Perfume boss David Crisp caught on video saying he ignored Russia sanctions

A British businessman caught on digicam confessing he was illegally promoting luxurious fragrance to Russia just isn’t going through legal costs, the BBC has discovered.

David Crisp admitted to an undercover investigator that he had “ignored government edicts” on sanctions by promoting £1,000-a-bottle “Boadicea the Victorious” fragrance in Russia.

The BBC can now completely present the undercover video, which has beforehand solely been shared in courtroom.

Mr Crisp was arrested in 2023 by HM Revenue and Customs (HMRC) – the UK authorities company liable for sanctions enforcement – however the investigation was dropped earlier this 12 months. This is regardless of the invention of proof that he tried to hide greater than £1.7m of unlawful gross sales.

Mr Crisp, from Surrey, denies knowingly breaching sanctions or concealing trades with Russia.

There has not been a single UK legal conviction for violating commerce sanctions on Russia, the BBC understands, since Moscow’s full-scale invasion of Ukraine virtually three years in the past.

Failing to punish violators is “a bad signal to send” and makes the UK appear to be a “soft touch,” says senior Conservative MP Sir Iain Duncan Smith, who has been calling for harder motion towards Russia.

Mr Crisp travelled the world promoting high-end fragrance, frequently rubbing shoulders with celebrities and VIPs, who have been unaware of his actions in Russia.

But when he began chatting to a pleasant American within the elevate of a luxurious lodge in Dallas in July final 12 months, he had no concept he was truly talking to a non-public investigator.

Posing as a Las Vegas businessman, the agent stated he was concerned with stocking Mr Crisp’s perfumes. They later met in Crisp’s lodge room to odor the fragrances – the place the investigator secretly filmed the dialog.

“How’s your Russian market?” the investigator requested. “Don’t tell anyone.” Mr Crisp replied, “We’re doing really well… we ignore government edicts.”

After Russia’s full-scale invasion of Ukraine in February 2022, the UK authorities launched sanctions banning commerce with Russia in a number of areas – perfumes are particularly named. Breaching these laws is a critical offence, with a most jail sentence of as much as 10 years.

Following the introduction of sanctions, Mr Crisp had agreed together with his then-business associate, David Garofalo, to stop buying and selling with Russia. But Mr Garofalo later turned suspicious after a whistleblower claimed that Crisp continued to promote fragrance in Moscow. Mr Garofalo then employed the non-public investigators.

The undercover footage is “sickening” David Garofalo informed me as we watch the footage collectively, including “he knows that he’s violating the sanctions”.

Without Mr Crisp’s data, the corporate additionally compiled a file of proof that he had knowingly violated sanctions.

Staff additionally discovered pallets of products within the firm’s UK facility with paperwork exhibiting recipients in Russia, and worldwide transport information confirming deliveries. Products have been found on sale in Moscow that the corporate had solely launched after the imposition of sanctions.

“He had actually gone out of his way to disguise the fact that he’d continued selling to Russia,” Mr Garofalo informed us. “He had deceived our in-house lawyer and misled our auditors.”

Mr Garofalo reported Mr Crisp to HMRC and it opened a legal investigation. At the identical time, Mr Garofalo pursued a civil case towards his associate to take away him from the corporate.

In July this 12 months, a High Court decide granted a uncommon provisional injunction, that means Mr Crisp could be eliminated instantly pending the complete civil trial.

In his ruling, the decide stated the undercover video was “compelling evidence” that Mr Crisp knew he was breaching sanctions and the corporate accounts confirmed he “concealed the Russian trading”.

After taking full management of the corporate, Mr Garofalo instantly halted all gross sales to Russia.

In an announcement, David Crisp informed the BBC: “I strongly refute the allegations made against me by Mr Garofalo, at no point did I knowingly trade in breach of Russian sanctions… at no point did I attempt to conceal those trades… the companies’ trades with Russia were well known to those within the business… I look forward to being fully exonerated.”

HMRC officers arrested Mr Crisp upon arrival at Gatwick Airport in October 2023 and seized his passport.

But, by July this 12 months, HMRC had dropped its investigation and informed Mr Crisp that it might take no additional motion towards him, returning his passport.

Mr Garofalo informed us he was shocked HMRC had confirmed little interest in the proof he had collected. “It was an open and shut case. The evidence was just irrefutable.”

HMRC doesn’t touch upon particular person circumstances, however it informed the BBC that failure to adjust to sanctions is a critical offence, and those that breach them may face enforcement actions together with monetary penalties or referral for legal prosecution.

Its assertion added: “HMRC has fined five companies for breaches of the Russia sanctions regulations in the last two years, including a £1m fine issued in August 2023.”

But the BBC understands there haven’t been any legal prosecutions for violating commerce sanctions on Russia since February 2022.

Sir Iain Duncan Smith MP, the chair of a committee of MPs engaged on sanctions towards Russia, informed the BBC the Crisp case isn’t a “one-off”.

“In terms of prosecution and seriously pursuing people over sanctions, the UK is very poor indeed,” stated Sir Iain. “If we don’t prosecute, who the hell is deterred from breaching sanctions?

He said other countries including the US, were “light years” forward of the UK by way of prosecuting violators.

“There needs to be arrest, prosecution and incarceration. And if we don’t do that, then there’s no such thing as sanctions.”

The former Conservative Party chief stated that HMRC usually reached settlements, as a substitute of issuing giant fines or legal convictions.

“The authorities may say the sanctions breaches are too small to prosecute, but the answer is you prosecute the small ones, because the big ones need to know that you’re coming after them as well,” he added.

The UK authorities had hoped sanctions could be a deterrent, with out the necessity for strong enforcement, in keeping with Tim Ash from the international affairs assume tank Chatham House.

“The reality is, the allure of doing business with Russia, the huge profits to be made, are too much for some people,” defined Mr Ash.

“They’re more interested in their bottom line, as opposed to the bottomless pit of Ukrainians dying.”

He stated circumstances like Mr Crisp’s despatched a transparent message that there could be no penalties for persevering with enterprise with Russia.

“We are almost three years into the [full-scale] invasion, and the fact that we haven’t got our sanctions regime together is pretty extraordinary.”