By John Helmer, Moscow
One of the peculiarities of the NATO alliance’s sanctions war against Russian businessmen is that the biggest of Russia’s bank robbers and corporate thieves have not been targeted by the press nor by the US Treasury. Indeed, the more criminal their conduct, and the more money they have stolen from Russia, the more welcome and secure the US, British, French, and Cypriot governments have made them and their bank accounts feel.
This is known as the Lucky Luciano gambit in the current war. Originally, between 1942 and 1946 that was an agreement between the imprisoned New York mafia boss Luciano, his treasurer Meyer Lansky, and his chief mobsters Albert Anastasia and Vito Genovese to assist US military intelligence, Army and Navy operations in their invasion of Sicily; and to go on helping the US prevent the Italian left from winning the postwar elections. In return, Luciano’s imprisonment was made more comfortable, then stopped, and in 1946 he was released to live in Italy (lead image, Luciano at home in Naples in 1948).
In the new Russian deal, the terms are that the runaway robbers must publicly blame President Vladimir Putin for prosecuting them for their crimes; declare themselves in support of regime change; assist MI6 and CIA; and pay for opposition propaganda. The case of Sergei Pugachev, who stole $1 billion from the Central Bank of Russia, is the best known of these deals. Convicted in the British courts of lying and protected by asylum in France, Pugachev has been promoted by the Financial Times of London and the Murdoch media group. His story has turned into a well-known book, and expensive out-of-court retractions.
The case of Leonid Lebedev, robber of Russian oilfields and electricity utilities, has been waged to failure in the London and Cyprus courts. It has just restarted in the New York state Supreme Court. New York is where Lebedev has banked his cash. It’s where he has pursued since 2014 his claim to be paid $2.7 billion for a stake in Russian oilfields for which he was paid, and signed off, years earlier.
The short list of big Russian robbers who are not the target of sanctions by the US, European Union, or the UK, their rap sheets, and their safe havens can be followed here: Andrei Borodin of the Bank of Moscow; Vadim Belyaev of Otkritie Bank; Ilya Yurov of National Bank Trust; Boris Mints of the O1 Group; the Ananiev brothers of Promsvyazbank and Vozrozhdenie Bank.
Left to right: Andrei Borodin; Vadim Belyaev; Ilya Yurov; Boris Mints; Alexei Ananiev.
In the Lebedev case, reading the evidence, lawyers’ papers and court judgements over eight years is hard going. The story of how his lies were defeated by international detective work, and along the way at least one of Lebedev’s associates died in mysterious circumstances, has been told here.
In 2019, after five years of hearings, Judge Saliann Scarpulla ruled to
dismiss Lebedev’s claim that Victor Vekselberg and Len Blavatnik owed him for a 15% share of their £13.8 billion sale of the TNK-BP oil company to Rosneft in 2013; the claim was $2.7 billion at the time.
In her ruling Scarpulla dismissed all Lebedev’s contentions. She also ordered him to pay “costs and disbursements to defendants as taxed by the Clerk upon the submission of an appropriate bill of costs.” The cost of the litigation for Vekselberg and Blavatnik, which has also extended to courts in London, Ireland, Cyprus, and Switzerland, was about $20 million; Lebedev’s costs were about the same. That was in 2019.
Lebedev had fled Russia four years before, abandoning his Federation Council seat and his immunity from prosecution. At the time Lebedev expected expulsion from the senate for lying about his foreign citizenship and offshore assets. He was also facing a criminal investigation of embezzlement of about $240 million from the regional electricity utility, TGK-2. This he had acquired with the patronage of Anatoly Chubais, once the head of the state’s electricity holding, UES.
Lebedev found safe haven in the US and Cyprus; the former by arrangement with the State Department; the latter from Cyprus President Nikos Anastasiades and his law firm in Limassol. They arranged a Cyprus passport for Lebedev which they kept secret from the Cyprus courts just as Lebedev kept it secret from the Russian senate.
Lebedev started his New York court case in February 2014, choosing the Manhattan branch of the state court because Vekselberg and Blavatnik had lived and conducted business in New York, and because Lebedev claimed they had negotiated their share sale in a walk through Central Park in Manhattan. Lebedev alleged Vekselberg and Blavatnik had violated the terms of their original deal in 2001, and cheated him over the ensuing years. Vekselberg and Blavatnik countered that Lebedev had been paid everything which had earlier been agreed as owing between them; concealed his money through an Irish front company and in bank accounts in Switzerland, Cyprus, Ireland, and New York; and then lied in the US court papers.
In February 2021 an appeal panel of the New York court accepted one part of Lebedev’s case and reinstated trial on one issue – breach of the contract he alleges between himself and the others. A new judge, Andrea Masley, has been appointed to hear the argument and re-read the evidence. For easy access to the court documents, go to the court docket here. At the moment there are 1,340 files.
Last month Vekselberg and Blavatnik made a visual presentation of the evidence that the contract Lebedev now says is still in force, supporting his claim, was signed and paid for through Lebedev’s Irish front company, Coral Petroleum, in 2003. Lebedev took $200 million at the time; more later.
Click to enlarge and read the presentation of 29 pages in full here.
On February 3 lawyers for both sides testified for two hours in front of Judge Masley. Follow their argument and the judge’s remarks here. “Okay. So I will just cut you off there,” Masley said during the presentation of the slide evidence. “I see where you are going with this and I need to move on. But I get it.” When Lebedev’s lawyer argued that the appeal court judgement nullified the interpretation of the front-company deal, Masley asked to be shown exactly where in the judgement this was written. After reading for herself, the judge said: “I am not so sure I am reading it the way you are.”
As Lebedev’s lawyer, Michael Miller of Steptoe & Johnson, continued, Masley (right) cut him off again. “I don’t care about your point. I am trying to — because I have to say throughout your papers you say a lot of what is not correct, but you don’t really give me what your position is but for one title. Anyway.”
She emphasized her scepticism: “So you [Miller]
you are telling me — don’t read the term ‘any and all
business interests’ as we in the Commercial Division would normally read any and all business interests because the parties were trying to paper-over something to get over on the banks? Is that what — the reason you want me to read any and all business interests is because they were trying to do something to explain why he is getting six hundred million instead of two hundred million for a two hundred million dollar note.”
Masley concluded the hearing by warning she will take time to read through the papers and draft her judgement. “Just so you know, we actually do get into the weeds of this and read the depositions. So that is sort of my explanation to you why this is going to take some time for me to draft this Decision and flog through all of it. Yes.”
That may not be until next year, the judge warned.