Incarcerated in Kuwait: The alarming case of Marsha Lazareva

Marsha Lazareva was a prominent businesswoman in the Middle East before she was wrongly convicted by a Kuwaiti court of misusing public funds, her defence teams says.

She has been serving a 10-year jail sentence with hard labour in Kuwait's overcrowded Sulaibiya prison since May 2018, and despite vociferous calls for her release from a cadre of prominent international dignitaries, she remains locked up. Her case has highlighted the injustices of Kuwait's legal system at a time when the western world is closely tracking human rights abuses in the Gulf, and it may soon have international ramifications.

Lazareva, a graduate of the prestigious Wharton School of Business in Philadelphia, was the CEO and vice-chairman of KGL Investment (KGLI), a private equity and venture capital firm she led since its establishment in 2007.

KGLI oversaw The Port Fund, another financial house that invested in development projects in multiple continents. Its most recent success was the sale of a real estate project in the Philippines to Udenna, a Davao City-based holdings company, for nearly $500 million.

The court issued a verdict without allowing her legal counsel to present a defence, sentencing her to 10 years hard labour

The Port Fund's prospects were so promising that it attracted investment dollars from the Kuwait government itself. Two Kuwaiti government agencies had a stake in the fund, along with several independent investors.  

However, shortly after the Philippines deal was completed in 2017, Lazareva was charged by a Kuwaiti court with stealing their money.

Even after she informed the court that the proceeds from the project would be returned with a profit, the Public Prosecutor, perhaps recognising that his case was about to crumble, detained her and began aggressively prosecuting her on another charge: That she stole funds from a Kuwait government agency by allegedly billing for consulting work KGLI had not performed.  

The government's groundless case relied largely on testimony from a single discredited witness from the Kuwait State Audit Bureau who presented forged financial documents. The court issued a verdict without allowing her legal counsel to present a defence, sentencing her to 10 years hard labour.  

In a recent development, a Kuwait civil court ruled that the government agency did in fact owe KGLI payment for consulting services provided. That verdict undermines the legal basis of her conviction, an inconvenient fact for the Public Prosecutor who continues to oppose Lazareva's release.  

What happened to the half-billion dollars that her company managed to raise?  

The money was transferred by BDO bank (a Philippine bank) to The Port Fund's account at Noor Bank in Dubai with instructions to distribute the net profits to investors.

Instead, the money was frozen by Noor Bank at the direction of Kuwait authorities. Meanwhile, the Kuwait Attorney General continued to prosecute Lazareva for stealing investor money, while preventing its distribution to those same investors.

After a 14-month battle, the Kuwait Attorney General relented, and the funds were finally released in February 2019. The Port Fund immediately repaid the Kuwait investors with a handsome profit. Yet the Kuwait government agencies have not publicly acknowledged receiving the payments, and the Kuwait Attorney General has not dropped the charges against Lazareva.

Increased attention to this human rights case from the global media puts Kuwait at the centre of a growing international incident, attracting attention from key players in the US, UK, and Russia.

Russian foreign minister Sergei Lavrov brought up her case with the Emir of Kuwait last month to no avail. Without question, the fate of Lazareva has the potential to negatively impact the strong relationship between Washington and Kuwait City, as well as close ties between London and Kuwait City.

An American/British delegation that recently went to Kuwait on behalf of Lazareva and her son, a US citizen, included: Neil Bush (the son of President George H.W. Bush); Louis Freeh (a former FBI Director); Cherie Blair (Human Rights Attorney and wife of former UK Prime Minister Tony Blair); Ed Royce (a former member of the US House of Representatives); and Jim Nicholson (Former Secretary of Veterans Affairs), plus other high-profile figures.

The weak rule of law in Kuwait has been known for years

Lazareva's case was also raised by US Secretary of State Mike Pompeo on his recent visit to Kuwait, according to her lawyers. Without question, her case will negatively impact trade relations between Kuwait and the US, as well as the Arabian Gulf emirate's foreign investment climate.

The weak rule of law in Kuwait has been known for years, as have the number of injustices in the country's legal system that occur annually. Many of these issues involve personal politics being played out in the courts. Often there are major political ramifications. Lazareva's case is just one example.

Dr Theodore Karasik is an Adjunct Senior Fellow at the Lexington Institute and a national security expert, specializing in Europe and the Middle East. He worked for the RAND Corporation and publishes widely in the US and international media.