Appeal court questions Russian millionaire over Airisto Helmi tax case

The Court of Appeal is hearing Russian millionaire Pavel Melnikov in the Airisto Helmi financial crime case, Yle reports. Prosecutors accuse him of tax evasion and paying undeclared wages through the company, while Melnikov denies the charges.

Melnikov was sentenced by the district court last year to one year and six months of suspended imprisonment for aggravated tax fraud and aggravated accounting offence. In the appeal, he is seeking to have the charges dismissed, while the prosecution is demanding a harsher conviction and sentence.

Melnikov is being heard for two days. The Court of Appeal began hearing the case in August, and this is the first time it has heard Melnikov himself.

The hearing is focusing particularly on whether undeclared wages were paid at Airisto Helmi. Prosecutors want to establish what Melnikov knew about the payments and what role he played in them.

Special prosecutor Petri Rautio said before the hearing that prosecutors would ask Melnikov about his knowledge of the activity, expense tables and his role in the overall arrangement.

“I believe his account will remain very similar to what it was in the district court,” Rautio said. “It is naturally not in his interest to talk about the payment of undeclared wages.”

Prosecutors have argued that accommodation services at Airisto Helmi were used to conceal the payment of undeclared wages.

Melnikov told the court that he rented out properties on islands he owned because he could not physically be present at all of them at the same time.

More than three million euros in cash was previously found in a safe at Airisto Helmi. Melnikov said the money was intended to fund his retirement in Finland.

“These were retirement funds. I planned to settle in Finland during my retirement. Since I do not have a pension system in Finland, my intention was for this cash to last throughout my retirement,” Melnikov said. He added that the money belonged to his companies and that he had withdrawn it for his own use.

During the hearing, Melnikov took various products from a red canvas bag. He said he owned more than 100 patents and had brought some of them to court.

When his defence lawyer Kai Kotiranta asked why he had decided to buy islands in Finland, Melnikov began by describing his background.

“I am a simple person and was born into an ordinary family. I have two university degrees,” he said.

Melnikov said he worked on construction sites after completing military service. When the Soviet Union collapsed, he said, his education was of little practical use, so he founded his own construction company.

“I earned my money myself. Since then, renovation has become my way of life,” Melnikov said.

He also described his background in sailing and how he began sailing from St Petersburg to the Finnish archipelago. He said difficult sea conditions sometimes meant that it took weeks to continue a journey, which always passed through the Turku archipelago.

During his sailing trips, Melnikov said, he saw many beautiful islands and asked whether fishing opportunities were available there. He was then advised to speak to a real estate agent, who showed him properties on the shores and islands.

“I liked all of them,” Melnikov said. He decided to buy them all, although he did not remember the purchase price and described it as irrelevant. He believed the islands would be good investments.

Melnikov said he had no company in Finland at the time and asked whether it would be better to buy the properties as a private individual or through a company. According to Melnikov, the real estate agent advised him to establish a company if he intended to rent out the properties and offered help with setting it up.