FRENCH billionaire Bernard Arnault and Russian oligarch Nikolai Sarkisov are under investigation for alleged money laundering at a luxury Alpine resort, said Paris prosecutors.

The probe concerns their activities in Courchevel, a ski resort in the French Alps known for being a playground for the ultra-rich, they said on Thursday (Sep 28).

The French economy ministry’s financial intelligence unit, Tracfin, is leading the investigation, but has yet to determine whether any crime had been committed, a source close to the investigation told AFP.

French daily Le Monde, citing Tracfin, reported that the 55-year-old Russian billionaire had acquired 14 housing units from a single seller in 2018 for 16 million euros (S$23.1 million) in a complex deal involving companies based in France, Luxembourg and Cyprus.

Although Sarkisov is believed to be the buyer, his name appears nowhere on the books of the company carrying out the purchase.

The company, called La Fleche, is believed to have bought three more real estate units from a second company which, it turns out, also belonged to Sarkisov.

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The sale of the real estate to himself allowed the Russian to pocket a capital gain of 1.2 million euros, said the paper.

Arnault – who runs luxury empire LVMH Moet Hennessy Louis Vuitton and is the world’s second-richest person after Elon Musk, according to Forbes – is suspected of lending 18.3 million euros to Sarkisov for the deal.

He is then believed to have acquired La Fleche, effectively becoming the owner of the real estate portfolio.

The ownership change could have been designed “to hide the exact origin of the funds”, Le Monde quoted a Tracfin document as saying, as well as the identity of the “ultimate beneficiary”.

Investigators believe Sarkisov made two million euros from the operation, but they were still in the dark regarding how much he had paid for the loan.

When contacted by AFP, LVMH declined to comment.

Le Monde, however, quoted a spokesman as saying that the operation had been “carried out with the strictest observance of the law”.

The paper also cited people close to Sarkisov as saying that the capital gain was “just a few hundreds of thousands of euros”, and that the Russian had not been involved personally.

Le Monde said that according to “family lore”, Arnault has a special connection to Courchevel because he learned to ski there as a child. He also owns a mansion and a luxury hotel there.

Hotel prices in the resort can reach several tens of thousands of euros per night, the paper noted. AFP