The Tribune

By NEIL HARTNELL

Tribune Business Editor

INFAMOUS Lyford Cay resident, Viktor Kozeny, was yesterday celebrating judicial victory over the US Government after the London-based Privy Council reaffirmed decisions by the Bahamian courts to reject his extradition over an alleged $200 million investment fraud.

The highest court of appeal in the Bahamian judicial system ruled that it had "no jurisdiction" to overturn decisions by the Bahamian Supreme Court/Court of Appeal to free the so-called 'Pirate of Prague' because there was nothing in the Bahamian constitution, or this country's statute law, permitting it to hear such cases.

While Mr Kozeny would have triumphed on this issue alone, the Privy Council also ruled on several substantive issues raised by the US government's attempts to extradite the Czech-born resident of the Bahamas. Again, they came down in Mr Kozeny's favour on every single point, and also highlighted potential weaknesses in Bahamian law.

The Privy Council found:

• Two key counts in the US government's indictment against Mr Kozeny were not extradition offences, because they involved acts which would not have breached Bahamian law had they occurred in the Bahamas.

• Although not directly ruling on it, the Privy Council described as "persuasive" arguments by Mr Kozeny's QCs that the US money laundering allegations against their client did not contravene the Bahamas' Money Laundering (Proceeds of Crime) Act 1996.

The allegations claimed Mr Kozeny " conspired to transport legitimate funds invested by US investors from the US to a place outside the US with intent to promote the carrying on of an unlawful activity". Yet the Bahamian Act only dealt with the movement/transfer of funds known to be derived from a criminal activity.

" Mr Keith submits that there is no evidence that the monies invested by the US investors were themselves the proceeds of crime. They had legitimate origins, and the fact that they were subsequently said to be used to further a crime is not relevant," the Privy Council said.

"The Board finds this submission persuasive, but it is unnecessary to express a concluded view on it."

• Finally, the Privy Council dismissed the US government's arguments that Mr Kozeny's alleged conduct had contravened the Inter-American Convention against Corruption (IACC) and its provisions against 'Transnational Bribery'.

It shot this down because the offences covered by the IACC were not detailed in the authorisation to proceed with extradition proceedings against Mr Kozeny, while noting that the alleged conduct took place before the Bahamas signed on to the convention.

While Mr Kozeny was yesterday celebrating his victory, which effectively allows him to 'thumb his nose' to the US government and Justice Department, the UK Privy Council strongly hinted that further efforts to extradite the 'Pirate of Prague' from the Bahamas to New York were likely - hence its decision to rule on issues "that are likely to arise again".

Still, Mr Kozeny said in a statement that he was "very satisfied" with the Privy Council verdict, arguing that it gave him "total exoneration" and brought an end to the case. It proved, he argued, that he never broke any laws, and he said: "I could not have expected a better outcome".

Outlining the matter's origins, the Privy Council said the US government first sought Mr Kozeny's extradition on November 28, 2005, in a bid to have him stand trial in New York on a 27-count indictment relating to alleged money laundering and bribery of public officials in Azerbaijan.

The affair centred on the purchase of some $200 million worth of vouchers/options involving the privatisation of the State Oil Company of the Azerbaijan Republic, which was ultimately aborted. It was alleged that Mr Kozeny conspired to violate the US Foreign Corrupt Practices Act, and conspired to commit money laundering.

Mr Kozeny was arrested in Nassau on October 5, 2005, and held in custody. On December 2, 2005, then-minister of foreign affairs, Fred Mitchell, issued his first Authority to Proceed (ATP) with the extradition request, asserting that the allegations against Mr Kozeny "would

have given rise to 30 offences contrary to Bahamian law".

During proceedings in the Magistrate's courts in early 2006, a second ATP was issued, the then-foreign minister saying he was satisfied the allegations made against Mr Kozeny covered offences provided for in the Bahamas-US extradition treaty.

The magistrate dismissed all the first ATP charges against Mr Kozeny, as well as the money laundering ones in the second ATP, in a June 23, 2006, decision. However, on September 28 that year she committed him to Fox Hill Prison on the grounds that alleged bribery of a public official had been proven.

Mr Kozeny and his attorneys subsequently applied for a writ of habeas corpus, in a bid to free himself from detention. In the Supreme Court, Justice John Isaacs ruled that none of the US indictment's counts was an 'extradition offence' because they were not offences contrary to Bahamian law. He also found that the US government could not re-introduce the money laundering charges contained in the second ATP.

The US government subsequently appealed the decision to release Mr Kozeny, but the Court of Appeal, too, shot this down. An application was made to the Court of Appeal for leave to appeal to the Judicial Committee of the Privy Council, but then withdrawn after the court "made it clear that it had no jurisdiction to grant leave to appeal".

"On 2 July, 2010, the appellants [US government] then applied to the Board for special leave," the Privy Council judgment noted. "The respondents [Kozeny] objected in writing on grounds which included that the Board has no jurisdiction to hear an appeal from the Court of Appeal of the Bahamas against an order made in habeas corpus proceedings for the release of a person who is detained.

"Permission to appeal was granted by Order in Council dated 9 February, 2011. But this grant of permission did not (and could not) give to the Board jurisdiction to entertain an appeal if it did not in fact have jurisdiction to do so. "

It was the view of Mr Kozeny and his attorneys that prevailed. "The Judicial Committee has no jurisdiction to entertain against a grant of habeas corpus in the Bahamas unless jurisdiction is conferred by a provision of the Constitution of the Bahamas or a Bahamian statute.....There is no such provision of either."

The 1994 Extradition Act allowed no further appeal, beyond the Court of Appeal, for a "detainer" - namely the Government - to challenge the decision to free a prisoner. Nor could the "detainer" appeal directly to the Privy Council if a verdict went against it in the Court of Appeal.