Russia's reckoning: Carpetbaggers who take their wealth to the West

IRINA KAZAKHOV is sitting in her luxury flat in Kensington, west London, watching the news on Russian state television, picked up by her specially tailored satellite dish. "It's terribly sad what's happening," she says. "But," she adds, more cheerfully, "I think this means there'll be some more of my friends moving over to London."

Irina can't watch for too long, as she has a lunch date with two fellow Russian exiles at Harvey Nichols' Fifth Floor restaurant.

Twenty-nine and statuesque, Irina is married to Konstantin Kazakhov (their names have been changed), and has been living in London for the past four years. The couple own a pounds 1m house in Hampstead (currently uninhabited) as well as the pounds 400,000 Kensington flat, and two flats in Monaco.

Irina has not worked since she accompanied her husband to London, but she keeps in shape with membership of the most exclusive sports clubs, and dines and parties on the circuit of the rich and glamorous: Annabel's and Tramp in London, Jimmy'z and the Sass Cafe in Monte Carlo.

Irina and Konstantin are among 60,000 Russians based in Britain, and Konstantin, who yesterday was in Moscow "tying up some loose ends", is one of thousands of shady Moscow businessmen to have spirited fabulous wealth out of Russia during the chaos of the past decade. The collapse of the rouble, the political turmoil, the shudders on the world's bourses: all of these mean little to the Kazakhovs. Their assets are safely stashed away in the West.

Irina won't reveal her husband's true worth - like a lot of Russian trophy wives she probably doesn't actually know it - but it is at least $200m (pounds 120m).

He is one of the good guys, relatively speaking: he made his initial fortune selling underwear in the early 1990s, diversifying to shipping, all the while illegally expatriating his mounting fortune to Swiss bank accounts, investing in stock markets and property speculation in Western Europe. He paid off various Mafia and government officials on the way, standard practice for any business in Moscow; he is not wanted for any offence, though some of his countrymen may feel tempted to put him on the gallows for moral crimes against the nation.

A decade after the 40 years of high alert against the invasion by Western society ended, Russia's wealth has indeed been pillaged by fat, cigar- chomping capitalists, but the perpetrators are, mostly, home-grown. A retired KGB general told a conference last year that one trillion dollars had been taken out of the country since 1989. More conservative estimates by Western police intelligence sources say Russians have spirited out between $120bn and $200bn of their country's wealth since 1990, enough to pay off the country's entire foreign national debt, with another $15- 20bn leaving each year. About $12bn is estimated to be stashed by private individuals in Swiss banks alone.

The premium residential areas of north and west London now boast myriad homes of fabulously wealthy Russians, as do swathes of the south of France, the Costa del Sol, Monaco, Cyprus and Israel. It is a common complaint among these Russian expatriates that anyone rich is automatically assumed to be associated with the Mafia, but intelligence services have identified three types of cash outflow from the country.

Firstly, there is the "clean" money, earned legally, such as Kazakhov's, but exported illegally. The majority of the money leaving Russia is in this category, sources say. Russia's strict exchange control regulations mean it is virtually impossible to get cash out of the country legally: only $416m was authorised to leave the country last year, a fraction of the amount spirited away.

To take out their hot money, businessmen set up legitimate companies in the West and send invoices to themselves in Russia for the supply of fictional goods.

Alternatively, they just bribe airport officials and carry out the cash in suitcases, a million dollars at a time. These people are of little interest to Western authorities. As a British police official put it: "Capital flight is a matter for the country whose capital is flying."

A German police intelligence source said: "We are interested only in the people who are involved in organised crime, who account for a significant amount of the outflow, mainly for money-laundering purposes and to finance criminal operations in the West."