September 2014

Russian oligarch’s arrest a warning from Putin, says hedge fund boss

The Guardian

The arrest of one of Russia’s richest men last week was an attempt by President Vladimir Putin to protect himself from a palace coup, according to one of his most vocal critics.

Bill Browder, the hedge fund manager who has become a crusader against Russian corruption, said the arrest of Vladimir Yevtushenkov was intended to send a message to any oligarch plotting moves against Putin, as the value of their assets drops in the wake of western sanctions.

Yevtushenkov was released on Friday, after being put under house arrest for three days on charges of money laundering.

As the richest man to fall into the hands of the Russian justice system since Mikhail Khodorkovsky was arrested in 2003, Yevtushenkov’s detention heightened speculation that the Kremlin wanted to take control of his oil company, Bashneft – one of the few Russian energy companies still in private ownership.

Speaking before Yevtushenkov’s release, Browder said the arrest was “more motivated by paranoia than any demand for a particular asset”, because “Putin and his underlings can always steal these assets in any number of ways”.

“I don’t know if Yevtushenkov did anything more or less irritating to Putin than the other oligarchs. I just think [Putin] randomly picked one out to make sure none of the other oligarchs are going to start challenging him or start planning any palace coups.

“Now that their wealth has been diminished by Putin’s actions, they have a big incentive to act against Putin and he knows that.”

Russia’s main stock market, Micex, has lost 6% of its value since the west tightened economic sanctions against Russia in July over its threat to the sovereignty of Ukraine, and the value of the rouble has fallen to all-time lows against the dollar.

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September 2014

Former New York Prosecutor Faces Confidentiality Breach Hearing

Wall Street Journal

John Moscow, a prominent former New York prosecutor, faces a hearing this week on whether he breached a prior client’s confidentiality when he began defending companies belonging to a Russian accused of buying Manhattan properties with the proceeds of a $230 million tax fraud.

Mr. Moscow is defending companies owned by Denis Katsyv that prosecutors allege funneled laundered money to buy the properties. Mr. Moscow was previously hired as an outside lawyer for London-based hedge-fund manager William Browder, a witness in the U.S. government case against Mr. Katsyv’s companies.

A New York judge will consider at a hearing Thursday whether Mr. Moscow and his law firm, Baker & Hostetler LLP, have information that will give them an advantage in questioning Mr. Browder.

“Our law firm concluded we had no conflict of interest; and our role as counsel is to insist the government prove its case,” Mark Cymrot, a BakerHostetler partner, told The Wall Street Journal.

The stakes are high, according to Lara Bazelon, visiting professor at Loyola Law School in Los Angeles and co-chair of an American Bar Association ethics committee.

“If the judge finds that Mr. Moscow relied upon information that he learned as a matter of confidence from a past client, that would be a violation of the duty of confidentiality,” Ms. Bazelon said. “That would be a very strong finding, particularly against someone so high-profile and well-respected.”

Mr. Moscow spent three decades at the New York County District Attorney’s Office, serving as chief of the fraud bureau and deputy chief of the investigations division. He led the investigation of money laundering and fraud at the Bank of Credit and Commerce International in the 1990s.

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May 2014

U.S. Treasury Sanctions 12 More Russians Under ‘Magnitsky Act’

Radio Free Europe

The U.S. Treasury has announced sanctions against 12 more Russians for alleged human rights abuses, including prison officials who allegedly withheld medical care from a man who uncovered tax fraud in Russia.

The visa bans and sanctions under the so-called “Magnitsky Act” freeze any U.S. assets of individuals accused by Washington in the 2009 prison death of whistle-blowing Russian lawyer Sergei Magnitsky, as well as other as well as other human rights abuses.

The list published on May 20 includes four Russian prison officials, a judge, a court official, a law-enforcement investigator, and alleged co-conspirators in the Russian fraud case.

Those alleged co-conspirators are said to have been involved in a massive tax fraud in Russia that Magnitsky disclosed prior to his death.

Most added to the blacklist are accused by Magnitsky’s supporters of complicity in his arrest and subsequent death while in pretrial detention at a Moscow prison in November 2009.

The judge named on May 20 was involved in the criminal proceedings against Magnitsky.

Russian prison officials on the expanded list include medical personnel who treated Magnitsky in prison.

On the list is Dr. Dmitry Kratov, who was charged with negligence in connection with Magnitsky’s death but was acquitted last December by a Russian court.

The expanded sanctions list does not include a top Russian law-enforcement official that senior U.S. lawmakers had tried to get included.

Proponents of the Magnitsky Act had called for Russian Investigative Committee head Aleksandr Bastrykin to be sanctioned under the 2012 law.

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May 2014

Obama Targets Russian Mob Boss

Daily Beast

The U.S. government has publicly added 12 Russian officials to a list of human right violators but he head of the Russian Investigative Committee may be on a still secret part of that list.

The State and Treasury Departments Tuesday sanctioned a dozen Russian officials under the Magnitsky Act, adding them to a public list of human rights violators subject to asset freezes and visa bans in the United States. But Alexander Bastrykin, the powerful head of Russia’s Investigative Committee, was not on the list, at least the version released to the public.

The twelve names publicly announced for sanctions Tuesday include Dmitry Klyuev, the alleged kingpin of a Russian organized crime group. 10 of the 12 Russians on the list were associated with the death of Sergei Magnitsky, the Russian anti-corruption lawyer who died in prison after being severely tortured. Magnitsky was then posthumously convicted for tax fraud. The judge who convicted Magnitsky after he died, Igor Alisov, was also sanctioned Tuesday.

Bastrykin’s name was conspicuously not on the public list, but administration sources said one name was added to the classified version of the Magnitsky list. Administration officials declined to comment on whether or not that person was Bastrykin. If so, he would be the highest ranking Russian sanctioned thus far under the law.

In January, four senior senators used a provision of the law to force the administration to consider sanctions on Klyuev and Bastrykin. Both had been vetted and prepared for sanctions inside the administration last year but the White House ultimately decided not to add any names to the Magnitsky list at the time.

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May 2014

U.S. Treasury Adds 12 Russians to ‘Magnitsky List’

Moscow Times

The U.S. has sanctioned 12 Russians for human rights abuses, including officials who allegedly withheld medical care from lawyer Sergei Magnitsky who died in prison after exposing large-scale corruption in Russia.

The U.S. Treasury Department, which announced the action on Tuesday, did not link it with the confrontation between Washington and Moscow over the Ukraine crisis, which has led the U.S. to target a number of senior Russian officials with sanctions.

The Treasury said in a statement that the sanctions would freeze any U.S. assets held by the 12 individuals and bar Americans from doing business with them.

Since 2012, the U.S. has targeted Russians for human rights abuses under a law named for Russian lawyer Magnitsky, who allegedly uncovered tax fraud that involved Russian officials.

The State Department has placed 18 Russians on a public list of those affected, and a handful of other senior officials are on a list that was not made public.

Last year, Russia convicted Magnitsky of tax evasion even after his death.

The people sanctioned on Tuesday included prison doctors, the judge who oversaw his posthumous trial and a banker alleged to have masterminded the conspiracy he uncovered.

May 2014

Magnitsky Sanctions Designations

US Dept of Treasury

Magnitsky Sanctions Designations

Specially Designated Nationals List
The following individuals have been added to OFAC’s SDN List:

ALISOV, Igor Borisovich; DOB 11 Mar 1968 (individual) [MAGNIT].

GAUS, Alexandra Viktorovna (a.k.a. GAUSS, Alexandra); DOB 29 Mar 1975 (individual) [MAGNIT].

KHLEBNIKOV, Vyacheslav Georgievich (a.k.a. KHLEBNIKOV, Viacheslav); DOB 09 Jul 1967 (individual) [MAGNIT].

KLYUEV, Dmitry Vladislavovich (a.k.a. KLYUYEV, Dmitriy); DOB 10 Aug 1967 (individual) [MAGNIT].

KRATOV, Dmitry Borisovich; DOB 16 Jul 1964 (individual) [MAGNIT].

KRECHETOV, Andrei Alexandrovich; DOB 22 Sep 1981 (individual) [MAGNIT].

LITVINOVA, Larisa Anatolievna; DOB 18 Nov 1963 (individual) [MAGNIT].

MARKELOV, Viktor Aleksandrovich; DOB 15 Dec 1967; POB Leninskoye village, Uzgenskiy District, Oshkaya region of the Kirghiz SSR (individual) [MAGNIT].

STEPANOV, Vladlen Yurievich; DOB 17 Jul 1962 (individual) [MAGNIT].

SUGAIPOV, Umar; DOB 17 Apr 1966; POB Chechen Republic, Russia (individual) [MAGNIT].

TAGIYEV, Fikret (a.k.a. TAGIEV, Fikhret Gabdulla Ogly; a.k.a. TAGIYEV, Fikhret); DOB 03 Apr 1962 (individual) [MAGNIT].

VAKHAYEV, Musa; DOB 1964; POB Urus-Martan, Chechen Republic, Russia (individual) [MAGNIT].

March 2014

Why London turns a blind eye to Russia’s adventurism

The Guardian

Threats to Russia over its actions in Ukraine are undermined by the warm welcome its billionaires continue to receive in the west.

The kleptocracies that have replaced the old Soviet empire are vulnerable, I wrote on these pages as the Ukraine crisis began. The freezing of their assets was a non-violent response to the threat to the integrity of a sovereign state that had not committed genocide or developed weapons of mass destruction; that had not threatened to invade a neighbour or provided any other casus belli beyond having a revolution against a fantastically corrupt government.

We might have threatened Putin’s elite support and made his backers realise that they had to choose between supporting Russian adventurism or holding on to their loot. I believed we had a fair idea of what their choice would have been.

Russia is exposed. Putin’s central bank estimated that two-thirds of the $56bn moved out of Russia in 2012 might have been the proceeds of crimes, bribes to state officials and tax fraud. English bankers and lawyers, British and Dutch tax havens in the Caribbean, and estate agents in Mayfair, the Cote d’Azur and Manhattan launder the loot.

Never mind asset freezes and visa bans; a vigorous investigation into immoral earnings by the European and north American authorities would have spread panic among the crime bosses. David Cameron sniffed weakness. He warned Moscow at the beginning of March that Russia would pay “significant costs” if it did not back down.

The crisis escalates today as Crimea votes on an anschluss with Russia under the eyes of Putin’s troops. The failure to date to impose sanctions on or make believable threats against Russian assets tells us much about Britain and the wider west, none of it flattering.

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March 2014

How U.S. sanctions hope to strike at Putin’s allies without actually targeting Putin

Washington Post

On Monday, President Obama released a list of individuals sanctioned for their involvement in Crimea’s vote to join the Russian Federation. Of the 10 names on the list, seven are Russian.

One person, however, was notable by his absence: Russian President Vladimir Putin.

While Putin’s name appears three times in the list, U.S. officials have explained that it would be “extraordinary” for them to target a head of state in such a case, despite calls to do so from people such as Bill Browder, one of the key supporters of the Magnitsky Act.

The list does strike at Putin, however, by targeting some of his key allies. These people may not be household names in the United States or Western Europe, but they hold real power in Russia, which may not be apparent from the one-line descriptions given by the White House.

For starters, there’s Vladislav Surkov, described as a presidential aide to Putin. Surkov is notorious in Russia-watching circles as the theater director who later became a PR man for Mikhail Khodorkovsky. He eventually came to the Kremlin and used his understanding of publicity and image to help sustain and strengthen Putin’s presidency, with some even suggesting that he was the real power behind the throne. He was called “Putin’s Rasputin” in the London Review of Books, and the “Gray Cardinal” by many others. While he apparently fell out of favor after anti-Putin protests in 2012, he was brought back last fall to help deal with Ukraine and other situations.

Then there’s Sergei Glazyev, once a fierce critic of Putin and even a rival to his presidency, who was brought into the president’s fold in 2012, and is described as a “Presidential Adviser to Russian President Vladimir Putin.” Glazyev was tasked with developing the Customs Union between Russia, Belarus and Kazakhstan, a precursor to the “Eurasian Union” that is said to be close to Putin’s heart. It had been hoped that Ukraine might join the Customs Union, and Glazyev had acted as Putin’s main emissary to the country over 2013. He had issued a number of warnings to Ukrainians as the Euromaidan protests progressed.

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March 2014

Time for the Magnitsky Act

National Review Online

When it comes to Ukraine, the United States and European Union are stuck between a rock and a hard place. Russian troops are hunkering down in the recently occupied Crimean peninsula, showing no signs of retreat. The West, wary of involvement — especially military involvement — in yet another international conflict, has confined its rhetoric to talk of “costs” and economic sanctions.

One weapon in the United States’ economic arsenal is the 2012 Magnitsky Act, which allows the administration to sanction individual Russians. In particular, the law was aimed at those who were responsible for the detention, abuse, and death of Sergei Magnitsky, a Russian accountant and auditor. Magnitsky was tortured and murdered after accusing Russian officials of corruption and theft of taxpayer funds. Under the act, the Obama administration could target individuals by freezing their assets held in the United States and denying them visas.

This individualized pressure could be coupled with sanctions against the entirety of Russia, further pressuring Russian leaders to remove troops from Crimea.

The Obama administration opposed its passage in 2012, when it was approved with bipartisan supermajorities in both houses of Congress. Now, however, the law is one of the few weapons the American government is potentially willing to use against Russia.

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