US to Seize Former Mongolia PM's Luxury New York Apartments Bought In 'Corruption Scheme'

The US government has said it will seize two luxury apartments in New York owned by former Mongolian prime minister Sukhbaatar Batbold that it said were bought as a “cover for his illicit corruption scheme.”

The US Justice Department on Tuesday unsealed a complaint claiming that Batbold used his position to award Mongolian mining contracts in return for the equivalent of millions of dollars in kickbacks. Batbold allegedly splashed $14 million of that income on a pair of properties in Manhattan’s ritzy Midtown and Upper East Side neighbourhoods, the department said.

“Today’s forfeiture action sends a message that corrupt officials will not use our real estate market to conceal proceeds of crimes,” said Breon Peace, US Attorney for New York’s Eastern District, in a press release. According to the complaint, Batbold and his family used state-owned mining contracts to move money through shell companies to fund lavish lifestyles.

One of the companies owned by Batbold’s “trusted intermediaries” was handed a $68 million contract despite having “no operational history, no mining expertise, and no financial or logistical infrastructure to execute commodity sales”. Millions of dollars from those contracts were then allegedly funnelled into foreign bank accounts, filtered through a succession of shadowy shell firms and finally spent on the apartments and other items.

The 60-year-old former head of state served as Mongolia’s PM from 2009 to 2012 and continues to represent the ruling party in the country’s parliament. He was later named in the Panama and Pandora papers, two major leaks detailing the overseas financial affairs of wealthy individuals and politicians.

Mongolia will hold legislative elections in June, in which incumbent Prime Minister Luvsannamsrain Oyun-Erdene will seek to maintain the ruling party’s majority in parliament. Mongolia, a landlocked democracy between China and Russia, is rich in deposits of coal, metals and other minerals. A years-long mining boom has helped ease historically high poverty rates but also fuelled corruption.

(With agency inputs)