Scola where´s your partner Leonid ?NEW YORK, June 9 /PRNewswire/ -- Russian corporation Alfa Group
Consortium and its U.S. entity, Alfa Capital Markets, Inc., are a criminal
enterprise that has used U.S. banks and stock exchanges as an integral part
of their theft schemes, costing American taxpayers and stockholders
hundreds of millions of dollars, IPOC International Growth Fund, Ltd.,
alleges in a federal racketeering lawsuit filed late Thursday.
The suit alleges that Alfa, one of the largest business conglomerates
in the Russian Federation -- along with Russian oligarch Mikhail Fridman
and U.S. citizen Leonid Rozhetskin -- engaged in a vast international money
laundering and fraud scheme in an attempt to take control of the Russian
cellular industry. "By doing so, defendants' conduct has had a substantial
effect on the United States and its citizens, and much of the criminal
conduct occurred in the United States," the suit, filed in U.S. District
Court for the Southern District of New York, said.
The criminal enterprise affected Americans, U.S.-based investors and
U.S. interests in numerous ways, the complaint alleges, involving the
evasion of U.S. taxes, insider trading of shares on U.S. stock markets, and
wiring payments through New York banks. The Alfa Group Consortium received
support from the Overseas Private Investment Corporation, a U.S. government
development agency, to provide a significant portion of funding for one of
Alfa's related businesses.
"The complaint alleges that the racketeering and other wrongs cited in
this case hurt U.S. investors, U.S. taxpayers and U.S. financial markets,"
said W. Gordon Dobie, an attorney with Winston & Strawn LLP, which filed
the case for IPOC International Growth Fund, Ltd. "It's my opinion that the
defendants should be called to account in court for their conduct."
A Daisy Chain of Nine Shell Companies
The suit details how Alfa, in a series of sham transactions over a
10-day period, knowingly and fraudulently colluded to steal IPOC's 25.1
percent stake in Russia's third largest mobile telecom company, MegaFon.
IPOC had originally signed two options agreements to buy the stake from LV
Finance, had paid for the shares and at all junctures honored the terms of
the agreements. At the final stage, IPOC discovered that LV Finance, acting
through its chairman Leonid Rozhetskin, had negotiated a purported sale of
LV Finance's interest in MegaFon to Mikhail Fridman's Alfa Group, involving
a complex web of nine offshore companies. Both companies are alleged to
have been aware of IPOC's prior ownership rights, but rode roughshod over
the agreement and fraudulently colluded to sell the same stake twice. They
"bought" and "sold" the $50 million stake, and yet there is no evidence of
money having changed hands throughout this daisy chain of sham
transactions.
"What was a legitimate business opportunity for IPOC evolved into a
vehicle for Rozhetskin's and Mikhail Fridman's theft and misappropriation,"
the suit alleges.
Scheme Concealed Wrongdoing
The suit alleges that at the center of the enterprise was Fridman, a
major VimpelCom shareholder, who used associates working directly for him
and for VimpelCom, to transfer the assets in the summer of 2003. The scheme
involved wiring payments through New York banks, taking the proceeds, and
then transferring those proceeds to various off-shore companies "to conceal
wrongdoing from IPOC, American taxing authorities, and others."
The suit states that Rozhetskin acted "as a point person to obtain
additional cellular phone assets" and worked closely with Fridman to assist
with the sham transactions. He later relied on New York banks to launder
the theft of $50 million, the money IPOC paid for the stake.
The complaint also alleges that Rozhetskin and Fridman were assisted by
Hans Bodmer, who served as escrow agent and sent instructions to IPOC to
wire money through banks in New York for the benefit of the defendants.
Bodmer recently plead guilty to criminal conspiracy to launder money and
conspiracy to violate the U.S. Foreign Corrupt Practices Act in connection
with an unrelated scheme to bribe foreign leaders.
Insider Dealing and Manipulation of VimpelCom Tax Inquiry
The suit also alleges that Fridman and the Alfa Group attempted to
manipulate VimpelCom's share price for their own gain, in their position as
major VimpelCom shareholders. On Dec. 8, 2004, the suit said, VimpelCom, a
New York Stock Exchange Company, disclosed the Russian tax authorities were
investigating the company for back taxes carrying potential for heavy fines
and penalties.
The news coincided with the auction of a $10 billion subsidiary of
Russian conglomerate Yukos to satisfy back-dated tax obligations. Yukos
later went through an unprecedented bankruptcy filing in the United States.
The suit claims that manipulation was insider dealing that advanced the
defendants' goal of obtaining control and consolidation of the
telecommunications market in Russia, furthering the ability to raise prices
for cellular services through a near-monopoly or oligopoly.
Notes to Editors
* IPOC International Growth Fund, Ltd. is an open-ended mutual fund
company based in Bermuda.
* The suit, based on claims under the Racketeer Influenced and Corrupt
Organizations (RICO) Act, charges that Fridman conspired with Rozhetskin
to steal IPOC's interest through money laundering, bribery, wire fraud
and other criminal wrongdoings. Other defendants are Alfa Capital
Markets, Inc., a U.S. corporation; Alfa Telecom (n/k/a) Altimo; and Hans
Bodmer.
* Alfa Group Consortium is an association of various companies controlled
by Fridman. It controls major international corporations traded in the
United States, including VimpelCom (NYSE) Russia's second largest mobile
telecoms company, Golden Telecom (NASDAQ) and Turkcell (NYSE).
* For more information about IPOC, go to
https://www.ipocfund.com/. A copy
of the lawsuit is being posted on this Web site June 9.
The Many Ties to the United States
As the lawsuit states, "... defendants' tentacles reach into and injure
numerous Americans...." The investors, taxpayers and financial markets of
the United States have been harmed.
The below sets out the individuals and firms referred to in the
lawsuit, and provides some further information:
The Defendants:
Leonard Rozhetskin: "Defendant Leonard Rozhetskin is a former director
and principal shareholder of LV Finance Group Limited ("LVFG"). He is a
United States taxpayer and citizen, owns property in the District, and
lived in the District for more than a decade ... featured on the cover of
the Russian edition of Forbes with the title: 'The Most Dangerous Shark in
Our Waters.'... Rozhetskin resides in the United States...."[pg.6]"
Mikhail Fridman: "Defendant Mikhail Fridman currently serves as
Chairman of the Board of Directors of co-conspirator Alfa Bank and as
Chairman of the Board of Directors of Defendant Consortium Alfa Group.
Fridman further served on the Board of VimpelCom, a NYSE company, and has
control over Golden Telecom, a NASDAQ company ... purchased the United
States trading firm owned by American, Mark Rich, the one time commodities
baron pardoned by President Clinton with much controversy. Fridman purports
to have become a philanthropist in the United States" and is a member of
the Board of the Council on Foreign Relations based in New York. [pgs. 6-7]
Pyotr Aven: "Defendant Pyotr Aven also has been a major participant in
the scheme and worked directly with Rozhetskin and Fridman in the
misappropriation and theft of IPOC monies. Aven is a director of Golden
Telecom, a NASDAQ company, which regularly files with the United States
Securities Exchange Commission. He is a controversial figure: As observed
by the United States District Court for the District of Columbia, a Russian
'corruption task force informed [the government] that Aven was engaged in
various misdeeds, including drug trafficking. See OAO Alfa Bank v. Center
for Public Integrity, Civ. Action No. 00-2208 (JDB), Mem. Op., Sept. 22,
2005 at 11 n.26." [pg. 8]
Hans Bodmer: "Defendant Hans Bodmer ... assisted Rozhetskin and Fridman
with the Sonic Duo/MegaFon theft scheme ... worked with his co-conspirators
to send instructions to IPOC to wire money through banks in New York for
the benefit of the Defendants. Bodmer is no stranger to criminal
prosecution in the United States, having recently pled guilty to the
criminal conspiracy to launder money and conspiracy to violate the United
States Foreign Corrupt Practices Act in connection with the scheme to bribe
foreign leaders (along with Victor Kozeny, who is currently being
extradited to New York from the Bahamas). Case No: 01: 05-CR-00518-RCC-ALL
(S.D.N.Y.)." [pg. 9]
* Publicly Listed U.S. Corporations Affiliated with Defendants:
Vimpel-Communications, VimpelCom and Golden Telecom, Inc. "...
Defendant Fridman has successfully obtained hundreds of millions of dollars
from American investors through the sale of interests in his Russian
telecommunications empire -- which includes New York Stock Exchange company
Vimpel-Communications, also known as VimpelCom, and Golden Telecom, Inc.,
("Golden Telecom"), a NASDAQ company. [pg. 3]"
Vimpel-Communications/VimpelCom Web site is
https://www.vimpelcom.com/index.wbp
Golden Telecom, Inc. Web site is
https://www.goldentelecom.com/?id=12
Alfa Capital Markets (USA), Inc: "Alfa Capital Markets (USA), Inc.
("Alfa Capital Markets") is a member of the Alfa Group and is a corporation
organized under the laws of the United States with its principal place of
business and office in New York City. Upon information and belief, Alfa
Capital Markets was used to structure the laundering of the proceeds of the
Fridman M.C. Enterprise for investment in the United States, such as the
recent acquisition of Golden Telecom, Inc., a publicly held American
company, controlled by the Alfa Group. On information and belief, Alfa
Capital Markets' accounts were used to fund the misappropriation of
plaintiffs' property." [pg. 9]
The Alfa Capital Markets (USA), Inc. Web site is
https://www.alfabank.com/usa/
A Wide Variety of U.S. Ties:
* The U.S. Banking System and the U.S. Treasury:
"... goal of cheating the American government of taxes due and owing
....": Rozhetskin knew the assets were unlawfully taken when he made use of
the United States to transfer the assets in interstate commerce. Further,
Rozhetskin's actions were in furtherance of his goal of cheating the
American government of taxes due and owing on the transactions." [pg. 18]
"... money laundering and wire fraud that affected interstate and
foreign commerce." "Defendants conspired to steal IPOC's money and
property, and to conceal their wrongdoing and the true ownership of the
proceeds through a series of sham transactions and transfer the stolen
assets in interstate and foreign commerce with the intent of carrying on
and furthering their unlawful activity. By doing so, Defendants engaged in
money laundering and wire fraud that affected interstate and foreign
commerce." [pg. 20]
"... substantial effect on the United States and its citizens....":
"Their actions included assisting Rozhetskin in an international money
laundering scheme by which Rozhetskin, using the United States banking
systems as an integral part of his theft scheme, took the proceeds of his
criminal conduct, and then transferred them to various off-shore companies
as part of an attempt to conceal wrongdoing from IPOC, American taxing
authorities, and others. By doing so, Defendants' conduct has had a
substantial effect on the United States and its citizens, and much of the
criminal conduct occurred in the United States." [pg. 21]
"... (Rozhetskin) defrauded the United States of taxes and his
return.": "Although Rozhetskin claimed to have sold LVFG and 25% stake in
MegaFon for hundreds of millions of dollars, he defrauded the United States
of taxes monies. He failed to pay taxes on monies received from IPOC and
from Fridman and his shell companies as part of their money
laundering/fraud scheme. Defendant Rozhetskin did so while relying upon New
York banks to launder the theft of Plaintiffs' money." [pg. 23]
"... tax fraud against the United States.": "Defendant Rozhetskin was
aided by co-Defendants who participated in a variety of sham transactions
using hold companies to collectively assist Rozhetskin in his tax fraud
against the United States." [pg. 23]
* U.S. Lobbying Firm and Corporation:
Barbour Griffith and Rogers: "The Alfa Group conducts such significant
and varied business in the United States that it has actually found it to
be in its interest to spend millions of dollars courting the American
political elite through Washington D.C. based lobbying firm of Barbour
Griffith and Rogers, LLC which lobbies Congress and others in Washington on
its behalf." [pgs. 7-8]
"In addition to using his lobbying firm, Alfa Group has retained Edward
Rogers' Washington D.C. based "investigative" firm, Diligence, Inc. --
which has criminally misappropriated IPOC information as described further
below ....[pg. 8]
"Having chosen to spend millions of dollars to influence the United
States Congress and others, and having received millions of dollars from
the American government and private citizens, it should not fairly be heard
to complain of being called to task now in an American courtroom." [pg. 8]
Diligence, Inc.: "Defendants have also paid U.S.-based Diligence, Inc.
to steal IPOC property in Bermuda. Indeed, at the Fridman M.C. Enterprise's
direction Diligence bribed officials of an accounting firm and/or otherwise
misappropriated IPOC property. More specifically, Diligence, Inc. describes
itself on its web site and in its press releases as a company comprised of
former Central Intelligence Agency ("CIA") and British MI5 operatives that
'specialize in obtaining non-public or hard-to-get information on
corporations.' See
https://www.diligencecorp.com/. Diligence, Inc. is owned
in part by Edward Rogers who has also been paid millions by defendants to
lobby Congress and consult for Alfa." [pg. 24]
"In violation of 18 U.S.C. section 912 and at Defendant Alfa's
instructions, Diligence, Inc. posed as United States Agents acting under
the authority of the United States to misappropriate IPOC information from
an accounting firm. Defendants further violated 18 U.S.C. section 913 by
searching IPOC property while falsely representing, through Diligence,
Inc., to be agents of the United States. By doing so, Defendants have had
an effect on the United States."[pg. 24]
* U.S.-related Investigations:
Norex Case: "In fact, the Second Circuit Court of Appeals recently
reversed a District Court decision which had dismissed RICO claims against
these Defendants based upon a RICO conspiracy to defraud Norex, its
Canadian partner, of its ownership interest in another company. Discovery
is now proceeding in that case. [pg. 5]
The ruling is available at
https://www.norexpetroleum.com/norex_vs_alfa/us_court_of_appeals_ruling/eng.pdf
Oil for Food Program: "The United Nations in New York, through former
Federal Reserve Board Chairman, Paul Volcker, has named Defendant Alfa
Group for criminal wrongdoing and cited its $2.3 million in illegal
kickbacks and bribes to Saddam Hussein in the Oil for Food Program. See
Independent Inquiry Committee into The United Nations Oil-For Food
Programme ("Volcker Report") at 44-66 (Oct. 27, 2005),
https://www.iicc-offp.org/story27oct05.htm;
https://www.timesonline.co.uk/article/03-1846855,00.html (noting an Alfa
payment of $2.3 million). In light of the Volcker report and other
activities in this Country, Alfa has found it to be in its interest to
retain its own politically connected Washington D.C. lobbying firm to
protect its interest as discussed further below." [pg. 5]
Center for Public Integrity Case: "Recently, Mikhail Fridman along with
Pyotr Aven availed themselves of American courts as a plaintiff in
litigation brought in September 2005. Fridman and Aven lost that case on
the merits at summary judgment. See OAO Alfa Bank v. Center for Public
Integrity, 387 F. Supp. 2d 20 (D.D.C. 2005)." [pg. 7]
The opening paragraph of the court ruling states:
Plaintiffs are two Russian businessmen and their companies who have
sued the defendants, a public interest organization and its reporters,
for defamation for publishing an article alleging that plaintiffs have
connections to organized crime and have engaged in narcotics
trafficking. Defendants have filed a motion for summary judgment in
which they argue, among other things, that plaintiffs are limited
public figures, and that the evidence demonstrates as a matter of law
that defendants did not publish the piece with actual malice. The Court
agrees. Although defendants' actions are not beyond reproach, they do
not rise to the level of actual malice that the Constitution demands in
order to preserve a vibrant exchange of ideas on issues of public
concern. For this reason, the Court grants defendants' motion for
summary judgment on all plaintiffs' claims.
The ruling is available at
https://www.dcd.uscourts.gov/opinions/2005/Bates/2000-CV-2208~12:14:20~9-27-2005-a.pdf
* U.S. Government Agency Funded Investment Firm:
The Great Circle Fund: The Alfa Group "[i]s also the regional manager
for a US/OPIC sponsored investment firm called 'The Great Circle Fund.' The
Alfa Group makes use of this United State agency's (OPIC's) support to
provide a significant portion of the funding to meet its investment
objectives." [pg. 7]
Per the Overseas Private Investment Corporation (OPIC) Web site, it was
"established as a development agency of the U.S. government in 1971. OPIC
helps U.S. businesses invest overseas, fosters economic development in new
and emerging markets, complements the private sector in managing the risks
associated with foreign direct investment, and supports U.S. foreign
policy. OPIC evaluates all project applications on the basis of their
contribution to economic development to ensure successful implementation of
the organization's core developmental mission, and prioritizes the
allocation of scarce resources to projects on the basis of their
developmental benefits."
The Great Circle Capital Web site
https://www.greatcirclecapital.com/
for the Great Circle Fund LP states that "Great Circle Capital has
appointed Moscow-based Alfa Capital as the regional manager and Brussel's
based probel (sic) Capital Management as investment advisor. A substantial
portion of the fund's capital is provided by the Overseas Private
Investment Corporation (OPIC), an independent, developmental US government
agency."
* Defendants Used U.S. Banks for Transfers. Some Examples Follow:
Barclays Bank in New York and Credit Suisse First Boston: "On April 11,
2001, IPOC wired $5,065,000 from its bank in Bermuda to Barclays Bank in
New York for further transfer to the Credit Suisse First Boston account of
Rozhetskin." [pg. 16]
Barclays Bank in New York and Chase Manhattan: "Using a number of
intermediaries and at Rozhetskin's requirement, such money was wired from
IPOC's account in Bermuda through Barclays Bank in New York and Chase
Manhattan to Rozhetskin and his designees in November 2001." [pg. 16]
Bank of New York and Credit Suisse First Boston. "[o]n December 20,
2001, IPOC through intermediaries wired an additional $3,070,000 to
Rozhetskin and his designees through the Bank of New York located at One
Wall Street in New York to Credit Suisse First Boston." [pg. 17]
"... using the American banks as a vehicle for the fraud scheme. ...":
"Plaintiff IPOC made all such payments and others through the United States
without knowledge that Defendants Rozhetskin, Bodmer, Fridman, Alfa Group,
Alfa Capital and Alfa Telecom were all conspiring whereby Rozhetskin, using
the American banks as a vehicle for the fraud scheme, would obtain IPOC's
cash, while Fridman through a labyrinth of associates and individuals would
obtain effective control over Plaintiffs' interest in Sonic Duo/MegaFon."
[pg. 17]
"... use of the United States to transfer assets in interstate
commerce": "Rozhetskin knew the assets were unlawfully taken when he made
use of the United States to transfer the assets in interstate commerce.
Further, Rozhetskin's actions were in furtherance of his goal of cheating
the American government of taxes due and owing on the transactions." [pg.
18]