On 14 May, the independent international expert Pauline David, selected in open competition by Transparency International Georgia, stated in her report that there is no basis to prove that the TBC Bank founders Mamuka Khazaradze and Badri Japaridze and businessman Avtandil Tsereteli committed a money laundering offence, either individually or as co-conspirators, reported agenda.ge. 

The key findings of her study was that there was no evidence of money laundering from which to infer an intention: 1) to ‘legalise’ (launder) any funds obtained by way of loan, 2) to conceal the ‘illegal origins’ of the loan funds or 3) to integrate those funds back into the legitimate economy.

She further emphasized that money laundering and the underlying predicate crime (misappropriation in this case) are separate offences. “Proof of a predicate… crime of misappropriation alone is not proof of money laundering. Even if the prosecution proved misappropriation, the subsequent [alleged] conduct… could only support the use of misappropriated proceeds, not the laundering of those proceeds,” she said. 

The report also further underlined that international courts condemn the practice of prosecuting for money laundering, when the alleged conduct extends no further than capable of proving the predicate crime. “Because of the statutory time limitation, the crime of misappropriation cannot now be prosecuted as a stand-alone offence, nor can it be proven as a predicate crime. It can be an abuse of process to circumvent a statute of limitations by prosecuting a person for an inappropriate or artificially constructed charge (money laundering) to get around the fact that the appropriate charge for the conduct alleged (misappropriation) is statute barred,” stood in the report. 

On 24 July 2019, Khazaradze and Japaridze were officially charged for money laundering, prompting them to leave their posts at the TBC Bank and the Anaklia Development Consortium. According to Khazaradze, the arrests were aimed to stop the construction of the deep seaport in Anaklia. As for Tsereteli, he was charged on 23 August 2019 as an accomplice in the money laundering case. The money laundering case was launched on 2 August 2018 relating to the developments in 2008, when LTD Samgori M and LTD Samgori Trade received a 17 million USD loan in an accelerated manner from TBC Bank without providing any real estate. The Prosecutor’s Office said that at the end of 2008, the TBC, without providing any genuine reasons, wrote off the companies’ debt and in 2012 completely freed the companies from any financial obligations to the bank. The TBC bank officials said that the loan was an “ordinary banking operation” which was checked by both the previous and current state authorities several times (Caucasus Watch reported).