Posts Tagged ‘Preet Bharara’
‘Sheriff of Wall Street’ pursues case linked to death of Russian lawyer
Preet Bharara is the new “Sheriff of Wall Street”. The US district attorney for the southern district of New York has taken down 60 insider dealers, including former McKinsey boss Rajat Gupta and Raj Rajaratnam over the Galleon scandal.
Currently, he has SAC Capital in his sights. He’s charged the giant hedge fund itself with allowing insider trading. Not for nothing has he inherited the populist monicker last claimed by Eliot Spitzer during his post-dotcom crackdown on white-collar crime.
Bharara even claims to eat “raw meat” for breakfast. If true, he’ll need it.
His latest target is far from white collar. Bharara is going after the Russian mafia – an organised crime group whose tentacles stretch throughout the state and, apparently, right into the Kremlin. At least two people connected to the crimes he’s pursuing have died in suspicious circumstances.
Last week, Bharara froze $24m (£15m) of property assets in Manhattan and Brooklyn, including “four luxury residential units and two high-end commercial spaces”, on charges of money-laundering. One 35-storey block boasts a pool, roof terrace, Turkish bath and indoor golf.
“As alleged, a Russian criminal enterprise sought to launder some of its billions in ill-gotten rubles through the purchase of pricey Manhattan real estate,” he said. “While New York is a world financial capital, it is not a safe haven for criminals seeking to hide their loot.”
If the court upholds the “civil forfeiture” complaint, the government will seize the assets.
Bharara’s case is the latest instalment in the tragic saga of Sergei Magnitsky, the Russian lawyer who uncovered a $230m tax refund fraud against the Russian people in 2007 while working for UK-based hedge fund Hermitage Capital Management.
Magnitsky blew the whistle hard. He named police officers involved in the crime group, identified tax officials who authorised the illegal payments and had begun tracking the money when he was thrown in jail on trumped-up tax-evasion charges in late 2008.
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From Moscow to Manhattan, the Long Way
U.S. prosecutors are trying to seize millions of dollars in ritzy New York City real estate they say are laundered rubles linked to the death of Moscow lawyer Sergei Magnitsky.
Federal prosecutors last week sought the forfeiture of $24 million worth of Manhattan real estate they say was purchased in part with funds connected to the notorious theft of $230 million from Russia’s Treasury in 2007. The crime assumed international importance later when lawyer Sergei Magnitsky died in the custody of Russian police he’d accused of complicity in the theft. Magnitsky was representing a Western-backed hedge fund that was victimized in the massive tax fraud.
“A Russian criminal enterprise sought to launder some of its billions in ill-gotten rubles through the purchase of pricey Manhattan real estate,” said Preet Bharara, the U.S. Attorney for the Southern District of New York, in a statement. “While New York is a world financial capital, it is not a safe haven for criminals seeking to hide their loot.” An order freezing the properties and related bank accounts was signed on Wednesday by U.S. District Judge Thomas P. Griesa.
The government’s civil complaint is the first U.S. law-enforcement response to the 2007 seizure of the Russian subsidiaries of Hermitage Capital, once the largest foreign investor in Russia. The complaint states that back then criminals stole the corporate identities of the money manager and used them to falsely claim the refund of $230 million for taxes that Hermitage had paid in prior years. When Moscow attorney Magnitsky presented evidence that he believed showed the involvement of police and tax officials, the complaint continues, he was arrested and died in prison a year later under suspicious circumstances. Barron’s reported on the case in detail in “Crime and Punishment in Putin’s Russia,” in our edition of April 18, 2011.
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U.S. Seeks Ritzy NY Properties in Russian Money Laundering Case
Federal prosecutors Tuesday sought the forfeiture of $24 million worth of Manhattan real estate they say was purchased in part with funds connected to the notorious theft of $230 million from Russia’s Treasury in 2007. The crime assumed international importance when lawyer Sergei Magnitsky later died in the custody of Russian police he’d accused of complicity in the theft. Magnitsky was representing a Western-backed hedge fund that was victimized in the massive tax fraud.
“A Russian criminal enterprise sought to launder some of its billions in ill-gotten rubles through the purchase of pricey Manhattan real estate,” said Preet Bharara, the U.S. Attorney for the Southern District of New York, in a statement. “While New York is a world financial capital, it is not a safe haven for criminals seeking to hide their loot.”
The government’s complaint is the first U.S. law-enforcement response to the 2007 seizure of the Russian subsidiaries of Hermitage Capital, once the largest foreign investor in Russia. The complaint states that criminals stole the corporate identities of the money manager and used them to falsely claim the refund of $230 million for taxes that Hermitage had paid in prior years. When Moscow attorney Magnitsky presented evidence that he believed showed the involvement of police and tax officials, the complaint continues, Magnitsky was himself arrested and died in prison a year later under suspicious circumstances (as reported in “Crime and Punishment in Putin’s Russia,” Barron’s, April 18, 2011).
The luxury apartments and fancy retail spaces that are subject to Tuesday’s civil forfeiture complaint were discovered last summer by Barron’s as part of a journalism collaboration that included Russia’s Novaya Gayzeta and an Eastern European not-for-profit journalism group known as the Organized Crime and Corruption Reporting Project. The Manhattan properties are owned by U.S. entities associated with a Cyprus corporation, Prevezon Holding, whose name had turned up in Eastern European bank transfers after the Russian Treasury heist. The forfeiture complaint alleges that these funds were laundered proceeds from the tax scam, and names both the U.S. and Cyprus corporations as defendants.
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As Putin Edges Out Obama In Syria Crisis, US Moves To Seize $230 Million From Alleged Russian Fraudsters
The Russia-U.S. relationship is the focus of a lot of attention this week, with President Vladimir Putin widely perceived to have out-maneuvered President Barack Obama and winning respect from unlikely corners.
Syria, however, is not the only issue between Russia and the U.S. at the moment.
Manhattan U.S. Attorney Preet Bharara announced Tuesday that authorities are seeking to seize luxury apartments and other property said to be used to launder funds by Russian criminal networks.
According to a 63-page lawsuit, Cyprus-based company Prevezon Holdings Ltd. and its New York affiliates must hand over more than $230 million for trying to launder tax fraud money with the purchase of real estate in the U.S. — notably the Alexander Condominium building at 250 East 49th street.
The case relates specifically to the notorious case of Sergei Magnitsky, the Moscow-based lawyer who was imprisoned and died mysteriously in jail after calling attention to an alleged Russian tax fraud scheme.
Magnitsky had been working for Hermitage Capital, a fund managed by American Bill Browder. After Hermitage’s Moscow offices were raided in 2007, Magnitsky began investigating and later testified that he had uncovered a huge scam by top police officials to embezzle $230 million in taxes from money that Hermitage Fund companies had paid in 2006.
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U.S. Seeks to Seize Properties Linked to Russian Tax Scheme
U.S. prosecutors seeks to seize high-end real estate they claim was bought with proceeds from a $230 million tax fraud allegedly committed by corrupt Russian officials
— The prosecutors allege the scheme took control of entities owned by U.S.-born investment fund manager Wiliam Browder
— Critics say the suit is emblematic of the Kremlin’s abuse of the legal process and has sparked tensions between the U.S. and Russia
U.S. prosecutors said Tuesday that they’re seeking to seize several luxury apartments and other high-end commercial spaces in New York that they claim were purchased with proceeds from a $230 million tax fraud allegedly committed by corrupt Russian officials.
Prosecutors said the fraud was allegedly uncovered by Sergei Magnitsky, a Russian lawyer who died in a Moscow prison in 2009 under suspicious circumstances. Mr. Magnitsky, before his death at age 37, claimed Russian police and security officials took control of entities owned by his client, U.S.-born fund manager William Browder, and defrauded the Russian government of hundreds of millions dollars in tax refunds. Mr. Magnitsky was arrested in 2008 after he provided testimony about the alleged fraud.
In July, a Russian court sentenced Mr. Browder without him being present in court to nine years in prison for tax evasion and returned a guilty verdict against Mr. Magnitsky, despite his death, on similar charges. Mr. Browder is a U.K. citizen living in London.
Critics of the Russian government have said the case is symbolic of the Kremlin’s abuse of the legal process and it has fueled tensions with the U.S., leading to a series of tit-for-tat recriminations between the nations. Russian President Vladimir Putin and other officials have denied allegations of judicial abuses in the case.
In a civil lawsuit filed in federal court in Manhattan on Tuesday, U.S. prosecutors alleged that a criminal organization, including officials at two Russian tax offices, corruptly sought tax refunds in the amount of 5.4 billion rubles, or about $230 million, on behalf of companies associated with Mr. Browder’s Hermitage Capital Management.
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New York freezes $24m of Magnitsky fraud assets
A New York district prosecutor has frozen more than $20m of Manhattan property assets following allegations they were used to launder money for Russian criminals linked to a $230m fraud uncovered by dead whistleblower Sergei Magnitsky.
Preet Bharara, the US Attorney for the Southern District of New York, has filed a “civil forfeiture” complaint against nine companies that own $24m (£15m) of real estate, including “four luxury residential units and two high-end commercial spaces”. If the court upholds the complaint, the state would be able to seize the assets.
Mr Bharara said: “As alleged, a Russian criminal enterprise sought to launder some of its billions in ill-gotten rubles through the purchase of pricey Manhattan real estate. While New York is a world financial capital, it is not a safe haven for criminals seeking to hide their loot, no matter how and where their fraud took place.”
The court case is a major escalation in the ongoing diplomatic war between Russia and the US over Mr Magnitsky’s death and the fraud he uncovered. The former lawyer’s plight has become symbolic of state-backed corruption in Russia.
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Russians Laundered $23.7 Million In Corrupt Cash Through NYC Real Estate, Says U.S. Attorney
American officials are seeking to seize $23.7 million in high-end Manhattan real estate they say were purchased with money from a huge fraud exposed by a lawyer who later died in prison.
U.S. Attorney Preet Bharara filed a civil forfeiture complaint Monday against properties held by nine offshore companies and the assets of two other companies they say laundered part of the proceeds of a huge Russian tax fraud that caused a rift in U.S.-Russian relations.
“Today’s forfeiture action is a significant step towards uncovering and unwinding a complex money laundering scheme arising from a notorious foreign fraud,” Bharara said in a statement. “A Russian criminal enterprise sought to launder some of its billions in ill-gotten rubles through the purchase of pricey Manhattan real estate. While New York is a world financial capital, it is not a safe haven for criminals seeking to hide their loot, no matter how and where their fraud took place.”
The complaint says that the real estate was purchased with money traced to a $230 million Russian tax fraud known as the “Magnitsky case” for the whistle-blowing lawyer who uncovered it. Sergei Magnitsky alleged in 2008 that corrupt officials and criminals conspired to steal subsidiaries of his client, Hermitage Capital Management, and claim a $230 million tax refund. He was jailed by the same officials he accused and died in prison a year later, aged 37. A report by Russia’s presidential human rights council in 2011 found that he had been systematically tortured, but President Vladimir Putin has repeatedly denied there was any criminality in Magnitsky’s death.
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US seeks to seize Russian criminal group’s real estate
US prosecutors are looking to seize New York property used by a Russian criminal organisation to launder funds derived from an elaborate $230m tax fraud, according to a complaint filed in a Manhattan court.
The civil action also seeks to impose money-laundering penalties on the companies set up by the organisation, whose members allegedly included corrupt Russian government officials, US Attorney Preet Bharara said.
“Today’s forfeiture action is a significant step towards uncovering and unwinding a complex money laundering scheme arising from a notorious foreign fraud,” Mr Bharara said on Tuesday in a statement.
“As alleged, a Russian criminal enterprise sought to launder some of its billions in ill-gotten roubles through the purchase of pricey Manhattan real estate. While New York is a world financial capital, it is not a safe haven for criminals seeking to hide their loot, no matter how and where their fraud took place.”
The $230m fraud was first uncovered by the late Sergei Magnitsky, a respected Russian lawyer who died in pre-trial detention in Moscow in 2009 shortly after making his whistleblowing allegations.
Prosecutors claim that members of the organisation stole the corporate identities of portfolio companies of the Hermitage Fund, a foreign investment fund operating in Russia, which were then used to make fraudulent claims for tax refunds through sham lawsuits. Officials at two Russian tax offices who were members of the organisation approved the disbursements.
Through a complex series of transfers through shell companies, $230m was laundered into numerous bank accounts in Russia and elsewhere, according to the civil complaint. A portion of the funds stolen from the Russian Treasury passed through a Cyprus-based property company Prevezon Holdings, which laundered the proceeds into Manhattan property including four luxury apartments and two high end commercial spaces, it is alleged.
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