Putin’s Olympian Fraud

Australia’s The Age reports:

The president of the Russian Olympic Committee has emerged as a figure in one of the biggest frauds in Australian corporate history – the $100 million failure of fuel technology company Firepower.

Leonid Tyagachev, a close friend and regular skiing companion of Russian Prime Minister Vladimir Putin, was part of a failed attempt to raise money for Firepower in London financial circles in 2008.

A 30-page document marked ”commercial in confidence” obtained by The Age shows Mr Tyagachev was one of three people who made a presentation to the London-based branch of the Japanese bank Nomura. The others were a former senior federal government employee Gregory Klumov and Firepower founder Tim Johnston.

The document claimed Firepower had the support of the Australian Government.


At the time, Firepower was spruiking a ”magic pill” said to cut emissions and improve fuel efficiency. Though the pills could not be openly purchased, the company received almost $400,000 in export grants from taxpayers and had the backing of the Australian Trade Commission.

Mr Klumov joined Firepower from the Australian Trade Commission, where he was a senior commerce liaison official between Russia and Australia.

Mr Johnston is now giving evidence in the Federal Court in Perth about the collapse of Firepower. His testimony last week included spectacular, unproven claims of a criminal gang threatening to ”bury” a person who stood in the company’s way.

Mr Johnston also admitted to the court that most investors were sold shares in a Firepower entity that owned no rights to its products – whether they worked or not.

Firepower raised almost $100 million from investors in Australia between 2003 and 2007 on the false promise of spectacular returns once the company floated in London. Investors included some of Australia’s most senior military figures, diplomats and many sporting stars.

Shareholders included a company believed to be associated with John Kizon, a convicted heroin dealer and close friend of underworld figure Mick Gatto.

Some of the money raised by Firepower was used to make it the biggest single sporting sponsor in the country.

Authorities investigating the collapse of Firepower now believe millions were transferred to companies in the British Virgin Islands, Singapore and to an obscure tax haven off the coast of Malaysia. Some was used to fund the lavish lifestyle of Mr Johnston.

By the time of Mr Tyagachev’s involvement in Firepower, the company had chewed through most of its shareholders’ money and was trying to raise more in a vain attempt to list Firepower on the London secondary stockmarket.

The investment case put to Nomura in the document included many of the same false claims made by Mr Johnston to Australian investors about Firepower’s so-called technology.

Mr Tyagachev served as Russia’s sports and tourism minister from 1995 to 1999. Mr Tyagachev did not reply to requests for comment.

2 responses to “Putin’s Olympian Fraud

  1. Heiberg threatens to deprive Russia Olympics

    Heiberg alerts rigorous testing by the Russians in Vancouver, but will not say how many new disclosures that will be needed to stop the Olympic Games in Sochi.

    http://msn.tv2sporten.no/ovrig/heiberg-truer-med-aa-frata-russland-ol-3128551.html

    We have zero tolerance. We have had a number of athletes on the winter that is taken for doping. It suits us terribly bad. We will use large amounts of fit when it comes to doping. It will not be spared anything. We’ve had a special eye on the Russians, it is not something new. They will be tested quite emphatically. It also applies to some of the other.

    http://www.nrksport.no/1.6899193

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