Fragrance Executive Confessed to Disregarding Russia Sanctions, Avoids Criminal Charges

A British entrepreneur, captured on camera acknowledging illicit sales of high-end fragrance to Russia, will not face criminal charges, the BBC has learned. David Crisp conceded to an undercover operative that he had “ignored government edicts” regarding sanctions through the sale of the £1,000-a-bottle perfume within Russia. The BBC is now able to exclusively broadcast the covert video footage, which had previously only been presented in a legal setting. Mr Crisp was apprehended in 2023 by HM Revenue and Customs (HMRC), the UK government body tasked with enforcing sanctions; however, the inquiry was terminated earlier this year. This occurred despite findings indicating his attempt to hide over £1.7m in unlawful transactions. Mr Crisp, a resident of Surrey, refutes allegations of deliberately violating sanctions or hiding commercial dealings with Russia. The BBC comprehends that no individual in the UK has received a criminal conviction for breaching trade sanctions against Russia since Moscow’s comprehensive invasion of Ukraine nearly three years prior. According to senior Conservative MP Sir Iain Duncan Smith, who advocates for more stringent measures against Russia, the failure to penalize offenders constitutes “a bad signal to send” and portrays the UK as a “soft touch.” Mr Crisp journeyed globally, marketing luxury perfume and frequently interacting with celebrities and VIPs, none of whom were cognizant of his operations in Russia. However, when he engaged in conversation with an amiable American in the elevator of a luxury hotel in Dallas in July last year, he was oblivious to the fact that he was conversing with a private investigator. Presenting himself as a Las Vegas entrepreneur, the agent expressed interest in carrying Mr Crisp’s perfumes. They subsequently convened in Crisp’s hotel room to sample the scents, during which the investigator covertly recorded their discussion. “How’s your Russian market?” the investigator inquired. “Don’t tell anyone.” Mr Crisp responded, “We’re doing really well… we ignore government edicts.” Following Russia’s full-scale invasion of Ukraine in February 2022, the UK government implemented sanctions prohibiting commerce with Russia across various sectors, explicitly including perfumes. Violating these rules constitutes a grave offense, punishable by a maximum prison term of up to 10 years. Subsequent to the imposition of sanctions, Mr Crisp had reached an agreement with his then-business partner, David Garofalo, to discontinue trade with Russia. However, Mr Garofalo grew suspicious after a whistleblower alleged that Crisp persisted in selling perfume in Moscow. Consequently, Mr Garofalo engaged private investigators. David Garofalo described the undercover footage as “sickening” while we viewed it together, further stating, “he knows that he’s violating the sanctions”. Unbeknownst to Mr Crisp, the company also assembled a collection of evidence indicating his deliberate breach of sanctions. Employees additionally located pallets of merchandise at the company’s UK premises, accompanied by documentation listing recipients in Russia and international shipping records verifying deliveries. Items were found available for purchase in Moscow that the company had introduced solely after sanctions were enacted. “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 notified HMRC about Mr Crisp, prompting the agency to initiate a criminal inquiry. Concurrently, Mr Garofalo commenced a civil lawsuit against his associate to have him expelled from the firm. In July this year, a High Court judge issued an unusual provisional injunction, stipulating Mr Crisp’s immediate removal while awaiting the complete civil trial. In his judgment, the judge declared the undercover video to be “compelling evidence” that Mr Crisp was aware he was violating sanctions, and that the company’s financial records demonstrated he “concealed the Russian trading”. Upon assuming complete command of the company, Mr Garofalo promptly ceased all sales directed towards Russia. In a declaration, 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 officials apprehended Mr Crisp upon his arrival at Gatwick Airport in October 2023 and confiscated his passport. However, by July this year, HMRC had concluded its inquiry and informed Mr Crisp that no additional measures would be taken against him, subsequently returning his passport. Mr Garofalo conveyed his astonishment that HMRC had displayed no interest in the evidence he had gathered. “It was an open and shut case. The evidence was just irrefutable.” HMRC refrains from commenting on specific cases, but it communicated to the BBC that non-compliance with sanctions constitutes a serious offense, and violators could encounter enforcement measures such as monetary fines or referral for criminal charges. Its statement further noted: “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.” However, the BBC comprehends that no criminal prosecutions have occurred for breaching trade sanctions against Russia since February 2022. Sir Iain Duncan Smith MP, who chairs a parliamentary committee focused on sanctions against Russia, informed the BBC that the Crisp case is not an isolated incident. “In terms of prosecution and seriously pursuing people over sanctions, the UK is very poor indeed,” Sir Iain stated. “If we don’t prosecute, who the hell is deterred from breaching sanctions? He asserted that other nations, such as the US, were “light years” more advanced than the UK in their approach to 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 leader of the Conservative Party remarked that HMRC frequently opted for settlements rather than imposing substantial fines or securing criminal 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 further commented. Tim Ash, from the foreign affairs think tank Chatham House, indicated that the UK government had anticipated sanctions would serve as a deterrent, negating the necessity for vigorous enforcement. “The reality is, the allure of doing business with Russia, the huge profits to be made, are too much for some people,” Mr Ash elaborated. “They’re more interested in their bottom line, as opposed to the bottomless pit of Ukrainians dying.” He stated that instances such as Mr Crisp’s conveyed an unambiguous message that there would be no repercussions for maintaining commercial ties 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.” Copyright 2024 BBC. All rights reserved. The BBC bears no responsibility for the material on external websites. Information regarding our policy on external linking is available.