May 15, 2017

New NY US Attorney agrees to Russian case sweetheart settlement

Daily Kos -This is the case that Preet Bharara as the Manhattan US Attorney  was working on when he was abruptly fired by Donald Trump back in March.

The trial was supposed to start May 15 and witness testimony was expected to shed light on how Russian dirty money gets laundered. Through real estate. Expensive Manhattan real estate. Now that avenue of information gathering has been shut down.

This is also the case where two relatively young lawyers died and one person “fell out of” a Moscow apartment window but survived.

Experts in the field are questioning the abrupt timing, how easily the Russian company got off with a small payment, and asking if some kind of political pressure was applied to settle the case. Given the timing of high profile firings in the news it does cast suspicion.

CNN - A major US investigation into Russian money laundering has come to an abrupt end. The case aimed to expose how Russian mobsters allegedly stole $230 million and hid some of the cash in New York City real estate. Also sure to come up was the suspicious death of the Russian lawyer who exposed the alleged fraud, though US prosecutors weren't alleging that the defendants were behind it.

The trial was set to start on Monday, but late Friday night, federal prosecutors in New York announced they settled the case with Prevezon, the company accused of buying up "high-end commercial space and luxury apartments" with laundered money. The abrupt conclusion has some involved in the trial wondering why this Russian investigation had been cut short.

"What most concerns me is: Has there been any political pressure applied in this?" asked Louise Shelley, an illicit finance expert who was set to testify in support of the US government on Tuesday. Shelley — who founded George Mason University's Terrorism, Transnational Crime and Corruption Center — said the alleged money launderers got off easy. "I think they won something. There's no recognition of wrongdoing," she said.

The US Attorney's office did not respond to CNN's request for comment. In the settlement, Prevezon and its business associates did not acknowledge any wrongdoing, and the government agreed to "release" them all from any future lawsuits in connection with this case. The case against Prevezon was a civil matter, so the federal government's inherent goal was to recover money. That it did. The $5.9 million settlement is three times the value of the $1.9 million in supposedly laundered money tied to funds stolen from the Russian state coffers. But it's far less than the value of Prevezon's real estate in Manhattan -- which Shelley estimates at $17 million -- that had been partially acquired with those allegedly laundered funds. Russia's largest ever tax fraud The alleged fraud behind the Prevezon case goes back a decade. According to US investigators, corrupt Russian government officials allegedly teamed up with a powerful Russian organized crime organization to pull off that country's largest ever tax fraud. Russian crime rings often use identity theft to file fake tax refunds.

In this case, the government says that the defendants essentially did that on a grand scale: allegedly stealing the corporate identity of Hermitage Capital Management, an investment firm in Russia. According to the complaints, the defendants then allegedly created fake losses, claimed fake tax refunds -- and made off with the stolen rubles. Hermitage's lawyer, Sergei Magnitsky, exposed the alleged fraud — and was later jailed by the very investigators he fingered in the plot. He was tortured and killed in prison, according to Russia's own Presidential Human Rights Commission. The Russian government insists that Magnitsky, age 37, died of a heart failure with no signs of violence. The conspirators allegedly laundered the illicit cash through shell companies, luxury cars, real estate around the world, and international bank accounts. But without a trial, the illicit money trail remains unproven to the public. The settlement allowed both sides to still claim a victory. Prevezon said this is proof it did nothing wrong. In a statement, the firm said: "From the outset, Prevezon and its owner Denis Katsyv have maintained their innocence and have repeatedly stated that they had no involvement in or knowledge of any fraudulent activities and never received any funds from any criminal activity." Prevezon claimed prosecutors "brought this case without conducting any independent investigation, relying exclusively on the claims of William Browder," the head of Hermitage.

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