The underworld always resurfaces through money laundering in capitals of the global economies. Our planet has become one joyful, socially connected experiment. There are no borders except for poor migrants who, for a multitude of reasons, are seeking a new nation for their survival.
Hermitage investigation …
- UK looks the other way by wealth of Russian oligarchs invested in the City of London
- US Justice and the Russian mob in New York
- FBI negotiations with Katsyv for a plea bargain
- Israel suits wealth of former Soviet oligarchs just fine – building settlements
As an addition, GPS Fusion of the British Dodgy Dossier fame has now been linked to pro-Russia lobbying in U.S. Congress to limit the sanctions due to the Magnitsky Act!
Lots more below the fold …
There may be some justice for Sergei Magnitsky yet.
Magnitsky is the Russian lawyer who died in Moscow’s notorious Butyrka prison in 2009 after a year of beatings and neglect. He had exposed a $US230 million tax scam, the largest in Russian history, but instead of a reward he was accused of the crime himself and jailed. The money disappeared and Russian authorities have said it cannot be found.
But for the first time there may be not only a moral retribution for those who benefited financially from Magnitsky’s death.
The US attorney for the Southern District of New York filed a complaint aimed at recovering some of those stolen funds. Prosecutors are asking that a number of high end apartments in the Wall Street area of Manhattan worth about $10 million and a number of bank accounts, owned by a series of related companies, be seized as illegal gains from the Magnitsky fraud. This is of course all related to high ranking Russian government officials.
U.S. Attorney Preet Bharara Russian connection nightmare
Bharara said in a press release: “Today’s forfeiture action is a significant step towards uncovering and unwinding a complex money laundering scheme arising from a notorious foreign fraud. As alleged, a Russian criminal enterprise sought to launder some of its billions (hundreds of millions us dollars) in ill-gotten rubles through the purchase of pricey Manhattan real estate.”
Prosecutors are asking the court to seize the assets of Prevezon Holdings Limited, owned by Denis Katsyv, the son of the wealthy Russian public official Pyotr Katsyv. It is also asking for the assets of nine subsidiaries, which own four luxury apartments and two high-end Manhattan commercial spaces as well as numerous bank accounts.
The companies also face civil money laundering penalties and charges.
“Manhattan may have some of the most desirable real estate in the world, but it is not the place to purchase it if you are allegedly doing so with Russian or other dirty money,” said District Attorney Cyrus R. Vance, Jr.
The U.S. agreed to take $5.9 million to settle a money-laundering lawsuit tied to a $230 million Russian tax fraud, avoiding a trial that was set to begin Monday.
Both the U.S. and a Cyprus-based company controlled by a Russian businessman claimed victory in avoiding a trial that promised to shed light on an intricate web of shell companies and middlemen that were allegedly used to spirit dirty money out of Russia in violation of international financial regulations.
Prevezon Holdings Ltd. said in an emailed statement that it agreed to settle the U.S. claims for less than 3 percent of the amount initially sought by the U.S. government. Acting Manhattan U.S. Attorney Joon Kim said the settlement amount was roughly 10 times the money that was allegedly traced directly into U.S. accounts and real estate.[DOJ statement Joon H. Kim – May 12, 2017]
Bill Browder was one of the first Westerners to make a fortune in post-Communism Russia.
After arriving in the country in 1997, his fund Hermitage Capital Management started with $25 million and was at one point thought to have invested $4.5 billion, making it one of the largest foreign investors in the country.
When Putin came to power, it was all chaos. In the 1990s, the chaos was driven by the oligarchs, the 22 oligarchs who stole 50 percent of the country from the state, and the rest of the 143 million Russians lived in destitute poverty.
When Putin came in, his promise to the people was that he was going to disenfranchise the oligarchs from the economy, and the state would then function in the national interest. Instead, of disenfranchising the oligarchs, he basically took out the biggest oligarch, Mikhail Khodorkovsky, the former head of Yukos, and then scared the other oligarchs into submission.
Putin then became the biggest oligarch himself along with some of his law enforcement colleagues. And they’ve now consolidated their position to such an extent that Putin is likely to be one of the richest men in the world.
- ○ Cold War: Democrats Too Had Covert Ties with Agents of USSR by Oui on March 4, 2017
○ Khodorkhovski found guilty. Yukos = Enron? by Jerome à Paris on May 16, 2005
○ Khodorkovsky, oligarchs and the former Soviet bloc by profmarcus on May 3, 2005
In comparison, both political players lead a very similar movement claiming to be pro “Our Country” and anti-Nazi fascists, both wearing the 5 pointed Red Star.
A similar picture emerges a few miles south of the leafy streets of Hampstead and Highgate down in Harley Street. The waiting rooms of the UK’s leading fertility clinics, orthodontists and cosmetic enhancement consultancies play host to wealthy families from the Middle East and the former Soviet bloc. From private schools to private healthcare, from Mercedes dealerships to Michelin-starred restaurants, the capital has benefited from a massive influx of foreign money.
A Deutsche Bank analysis in 2015 of the UK’s balance of payments data [pdf] suggested that since the mid-1970s much of this money has come from one country in particular. The bank’s report noted: “There is strong evidence that a good chunk of the UK’s £133bn of hidden capital inflows is related to Russia.”
It appears more than a coincidence that much of the money has washed up following a concerted effort aimed at enticing the super wealthy to live in the UK. Eight years ago, in return for investing £2m, foreign investors were offered a “golden visa” allowing them to live in the UK. After five years they qualified for permanent residency.
Analysis by Transparency International shows that, out of the 3,048 visas granted since the scheme began in 2008, 60% were awarded to Chinese and Russian nationals.
Amid widespread disquiet that the wealthy were being allowed to buy their way into the country, the programme was quietly scrapped. But the lucky millionaires and billionaires who bought their way into the UK remain, their wealth and web of influence growing.
At its most visible level, the effects of this massive cash injection from abroad can be seen in the capital’s booming property market. Prices in super prime parts of central London have soared due to the billions of pounds of investment pouring in from Hong Kong, Qatar and Russia.
Russian Oligarch or FBI Rat? by Michael Weiss - Dec. 2015
Three Russian witnesses in a federal asset forfeiture case–one tied to the most infamous Russian corruption and money-laundering scandal to emerge under Vladimir Putin’s presidency–amassed over $50,000 in hotel and dinner expenses during their four-day depositions in Manhattan.
In a separate twist to this story, one of the witnesses in the case, Denis Katsyv, may have tried to cut a deal with the FBI for an out-of-court settlement; or, to be more exact, his influential father, Petr Katsyv, did.
According to a letter to Judge Griesa by Preet Bharara, the U.S. attorney prosecuting the case, in February 2014, Special Agent John Penza of the FBI met in Rome with Denis Katsyv at the latter’s request and at the arrangement of an unnamed third party.
Bharara insists that this meeting took place without the foreknowledge or involvement of the U.S. attorney’s office, which only found out about it after being “told by the FBI that Denis Katsyv and his father Petr Katsyv wanted to meet again, this time with counsel for the Government, to provide information about criminal activity in Russia.” The FBI, Bharara writes, told the two Russians that any such follow-up meeting would require the consent of Denis Katsyv’s New York lawyer.
The Katsyv family’s involvement in the laundering of money from Russia into Israeli banks reflects the use of weak international channels, and exposes the route of official money being sent abroad from Russia. Peter Katsyv and his son Denis Katsyv were charged in Israel in 2005 with laundering money through their Martash Investment accounts in the Israeli Hapoalim Bank. Petr Katsyv, who was the Russian Deputy Minister of Transportation, allegedly laundered, through the company and its bank accounts, 250 million Israeli shekels (about $64 million) that he skimmed off from the Russian government. Hapoalim Bank allowed for the money to be transferred, and according Sam Vaknin, there is evidence that Israel has turned a blind eye to the origin of money transferred from South Africa and Russia.86 According to Globes, an Israeli business news source, the Israeli government acquitted the bank officials involved in the scam, saying that the defense materials were not properly handed over. The source reports that in 2010 the judge then argued that the Israeli state’s conduct of the case was bad, and impeded a fair trial, and that the defendants acted in accordance with the procedures of the bank and without intention to conceal information. The judge’s ruling, while correct pertaining to the evidence, is suspicious concerning the latter point. In 2012, Hapoalim’s chairman was indicted on charges of money laundering, reflecting a culture of money laundering that exists within the bank.
Katsyv ended up settling, and Martash Investment signed an agreement with the Israeli government in order to not be indicted for money laundering. In this agreement they were ordered to pay 35 million shekels (about $8 million).90 The settlement reflects the overall fear from the Katsyv family of an investigation, which could have led to the source of the money. The main income of the family was revealed to be “supervising” the trucking industry. Indeed, transportation development in Russia is notoriously corrupt. Evidence showed that the money in Israel was intended to be transferred and laundered abroad.
Senate Judiciary Committee Chairman Chuck Grassley is asking whether a suspected former Russian intelligence officer-turned U.S. lobbyist and the firm behind the unsubstantiated anti-Trump dossier should have registered as foreign agents for their efforts to bring down a U.S. law on behalf of the Kremlin. According to a complaint filed with the Justice Department, Fusion GPS, which was also involved in the creation of the unsubstantiated dossier alleging collusion between the Trump campaign and the Russians, was involved in the pro-Russia campaign to kill the Global Magnitsky Act around the same time.
Fusion GPS and Rinat Akhmetshin, among others, were involved in the pro-Russia campaign in 2016, which involved lobbying congressional staffers to attempt to undermine the Justice Department’s account of Magnitsky’s death and the crime he uncovered, repeal the Magnitsky Act itself, and delay efforts to expand it to countries beyond Russia, according to Browder’s complaint. Akhmetshin, a Russian immigrant, has reportedly admitted to being a “soviet counterintelligence officer,” and has a long history of lobbying the U.S. government for pro-Russia matters. Fusion GPS was reportedly tasked with generating negative press coverage of Browder and Hermitage.
Despite the reported evidence of their work on behalf of Russian interests, neither Fusion GPS nor Akhmetshin are registered as foreign agents under the Foreign Agent Registration Act (FARA).
From my diaries …