ON THE TRAIL OF MILOSEVIC'S MILLIONS

Dominic Kennedy
The Times

Gold bars belonging to the National Bank of Yugoslavia were smuggled out of the country during the last days of Slobodan Milosevic's regime, according to a secret investigation into his missing millions.
The bank's identification stamps were said to have been removed from the ingots in a Greek port and the gold transported in small boats across the Ionian Sea to Italy.
Antiques, artefacts, gold and silver cutlery and rare carpets were also said to have been smuggled from Yugoslavia with the dictator's knowledge, having been either looted during the Balkans wars or "fenced" through the region after being stolen in western Europe.

The gold and other treasures were taken to Lebanon to be sold by traders and the proceeds delivered to members of the Serbian military, a confidential report says. On one occasion, cash was brought directly to the house of the former President, it says, adding: "Some portion of the proceeds of the sale of these shipments appears to have been remitted to the ex-President." Some of his money is thought to be in bank accounts in Switzerland and The Netherlands.
Important figures in Yugoslavia's "DB" secret police, regular police and the Ministry of Finance are implicated in the money-laundering exercise.
The Times has been given exclusive access to the full report, prepared for the National Bank of Yugoslavia into Mr Milosevic's missing assets. The preliminary investigation is the first step in Yugoslavia's quest to recover illegally obtained assets removed from the country under the Milosevic regime. The findings have been passed to the Yugoslav authorities.
The central bank sought specialist help from Forensic Investigative Associates, whose London office is headed by Lord Armstrong of Ilminster, a former Cabinet Secretary and head of the British Civil Service. The report's authors emphasise that it is an intelligence document and that more work is required before the allegations can be presented as concrete evidence to a court.
The former President, ousted in a popular uprising in October 2000, is on trial in The Hague for a decade of alleged war crimes and genocide in the Balkans, ending with the Kosovo conflict of 1999.
"We were advised by confidential sources that the ex-President received kickbacks, commissions and tribute from weapons-smuggling, the sale of a variety of precious objects (which could have been war booty or might have been stolen in western jurisdictions and fenced through Yugoslavian networks) and the sale of government-owned gold," the investigators say.
According to the report, the central bank's recovery team believes "the ex-President received illegal commissions related to sanctions-breaking. Whatever the ultimate source of the funds, our intelligence indicates that the ex-President received personal financial benefit. Payments were made to him in a variety of ways and involved different people and payment mechanisms."
The report identifies 19 suspects, including leading businessmen and public servants in Belgrade, and a former politician from the Middle East. Informants' identities are protected.
As President Milosevic prepared to fight his final doomed election campaign, treasures were being shipped around the Mediterranean and the profits returned to his personal address, the report claims.
A container shipment to Beirut in August 1999 was said to have been organised by a former paramilitary officer who served under Ratko Mladic, the Bosnian Serb general whose troops are accused of massacring 8,000 Muslim men and youths in Srebrenica in 1995.
The report says that the container held antiques, artefacts and precious objects like gold and silver cutlery and rare carpets. The container was sent to a wealthy art dealer, and its contents were shared among a small team of dealers.
The proceeds were collected by three Middle Eastern men, including a money launderer, the report says. One of them made four trips to Belgrade to deliver the takings. On each occasion he took the money to a Serbian military officer. Once the soldier took the cash directly to Mr Milosevic's house.
In early 2000 another shipment arrived in Beirut via Greece. The items were sold and the money sent to Belgrade. In January 2000 "there were two shipments from Yugoslavia to a port in Greece. In each instance, the contents of the containers included gold ingots bearing the stamp of the National Bank of Yugoslavia," the report says. "These stamps were erased in the Greek port. The gold was later sent on small boats to Italy. According to a confidential source, after the gold was sold, some of the proceeds were sent to a bank in Holland."
During 1999 and 2000, a money-laundering cell, including two Yugoslavs and a Russian, had transferred some of the ex-President's money through Yugoslavia, Cyprus, Greece and Lebanon to Switzerland, the report says.
In December 1999, the Russian and one of the Yugoslavs went to the home of a senior figure in the Ministry of Finance in Belgrade. He telephoned the head office of a bank in Belgrade, which arranged to transfer $6 million, DM2 million and £1 million to a bank account in Cyprus held in the Russian's name.
Meanwhile, the money launderers had gone to the Belgrade bank's head office where the Yugoslav was handed $1 million, DM2 million and £1 million. He had arrived in Cyprus in January 2000, opened a bank account, deposited the money and ordered its immediate wire transfer to a Greek bank in Athens.
"Our informants believe that all of the participants in this transaction were acting on behalf of the ex-President," the report says.