks flowed freely, as the waiter served up morsels of fresh lobster. Between bites, I did a quick tech check. The overworked battery pack was burning against my bare skin, an oddly reassuring sensation that the undercover cameras were still recording. It was hour five of day three.
My lunch companions were basking in the warm sea breeze.
“Next time we’re here we should all take a boat, it’ll be very nice,” said lawyer Andreas Pittadjis.
Andreas has a legal pedigree. He is a partner at his father’s law firm, where he takes on high profile cases. We had just met the day before and quickly bonded over the prospect of lucrative business opportunities.
My colleague and I were posing as representatives of a nameless, fictional client we referred to as Mr X. An ultra-rich Chinese businessman, he had fled China after he was charged with bribery and money laundering. He received a seven-year jail sentence in absentia. And now he wanted to buy a Cypriot passport. We were told that Andreas was the man to help us do that, even though convicted criminals are not allowed to be granted passports under the Cyprus Investment Programme (CIP).
“No passport case is clean and clear, crystal clear. None of them,” Andreas told us. “They all have their issues, that’s why they want a passport. Everybody has issues, everybody.”
He was a captivating storyteller with a flair for the dramatic. With just a touch of faux modesty, he regaled us with stories about difficult passport application cases and how he had succeeded in working the system each time.
The man who introduced us was also at the table. With his slicked-back hair, loose patterned shirts and generous smiles, Tony Kay resembled a seasoned dealmaker from the Costa del Sol. He is a Brit who runs a property agency in Cyprus with his wife, Denise. They have carved out a profitable niche on the island, helping real estate investors obtain European passports through the CIP.
These “golden passports” allow foreigners who invest a minimum of $2.5m to obtain a passport, and the right to live and work across the European Union. It has brought more than $8bn to Cyprus since 2013, and most of that has gone into the real estate sector.
The business of selling … passports
The Kays were our first “friends” on the island. They did not shy away when we shared our mission. “I think, I’m right in saying that, frankly, it won’t be so much focused on the investment or really anything other than making sure we can get this passport for this client,” Tony said when we first met them in our hotel room, and we agreed.
The tone was set from the start that we were there with the sole purpose of procuring an EU passport for our criminal client, Mr X, and, thankfully, our new Cypriot contacts were in the business of selling.
“Where there are problems, it costs more money to achieve these things. So, what we will do is find out who has to be spoken to and who has to be paid, what investments need to be made,” Tony told us.
To incentivise them, we explained that there were many more clients in Asia who could also be interested if this went well. If we had other potential applicants, Andreas thought it was best to strike quickly. It was October 2019 and the window of opportunity was closing.
“The passport programme was changed in January this year … and they’re thinking of changing it again, make it even more difficult. That’s why I’m saying if you have people that they need a passport even now, don’t wait,” he told us.
The laws were being tightened following criticisms of the CIP.
“Because they believe that we are selling passports, it’s under attack by the European Union, it’s under attack by European Commission, it’s under attack by the (anti) money laundering authorities,” Andreas explained.
Still, Cyprus offered the best option for the time being, Tony insisted.
“It’s a fabulous scheme for achieving the EU passports, right now. But like everything, for how long?” he said. “After nine months to a year they will change things, they will say you have to invest more money or you have to leave the money in for longer, or you have to reside maybe in Cyprus for a period of time, or you have to learn the language.”
‘Of course. This is Cyprus’
As we finally got up to leave the lunch, I was saturated with information and fish. I was also on the last legs of my last battery. But there was one pivotal question remaining for the solution finders.
I tried to look relaxed, but I was worried that I might be about to push our luck too far. I wondered if I should wait to ask it on another day, when I could be sure I had enough battery left to capture the answer. But we’d had a relaxing afternoon and Andreas was in a chatty mood. There might not be a better time. So I asked it:
“Can my client change his name on the new passport, just a little bit?”
Andreas did not skip a beat. “We can name him Andreas Jr,” he said. “I have a client that his name now is the name half of United States has. But if you check his original name, he cannot even travel with that name. So, we made an affidavit in Cyprus, changed his name, changed his passport. He is travelling now with his new passport, nobody knows.”
“Really? You’ve done this before?” we ask.
“Of course. This is Cyprus,” he shrugged his shoulders and chuckled as he sauntered off towards his shiny black car.
This meant that Mr X could obtain a new passport and completely change his identity, freeing him from any consequences of his criminal past. It was confirmation that the loopholes in the system allow criminals to essentially disappear, evade justice internationally and ensure that their wealth is untainted by their crimes. God, I hoped we’d got that on camera.
‘When you know the angels, you don’t need God’
We spent the next morning viewing high-end luxury properties around the south-east of the island that Mr X could potentially invest in. They were all projects by one of Cyprus’s largest real estate developers, Giovani Group. Christakis Giovanis, also known in Cyprus as Christakis Giovani, who heads the group, also happens to be a member of parliament.
Tony and Andreas told us that Christakis was an important man to know, a miracle worker. He knows all the right people for what we were doing.
“When you know the angels, you don’t need God,” Andreas explained.
They are all part of a specialised team of enablers. And Christakis’s connections were key to overcoming our hurdles. We met him over dinner at his favourite Japanese restaurant. Christakis has a kind, grandfatherly face. He sat in the corner and did not say much. But when he did speak, it was in low, gentle tones. It was hard to hear him over the din of the restaurant, so I edged closer for better audio recording.
Christakis left the talking to his right-hand man Antonis Antoniou, the executive director of Giovani Group; only nodding occasionally as he quietly ate plates of tuna tartare and sea bream.
Antonis laid out the next steps in our pursuit of a passport. He told us the main complication with our client’s conviction would be getting his profile past the banks, and his funds into Cyprus.
“The number one part is how we complete a good KYC for the money to arrive in Cyprus. Put the file together and through the banks we can accommodate the money here in Cyprus.”
KYC, or Know Your Client, is a background check that financial professionals run to verify risks. It is part of measures to curb money laundering. This is Andreas’ forte and he later explained the importance of putting together a “good” KYC to paint the right picture for the banks.
As he went into greater detail, the chef brought over seemingly endless servings of salad and sashimi. It was getting harder to film as plates and glasses filled the table.
Soon, Antonis and Christakis left to catch a red-eye flight for a quick business trip. But we were asked to extend our stay on the island for another day until they returned. “You’ll find it to be very worthwhile,” Tony promised.
‘The higher, the better’
During our four days in Cyprus, we were shown the sites – from the undersea caves and rock structures of Cape Greco to the party scenes of Nissi Beach.
“If you send clients over, when they arrive we chaperone them, we look after them. They’re treated very, very well,” Tony assured us. “When they leave here they’ll be in love with Cyprus. And we will achieve whatever they need to achieve.”
Over a series of three long lunches and two dinners, our Cypriot advisors guided us through the roadmap to securing a European passport for a criminal applicant. Andreas and Christakis are both registered service providers of the CIP. Instead of telling us that Mr X was not eligible for a passport, we were given step-by-step tutorials on the potential ways to achieve our goal. It was a blueprint for money laundering – moving Mr X’s funds into Cyprus, despite his criminal convictions, through the banks and getting the government to look the other way.
I was both amazed and nervous that we had gotten that far without providing a name or ID for Mr X.
Andreas let us in on an industry secret – there is a two-track application system. One is the official route.
“You can still get a passport for two million [euros]. Nobody will say no,” Andreas explained.
But the other path required more money.
He elaborated: “A differential and preferential treatment is given to people that the society and the government feels that they are not buying the passport. They are investors … Those over the limit are treated differently. Nobody would admit that. You cannot see this in any book, or any regulation. My humble opinion is if this guy is interested and you have the issues that we have discussed already he should commit to higher investment. If there are issues and we want a passport to be issued fast, go higher. How high? Up to you. The higher, the better.”
When Antonis returned from his trip, he picked us up for a drive around the island in his silver Range Rover. Even in the afternoon heat, he was impeccably dressed; the sleeves of his navy blue shirt stylishly rolled up, his luxury timepiece glinting in the afternoon sun.
“You have many opportunities where somebody can make very quick money,” he told us.
We drove past Sun City, a Giovani development in the making with a hotel and beachfront villas.
“Our investors in Sun City, we gave them passports very quickly … because they invested about 18 million euros, they got the passport like this,” he said, snapping his fingers. “The more you invest you are in more favourable terms. You can skip the waiting list, as we say.”
He already had a project in mind for us – an amazing investment opportunity that our client could get in on early. It became clear that the investment he was seeking went far beyond the $2.5m the CIP requires.
We stopped at an undeveloped plot of land by the water. A 10-minute drive from the Sun City site, it was a picturesque sea canal in Liopetri. The water was calm and clear. It was quiet and peaceful; a far cry from other blue-flag beaches saturated by tourists.
“If you have any rich people who want to have a five-star hotel right on the beach, this is number one on the chart. Twenty million euros. The rest we can make from the sale of the apartments,” Antonis told us.
The proposal was to acquire the land to build a five-star hotel run by an internationally renowned hotel chain.
‘Nobody would care’
In the meantime, Andreas had some ideas about how we could bring in Mr X’s funds, despite his money laundering conviction. One option was using a front company that was untainted by the applicant’s criminal conviction, he explained.
“Not all companies are criminals,” he said, seated at his office desk, a large mural of Gandhi on the Salt March behind him.
“I had a client who was convicted in relation to a criminal offence. He could make an investment in Cyprus because the origin of the money was clear.”
Another way for Mr X to invest in Cyprus would be to do it in his spouse’s name. His spouse would be the main investor and he would gain entry as a dependent. Under the CIP, a spouse or child can apply for a passport as a dependent of the main investor.
“In the bank, they will not check the husband. They will just check the investor, who’s bringing the money. So if the person bringing the money is a company that doesn’t have to do with the client, nobody would find out. Nobody would care,” Andreas explained.
And when it got past the banks, Christakis’s connections would get the application the rest of the way, he added.
“When it goes to the government you have Christakis’s assistance. And Christakis will push so that they maybe overlook the husband because he’s not the primary investor.”
The ease with which they shared all the ways that a convicted criminal could become an EU citizen was surprising. The advice we received, including the use of front companies, hiding behind nominee directors, influencing civil servants to overlook our client’s criminal record, creating proof of funds and painting the right picture for banks, was so matter-of-fact, it felt surreal – as though we were bringing to life the Panama Papers. While the Panama Papers uncovered that shell companies were used for fraud and to evade taxes and international sanctions, here we were being handed the blueprint for how that could be achieved.
We found it difficult to square many of the “solutions” they described with Cyprus’s money laundering regulations. To me, paying a cash donation in return for support of Mr X’s case sounded a lot like corruption and bribery. But our Cypriot network of enablers insisted that it was not illegal.
“You cannot bypass the systems,” Andreas told us. “You have to dance to the rhythms of the music of the regulation.”
‘You are in my kingdom’
In a few days we had bonded with Tony the property agent who specialised in getting passports, Andreas the lawyer with the know-how to prepare a KYC that would get Mr X past the banks, and Christakis the MP-slash-property magnate with the right connections to get the government to look the other way.
Our hosts had spared no expense in hospitality. “You are in my country, you are in my town, you are in my kingdom. Cannot pay. It will be a great insult,” Andreas said.
But without providing a name, business card or passport for our client, Mr X, they were starting to get impatient. Each day, they prodded us to share his business card and a copy of his passport. And each day, we found ways to stall and delay. But it was getting harder to dance around their questions.
The night before we were due to fly out, my colleague and I were having dinner with Andreas at the local tavern. He told us he had received a call from a doubtful Christakis.
“Andreas, I am bringing to this lunch the second-in-command of the whole Cyprus and we don’t even know about who we’re talking. Should I cancel lunch?” Andreas told us Christakis had asked him, referring to a lunch we were due to attend at his house the following day.
I wondered if we would be able to make a clean exit.
But, Andreas told us, he had assuaged Christakis’s fears. “I told Christakis. ‘See these people, I am taking the risk, I vouch for them’.”
My colleague promised that, yes, we would send the business cards tomorrow. The tension passed, but we were clearly on thin ice.
The following day, our invitation to lunch at Christakis’s home seemed too good to be true. Was it a trap? Had our covers been blown?
For safety reasons, I try to avoid undercover meetings on the subject’s turf. It leaves me vulnerable, unable to first recce the location or to formulate an exit strategy.
But this time, we went ahead, staying in communication with the team waiting nearby, in case things went awry.
As always, I offered a handshake to sidestep the awkwardness of hugs while wearing a recorder.
His home was grand and his family gave us a warm welcome. Waiting for us was a guest of great importance. It was a celebration in honour of Demetris Syllouris, president of the Cypriot House of Representatives – the second highest office of state.
In attendance were some of the people we had met during four days there, including Tony and Antonis.
It is a rare insight for a journalist to see elected officials – a member of parliament and the president of parliament – in a home setting surrounded by loved ones. We work hard to quickly forge friendships with our subjects, to win their trust and learn their motivations. That pays off on a day like this one, when we gain access to their inner circle and the privilege of being invited to dine at their home with their family. But the closer you get, the greater the unease. It is an incongruity that comes with being an undercover reporter.
It was the weekend and they had prepared an impressive spread. Everyone was relaxed and laughter echoed through the house. Christakis opened a bottle from his prized wine collection.
We toasted to good health. But the glasses were getting in the way of the cameras.
Demetris was briefed on Mr X’s situation. He understood our client’s need for privacy. He considered it and in a private conversation, away from the party, offered suggestions.
Demetris indicated that he would personally discuss our application with those in charge. “I will call the minister to come into my office and the permanent secretary of the minister. Okay? Come in my office. And I tell him, ‘What do you think about that?’”
“And they may tell, ‘Okay, forget it.’ ‘What about his wife?’ If she’s okay, the wife, we’ll go with the wife. And then she can bring him in as a husband.”
But there is a second option. If things don’t go well in Cyprus, he knows presidents of parliaments elsewhere and will put in a good word for us to apply in those countries.
“I can do something in many countries. I know all the presidents of parliament,” he explained. “I’m not talking about Sweden or Denmark. But I know Malta, I know Latvia, I know Slovenia.”
He asked us to reassure the client that there would be a solution.
“You can tell him that he will have, without mentioning my name or anybody else, full support from Cyprus at any level – political, economic, social, everything. Full support.”
With that promise, Demetris revealed what he wanted in return. The prospect of us bringing in many more high net worth passport buyers had been a great motivator. With the Brexit deadline looming and political instability in Hong Kong, he said many would now be interested in mobility and access to the EU.
“There are a lot they may want a European passport, so you bring them in Cyprus,” he told us.
Between his connections, the property developers, and our clients, we could get a good business going, he said.
“And this is going to be very good business for you and Antonis. Okay, with full support for you.”
We had the president of parliament’s blessing. But it was a secret.
“Don’t say that to anybody. Even Tony. Don’t say I speak to you. Because I have to protect my name as well,” Demetris told us.
Did he have confidence that he could help us get a passport for our criminal applicant, Mr X?
“I cannot say 100 percent, but I say 99 percent.”
Good enough. I had put on weight from overeating, but otherwise, the investigation was a success.
A year later, when confronted with the evidence, all those involved denied any wrongdoing and claimed to have been suspicious of us from the outset. Andreas Pittadjis said he had reported us to Cyprus’s Unit for Combating Money Laundering (MOKAS) two days after we left the island. Christakis Giovani, Tony Kay, Antonis Antoniou and the Giovani Group all said they had supported Andreas Pittadjis’s report.
After the investigation was released, the Cypriot government announced an end to the Cyprus Investment Programme (CIP). Attorney General George Savvidis launched a full investigation into the evidence provided by the documentary. Demetris Syllouris, President of the House of Representatives, is abstaining from duties until investigations are completed. Christakis Giovani resigned from his position as member of parliament and from all his positions within the AKEL party.