How to buy a superyacht on the cheap

Oliver Bullough



Many of you will have at some stage sat on the shore and watched a yacht slip by, its reflection dappling on the azure waves, the sun glinting from its portholes, the distant susurration of merry revelers drifting over the water, and envied the fortunate souls able to afford such a delightful possession. If you recognise yourself in that description, be of good cheer, for this could be your moment. The alarmingly-named superyacht Alfa Nero (was Caligula already taken?) is up for sale and — chances are — the price will be low, relatively speaking.

  • “ALFA NERO is a unique masterpiece, built to inspire. The stunning Alberto Pinto design features an innovative infinity pool that transforms into a dancefloor, creating ample deck areas with state-of-the-art party set-up and warm interiors.” Apparently the pool/dance floor also triples up as a helicopter pad, should you need one.

Alfa Nero’s charmed existence ended this time last year, when it was named by the U.S. Department of Treasury as the property of the fertilizer tycoon Andrei Guryev, who’s been sanctioned in the U.S. and the U.K., along with his son, also called Andrei. Alfa Nero has since dropped off the Cayman Islands shipping registry and been more or less abandoned in Falmouth Harbour, Antigua, the bills unpaid, the pool unsplashed in, the dance floor untrodden. Its 41-strong crew has gradually dispersed, and now there are just five people left on board, and they only have enough money left for a fortnight’s worth of food.

The Guryevs have previously denied owning the Alfa Nero. Its ownership documents name the British Virgin Islands-registered company Flying Dutchman Overseas Limited and Guernsey’s Opus Private Limited, but the Antiguan authorities have got fed up with not hearing from them and have declared the yacht to be abandoned.

  • “It has lost its registration and its sea-worthiness and it has been here in Antigua and Barbuda accumulating waste water, other waste and debts…the resources raised will be placed in the Consolidated Fund – the Treasury – and the government will meet some of the obligations that were incurred and it will also be provided with a new name and the flag of Antigua and Barbuda so it can sail out of port,” said the Prime Minister’s Chief of Staff Lionel Hurst.

So, should you decide to make an offer, how much should you expect to pay? The superyacht Axioma sold for a mere $37.5 million at auction (to settle a debt to JPMorgan) in Gibraltar last year, despite being valued at twice that, which is why this may be your best chance to snap up a superyacht for a song.

  • “Nero would be lucky to land between $60 and $80 million. If history (read: Axioma’s case) has taught us anything, it is that no matter how gorgeous a pleasure craft is, when a sanctioned owner’s possession is auctioned, it would be considered lucky to amass even half its actual value,” it says here. Hurry up though, bids of $48-50 million have already been received.

But don’t get your hopes up too high. This is Antigua and Barbuda after all, where politics is rarely straightforward. The political parties differ little (if at all) when it comes to the policies they implement when in government, but that does not stop them throwing all kinds of accusations at each other. The government changed the law specifically to make sure there would be no legal blowback from the auction, but that has alarmed Jamale Pringle, leader of the United Progressive Party. He led a walkout by opposition MPs in protest against the government’s decision to auction Alfa Nero, claiming it could undermine the country’s yachting industry. Following that, a Muscovite called Alexander Mavrodi emailed the UPP claiming to be the true owner of the yacht, and no one is quite sure what to do with that information.

Antiguan officials are hoping to hurry things along, however. Partly this is because they want their harbor back and partly because superyachts lose value fast when they’re just sitting around. Amadea, which is currently at a mooring in San Diego, is costing the U.S. government millions of dollars a year and will continue to do so unless a judge allows her to be sold off.

Scheherazade is costing the Italian authorities similar sums, and Meridian A is causing similar problems in Spain.

  • “I think most oligarchs would happily say, ‘Well I can’t use it, I am not paying for it, let’s release it,’” said James Jaffa of the specialist legal firm Jaffa & Co. “Do they pay for the upkeep of a boat which they have no control over, certainly no enjoyment, or just leave it and see what happens?”
  • “It’s been a public-relations success for Western governments, but legally and, perversely, financially, it’s a total mess,” Bloomberg noted.

So if you decide to enter the bidding for Alfa Nero, you’ll need to make a choice, therefore: Do you think these other yachts will come on the market as well? Because if they do, you could get an even better bargain. Be careful about hidden costs, however. The running expenses for the Scheherazade alone are said to be $70 million a year.


The American satirist P. J. O’Rourke once said: “A Canadian is indistinguishable from a normal boring white person, except that he’s dressed to go outdoors.” (Apologies if I’ve got that wrong; it’s been about 30 years since I read the book containing that particular bit of snark, but I’m pretty sure I’ve got the gist of it.) I am not endorsing that description, and I personally think the Canadians are super interesting, but I do think it speaks to the fact that Canada has a rather staid image, which has helped its professionals launder money without anyone really noticing. We expect financial crime in Miami and Moscow, but we surely don’t expect it in Montreal.

Even when the colossal inflow of hot money into Vancouver from China was exposed by the Cullen Commission’s final report, it didn’t do much to alter everyone’s image of Canadians as being basically delightfully dull. The Toronto Star attempted to alert the world to what was happening by coining the term “snow-washing,” the process by which Canadians take dirty money and make it as “pure as the driven snow of the great white north.” But did any of us really pay attention?

So, in light of all that, one and a half cheers for the Canadian government’s introduction of a bill that would provide transparency of ownership of corporations established under the Canada Business Corporations Act. Murky company ownership is one of the biggest boons to financial criminals because it allows them to move money around undetected, and opening up corporate registries is very important. This bill, if passed, could well strike a blow at snow-washing and help expose a key nexus in the criminal economy.

  • “Our government continues to take all necessary steps to prevent illicit activities, improve Canadians’ trust in corporate institutions and ensure a well-functioning marketplace. Now, more than ever, greater corporate transparency and accountability are needed, and this is why we are committed to implementing a beneficial ownership registry that will strengthen the safety and economic interests of Canadians,” said Francois-Philippe Champagne, the minister of innovation, science and industry and a member of parliament from the ruling Liberal Party. Incidentally, the New Democratic Party, which is propping up Justin Trudeau’s government with a confidence and supply deal, is steadfastly claiming all the credit.
  • “We applaud Minister Champagne for introducing critical legislation as a publicly accessible and searchable registry can potentially deter billions of dollars of illicit funds from entering Canada through federal companies each year,” said Sasha Caldera, the beneficial ownership campaign manager at Publish What You Pay Canada.

What’s not to like about that, I hear you ask? Why’s grumpy old Oliver misquoting people being mean about the Canadians and only giving one and a half cheers for this excellent piece of proposed legislation? I will be very happy to be proved wrong, but I fear that this may be one of those devil/details situations that so often arise whenever we’re talking about corporate transparency.

  • “The federal registry will be implemented in a way that makes it scalable to include the information held by provinces and territories that decide to participate,” the government press release states.

That decide to participate? Oh dear.

Canada is, of course, a federal state, and its provinces have powers to set their own rules around corporate registries. Quebec has made progress, but other provinces have not, which makes the federal changes a bit academic, rather as if Delaware or Nevada could just opt out of the new U.S. Corporate Transparency Act. The situation is really not that great at present.


In last week’s newsletter, I wrote about smurfs and wondered whether, in French, the equivalent word “schtroumpf” has the same double meaning as it has in English — both a little blue person and a foot soldier in a sophisticated money laundering operation. Thanks to Clement who wrote in to tell me that it does!

  • Schtroumpfage is defined as “blanchiment par fractionnement des dépôts.”

But, wait, just as this newsletter was going to press, Youri wrote in to add a bit of complexity to an answer that did look surprisingly straightforward, considering we’re talking about the sacred French language. It’s true that the Financial Action Task Force used the term in its mutual evaluation of France last year and the United Nations has done so too (though, it got the spelling wrong in this document, I’m shocked to notice), but Youri says that looks absurd, and he prefers to use the English term, even when speaking French.

  • “I think the French being more formal in work relationships would tend to use ‘smurfing’ (which would add to their credibility) rather than ‘schtroumpfage’ (which could risk undermining it),” he wrote.

Personally, I wouldn’t blame any proud French speaker who chose to shift the blame for the silliness of the term onto the Anglophone world. It must be practically irresistible.

When it comes to silly money laundering expressions, however, we are nowhere near the bottom of the barrel, so what about cuckoo smurfing? For those who don’t know, this ludicrous expression describes a technique whereby criminal proceeds are laundered via the bank accounts of people who don’t realize they’re being asked to move illicit money. As such, it’s a metaphor piled on top of another metaphor: Firstly, there is the money laundering foot soldier, who’s akin to one of the little blue people, and secondly, there is the recipient welcoming disguised cash into her account, who is (supposedly) like a songbird unknowingly raising another bird’s chick as her own. Pleasingly, in French — or in Quebecois, at any rate, since this example comes from Scotia Bank — a cuckoo smurf engages in “schtroumpfage du coucou.”

Flushed with enthusiasm for multilingual money laundering terminology, I decided to check whether smurf has the same double meaning in other European languages. I didn’t get very far though, mainly because I got distracted by an improbable news report from last year about a Colombian football star who was arrested in Italy in connection with a cocaine smuggling scheme. He was very short, so his nickname was Pitufo, which means smurf in Spanish. And as if that wasn’t improbable enough, read on.

So what is smurf in German? Schlumpf. And what was the name of the Swiss president in 2012, when Switzerland was forced to negotiate the U.S. deal that pushed the notoriously-dodgy Swiss banks out of the secrecy business at last? Eveline Widmer-Schlumpf. I don’t know if that counts as nominative determinism exactly but, really, what are the odds?


The BBC has been screening a drama called “The Gold” based on the true story of the gigantic heist at the Brink’s Mat warehouse near Heathrow airport in 1983, which I didn’t get round to finishing. However, it also made a parallel documentary about the case, which I thought was more interesting, particularly for the light it shed on the lack of rules against money laundering back in the 1980s.

A banker in a small English town was handing out hundreds of thousands of pounds worth of brand new banknotes to a gold dealer just weeks after the biggest gold theft in British history but had no need to report it to the authorities. Then a car was stopped on its way to Switzerland, with a vast quantity of the same banknotes onboard, but that was fine too. When the police cracked the conspiracy, one of the conspirators just hung out on a beach in Spain, which had no extradition treaty with the U.K.

There was no need for clever techniques like smurfing in those days, and it’s no wonder most of the gold was never found.