Jim Mellon introduced Brexit 'bad boys' Nigel Farage and Arron Banks, and was a Leave.EU ambassador. He claims he hasn't been involved in Russia since the 1990s. But our investigation shows he still has major financial exposure to Russian investments.

In early 1990s Russia, a lot of people died. Organised criminals and ex-Soviet officials fought vicious turf wars for control of industries and political power. And a man called Jim Mellon became fabulously wealthy.

Two decades later, Mellon toured his friend Nigel Farage around a number of potential major political donors. In late summer 2014, he introduced the UKIP leader to the insurance salesman Arron Banks. Within a few weeks, Banks had pledged a million pounds to the anti-EU party and, the next year, Mellon donated a reported £100,000 to theKnow.eu, a forerunner to Banks and Farage's Leave.EU campaign. Mellon was described as an "ambassador" for Leave.EU, and was scheduled to appear at Leave.EU's launch.

Last week the National Crime Agency announced an investigation into Arron Banks and others linked to Leave.EU over suspected criminal offences committed in the Brexit referendum, after the Electoral Commission found there were reasonable grounds to suspect that Banks was not the "true source" of £8m in funding for the pro-Brexit groups he backed. This followed reporting from openDemocracy and others which raised pressing questions about how Banks could have afforded to become the biggest political donor in British history.

The UK parliament's ongoing inquiry into misinformation and fake news has asked questions about Banks's Russian links, and the Observer newspaper has revealed a string of connections between Banks and Russia. In notorious emails between Banks and the Russian embassy, Banks describes Jim Mellon as his business partner. But Mellon, the man who introduced Banks and Farage, has escaped much scrutiny - until now.

During the 2016 referendum campaign, a representative of Jim Mellon, Denham Eke said he had "not been involved in Russia or Russian investments since the 1990s" and had "no relationship with Russia".

However, an investigation by openDemocracy has revealed that firms in which Mellon has major interests have maintained close links with prominent Russian businessmen - and have profited significantly from decisions made by Vladimir Putin and his associates over the last 25 years.

Specifically, we have learned that:

- Firms linked to Mellon have continued to invest in Russia for over 25 years and adopted a strategy of investing in firms with "management close to Putin."

- One fund linked to Mellon set up a new firm to buy Gazprom shares on the very day that Putin announced foreigners would be allowed to purchase them.

- The same Mellon-linked fund was selected to invest in Russia's state diamond company as it was privatised.

- Mellon holds a stake in a bio-tech firm with labs in the Skolkovo science park in Moscow. The FBI have warned that Skolkovo is a front for industrial espionage activities.

- Firms linked to Mellon were involved in a number of deals with politically exposed Russian oligarchs including an ex-KGB officer, Andrey Pannikov, and Roustam Tariko, who sponsored the Miss World event in Moscow attended by Trump.

- Mellon invested £120,000 in a South London beauty salon run by a Russian ex-Alfa Bank employee.

Mellon highlights that he had no executive role in the firm with the most Russian connections - Charlemagne Capital - and says he was not directly involved in the investment decisions. However, he was a co-founder, non-executive director and major shareholder of the firm.

Mellon's business partner Arron Banks is listed as the main funder of the Brexit campaign, claiming to have put £12m into Leave.EU and other anti-EU groups. However, as openDemocracy revealed last year, there are serious questions about how Arron Banks could have afforded to donate that amount of money to the Brexit cause. Banks claims he made all his money from his insurance businesses, saying "The Leave.EU campaign was funded by myself, Peter Hargreaves and the general public... allegations of 'Brexit' being funded by the Russians... are complete bollocks from beginning to end."

There is absolutely no allegation that Jim Mellon is the source of Banks' Brexit funding, nor that he has broken any law. But our investigation does reveal yet more connections between an important Leave.EU ambassador and Russia, including prominent Russians with close links to Putin.

Mellon has declined to provide openDemocracy with a comment on the record about any of the questions we put to him.

How did Mellon make his millions?

During the chaotic privatisations of the early 1990s, Russian citizens were given vouchers which entitled them to buy shares in the privatised state companies. While the traditional Soviet economy collapsed, a violent black market thrived.

On an early visit to Russia, Jim Mellon talks of having to barricade the door of his hotel in Vladivostok where, just a week later, a New Zealander was "hacked to death". After hiring bodyguards, he and his business partner, Jayne Sutcliffe, picked up suitcases of share vouchers for "little more than a bottle of vodka" and overnight transformed $2m to $17m.

Mellon then founded his investment business, Regent Pacific, and began to invest millions of pounds in Russia throughout the 1990s, taking large stakes in many of Russia's biggest companies.

These days, Mellon is a resident of the Isle of Man, the offshore banking centre between the UK and Ireland which he says is "a good base to establish new businesses from a tax and regulatory point of view."

It also means he is not eligible to vote in the UK. However, Mellon has provided tens of thousands of pounds to UK political causes from his UK-based companies, backing the Conservatives, UKIP and both Leave.EU and the official Vote Leave Campaign. This is all legal.

However, questions have always circulated about the extent of Mellon's involvement in UK politics, his business career and ties to Russia.

Who is Jim Mellon?

Mellon, an Oxford-educated Scot, is the son of Sir James Mellon, a British diplomat who served in East Berlin before becoming ambassador to Denmark, High Commissioner in Ghana and Consul General in New York.

He began his career as an investment analyst in Hong Kong in 1979 before going on to found Thornton Management with former colleague Richard Thornton in 1984. When the firm was sold four years later, Mellon became a millionaire. He bought homes in Ibiza and the Isle of Man where he continues to live, and went on to found Regent Pacific in Hong Kong, which soon became one of the largest investors in the Russian market on the back of the share certificates he bought from "Russian housewives".

In 1994, Mellon described privatisation in Russia as "the largest and fastest restructuring of an economy in human history". By 1997, Bloomberg featured Regent Pacific in an article titled "The Bad Boys of Emerging Markets". The firm had over $1.1 billion invested in Russia, and also ran its third largest brokerage house.

The same year, the company was listed as the second largest shareholder in Uralmash, a manufacturer of heavy engineering vehicles notorious for its connections to the Uralmash gang which fought a vicious turf war to control the city of Ekaterinburg.

Regent Pacific also took a stake in Lukoil, a company co-founded by Andrey Pannikov, an ex-KGB man who had been expelled for espionage from Sweden in 1988. Pannikov had obtained the first oil export license issued by Russia and had begun to foster close relations with Vladimir Putin, then deputy mayor of St. Petersburg, whom he was rumoured to have financially supported.

Mellon and Regent Pacific also attracted the attention of the board of Gazprom, the state owned Russian gas company. At the time, there were only a limited number of shares available to foreign investors due to the Russian government's policy of ensuring the company remained in Russian hands.

A parallel market was set up by Deutsche Bank to trade these stocks. Overseas investors could buy ADRs (American Depositary Receipts) from Deutsche which were actually packages of Gazprom shares deposited with the bank in Russia.

Predictably, the prices of locally traded shares and the ADRs widened: "Russian only" shares cost much less than the shares traded by western investors.

To exploit this difference, Regent Pacific set up a Russian company to buy Gazprom stock on the Russian market and then to sell units in this company to foreign investors. Mellon quickly raised $200m from western investors.

However, the scheme led to the Gazprom board voicing their disapproval of Regent Pacific's methods. Mellon later told a reporter he decided to leave Russia, fearing he "might end up at the bottom of the Moscow River". Following pressure from influential ministers and the Gazprom board, Mellon cancelled the scheme saying later, "We had too much at stake in Russia ... and I know when to walk away."

Then, during the Russian financial collapse of 1998, Mellon's funds dramatically collapsed in value, wiping out much of his investors funds. Regent Pacific had to lay off over 40 workers in their Moscow office. It seemed Mellon's days in Russia were nearly over.

Putin's Russia

However, by 2000 the Russian economy had begun to rebound - and so did Regent Pacific. Mellon and his business partner Jayne Sutcliffe split their funds into two companies, with Mellon running the Hong Kong-based Regent Pacific and Sutcliffe leading the London-based Charlemagne Capital, which focused on investments in Russia, and other east European emerging markets. This is the point at which Mellon's spokesperson claims he severed his links with the country. But Mellon remained a major shareholder and non-executive director of Charlemagne, and his father took up a place on its board.

Yeltsin had been replaced by Vladimir Putin. The new leader appointed Medvedev, the current prime minister, to the board of Gazprom and began kicking out old Yeltsin appointees and replacing them with his own hand-picked men, such as Herman Gref, the now-sanctioned CEO of Sberbank.

Putin decided to relax restrictions on foreigners holding Gazprom stock. In a meeting on 30th October 2003, he gave his consent to the type of scheme Mellon had attempted to set up five years earlier.

According to the Russian website neftegaz.ru, on the same day Charlemagne Capital established a company called Novy Neft in Bermuda to purchase the new shares and raised $100m from investors within a fortnight. This was either enormously fast paperwork, or Charlemagne had prior knowledge of Putin's announcement.

The scheme was enormously successful. A second fund, Novy Neft II, soon followed. Gazprom shares rose in value, both funds saw large increases in the values of their stocks and investors saw significant gains.

Russian diamonds, Trump, and Arron Banks

In 2013 and 2016, Charlemagne Capital was selected to participate in partial privatisations of Alrosa, the Russian state diamond company, and the second largest diamond producer in the world.

The Russian Direct Investment Fund, a now sanctioned Russian sovereign wealth fund run by Kirill Dmitriev, selected Charlemagne as an investor in 2013. Dmitriev has more recently been in the headlines for secret meeting with a Trump confidant, the Blackwater founder, Erik Prince, in the Seychelles during the US presidential election campaign.

In 2016, when there was another part-privatisation, Charlemagne was invited to participate again. Between the announcement of the sale and its completion, investors were only given five working days to subscribe to the shares, offered at a sharp discount to the government's own valuation.

Mellon owned 40% of Charlemagne when it was established and continued to hold at least 20% of the business until 2016. His father, now in his late eighties, sat on its board from 2000 until its sale, although Mellon denies any involvement in the operation of the business or any knowledge of its investments.

The UK House of Commons Inquiry into Disinformation and 'Fake News', which has released a report on the Brexit referendum campaigns, has highlighted the Alrosa deal as a point of concern, particularly as it was raised in emails between Brexit-backer Arron Banks and the Russian ambassador. Another deal floated by the Russians to Banks concerned the consolidation of a number of goldmines, and in emails seen by openDemocracy, Banks says "I've chatted to Jim Mellon who is my partner in the bank (Isle of Man based Manx financial). Jim has extensive interests in commodities."

While Mellon denies knowing or having close ties to any Russian business or political figures, he does concede to having met the Russian ambassador to the UK on several occasions over the past few years. For this part, Arron Banks caused controversy when it transpired that he had in fact met the Russian ambassador eleven times, despite having long maintained he had only met him once.

Mergers in the Caribbean

In 2012, two Trinidad and Tobago based oil firms merged: Bayfield and Trinity. Andrey Pannikov, the former KGB man with close ties to Putin's inner circle, owned 20% of Bayfield. Jim Mellon's firm Regent Pacific was a major investor in Trinity. Trinity had booked strong profits in 2011. Bayfield, however, was struggling, yet the two companies merged in a deal which seemingly made little sense for shareholders who were forced to accept large losses on their investments. Pannikov himself lost millions on his investment in Bayfield but was able to see the loss-making company salvaged by Trinity. Mellon admits the deal lost Regent Pacific £5m, and despite being a non-executive chairman and a major shareholder, he denies being personally involved and says he has never met Pannikov.

In the mid 2000s, Charlemagne Capital became one of the largest shareholders in the Central European Distribution Company, based in Poland. But the firm was hit hard by the 2008 crisis, and in April 2013 entered Chapter 11 bankruptcy proceedings in order to restructure its debts. In the pre-packaged deal, over one third of the group's debt was written off and Russian billionaire Roustam Tariko took ownership of the business. The New York Times called the deal an "exercise in stiffing shareholders", but Charlemagne was able to exchange its equity for debt and salvaged 83% of the value of their investment. A rival offer from an Alfa Bank consortium put in a larger offer for the business, but strangely this seems to have been immediately rejected.

A few years later, Roustam Tariko sponsored the 2013 Miss Universe competition in Moscow, where he had a neighbouring VIP box to its organiser, Donald Trump.

"Firms whose management is close to Putin"

Charlemagne Capital continued to invest heavily in Russia throughout the 2000s as Putin consolidated his grip on power. In 2003, Stefan Böttcher, a Charlemagne fund manager, described how the business had a policy of investing in "firms whose management is close to Putin."

Mellon states that while he was a major shareholder in the business, he had no operational control and was not made aware of any investment decisions or strategies and thus had no involvement in or influence over the deals in Alrosa, Novy Neft, or the CEDC takeover. When the firm floated on the London stock market in 2006, Mellon reduced his shareholding from 40% to around 20%. The business boasted $4 billion in assets under management, which were mostly invested in Russia, and other east European countries.

Mellon also denies having ever met Andrey Pannikov or Roustam Tariko, but often meets Russians, including the ambassador to the UK, and personal friends at cultural and business gatherings.

"Lasers", and Russian Intelligence

One such personal friend is Anna Saprykina, a former Alfa Bank employee who now runs a company called Body Silk in Hither Green, South London, which specialises in laser hair removal. Born in Russia, but with over 10 years spent in the UK, Saprykina is now a British citizen. A keen classical musician, she tells the story of how she and her sister were looking for investment to set up their business when they were introduced to Mellon at a concert in 2010.

Mellon invested £120,000 in the business. Eight years after it was established, it is currently for sale having racked up losses of £240,000. Saprykina, advertised the business as "ideal for a Tier One Entrepreneur visa" on her LinkedIn page.

Alfa Bank, Saprykina's former employer, has been named as a conduit for Russian intelligence activities in multiple countries and is a focus of the Mueller investigation into ties between the Russian state and Donald Trump, although there is no suggestion that Saprykina has been involved in Russian intelligence.

The 'money fountain'

Mellon first met Banks when he invested in Conister Bank, an Isle of Man bank which Banks and his partners from Brightside insurance had recently been bought out of insolvency. The two men became business partners in the venture they would soon re-name Manx Financial.

Both Arron Banks and Mellon continue to hold significant stakes in Manx Financial and have also co-invested in other businesses together. It was from this relationship that Banks's involvement in UK politics would grow as Mellon introduced him to Nigel Farage. The three men were reported discussing "other ways" of funding the then near-bankrupt UKIP to get around Mellon's non-resident status according to a Telegraph report in 2013.

When openDemocracy (and others) have looked into Banks' true wealth, we have not found evidence that he is as rich as he claims. With Mellon, however, there is little doubt that he has the trappings of a very wealthy man. He moves between luxury homes in Ibiza, Berlin and the Isle of Man on a private jet and gets the Brand New Heavies to play at his parties. But, given that most of his businesses are based in secretive tax havens, it is difficult to gauge whether Mellon is, as Canadian senators said in a report about another of his businesses, "in constant financial difficulty" or more correctly valued at £1 billion, as the Sunday Times Rich List reported this year.

There is no suggestion that Mellon is the ultimate provider of the disputed funding for Leave campaigns.

'Living for 200 years'

Today Regent Pacific, Mellon's Hong Kong based business, is moving into biotech. Mellon says humans can live for 200 years due to all manner of technological advances, and claims he knows which ones to invest in. He calls this 'longevity science', tells investors it's a 'money fountain', and has even co-written a book about longevity, called "Juvenesence" and set up a business with the same name.

Once again, his recent foray has brought him into contact with well-connected Russians. One of the companies Mellon owns a stake in is the start-up Insilico medicine, which has 80% of its staff in offices and labs at the Skolkovo Foundation Science Park in Moscow.

The Skolkovo Foundation is the brainchild of Viktor Veskelberg, a sanctioned oligarch and close confidant of Putin. It has been described by the FBI as an attempt to conduct industrial espionage.

Mellon says that while he has visited the Skolkovo business park to see the Insilico Medicine operations, he has not had any interaction or meetings of any type with members of the Skolkovo Foundation, which often invests in businesses based on its campus, and points out that the firm is registered in the US and also has a base at Johns Hopkins University in Baltimore.

"Snake in the grass"

Arron Banks, the self-styled 'bad boy of Brexit', has already been found to have misrepresented the extent of his connections with Russian officials and the value of his investments. As openDemocracy has repeatedly shown, major question marks hang over the true extent of the insurance tycoon's wealth. Our reporting has also revealed how he misled parliament about his business and political operations, and how he accessed data on millions of voters. In the midst of intense political rows over the Brexit negotiations, Banks has also openly threatened to rally Leave.EU's supporters to unseat anti-Brexit Tories.

For all these reasons, the questions about how Arron Banks found the money to become the largest political donor in UK history are not merely historic. They urgently need answers. There is no evidence to suggest that Mellon himself is the true source of Banks's Brexit funds. However, while his spokesman said that Mellon "had not been involved in Russia or Russian investments since the 1990s", our investigation shows that his financial exposure to Russian investments remains significant.

British parliamentarians from across the political spectrum have called for a Mueller-style investigation into Russian meddling in the Brexit referendum. One of the most prominent voices demanding this is the Conservative MP Damian Collins, chair of parliament's ongoing inquiry into misinformation and fake news. Arron Banks last week month sent letters to all of Collins's constituents calling him "a disgrace" and "a snake in the grass", and urging Leave.EU supporters to "put his position into question by joining the Conservatives and applying pressure from within the party".

Both Mellon and Banks have declined to respond on the record to any of the question we have put to them.

About the author: After cutting his teeth as a reporter with local newspapers, Iain re-qualified as an ACCA accountant and had worked as a risk consultant and programme and project manager within some of the City's largest institutions over the past 15 years.