The Platinum Investors and the Ultimate Swindle, Blame it on the Victim? And More to Come

The Investors Knew the Risks? Nonsense… Another Platinum Colored Misrepresentation – To the Legal and Judicial Community – Follow the Money

 

Opinion and Analysis – LM – 30.4.19

The claim that investors in the litany of Platinum swindles [Echo Therapeutics, Black Elk, Seabrook’s COBA Fund , Glacial Energy Holdings and Agera Energy LLC, among many others] knew the risks is absurd, utterly absurd. Perhaps if one argues that they should have known that they were dealing with swindlers and therefore the Ponzi Scheme was foreseeable, there is some logic; but no. Such an argument does not hold water, particular in the environment of fiduciary duty and fair dealing. The entire premise is akin to blaming any victim for a crime perpetrated upon him or her. The major difference between the Platinum Ponzi Schemes and brutal, violent crimes is that the investors in Platinum Partners were disavowed of their finances with a measure of finesse, charm and savior faire.  These guys did a better job of conning their victims out of money than Madoff. Madoff’s reputation preceded him, the impossible-to-believe-he-could-do-it criminal. With the Platinum Partners, for those of us who did years of research, it was obvious. For investors, the elegance of the schemes was extraordinary, which makes these crimes almost worse than a violent serial robber, thief or rapist. These guys based their entire swindle on betraying the trust of others.

While Platinum Partners’ investor group was comprised of a fair share of “big-boys” people who were accredited investors or otherwise knew the rules of the investment road, many who were dragged in were friends and people who trusted Platinum’s partners. They “put a little faith in their friends,” far too much faith. Many still do. And those entrusted with the money were pathological scammers, godless characters who thought little of their victims. Friends were nothing more than income sources at the end of the day; or a name to drop for legitimacy purposes. 

Mark Nordlicht, Murray Huberfeld, Uri Landesman, David Levy are brilliant financiers, master manipulators, incredibly savvy and largely charming individuals. Jona Rechnitz and Jeremy Reichberg were peddling the Platinum wares with their friends in high places offering up a glamorous life to anyone dumb enough to take the bait. Jona Rechnitz began his career working side-by-side with diamond magnate Lev Leviev, one of the initial investors in Platinum through Africa Israel, a class-A mentor and the basis for an unbeatable resume. That Jona Rechntiz has made lying into an art form was just another piece to the greater picture of how this entire scheme was orchestrated.

The whole Platinum Partners endeavor had an air of legitimacy that even most savvy and experienced investors would have had a hard time seeing through.  The Platinum Partners’ partners had friends and friends of friends and big names behind them. They painted a very rosy picture and very few high level newspapers covered the unrealistic nature of Platinum’s returns, one of the exceptions being Reuters (Reuters).   

And Platinum chose their investors wisely. People like Norman Seabrook, the head of COBA, were simply not savvy enough to understand that all of the wining and dining was a show of just how stupid Murray Huberfeld thought Seabrook was. We have opined on this before. Sadly, Seabrook was nothing more than a dumb “shvartze” in the eyes of Huberfeld and Nordlicht. It’s a horrible and racist comment, admittedly. But, when examining the nature of the Platinum swindle, it’s simply reality. Seabrook did not have the financial savvy to understand he was being completely steamrolled with the investment being offered to him. And, well… the wining and dining and show of wealth, the trips to Israel and greetings from the un-“pious ones” at the Western Wall was too much temptation when coupled with the returns he was likely being promised and the side money and items being gifted. And with his investment into Platinum, the partners could turn around and show the next guy that they had value. If the head of the COBA investments gave his blessing to the fund, it had to be legitimate. 

The NFL football players, and the payday loans offered to them by a link of Platinum associated entities, was another of the many schemes, a little more unsettling than the others. Investors who were inserting the flow of capital while being guaranteed returns of high interest and fees from NFL players who were on strike and would inevitably be paid. It was a “no-fail” cool trick. While the football players were paying interest rates and savage fees, the Platinum or associated investors were being showered with money. The Platinum associated fund that offered the loans and corresponding investment opportunities was allowing its investors a proverbial taste of fine wine, enticing as it was, and easy money. Little could those investors know that they were being hustled into other more dangerous financial waters.  

While the payday loan piece of the Platinum Partners story has not gotten much press coverage in the grand Platinum fraud, nor have the football players involved, neither the investors nor the players themselves were savvy enough to know that they were being disenfranchised. The players sadly were vulnerable to both the NFL on one side and the fund that was backing them while they were on strike on the other. And these guys did not have the financial savvy or upper-crust white wealthy background to grasp that the millions they were to receive from the NFL was all too easily spent. The Platinum Partners were sharp enough in this game to know, understand and manipulate the mentality, the vulnerabilities and the financial struggles of these players.  Many of those players lost thousands of dollars. All the while, a bunch of hedge fund guys and their investors sat in cushy Herman Miller chairs in their gilded offices and laughed all the way to the bank. The investors who were smart enough to get out might not have lost their shirts. Those who decided to try the next proverbial bottle of wine, were hooked both to the adrenaline and to the returns, little did they know, unless they did. 

And what of the religious investors who saw the Yeshiva connection as a sign of integrity? Torah Usemorah loaned money to a failing hedge fund while the partners donated money to a different yeshiva, or not. Of course if a Yeshiva is going to loan money to a hedge fund, the fund must be worth its weight in salt, yes? No. This was just another part of the swindle. It gave the entire venture a different level of credibility, that of the religious kind.  How were investors supposed to know that the Platinum Partners’ promised returns were a sham when the men in charge looked like G-d-faring philanthropists? 

They couldn’t. 

The picture that was painted was glorious and quite irresistible to investors and adrenaline junkies who sought high returns. Huberfeld’s friendships with Charlie Kushner (albeit a red flag for some) gave him some Wall Street cred. Few remembered that he had hired someone to take his SEC exams years earlier. And the forgiveness he got from the SEC was enough to show the world that if he was donned with his various SEC credentials, whatever he did was worth the forgiveness. And it was not. Someone who does ample due diligence would have stayed far away. But while Murray Huberfeld was convincing his Chabad friends to invest, Jona Rechnitz was peddling Platinum investments to people via his connections with seemingly credible organizations (Simon Wiesenthal Center, the Brooklyn Shomrim, his multiple connection to de Blasio and his Leviev history).

Mark Nordlicht was using his connections to the Westchester Torah Academy and a variety of his long-standing friendships with prominent Jewish families made him look like a reliable place to put some money. He wasn’t. He isn’t. He will never be. We will be surprised if Westchester Torah Academy doesn’t lose its shirt in the end also.

To blame the investors by stating that they knew the risks is a travesty, an affront to morality, ethics and the law. These men spent years and years cultivating and perfecting their ability to defraud the financial system, almost like a master fly fisherman does as sport. The difference is the the fly fisherman is an honest sportsman and doesn’t generally turn around and blame the fish for taking the bait. 

The outcome of this case with all of its many tentacles and the various webs woven will determine how the next aspiring fraudster views the investment climate. If the SEC, the judicial system, and the taxing authorities do not take this seriously and are somehow swayed by the argument that “they knew the risks” the next fraud will be worse and it will likely come from the same people who will either be directly guilty or guilty by mentoring.

Platinum’s partners knew the “friarim” (loose translation – “suckers”) in the system and they are playing those adjudicating these cases for absolute fools. Our financial system is based upon trust. The Investors, defrauded of millions should be able to trust in the system and get justice. The money that was filtered out of these funds can be traced to the personal accounts and trust of the partners, their friends, their shuls or their children. It is not gone and it should be recovered with whatever means are necessary. No one should be fooled here.

To the legal and judicial community, you now know the risks of letting this go without justice.

 

LAW360 – By subscription only

Ex-AG Mukasey Won’t Testify At Platinum Founder’s Trial

Law360 (April 26, 2019, 9:10 PM EDT) — A New York federal judge accused Platinum Partners co-founder Mark Nordlicht on Friday of trying to “dazzle” a jury by having former U.S. Attorney General Michael B. Mukasey testify at his criminal trial, knocking down a subpoena targeting Mukasey and another attorney at Debevoise & Plimpton.

U.S. District Judge Brian M. Cogan granted Mukasey’s bid to quash a subpoena from Nordlicht, on trial for fraud related to the $1 billion hedge fund’s collapse, who’d said in a letter one day earlier that he wanted Mukasey, now of counsel for Debevoise, to testify about his representation of Platinum during a five-month period in 2013 that was “during the heart of the alleged conspiracy.”

Nordlicht said in his letter that “the mere fact of [Mukasey’s] representation is critical and of course has bearing.”
Read more at: https://www.law360.com/securities/articles/1154097/ex-ag-mukasey-won-t-testify-at-platinum-founder-s-trial?

Zambian Court Orders Liquidation of Leviev Company – Frango Finance Ltd. and Gemcanton Investments Holdings

Zambia Court Orders Liquidation of Billionaire Leviev’s Company

A Zambian court has ordered the liquidation of a company owned by Israeli diamond billionaire Lev Leviev as the fight with his local partner in an emerald mine rages on.

The Zambian High Court placed Frango Finance Ltd., which owns half of Gemcanton Investments Holdings, in compulsory liquidation after receiving a petition on Feb. 18, according to a statement published in the Daily Nation newspaper.

LEVIEV Store Opening

Lev Leviev

Photographer: Scott Wintrow/Getty Images

Leviev will contest the order, said his lawyer, Dickson Jere. “We have been served with an order which was issued without hearing my client,” he said in a text message. “We will be going to challenge it in court as Frango is not even a Zambian-registered company.”

Leviev and Abdoulaye Ndiaye became embroiled in legal battles soon after the diamond magnate bought half of what was previously known as the Grizzly emerald mine from Ndiaye in Zambia’s Copperbelt province in 2015.

Leviev, Gutnick, Chabad Donors; The Good and the Bad of Chabad’s Non-Discerning Donor Pool…

Ronald Perelman, Lev Leviev and Tevfik Arif Among Wealthy Donors to the Chabad Movement

(Newswire.net — March 1, 2019) — Chabad-Lubavitch, also known simply as Chabad, is one of the most well-known and fastest growing Hasidic movements and the closest approximation to evangelism in Judaism. Their primary mission is to promote and revive the Jewish faith, while supporting Jewish communities around the globe. Their most visible presence are Chabad houses that can be found in cities of all sizes around the world.

What is Chabad?

Chabad local organizations provide for Jewish communities through outreach activities serving the needs of the community and advancing the renewal of the Jewish faith. Chabad centers often provide religious services, child care, education and organized activities for all ages.

While Chabad is an Orthodox Hasidic movement its practice blends traditional values with modern day techniques. Chabad advocate a policy of openness, accepting Jews from all levels of religious commitment and practice. They promote cooperation and non-judgment, while maintaining a positive outlook on life and helping those in need. Chabad supports the integration of the Jewish faith in all aspects of life, family and community.

Philanthropy and service are part of the Chabad movement’s commitment to the Jewish Community. They pride themselves on providing a home away from home for Jews anywhere in the world. The doors of Chabad Houses are open and accepting to every single Jew regardless of affiliation, background or religious commitment.

Today there are over 4,000 official Chabad emissary families operating 3,500 institutions in 81 countries with additional affiliated activities occurring in many more. The Chabad network also includes a group of rabbis and Jewish educators prominently featured on college campuses worldwide.

The Wealthy Donors of Chabad

Chabad relies heavily on donors to effectively carry out their activities. The organization has become an attractive pursuit to donors big and small. Most of the donations made to Chabad Houses and institutions across the world are made in small sums by private individuals, but there are an increasing number of notorious high-profile donors who give large donations to the movement.

Many of the world’s most successful businessmen and industry leaders have identified ties to the Chabad organization. Chabad has attracted top Israeli business leaders including Nochi Dankner, Israel’s richest woman Shari Arison through the Ted Arison Foundation, and venture capitalist Shlomo Kalish. Lev Leviev known as the “King of Diamonds” has been a major patron to the Chabad movement in the former Soviet Union and Eastern Europe.

Chabad is hugely popular In Russia and across Eastern Europe. One of the most sacred sites of the movement, the graves of spiritual leaders Rabbi Menachem Mendel Schneerson and Shmuel Schneersohn, is in Lyubavichi, Russia. Chabad Rabbi Berel Lazar has been recognized by the Russian government as the Chief Rabbi of Russia.

Many former Soviet oligarchs, some who have been drawn back to Judaism through Chabad, have become supporters and donors including Mikhail Mirilashvili of Georgia, Ukrainian billionaire Gennadiy Bogolyubov, Alexander Granovsky from Ukraine and Alexander Mashkevich. Although he is not Jewish, Tevfik Arif, a Kazak-Turkish real estate investor and partner in Doyen Group, has become one of the largest single donors to the Chabad Center of Port Washington in Long Island, the community where he owns a residence. 

The religious movement has also found supporters among the most successful American business leaders. Ronald Perelman, American billionaire and philanthropist of Revlon fame, has become a close friend and follower of Rabbi Avrohom Shemtov, the director of the Philadelphia Lubavitcher Center. Perelman has made numerous donations to Chabad and has a building dedicated in his name at the University of Pennsylvania, the Ronald O. Perelman Center for Jewish Life-Lubavitch House. Other prominent American Chabad donors include: American investor and billionaire Michael Steinhardt, heir to Estee Lauder Companies Ronald Lauder and Shaya Boymelgreen.

Globally, Australian tycoon Joseph Gutnick, South African billionaire Nathan Kirsh, and Eduardo Elsztain, Argentina’s largest real-estate developer, are all well-known supporters of Chabad.

To continue reading the article click here.

A Platinum Schemer and a Jewelry Show, the Benefits of Privilege and the Opportunities that Await… in Hong Kong

Jona Rechnitz

A TRIP TO HONG KONG FOR A DIAMOND DEALER, WHO JUST HAPPENS TO ALSO BE AN ADMITTED FRAUDSTER AND CON-ARTIST. 

To Our Readers:

We saw this story and found it quite astonishing. Jona Rechnitz has admitted to guilt for numerous crimes, crimes of significant magnitude, for which at least one member of the Platinum family, just got sentenced to 30 months.

He has testified with a level of arrogance fit only for rich, entitled, unrepentant fraudsters, flippantly waiving around the word “truth” as if he knows the significance of its foundation in the English language and jurisprudence. He has been smug, lied, admitted to numerous infractions of morality, ethics and the law and now he asks to be allowed to Hong Kong to attend a jewelry show.

Have we lost our collective minds? Perhaps he wants to ask his friends and accomplices for a “bisel gelt” [a little bit of money] to buy something nice, or to grease the palms of someone who can? He is one of a group of white, privileged criminals running roughshod over the law.

Let’s not forget that his early career started with a position working for LevLeviev’s Africa Israel. Leviev, a diamond magnate in his own right, is unable to travel the world these days as a result of the criminal laws of multiple countries. It is unclear whether Rechnitz and his well-connected family has broken ties. And let’s be reminded that the Israeli justice system is trying to maneuver testimony from that same Leviev regarding a major diamond smuggling endeavor. 

And Judge Hellerstein is being asked by a begging Jona Rechnitz to attend a jewelry show in Hong Kong? And the prosecutor is agreeing on condition that Rechnitz’s wife surrender her passport? Has the prosecutor not thought this through?

The exchange for Rechnitz’s wife’s passport is but a joke, a circus stunt. Both Jona Rechnitz and his wife likely carry numerous passports and the surrender is thus insignificant. Moreover, the ideal guarantee that Rechnitz would return from the Hong Kong jewelry show without a new bank vault of difficult to trace assets would be to freeze all of his bank accounts while he is gone… and perhaps those of his family and all of their closest friends and associates. 

Judge Hellerstein, you got the Murray Huberfeld verdict right, please think about what is really going on here. You are being asked to help a very wealthy, entitled, dishonest and connected man get just a little bit wealthier. He has committed crimes. He should not be rewarded for his willingness to testify on behalf of the government when few can discern if his testimony was lies, truth or some combination of the two. 

Corrupt de Blasio donor begs judge to let him attend Hong Kong jewelry show

A Mayor de Blasio donor who is out on $500,000 bail pending his sentencing for bribing cops wants a judge to allow him to travel to Hong Kong for a jewelry show later this month, according to new court documents.

Jona Rechnitz — a government cooperator who testified at two corruption trials — is asking Manhattan federal Judge Alvin Hellerstein to allow him to travel for nine days starting Feb. 25 “to attend an international jewelry show” for business, lawyer Alan Levine wrote in a letter to Hellerstein.

During testimony, Rechnitz said he currently works in real estate and jewelry.

Prosecutors agreed to the request as long as Rechnitz’s wife turns over her passport.

To read the article in its entirety, click here.

 

The Magnitsky Affair, Paul Manafort, Jared Kushner, Konstantin Kilimnik and Prevezon

Investigators bat in a two-run double

The dozens of people investigating illicit connections between the United States and Russia scored twice early in the week. Here are the revelatory stories:

1. Some of Paul Manafort’s attorneys inadvertently divulged, on Tuesday, that the former Trump campaign chairman gave 2016 presidential polling data to a Kiev associate that American officials have linked to Russian intelligence and may have discussed a Ukraine peace plan with him.

 

The attorneys let the disclosures be made public on Tuesday when they disputed special counsel Robert Mueller’s allegation that their client lied to investigators about his contacts with the Kiev associate, Konstantin Kilimnik.

Other matters were disclosed when they reached a plea agreement last year.

The defendant’s legal team played down the significance of Manafort’s alleged misstatements, saying they were the result of a faulty memory, failing health and his inability to review relevant documents before meeting with prosecutors.

 

In the filing, Manafort’s legal team said their client gave the government access to his electronic devices, email accounts and passwords, met with investigators a dozen times, testified twice before a grand jury and tried to provide accurate information “to the best of his ability.

 

Mueller accused Manafort late last year of telling “multiple discernible lies” about his contacts with the Trump administration and Kilimnik as well as about other matters in the weeks after he agreed to plead guilty to multiple crimes and cooperate in Mueller’s investigation into Russian interference in the 2016 election and any links to the Trump campaign.

 

2. The Russian lawyer who met with Trump campaign officials at Trump Tower in 2016 has been charged with obstruction of justice, stemming from her role in a federal money-laundering case, according to an indictment unsealed Tuesday in Manhattan federal court.

 

Natalya Veselnitskaya allegedly attempted to thwart an investigation into a tax-fraud scheme involving Russian officials, an influential Russian businessman and an investment firm, Manhattan federal prosecutors said.

 

The indictment unsealed Tuesday is unrelated to the 2016 Trump Tower meeting, but suggests Veselnitskaya had close ties to senior Russian government officials and at times sought to advance Russia’s interests in her dealings with United States officials.

Prosecutors say her efforts included working secretly with a Russian prosecutor to draft a response by the Russian government to U.S. investigators.

 

In 2013, federal prosecutors in Manhattan filed a complaint seeking to recover millions of dollars in property, including New York real estate, alleging the property had been used to launder the proceeds of an elaborate Russian tax-fraud scheme involving corrupt Russian officials and a holding company, Prevezon Holdings.

 

Veselnitskaya participated in a well-publicized June 2016 meeting with top Trump advisers, including Donald Trump Jr., that had come under scrutiny by special counsel Robert Mueller.

Many of the commentators who are watching the Mueller investigation closely believe these two stories will notably strengthen the special counsel’s complicated case.

The Prevezon Story, Throwback to 2012 – The Money Flow, Denis Katsyv and Millions Never Recovered

 

Natalia Veselnitskaya, Russian lawyer with connections to the Kremlin and Vladimir Putin met with Donald Trump Jr., Paul Manafort and Jared Kushner during the 2016 election, Photo Date: July 2017 / Photo: MSNBC / (MGN)

 

The Magnitsky Affair 2012 – Finding the Connections AND THE 100’S OF MILLIONS OF DOLLARS

Dear Reader:

In 2012 through a joint effort of OCCRP, Novaya Gazeta nd Barrons an extensive report was published which, in pertinent part, laid out what appeared to be a frighteningly detailed account of the money trail leading to the death of Russian tax lawyer Sergein Magnitsky. Magnitsky died slowly of abuse and neglect in a Russian pirson. He had been accused of a tax theft on the magnitude of  $230 Million  or what was the equivalent of 5.4billion Russian Rubles, which had disappeared. He maintained his innocence to his grave.

He had been accused of the theft of Russian tax money, despite being the whistle blower who had reported the money missing.  To many at the time, and even those questioned now, it all made little if any sense. The money was being hidden as part of a larger conspiracy which included influential Russian and US families, most of which were heavily invested in the real estate business.

The entire sordid affair became known in legal and journalistic circles as the “Magnitsky Affair.” Most of the money was never recovered, and it was widely believed that he had been murdered by the Russian government in what may have been a join operation between the Russian government and several wealthy Jewish families, the most notable of which was Lev Leviev and Alexander Litvak who was director of Prevezon Holdings Ltd, which was a foreign registered business in Brooklyn. 

What makes the story so interesting now, a  little more than 6 years later, is that Prevezon Holdings is not only connected to Leviev, but also to the family of Jared Kushner who, it is widely  known has had dealings with Leviev, both in the diamond industry and in Leviev’s Africa-Israel land dealings. What makes the story even more interesting is the recent arrest of  Natalia Veselnitskaya, a Russian attorney who had meetings with Jared Kushner, Donald Trump Jr. and Paul Manaford in the Trump Tower in 2016.

There are no coincidences. 

We suggest that you refer to the original article below, republished only in part, and the many attachments to that article. It was very comprehensive. It is our position that there are properties in Manhattan, which we believe also includes some of the most iconic buildings including Mahattan’s Chrysler Building wihhc was just put up for sale. There are others connected to the Magnitsky affair.

We maintain that you need not look very far to find the connections dating back to 2012, and the many millions in uncovered money is likely within walking distance as well.

https://www.reportingproject.net/proxy/en/following-the-magnitsky-money

Following the Magnitsky Money

BUNICON HEADQUARTERS

“The Money Flow

The scam began with a Russian police raid on the offices of Magnitsky’s client:  Hermitage Capital Management investment fund. People impersonating company employees then used official stamps and documents seized in the raid and pled guilty to various crimes. The company was fined amounts that offset the company’s earnings for the year, and the impersonators then filed for a giant tax refund.

Three phantom businesses, shell companies that exist only on paper, applied at Moscow tax offices #28 and #25 on behalf of Hermitage for a refund which was instantly granted.  Magnitsky, who reported the fraud, believed wrongly that if officials only knew what was happening they would react. They reacted by imprisoning him for tax evasion, demanding he write a confession, denying him medical care and beating him repeatedly. He lasted one year dying in 2009.

In 2009 and 2011, secret trials in Moscow’s Tverskoy District Court fixed legal blame for what was a massive, arcane scam on two low-level ex-convicts: sawmill worker Viktor Markelov, once found guilty of manslaughter, and a robber,– Vyacheslav Khlebnikov.

Both pled guilty. Both got minimum sentences of five years in a correctional colony. They were not even ordered to pay back the stolen money. Irina Dudukina, a spokeswoman for the Investigative Department of the Russian police, announced to the public that it was impossible to find the refund money because documents of the Moscow bank UBS were burned up in a truck crash. She had no details on when or where this crash occurred or why the documents were in a truck. And she didn’t specify why investigators didn’t try to get the same documents from the Russian Central Bank, which had copies of many of the transactions.

No government executive or bureaucrat involved in the deals that sparked the rebate, in the illicit tax refund, or in Magnitsky’s death has ever been charged with anything.

A government investigation concluded that the tax officials who handed out the rebates had been tricked by fraudsters, so it was not their fault.

Tracking the Money

INFOGRAPHIC small

Banking records of the three companies that got the illegal tax refund — Makhaon, Parfenion and Rilend — show that the stolen money dissipated into phantom companies through thousands of banking transactions. Soon after these transactions, the three companies dissolved. Phantom companies fronted by proxy shareholders and directors designed to hide the real owners, made certain for years that who really was benefitting from the huge heist remained a secret.

OCCRP reporters worked out a money trail that Russian officials were either unable or unwilling to follow.

In January and the beginning of February 2008, for example, Parfenion wired $63 million USD to the bank accounts of two phantom companies: ZhK and Fausta .  Another transaction took place directly where Fausta sent $21 million USD to ZhK’s accounts.

ZhK, which received in total about $39 million USD, was established in November 2003, by Marta Dmitrieva of Moscow. Dmitrieva told OCCRP reporters that while, yes, she did file documents with the tax office, she knew nothing of ZhK.

“I have never been a shareholder or director of the company,” she said. “I didn’t have a job, and I found an Internet commercial that said there was a possibility to work as courier and applicant for different companies.”

The sole shareholder of ZhK was Anatoly Dvoinikov from the village of Poselki in the Penzenskaya region, 640 kilometers from Moscow. Court records OCCRP reviewed show that Dvoinikov is likely a proxy shareholder and the director of many phantom companies.

In November 2008, ZhK was folded into a new commercial entity along with two other companies. The address of this new corporate creation was in Vladivostok in the Russian Far East, more than 6,400 kilometers from Moscow.

Russian organized crime commonly uses the tactic of reorganizing companies to cover up fraud.

Fausta, the other company that got money from Parfenion – about $45 million USD — was registered in July 2007 by Sergey Kirillov from Moscow.  Kirillov told OCCRP he did not establish the company.

“I don’t know anything about this company,” he said. “Nobody asked me to establish it. Maybe some people got my passport details from banks where I took loans.”

In March 2008, just a month after getting the Parfenion millions, Fausta was dissolved, according to the Russian Tax Service.  Fausta’s banking records show that the money went from its bank account into the bank account of Univers another Moscow company.

Univers was registered in October 2007 with Natalya Senchukova listed as the sole shareholder and director. The Russian state commercial registry lists her as a shareholder in more than 30 companies and she is likely another proxy.

In November 2008, Univers was reorganized too in much the way ZhK had been. It was folded in with another company and the headquarters also were moved from Moscow to Vladivostok.

OCCRP has obtained documents showing that the same registration agents reorganized both Univers and ZhK.

Univers received money from Rilend and Makhaon, too. But bank records show that these transactions were made not directly, but through an intermediary company, called Anika.

From the accounts of Univers and ZhK in Sberbank, the largest state-owned bank in Russia, and in Mosstroyeconombank, a small Moscow bank, money went into what is called a “correspondent bank account” held by tiny Krainiy Sever bank in one of Russia’s biggest banks, Alfa Bank. Small banks commonly keep correspondent accounts within large banks so that they can more easily make foreign money transfers.

From Feb. 5-13, 2008, $33 million poured into to Krainiy Sever’s correspondent account from Univers and ZhK. OCCRP has obtained court documents from cases unrelated to the Magnitsky case which indicates that this account has been a major recipient of money stolen from the Russian budget. Court decisions mention a number of phantom companies (including Starmiks, Optimtorg) which wired money to this account. (Doc1Doc2Doc3Doc4Doc5).

Police files OCCRP has obtained also mention many of these companies including ZhK, Univers, Starmiks, Optimtorg, as phantom firms used to launder money stolen from the Russian budget in December 2007.

The Krainiy Sever account was used as a kind of “border point” from which money flowed to companies registered abroad.

On Feb. 13, 2008, a Russian court ordered that account seized and a month later the Central Bank of the Russian Federation cancelled Krainiy Sever’s banking license for violation of the law “to combat money laundering and the financing of terrorism”.

In a press release the Central Bank said that Krainiy Sever managers had lost control of their Moscow subsidiary. Court records show that during two weeks in February of 2008, bank clients, mostly phantom companies, suspiciously wired $300 million into bank accounts in Ukraine, Kyrgyzstan, Moldova, Latvia, Lithuania, Estonia and Cyprus belonging to companies from the United Kingdom, British Virgin Islands (BVI) and Belize .

OCCRP got in touch with an ex-police officer who investigated money laundering proceeds in Krainiy Sever.

“When we raided the Moscow office of the bank, we met a guy there with a laptop from which he wired billions of rubles to different countries through the Internet. The guy was crying that he is from the FSB [Federal Security Service, the main secret service in Russia] and promised us a lot of problems”, said a former law enforcement officer who asked that his name not be mentioned for fear of retribution.”

 

“Denis Katsyv

DENIS KATSYVDenis Katsyv the owner of Prevezon Holding is the son of Petr Katsyv, the wealthy and powerful former minister of transportation in the Moscow regionAnother company which received Russian money from Moldova is Prevezon Holdings Ltd owned by Denis Katsyv, the son of Petr Katsyv, the wealthy and powerful former minister of transportation in the Moscow region.  Petr Katsyv is considered one of the wealthiest civil servants in Russia. According to Forbes Magazine he is worth more than $4 million in 2012, and real estate records OCCRP obtained show the son is worth far more.  In 2012 the father left his ministerial post to head the General Department of Moscow Region for Cooperation with Federal Authorities.

On Feb. 5, 2008, Bunicon received rubles equivalent to $9.4 million USD in 2008 exchange rates in two transactions from the correspondent account of the Krainiy Sever bank. The next day Bunicon sent $410,000 to Prevezon’s account at the Swiss bank UBS AG.

On Feb. 13, 2008, Elenast received the equivalent of $800,000 USD from the same correspondent account, and transferred more than half of that amount to Prevezon.

Records from the Cyprus commercial registry show Prevezon Holdings Ltd was registered in 2005 and is owned by Denis Katsyv (1000 shares) and a company called Martash Investment Holdings Ltd from the British Virgin Islands (1 share). Martash Investments is also owned by Denis Katsyv.

Denis Katsyv told OCCRP that his company never dealt with any companies from Moldova.

“I am really surprised to hear that,” he said. “I give you 200 percent that it is impossible. I am ready to help you in your investigation and show the banking statement of Prevezon to prove that it never received such money.”

Katsyv never showed the statement.  Instead he called reporters and said he became shareholder in Prevezon only in April 2009 and had nothing to do with any Moldovan money.  Records from the Cyprus commercial registry show Katsyv actually became a shareholder in June 2008, a few months after the transfers.  Prevezon’s sole shareholder at the time of the transfers, Timofey Krit, is Katysv’s current business partner and the director of Prevezon.

Other Problems

This is not the first time the Katsyv family has run afoul of the law. In 2010, the Katsyv family was mentioned in a money-laundering case of Israeli bank Hapoalim which was investigated by Israeli authorities.

According to court records OCCRP obtained, millions of dollars were transferred through Katsyv-controlled accounts at the bank.  Israeli prosecutors insisted that bank managers concealed the real beneficiaries of this accounts in violation of anti-money-laundering rules. But their lawyers blamed Katsyv’s business for the bank’s problems. The court eventually agreed and found the bank managers not guilty.

According to the judgment, Katsyv’s company Martash Investment had to sign a secret agreement with the Israeli government to avoid indictment.

“If the clients of the bank [Katsyv family] had denied signing the agreement, they would have faced charges and an indictment. The situation described by the lawyer [for Hapoalim managers] leads to the conclusion that the clients of the bank, who are the main culprits, apparently bought their freedom for money,” the final ruling in the case says.

New York Properties

The Katsyv family owns more than $17 million in New York real estate alone despite a new US law that says those who benefited from the Magnitsky case cannot enter the country.

On Nov. 12, 2009, the Katsyv-owned Prevezon Holdings Ltd registered itself as a foreign business corporation in Brooklyn and on Nov. 30 that year Katsyv’s company set up a US business. Two weeks later it signed a deed on a condominium at Pine Street in Manhattan, for $829,000. The same day Prevezon Holding Ltd signed another deed and bought a second condo in the building for $1.2 million. Alexander Litvak, director of Prevezon Holdings Ltd, signed both deeds.

BUNICONLev Leviev’s group of companies, Africa Israel-AFI, opened shopping malls all over the world. AFI Palace is the biggest shopping mall in Romania.

The New York State Division of Corporations lists seven companies with names similar to Prevezon Holding Ltd that together own more than $17 million in New York real estate. Property records show that all the similarly named companies are affiliated with the same directors and managers, including Litvak and Krit, current director of Cyprus-based Prevezon. Some also own other New York City properties including five units in a luxury condominium complex at 20 Pine Street in the heart of Wall Street. A number of these are currently for sale for between $1 and $2 million each.

Katsyv’s businesses are closely tied to another controversial figure: Russian oligarch Lev Leviev.  Leviev and Katsyv’s businesses often trade assets. (see Leviev story)

While the money trail leads to Stepanov and Katsyv, they are not the only persons involved with the Magnitsky money.  The whereabouts of hundreds of millions of dollars still missing lie unlocked in other banking records that are still to be checked.”

 

ADDITIONAL READING:

 

Attorney, Prevezon Holdings, Lev Leviev, Jared Kushner and Money Laundering

Natalia Veselnitskaya and 20 Pine Street (Credit: Facebook and CityRealty)

Russian attorney, who attended Trump Tower meeting, indicted for obstructing real estate money laundering investigation

A Russian attorney who met with Donald Trump Jr. during the 2016 presidential campaign has been indicted for obstructing a federal investigation into a New York money laundering scheme, according to a complaint unsealed Tuesday in Manhattan court.

Natalie Veselnitskaya had been the defense attorney for real estate company Prevezon Holdings, which in 2013 was accused by U.S. prosecutors of laundering millions in stolen Russian money into Manhattan luxury properties, including condominiums at 20 Pine Street in the Financial District.

Before the case went to trial, Veselnitskaya’s clients settled, and in February of last year were ordered to pay $6 million. But in today’s unveiled complaint, prosecutors allege the Russian attorney provided the American court with falsified reports presented as authentic Russian government findings that denied the United States’ claims against Prevezon.

The New York Times first reported on the unsealed complaint.

In the Prevezon case, prosecutors alleged that laundered money came from a more than $200 million Russian tax fraud scheme, in which American hedge fund manager Bill Browder, and his firm Hermitage Capital, were said to be framed by Russian officials, who issued phony tax rebates and pocketed the sums for themselves. The fracas culminated in the mysterious death of Hermitage’s accountant, Sergei Magnitsky, in a Russian prison in 2009. Those events led the US Congress to pass the Magnitsky Act, which sanctioned high-ranking Russian officials believed to be responsible.

Veselnitskaya, Prevezon’s now indicted attorney, is better known as a subject of Special Counsel Robert Mueller’s investigation into President Donald Trump’s 2016 presidential campaign and potential collusion with Russian individuals. In 2016, Veselnitskaya met with Donald Trump Jr, campaign manager Paul Manafort and Jared Kushner at Trump Tower. The meeting was ostensibly held to discuss potential opposition research on Hillary Clinton, but ultimately to lobby them on the Magnitsky Act, Donald Trump, Jr. later said. Trump, Jr. had first been pitched the meeting by an English publicist, who described Veselnitskaya as connected to “the Crown prosecutor of Russia” in an email.

The Russian government was largely uncooperative in the U.S. Prevezon investigation, according to previous reporting, but Veselnitskaya provided to U.S. attorneys documents she said were the result of the Russian government’s own investigation into the allegations, claiming that the tax fraud scheme had been carried out not by corrupt Russian bureaucrats, but by Browder and Hermitage Capital. U.S. Attorneys, however, allege in their indictment that Veselnitskaya herself participated in the drafting and careful wording of these documents, without disclosing to the court that she had done so.

In a statement Tuesday Morning, Geoffrey Berman, U.S. Attorney for the Southern District of New York, said, “Fabricating evidence – submitting false and deceptive declarations to a federal judge – in an attempt to affect the outcome of pending litigation not only undermines the integrity of the judicial process, but it threatens the ability of our courts and our Government to ensure that justice is done.”

Prevezon, which admitted no wrongdoing in its 2017 settlement, was a partner of Lev Leviev’s Africa Israel Investment, including in investments alleged to be vehicles for money laundering, such as the sale of the 20 Pine condos.

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