Posts Tagged ‘Prevezon’
U.S. Alleges Further Laundering in Magnitsky-Linked Case
A federal judge on Wednesday granted a request from U.S. prosecutors to file an amended complaint alleging further money laundering by a Russian businessman, as well as a forfeiture order narrowing the assets to be seized in the case.
U.S. District Judge Thomas P. Griesa approved the request at a contentious hearing between prosecutors and lawyers for companies owned by Denis Katsyv, who is accused of laundering some of the proceeds of an alleged $230 million tax fraud in Russia exposed by deceased lawyer Sergei Magnitsky. The amended complaint, prosecutors said, provides additional allegations of money laundering and “significantly narrows” the amount of property the U.S. seeks to forfeit.
“It is necessary to have” the amended complaint and forfeiture order for the case to continue, said Judge Griesa.
The civil forfeiture case brought by the Manhattan U.S. attorney’s office in September 2013 alleged that Mr. Katsyv used some of the laundered money to buy real estate in New York. Prosecutors say a portion of the funds traveled through several shell companies into Prevezon Holdings, a Cyprus-based real estate company that laundered the money into its real estate holdings, including those subject to the forfeiture action.
Mr. Katsyv and his company, Prevezon Holdings, deny the allegations, having tried to dismiss the case in March, and through its lawyers they denied the new accusations raised Wednesday.
The amended forfeiture order, prosecutors said, seeks about $14 million in assets, including $10 million in property in New York and about $4 million, in euros, at an account in the Netherlands. The original forfeiture action sought all assets, known and unknown, tied to Mr. Katsyv and his partners; Judge Griesa had told prosecutors to restrain the order after hearing from lawyers for the defendants that unrelated assets in Russia and elsewhere were frozen.
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Former prosecutor feels heat over Russia involvement
A prominent Manhattan white-collar criminal defense lawyer is the subject of a federal court grievance complaint, The Post has learned.
John Moscow, a former prosecutor now working at BakerHostetler, shouldn’t be allowed to represent several companies accused of funneling dirty Russian cash into the US to buy pricey Manhattan real estate, according to the complaint.
Moscow was hired in November 2008 by a hedge fund mogul to investigate the Russian money trail.
That conflict of interest should bar him from his current role as defense counsel to the allegedly dirty companies, William Browder, the feisty hedge fund manager who hired him, claims.
Browder says he gave Moscow confidential information that led to federal charges against Prevezon Holdings, part of the allegedly shady real estate scheme.
Moscow represents Prevezon and a slew of other defendants in a civil forfeiture case brought by US Attorney Preet Bharara.
“The same guy I was baring my soul to is now turning to the other side,” Browder told The Post.
“It’s the most shocking thing I’ve ever seen in the legal profession.”
Browder hired Moscow to help him win the freedom of his hedge fund’s lawyer, Sergei Magnitsky, who was arrested in Russia.
Browder said following the money trail through subpoenas was one of the tactics Moscow had suggested to locate the persons behind the lawyer’s imprisonment.
The lawyer had been looking into an identity theft ring that hit Browder’s Hermitage hedge fund — at the time a large investor in Russia.
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Could U.S. Assets Seizure Lead To Expansion Of Magnitsky Blacklist?
As shady Russian businessmen snapped up luxury apartments in New York City, lawyer Sergei Magnitsky was confined to the few square meters of a Moscow jail cell. He would die there under suspicious circumstances in 2009 after revealing a scheme by government officials and associates to steal $230 million from the Russian treasury. U.S. prosecutors say the proceeds of that heist paid for the Manhattan properties.
A complaint filed by the U.S. Department of Justice on September 10 seeks the seizure of the four Wall Street-area apartments as well as two commercial spaces. It also details the twists and turns of the fraud scheme. If approved, the seizure would be the first such move in a case that has already seen bank accounts frozen in several European countries.
But perhaps more significantly, at least for U.S.-Russian relations, the complaint names alleged beneficiaries of the fraud that are not included on the “Magnitsky list,” a U.S. blacklist of Russian officials implicated in the case. It appears, then, to offer a potent argument for those members of the U.S. Congress seeking to expand the list and push back against any hesitation by the administration of President Barack Obama over harm that might cause to ties with Moscow.
Informed congressional sources told RFE/RL that the naming of names in the complaint had “been noted” and could be used to push the administration ahead of an upcoming deadline.
The U.S. legislation establishing travel and financial sanctions in the Magnitsky case requires that the State and Treasury departments add more names to the blacklist “as new information becomes available.” The Obama administration must add names to the list by a December 14 congressional reporting deadline or justify why it hasn’t done so.
The first version of the list, published in April, implicated 16 individuals in connection with the case (plus another two implicated in other crimes). Some U.S. lawmakers had expressed disappointment that more names had not been included. It was enough, however, to elicit rage — and a retaliatory blacklist — from Moscow.
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‘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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U.S. Justice Department Files Suit Against Companies Connected to Magnitsky Affair
The U.S. Justice Department has filed civil suits against 11 companies involved with Russian officials on the Magnitsky list, alleging that they used luxury New York real estate to launder $230 million in illegally begotten funds.
The action is “a significant step towards uncovering and unwinding a complex money laundering scheme,” Preet Bharara, a U.S. district attorney in New York, said in a statement.
Officials are accused of using an American subsidiary of the Cyprus-based company Prevezon Holdings, owned by former Transportation Minister Peter Katsyv’s son Denis, and other intermediaries to hide billions of rubles stolen from the Russian treasury.
Denis Katysv’s lawyer said that her client was surprised by the accusations because he bought the company six months after the alleged money laundering took place, Kommersant reported.
The complaint says the companies purchased high-end Manhattan condos with money that had been funneled to them in an elaborate tax fraud scheme that involved sham lawsuits against the investment fund Hermitage Capital Management.
A lawyer for the fund, Sergei Magnitsky, accused Russian government officials of masterminding the fraud scheme, but was arrested and later charged with the same crimes he had reported to the authorities and died after a beating in detention.
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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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