A supplier of perfumes to Harrods is facing a criminal investigation after continuing to sell his high-value products to Russia, in a sign that luxury goods are still being sent to the country in breach of UK sanctions.

Company director, David Crisp, is accused of knowingly breaking the export bans after continuing to offer his perfumes to Russia well into 2023, according to a London civil court ruling published last week. Evidence put before the court apparently showed Crisp had told an undercover private investigator that the Russian market was doing “really well” and that he ignored “government edicts.”

Details of the allegations emerged from the court case, brought by a fellow director who successfully pushed to replace Crisp on the board of the perfume company. 

The ruling also said that Crisp was arrested by UK tax authorities in October last year on suspicion of breaching the Russian sanctions and remains under criminal investigation. He has not been charged with any crime. 

Lawyers for Crisp told Bloomberg that he firmly denied knowingly trading in breach of export controls but were unable to comment further while the investigation continued. 

It’s the first public criminal investigation by HM Revenue & Customs for sanctions breaches revealed since Russia’s invasion of Ukraine.

The British government was quick to target luxury items in the rush to impose sanctions on Russia in the wake of the invasion. Governments around the world have seized super yachts, artworks and billions in Russian-linked assets in a bid to starve citizens and businesses of their wealth. Meanwhile UK exports to Russia have fallen 73% since February 2022, the UK said last month.

In a statement from March 2022, the UK said it was determined to ensure that “oligarchs and other members of the elite, who have grown rich under President Putin’s reign” were deprived of access to luxury goods. But there has since been questions about the effectiveness of those sanctions, with many western luxury brands still available in Russia.

Crisp accepts that he continued to ship the perfumes to Russia but said he didn’t realize that he’d breached rules that banned the sales of the expensive goods, the judge wrote in the decision. Lawyers told the judge he had not understood the limits that were imposed on the price per volume of perfumes. 

Crisp’s lawyer said he planned to appeal the decision “at the earliest opportunity.”

“We are confident that a judge will dismiss the claim and vindicate Mr. Crisp’s reputation with the benefit of full disclosure and evidence at trial,” they said in a statement. 

Crisp’s firm manufactured and sold a range of expensive perfumes called Boadicea The Victorious that retail at Harrods and Selfridges department stores as well as the Emirates airline priced as much as £900 for 100ml, according to the ruling. Harrods itself sent Crisp a warning about trading with Russia in May 2022. 

The case was revealed after Crisp’s fellow director David Garofalo became concerned that the company was continuing to export perfumes into Russia in breach of sanctions. He hired a private investigator who put Crisp under surveillance and secretly filmed him at a hotel in Dallas, Texas.

A month later, Moscow-based investigators discovered that the branded products were currently on sale in the Russian capital at various department stores, according to the ruling. The judge said Garofolo’s efforts then resulted in evidence showing a distributor linked to Crisp had imported the perfumes in 2022 and 2023.

In his ruling on July 5, the London judge said there was what he called a strong case that Crisp traded with Russia knowing he was in breach of the sanctions. He said it was for a final trial for the allegations to be ultimately proved but that he had a “high degree of assurance” that they would be. He ruled that Crisp could be stripped of his directorship while the investigation continues.

It was plausible that there was “an existential threat to the business of the companies unless dealt with swiftly such as to distance the wrongdoer from the companies,” Judge Clive Freedman said.

After his arrest, Crisp, who lives outside the UK, was informed that he was no longer on bail, according to the ruling. A spokesman for HMRC said the agency will neither confirm nor deny an investigation.

“We had no option but to seek this unprecedented injunction due to the scale of Crisp’s misconduct,” Garofalo said in a statement. “ We are extremely grateful to the court for its decision which has allowed us to ensure the company is no longer subject to the abusive and unlawful action of its former rogue CEO.”