Before the crash

A member of the ground staff placed his three pieces of hand luggage on the seat in front of him and gave the pilot the thumbs up. At 6.59pm the chopper lifted off from London's Battersea Heliport into a leaden sky.

After a day of work in wintry London, Curtis was looking forward to getting home to his lavish castle on one of the most beautiful and exclusive parts of the Dorset coast.

It was raining lightly and the runway was obscured by cloud as Curtis's helicopter approached Bournemouth airport. The pilot, a local 34-year-old man who regularly flew Curtis to London and back, radioed the control tower requesting permission to land.

Two air traffic controllers saw the helicopter begin to emerge from the gloom when it suddenly lurched downwards and to the left, swinging around out of control. In radio contact with the tower, the pilot confirmed that he was in difficulty but, according to investigators, could not or did not describe what the problem was.

Twenty-nine seconds later, the chopper smashed nose-first into a field, exploding into a 30ft ball of flame. Little was left of the helicopter, or of its passengers: Curtis and the pilot were so badly burned that they had to be identified by the coroner using DNA samples. But British intelligence officials already knew who Curtis was. He was one of their latest informers.

His death set off alarm bells in Britain's intelligence agencies and law enforcement circles worldwide. No one said so publicly, but the authorities were deeply suspicious of the circumstances surrounding the crash, although the official investigation has not yet been concluded.

"I could not believe that accident," recalled one US law enforcement official with long experience investigating international financial crime. "The timing [was] exceptionally propitious."

The British agents were most shocked. The Financial Times has learned that Curtis approached UK intelligence agencies in the weeks before the crash, offering to provide information about illicit Russian business activities in Britain.

In the days before his death, he had been assigned to a handler at the UK's National Criminal Intelligence Service (NCIS), which collects information about organised crime in Britain. "My sense," someone close to British intelligence told me, "was that he was fearful of being prosecuted by the Russian authorities for being party to assisting in the capital flight and that he thought that going to the UK authorities would give him some sort of top cover."

Curtis was likely to have needed a great deal of cover. For the 45-year-old lawyer had found himself in the middle of one of the highest stakes contests between state and private power in the world - between Russia's most powerful man, President Vladimir Putin, and its wealthiest man, Mikhail Khodorkovsky.

Putin threw Khodorkovsky in a Moscow prison last October on charges of fraud and tax evasion. His trial, set for this summer, will be a test case in both the political and economic development of Russia. In this drama, Curtis was a hidden - but crucial - bit player. What he knew and whom he told could hold the key to its outcome.

The month after Khodorkovsky was imprisoned, and to widespread surprise, Curtis was put in charge of Khodorkovsky's Menatep, a $30bn holding group that owns a large portion of Russia's second-biggest oil producer, Yukos.

The man whom he replaced in that role was another billionaire shareholder of Menatep, Platon Lebedev, who is also in jail. Other Menatep shareholders and Yukos executives have been charged with crimes ranging from fraud to ordering contract killings.

How did Curtis, a small-time lawyer who grew up in Sunderland and studied in Aberystwyth, come to head one of Russia's largest financial concerns? How did he come to represent wealthy Russian oligarchs, such as Boris Berezovsky, the billionaire exiled in the UK? How was he able to afford such a fabulous lifestyle?

When he was not at his homes in Spain and Gibraltar, Curtis's life revolved around his castle. Pennsylvania Castle was built in the 18th century at Portland - a beautiful and wealthy promontory of Dorset coast - by the grandson of the founder of the US state. A Union Jack was flying at half-mast above its ramparts when I visited the area.

Few people were willing to talk about the man who had moved into the castle up on the hill in 1997, and none would go on the record. One woman pulled me aside to give me some "friendly advice". Portland, she said, was a tight-knit community where Curtis, his wife Sarah and daughter Louise were much liked.

The Curtises made a great effort to be accepted by the locals. Curtis contributed substantial amounts of money to local causes, including the Rotary Club.

And residents were invited to grand events at Pennsylvania Castle such as the Curtises' 20th wedding anniversary in 2001, where fellow guests included millionaire businessmen and an Arab prince.

"The food was fantastic and the drink was only the finest champagne and wines, and it flowed like water," recalled another local in awed tones. "The waiters and waitresses were all immaculately dressed.

There was a small fairground in the garden for the youngsters and the evening ended with a professional fireworks display. I have never seen anything like it before and probably never will do again."

Curtis was never shy about flaunting his wealth. People who met him describe a tall, well-fed man who was expensively, even gaudily, dressed. He cultivated an image of mystery, loved James Bond films and always turned up for business meetings ostentatiously, in a Ferrari or a Bentley.

He is invariably described as a gregarious, unpretentious character who showered his friends with gifts. And he had a prodigious appetite for work. "He liked to work. That was his passion," said one friend. "And, yes, he liked the finer things in life, but we all do."

There was always just one condition imposed on the guests at Pennsylvania Castle: there were to be no photographs of Curtis. Local reporters recalled that Curtis seemed to melt away when photographers arrived. There are no recent photographs in the public domain of the obsessively secretive lawyer, even after he was appointed head of Menatep.

A six-week investigation by the Financial Times has answered some questions about the vast wealth and meteoric rise of Curtis, even as it raises others. Interviews and documents gathered give the fullest picture yet of the services Curtis performed for his wealthy clients.

Above all, they show how Russian companies took advantage of loosely regulated offshore centres, apparently to hide profits and avoid taxes in the anything-goes first years of the post-Soviet era. Under the presidency of Boris Yeltsin from 1991 to 1999, the men who were to become known as the oligarchs gained control of much of Russia's vast mineral wealth as it was sold off by the state.

Today they are among the richest people in the world. But, in the early days, many used dubious means to reach their goals, causing Russians to fear that communism had been replaced by a form of "gangster capitalism".

During those days, Curtis was very much in evidence in Russia. As one western money manager with lengthy experience investing in Russia explained, the Russians in the early days were very unsophisticated and were grateful for the services he provided. Or, as a British lawyer who sometimes crossed paths with him said, Curtis was "a bag-man for the oligarchs".

Documents obtained by the FT show that for clients such as Yukos, Curtis set up a dizzying array of shell companies in tax havens around the world apparently to conceal money from prying eyes.

His partner in many of these schemes was Peter Bond, a financier based on the Isle of Man who has been investigated - but not prosecuted - by the FBI and other law enforcement agencies in connection with suspected money-laundering schemes around the world. He is facing disqualification proceedings by financial regulators on the Isle of Man after admitting to hiding millions of dollars for clients at the trial of a US stock promoter convicted of money laundering and fraud. Bond was granted immunity from prosecution by the US authorities in exchange for his testimony.

Inquiries and public records searches have revealed close links between Bond's company, called Valmet, Curtis's law firm and Khodorkovsky's Menatep Group. Just how close was made clear at an encounter between Curtis and Bond on June 1 1999, at Curtis & Co's elegant London offices at 94 Park Lane. A confidential "attendance note" of the meeting, obtained by the FT, shows that Curtis and Bond created a financial structure involving a web of shell companies stretching from Gibraltar to Cyprus and the Isle of Man.

The purpose, the documents strongly suggest, was to conceal profits from the sale of Russian oil so that they would not appear on Yukos's balance sheet. This would allow the company's principal Russian shareholders to avoid paying taxes and could also be used to deceive the minority shareholders - often western investors. The structure, one of several referred to in the documents, was codenamed "Jurby Lake" after a place on the Isle of Man.

Bond's former partner at Valmet, Christopher Samuelson, strongly denied that there was anything untoward about the company's work for Menatep and Yukos. "There was no question of it being money laundering or anything of the sort," he said by telephone from the US. "There was no question of hiding assets, to the best of my knowledge, anyway. But I wasn't involved in any of those structures myself. You need to speak to Peter Bond."

Bond did not reply to written questions or calls to his home. Valmet has changed its name to Mutual Trust Management. A director of the company, Karen Harris, said Bond left Valmet in August 2001 and she declined to pass written questions to him.

Did the Russian oligarchs know what Curtis and Bond were doing on their behalf? It seems very likely that they did - indeed, that both Khodorkovsky and Lebedev had personally authorised the creation of this financial structure. In a letter to a Yukos lawyer, also obtained by the FT, Curtis outlined a potential conflict of interest raised by his ownership stake in two shell companies involved in his financial structure. In the process, he made clear that his work had been authorised at the highest levels of the Yukos hierarchy.

"You, Mr Lebedev and Mr Khodorkovsky," he wrote, "were made aware of this conflict at a very early stage and kindly indicated that you did not believe it would prevent me in assisting in preparing this Structure."

The minutes of the meeting at 94 Park Lane suggest that Curtis and Bond were not just the architects of the scheme, but were personally entrusted with managing millions of dollars in oil profits through companies no longer formally controlled by Yukos. Curtis explained the nature of the financial structure that would handle potentially billions of dollars a year in Russian oil sales. "A huge amount of the structure was based on trust," he said.

Two other officials are mentioned in the minutes of the meeting and in personal correspondence from Curtis: Viktor Prokofiev, then a Menatep official, and Vasily Alexanyan, a lawyer for Yukos. A Menatep spokesperson said Prokofiev no longer worked at the company. Alexanyan, who now represents the interests of the principal shareholders, could not be reached for comment. Questions submitted to him via Yukos were not replied to.

Russian authorities have seized much of Alexanyan's assets as part of their sprawling probe of Yukos and Menatep. The arrests of Khodorkovsky and Lebedev drew widespread condemnation in the west and prompted other Yukos shareholders to flee Russia. The story repeated by the oligarchs - that the arrests were part of an autocratic power-play by Putin designed to put Russia's emerging capitalists in their place - was accepted by many western politicians and journalists.

But the documents from the Curtis & Co meeting, as well as other important papers, would seem to support the case of Russian prosecutors that Yukos and its principal shareholders evaded billions of dollars in taxes. As part of the Russian investigation, Swiss police have raided several Yukos companies that formed part of Curtis and Bond's structure, among them one called Karran Tankers.

Russian prosecutors also got Swiss authorities to freeze nearly $5bn in assets belonging to companies named in the documents. There have also been reports that Russian authorities have asked their British counterparts to raid the offices of Yukos in London - really the offices of Curtis & Co in Park Lane - to seize documentation.

Bolstering the Russian authorities' case are hundreds of documents about Yukos's and Menatep's most intimate financial dealings, provided to Kremlin authorities by Yelena Collongues- Popova, a former assistant of Khodorkovsky's associate, Alexei Golubovich. As well as serving as Yukos's finance director, Golubovich had a substantial shareholding in Menatep and - records show - important links to Valmet. His current whereabouts are unknown.

From her flat in Paris, where she is under 24-hour police protection, Collongues-Popova told journalists that she moved $800m to offshore centres - including the Isle of Man - for Golubovich. "Yukos and Menatep used the [offshore] companies to minimise tax and disperse shares to avoid problems with the Russian state anti- monopoly committee," she told the Mail on Sunday in November. "It was like the soap opera Dallas, but in Moscow rather than Texas... It meant executive-jet flights all the time to the Caribbean, to the Seychelles and the Isle of Man. It was a life of luxury hotels, top restaurants and endless supplies of cash."

The work that Curtis and Bond performed for Khodorkovsky and the principal Menatep shareholders in Yukos was wide-ranging and extensive, and the relationship between them deep and long- standing. This helps to explain why Curtis was appointed managing director of the Russian billionaire's main holding company at a time when the Russian government was aggressively moving against its principals. Curtis was one of the very few people who knew his way through the maze of Menatep's complicated finances. Naturally, because he had helped to create it.

Following the complex trail of shell companies that hop- scotch from one secretive offshore haven to another shows that both Curtis & Co and Valmet have had important ties to Menatep, as well as to each other. In some cases, they have shared office space; in others, directors or shareholders. But behind both Valmet and Curtis & Co, Russian billionaires on the run from Russia's government can very often be discerned.

For example, Curtis & Co is mentioned in the UK registration information for Totbest Ltd, a now-liquidated company that has had all the key Menatep shareholders in Yukos on its board. The office for Yukos UK is based at Curtis & Co's Park Lane premises. And Curtis's number two, James Jacobson, sat on the Yukos UK board until 2002, when the company moved to Cyprus "for tax purposes". Jacobson declined to be interviewed for this article, referring questions to a public relations representative from APCO Worldwide. "[Jacobson] is not doing any media at the moment," said his spokesman, Simon Whitehead. "He's just sorting out his affairs and Stephen's affairs and making sure that things are running [at the office]."

The president and chief executive of APCO, Margery Kraus, sits on the international advisory board of Menatep and has for several years advised Khodorkovsky on cleaning up his image in the west. Whitehead did not answer any further inquiries, including whether he had been appointed to handle the story by Menatep.

Valmet has also had long-standing links with Menatep, guiding its emerging billionaires through the complicated maze of offshore havens. An old Menatep prospectus lists Valmet (Bermuda) as a subsidiary, and company documents show that Menatep has held a 20 per cent stake in the overall Valmet Group. Bond's former partner at Valmet, Christopher Samuelson, told the FT that Menatep held shares in Valmet until 2001.

Completing the triangle between Khodorkovsky, Curtis and Bond is a series of factors linking Curtis & Co with Valmet. They have shared directors: Samuelson, who ran Valmet with Bond, was also a director of another Curtis company, 94 Park Lane Ltd. And the registration documents of 94 Park Lane Ltd reveal that its ultimate holding company is Valmet Holdings Ltd in Gibraltar. In fact, so close was Valmet to Curtis that its former marketing director, Branson Bean, told the FT that "we actually had offices in his building at one point".

Samuelson acknowledged the strong historical links between the two companies and the principals. "I knew Stephen Curtis for many years and was fully aware he was killed when his helicopter crashed," he said. "Everyone was suspicious that there might have been third-party involvement, but I think that was to do with the sensitivity of what's happening in Russia."

While at Valmet, Bond worked on several controversial deals for Yukos and its principal shareholders at Menatep. Western investors, led by the reclusive US financier Kenneth Dart, launched lawsuits in 1999 contending that Valmet had been instrumental in a bare-faced scheme by the majority Russian shareholders to defraud them. Dart successfully sued in the Isle of Man to halt a secret effort to transfer Yukos's prize assets out to a wide array of dummy companies in jurisdictions around the world. Several of them had been set up or were operated by Valmet. Valmet later claimed that the transaction never got beyond the "early stages of contemplation", according to The New York Times.

Bond was also involved in a second dispute between Menatep and western investors, which again involved Dart. After buying a huge Russian titanium producer called Avisma from Menatep in 1997, the investors alleged in lawsuits on the Isle of Man and in Ireland that they were being swindled on a massive scale. They said they had discovered that tens of millions of dollars a year in profits were being drained by an offshore company called TMC, which was owned and operated by one Peter Bond. The investors claimed that the profits were finding their way back to Menatep. In 1998, the investors got a judge on the Isle of Man to freeze $20m that TMC was holding at Barclays Bank. TMC was forced to settle the case, returning some $8m to investors.

But nothing is simple in Russia. After further changes in major shareholdings, Avisma itself later sued the western shareholders in the US, alleging that they had taken over and profited from the very same "illegal scheme" set up by Bond at the expense of the company. Avisma calculated that it had been stripped of $50m under the arrangement. The case was settled out of court for an undisclosed amount.

For their part, Valmet, TMC and Bond maintained that they were merely middlemen in a legitimate trading arrangement and bystanders in the dispute between different shareholders. They had returned the $8m when the parties involved had agreed to whom it belonged, they said.

Partly because of its role in the Avisma case, Valmet was also one of the first companies that US and Swiss investigators looked at during the Bank of New York money laundering scandal that erupted in August 1999 after more than $7bn in suspect Russian funds was found to have been funnelled through the venerable bank. It didn't help that Valmet had been moving the funds alleged to have been looted from Avisma though accounts at the bank.

Two Russian emigres pleaded guilty to money laundering in the Bank of New York case, which is still under investigation. No charges were ultimately brought against Bond - nor apparently could they be under the terms of a deal that Bond later struck with US prosecutors. In order to get him to testify against his client Robert Brennan, the US stock promoter whom authorities had long been pursuing, prosecutors offered Bond an immunity deal. With the aid of Bond's testimony, Brennan was convicted of fraud and money laundering in 2001. But Brennan's defence lawyers alleged in court that the immunity deal shielded Bond from any possible future charges in connection with the huge money-laundering scheme discovered at the Bank of New York.

In the courtroom, Bond was remarkably candid about what he did, while never admitting wrong-doing himself. He testified that he set up dozens of dummy companies around the world to shield tens of millions of dollars for Brennan. On one occasion, Bond said he received $4m in bearer bonds which Brennan was hiding from creditors. "It was a very bizarre experience," he said, recalling his return trip to Britain holding the suitcase stuffed with bonds. "You think about putting it down in the gents toilet and losing it," he told the court. Bond testified that he had kept $1.7m in fees and expenses for setting up the dummy companies for Brennan. The latter's lawyer's roundly attacked Bond's credibility as a witness.

Curtis's connection to Bond helped him to get work managing offshore money for Arab clients and, increasingly, the emerging Russian oligarchs. Curtis worked for Boris Berezovsky, the Russian billionaire who was granted political asylum in Britain last September and, according to friends, enjoyed a close personal relationship with him. Last year Curtis worked to prevent Berezovsky's extradition to Russia, where he was wanted on charges of fraud. Curtis was one of two people to financially guarantee that Berezovsky would not flee while the extradition hearing was going on. Berezovsky has told friends that Curtis's death proves his contention that it is unsafe for him to return to Russia, for reasons that are unclear. Berezovsky declined to be interviewed for this story. There is no evidence to suggest that Curtis did anything improper for him.

Bond's company Valmet International also shared an address in Geneva and Gibraltar with Runicom, the company controlled by Roman Abramovich, who has become the most widely known Russian oligarch because of his purchase of Chelsea Football Club. Abramovich, who was Berezovsky's protege, was the closest of the oligarchs to the Yeltsin family. He followed Berezovsky to London and was recently named Britain's wealthiest man. Abramovich could not be reached for comment. There is no evidence to suggest that there was anything improper about the connection with Bond's company.

One London-based lawyer said he had met Curtis many times while representing Khodorkovsky and Berezovsky and had marvelled at his "impressive" list of clients, which included not just the new Russian rich, but also wealthy Arabs. Yet Curtis also managed to have interests in Israel: according to the Israeli daily Haaretz, he was poised to buy up to 95 per cent of the Israeli franchise of Ikea, the Swedish furniture giant, in the months before his death. Haaretz said that Curtis had travelled more than once to Israel to clinch the deal. It is not known whether he met the Menatep shareholders in self-imposed exile there.

Further to the Israeli connection, Curtis owned a portion of a private investigation company called ISC Global. The company, also registered at his office, is run by three former officers from London's Metropolitan Police. It split off from an Israeli company of the same name several years ago for reasons that are not clear. "[ISC] is well known on the [private investigations] circuit to be funded with Russian money," said one security consultant, who spoke on condition of anonymity. "Curtis used a lot of dirty tricks, bugging phones, hacking into computers, etc when he was involved in litigation."

Curtis was also a director of the Bermuda Commercial Bank, which, according to its website, performs discreet financial services for wealthy clients, including the formation and management of off-the-shelf companies. "We understand that confidentiality and security are the core principles of offshore banking," it says. "Whether you bank, trade or invest through us, BCB will use only its own name in executing your trades and investments in the global financial markets."

Khodorkovsky was imprisoned, and Stephen Curtis died, as the era that had made the first a billionaire and the second a very wealthy man was coming to an end. Khodorkovsky's company was completing a transformation into a real example of good corporate governance - a process that observers agree began some months after Yukos's legal settlement with Dart in the closing days of 1999.

As the new century began, many of Russia's established oligarchs had recognised that they had to attempt to shake their negative reputation in the west and reposition themselves as legitimate businessmen. Public relations firms in London and Washington were deployed to burnish their images and tout their clients' new-found legitimacy. Their supporters conceded that the oligarchs had seized control of Russia's state assets by dubious means and in the process amassed unimaginable wealth. But they argued that, like the robber barons of 19th-century America, they would go on to become pillars of the new Russian business establishment. The Soviet Union had been a criminal state, they said; criminality was bound to attend its fall.

In 2001, Khodorkovsky sat in a 19th-century mansion in Moscow under a sign with the slogan, "Honesty, Openness, Responsibility" to tell The New York Times about his apparent conversion. "There has been a change in mentality," he said. "People now understand that transparency, good relations with investors and honest behaviour in the market in the short term are to your advantage."

In several important respects, Khodorkovsky delivered on his promise. International investors say that the sort of financial sleight-of-hand engineered by the likes of Curtis and Bond had largely ceased. But it was too late. Putin had been angered by Khodorkovsky's efforts to derail his energy legislation and alarmed by his forays into politics - in breach, the Russian leader believed, of an agreement with the oligarchs that would leave their riches untouched if they stayed out of politics.

From prison, Khodorkovsky has attempted to show a belated conversion to Putin's line. He published a letter in a Russian newspaper in March, saying that liberal politicians who forgot the interests of ordinary people had only themselves to blame for their defeat in last year's parliamentary elections. Last month, he went one better by asking the Russian people to forgive him and the country's liberal politicians for their perceived sins during the 1990s. "We have made many mistakes because of our stupidity, ambitions and lack of understanding," he said in an open letter. "Forgive us, if you can, and allow us to redeem [ourselves]."

The change seems to have come too late for Curtis. But what was he doing for Menatep at the time of his death? And why did he approach the UK authorities? Law enforcement sources speculate that Curtis was scattering the assets of Menatep's billionaires around the world to protect them from being seized by the Russian government. Others believe he was placed in charge of Menatep to unwind the financial schemes he himself had put in place. Perhaps Bond, if he ever talks, would be able to shed light on the mystery. If he doesn't, the secret may have gone with Curtis to his grave.

Curtis was buried in the grounds of Pennsylvania Castle after a lavish ceremony, which he planned himself after being diagnosed with leukaemia several years ago. Wealthy Russians, including Berezovsky, were among the 1,000 mourners who attended the funeral and watched as his coffin was placed on a horse-drawn carriage. The burial was later marked by a magnificent fireworks display. "He always had pyrotechnics at big functions," reflected one mourner. "It must have cost thousands, but he loved them."

Thomas Catan is an investigative reporter for the FT.

thomas.catan@ft.com