06 November 2007

Red Mafia and its connectivity

I am posting up the following article in its 'raw' form - no real attempt to neaten it, spell check, or even grammar check it has been done. Also missing are my usual neat and tidy formatting of blockquote text so that you can get an appealing color layout... in my copious free time I doubt I will ever get to doing *that*, either

What you do get is one of those tightly interconnected looks at the Red Mafia, starting out from a place that is very, very familiar. Then it goes downhill from there....

There are questions that politics gives rise to that seem a bit strange or even absurd, until you go down just a bit to see what the connections between individuals and groups actually are. Previously I had looked at the strange question: What is the connection between Hillary Clinton and the unfinished Soviet Aircraft Carrier Varyag?

That question has a reasonable answer to it in the form of Macau's Triad connected legislator Chen Kai-kit, and his connections to the People's Liberation Army of China and via another associate to the North Korean government. Those sorts of questions actually yield meaningful answers and gives an idea of how close someone is related to various parts of society. From that a good idea of the capabilities and reach of an individual can be found via those interconnections. Those connections are via degrees of removal which indicate the number of connections involved, so the CV Varyag is two degress from Hillary Clinton: Hillary Clinton to Chen Kai-kit to CV Varyag. To work that Chen Kai-kit worked his contact network, of course, and also had received orders from the PLA to get the ship, which sits, today, rusting in a Chinese shipyard not really useful for anything.

One of the lesser known scandals around Hillary Clinton during her first Senatorial campaign would devolve to a delightfully absurd question: What is the connection to Hillary Clinton and Randy "Duke" Cunningham? Really, these are entirely two different parts of society represented by these individuals, with Hillary Clinton being on the Transnationalist Left and Randy "Duke" Cunningham being on the Corrupt Right. Beyond their Congressional contacts, of course, which only counts for something if they were caucausing together and such, which I take it they, and Mr. Cunningham's departure due to all sorts of bribery and tax evasion things that he admitted to. Well, the Clintons only admit to sax evasion not tax evasion and all the funding scandals do point out some nefarious goings-on, but those don't really cut it as connections as there is no real human connection there. There is, however, a real human connection between the two, and its an interesting thing to look at, who goes by the name Arik Kislin.

Now who, in all tarnation, is Arik Kislin?

Arik Kislin is the nephew of Semyon (Sam) Kislin. Does that help out?

No?

Ok, then it is the old 'blast from the past' deal, heading way back to 1999 and Hillary Clinton's first run for the Senate in NY State. The connections of the Kislin family are of interest due to Semyon's connection to a Bank of New York money laundering scheme that had a number of the Kislin family involved (including Arik via Blonde Management), the Chernoy brothers and the 'Red Don' Semion Mogilevich (as seen in this GlobalSecurity cache of a CRS Report on Russian Capital Flight in the Appendix on Recent Banking Scandals). The Kislin family seems to be somewhat involved in politics on the local level, and relatively bipartisan, at least in donations. That is where the connection to Randy "Duke" Cunningham shows up, in one of those strange juxtapositions of a donor able to support *both* Cunningham and Clinton. The OpenSecrets site has a good rundown on the Kislin family's donations (search OpenSecrets for Individual donors and use the name Kislin):

Contributor Occupation Date Amount Recipient
KISLIN, ARIK GREAT NECK,NY 11024 SELF/RETIRED 3/29/2005 $2,100 Berkley, Shelley
KISLIN, ARIK NEW YORK,NY 10010 SELF/REAL ESTATE INVESTMENTS 9/12/2006 $2,100 Clinton, Hillary
KISLIN, ARIK GREAT NECK,NY 11024 SELF/RETIRED 3/29/2005 $1,900 Berkley, Shelley
KISLIN, ARIK NEW YORK,NY 10010 SELF/REAL ESTATE INVESTMENTS 9/12/2006 $1,900 Clinton, Hillary
KISLIN, ARIK NEW YORK,NY 10019 BLONDE MANAGEMENT 10/30/1996 $1,000 Democratic National Committee
KISLIN, ARIK NEW YORK,NY 10019 REAL ESTATE 10/25/1995 $1,000 Cunningham, Randy "Duke"
KISLIN, DAVID NEW YORK,NY 10023 11/6/1997 $1,000 Schumer, Charles E
KISLIN, DAVID NEW YORK,NY 10023 11/6/1997 $1,000 Schumer, Charles E
KISLIN, LUDMILA NEW YORK,NY 10023 10/31/1997 $1,000 Schumer, Charles E
KISLIN, LUDMILA NEW YORK,NY 10023 10/31/1997 $1,000 Schumer, Charles E
KISLIN, LUDMILA NEW YORK,NY 10023 2/2/1996 $250 Dole, Bob
KISLIN, LUDNILA NEW YORK,NY 10023 HOUSEWIFE 11/9/1995 $1,000 Clinton, Bill
KISLIN, OLYA NEW YORK,NY 10010 N/A/HOMEMAKER 9/12/2006 $2,100 Clinton, Hillary
KISLIN, OLYA NEW YORK,NY 10010 N/A/HOMEMAKER 9/12/2006 $1,900 Clinton, Hillary
KISLIN, REGINA NEW YORK,NY 10023 10/31/1997 $1,000 Schumer, Charles E
KISLIN, REGINA NEW YORK,NY 10023 10/31/1997 $1,000 Schumer, Charles E
KISLIN, SAM NEW YORK,NY 10023 TRANS COMMODITIES 11/9/1995 $1,000 Clinton, Bill
KISLIN, SAM NEW YORK,NY 10019 REDI CORP USA 10/31/1997 $1,000 Schumer, Charles E
KISLIN, SAM NEW YORK,NY 10019 REDI CORP USA 10/31/1997 $1,000 Schumer, Charles E
KISLIN, SAM NEW YORK,NY 10023 REDI CORP USA 2/25/1997 $1,000 D'Amato, Alfonse M

There are times when one does have to wonder about politics! Be that as it may, the Kislin family is pretty well represented here, and their backgrounds have been given a pretty good looking over by Knut Royce at The Center for Public Integrity in his article on the FBI tracking the donations of one of the Kislins to Rudy Giuliani as part of a larger investigation of the Kislins and others in the Russian Mafia. Unlike the current inHsurance problems going on, the Kislins seem to shift their donations around a bit over time, until they more properly align with the Democratic Party. Gone are the days of donating to Alfonse D'Amato, Bob Dole and Rudy Giuliani. Today the donations are more targeted at Democrats, particularly Hillary Clinton, and that for her 2006 Senate campaign. Do note that the records across the various donation searches pulls up that Mr. Giuliani returned donations, but the organizing done by Sam Kislin is similar to that of other 'bundlers'.

Now for some background on Sam Kislin and his business partners, the first of which is Michael and Leo Chernoy. For this I will look at a report from the Russian Press Center that looks at the businessmen that have influenced Russia since the fall of the USSR: Exiled Russian Oligarchs: Battle for Moscow 2008. The Chernoy brothers started in the legal trade then went into flowers, plastics manufacturing, raw materials commodity trading and the manufacture of household goods during the mid to late 1980's. On page 36 of the report we see how they utilized their ventures via the local Russian press reports:
'The Chernoy brothers got their seed-money for business through their connections with the Uzbek criminal world, - Konservator newspaper wrote in 2003. - Chernoy's cooperative was used by the criminals to launder revenues from racketeering, prostitution, illegal arms and drugs trade.
From there the Chernoy (aka. Cherney, Chernoi, Chorny) brothers would utilize contacts to branch out in their business reach. That is where the Odessa emigre Sam Kislin first meets up with the Chernoy brothers as his company, Transcommoditites, also was a going concern in Russia. In the days right after the fall of the Soviet regime, the Chernoy brothers and Sam Kislin made out quite well by retaining ownership of their factories and dealing directly via barter and other means to continue production and good profit. The commodities market would prove especially good and that would lead to a profitable business utilizing Western contracts to supply coke from Russian smelters and utilizing their manufacturing businesses to barter goods and appliances for the coke. That triangular trade would serve as a basis for a thriving business in the coke manufacturing area that would bolster investments in heavy metals work. Michael Chernoy would partner with his younger brother Lev and become a dominant part of the export trade in coal, copper, coke and ferrous metals. By 1992 their association with Sam Kislin would end by bringing in the Reuben brothers (David from London and Simon from Monaco) for local manufacturing of aluminum from alumina ore. Part of that was no doubt due to Sam Kislin's association with organized crime, as gone over in page 43:
Although Chernoy has recently sought to position himself as a philanthropist and legitimate businessman, his documented association with major organized crime figures seriously undermines such claims. Chernoy is known to have a close relationship with Sam Kislin, an American-citizen from Ukraine tracked by the FBI for organized crime. A 1996 Interpol report confirms one of Kislin's companies was used by Chernoy and his brother Lev to launder millions of dollars. The FBI considers both Chernoy and Kislin to be members of the American Russian mob headed by imprisoned godfather Vyacheslav Ivankov, who was recently released.

Chernoy is also a known associate of Russian mobster, Alimzhan Tokhtakhounov, a shadowy figure in Russia implicated in serious crimes such as arms dealing and smuggling. Tokhtakhounov was also charged with bribing figure skating judges in the 2002 Winter Olympics. A 2002 New York Times article reported that Tohktakhounov introduced Michael Chernoy to the "famous Russian mob leader, Anton Malevsky," who is a contract killer and head of the Izmailovskaya gang. Malevsky met an untimely death in a parachute accident in South Africa in 2001.
The Chernoys would go on to build the business up to become the third largest aluminum producer globally with the Reuben brothers and then take control of the entire thing from the Reubens by 1998. Trans World commodities would not stand there long, and Fortune Magazine has an article from 12 JUN 2000 at CNN to pick up some of the pieces of the investments that went on with Trans World. This is one of those chaotic investment concepts that went on in the post-Soviet Russia, and that involved the use of factories for a 'toll' which is actually paying a large workforce a minimum (or even sub-minimum) wage. The State waved all import and export taxes and tariffs, and also provided the 'toll' concept, which would allow for lucrative kickbacks to government officials from the factory owners. This temporary fix to the unemployment problem created the oligarch class of Russian traders and factory owners that still plagues the Nation. The Reuben brothers, would exploit this and the vagaries of world commodities trading as seen in the following:
"I don't seek any tax advice from experts," boasts Simon from his Geneva redoubt. "I can't read a computer screen and never use a calculator. It's all in my head and by hand." Simon's global web, set up to avoid taxes, has baffled investigators for years. For starters, there are more companies than employees: Some 200 entities were created in the West and nearly 100 more by his Russian associates. Shells within shells within shells--constantly shifting, many with similar names--in places like Cyprus, the Bahamas, the Cayman Islands, the Isle of Man. In 1999, a Virgin Islands shell (Landal Worldwide) seems to have been at the pyramid's apex. Below that, at various times: Trans World Group Inc.; Trans-World Group PLC; Trans-World Metals International; Trans-World Metals SA; TWM Holdings; TWM Trading; Transmet; Landal SAM; etc. The Reubens had a private bank in Western Samoa, a second in Moscow, a third in the Bahamas, a bank holding shell in Bermuda, and various accounts at nonrelated Swiss, German, and U.S. banks such as Bank of New York. The layers just go on and on, an optical illusion to make M.C. Escher scratch his head. "Simon loves the complexity," says one Trans World insider. "He'd set up three companies just to pay his rent."
It is that financial empire that allowed TransWorld Commodities to become the vast network it was, and implode when some of the investments and cross-investments started to be questioned. And as the old Soviet nomenklatura system did not like the new capitalist industry barons, those investments were questioned along with ties to organized crime. This also caused situations in which the need for liquidity or immediate cash to pay off loans also arose, and that, more than anything, would plague TransWorld:
The plant manager's assertion, in turn, dragged Trans World into an ongoing government inquiry into the theft of more than $100 million from Russia's central bank by a number of separate criminal groups during the early 1990s. That a theft occurred is not in dispute, nor is the fact that the Chernoys ended up with a piece of the stolen money and used it to partially fund Trans World's startup phase in 1992. (At Krasnoyarsk, FORTUNE has concluded, it helped fund the initial deals that brought raw materials into the plant.) The inquiry's objective was to determine whether the Chernoys knew the funds were indeed stolen.
Mind you, the Chernoys owned the business in question and it was in that period that Sam Kislin was helping the Chernoys to get it going. Such good luck for Sam Kislin to leave before that scandal hit! By 1996 some of those problems had been addressed, but new ones started to arise outside Russia that would revolve around the business dealings of the Reubens and Chernoys. Problems were cropping up in the UK, Switzerland and the US:
In Switzerland, Michael was briefly arrested and interrogated as a suspect in an organized crime case. (A probe there against him is still under way.) In England, Operation Copperfield (perhaps named for David Reuben) led British intelligence agents to connect the Chernoys to Vyacheslav Ivankov, the jailed "godfather" of the American arm of the Russian mafia. The agents found that 25% of the phone calls from Trans World's London offices went to apparent mob figures involved in money laundering, drugs, and gem smuggling. (David: "I would be grateful if you could get them to give you a single phone number, because it must be a mistake." The Brits: No comment.) In Russia, one government investigator linked the Chernoys to the cycling of funds from drugs and car thefts through retail stores and on to London, but complained that the scale of the scheme was too vast to grasp, according to the Copperfield report. The Russian Interior Minister, without a money-laundering law to back him up, asked the FBI for help.

Joel Bartow, a former FBI agent who specialized in Russian mob cases, spent nearly four years in the mid-1990s trying to indict Michael Cherney for laundering but says, "Money laundering is a difficult charge to prove on someone who is not a U.S. citizen." Bartow says he dug up evidence of "false bills of lading" and "phantom contracts" involving some of Michael's oil deals. "Lev and Michael were moving money for people, and they were taking 10%," he explains. "They knew how to move it, and they weren't asking where the money came from and didn't care where it was going. They were moving it for corrupt politicians, for people who were committing fraud, and for people who didn't want to pay taxes."
Very difficult to prove, as it turns out, especially when dealing in one of the world's largest trading companies and producers of aluminum. Just the sheer number of transactions to keep a company of that size going is difficult to track internally, and it was being done by HAND. As this was hitting the fan, back in 1996-97 the Reuben brothers were clearly in a bind as they were having problems documenting the procedures used to run TransWorld Commodities and getting investigated nearly everywhere. To stem that tide they would turn to:
The Reubens clearly needed high-powered help, and they found it in Mickey Kantor, the former U.S. Commerce Secretary, and his law firm, Mayer Brown & Platt, which received $5 million for its services. The lawyers enlisted IGI, the investigative agency that President Clinton used during the Monica Lewinsky affair. The IGI investigator assigned to the case--Terrence Burke, an ex-CIA agent and former acting head of the Drug Enforcement Administration--met with Michael Cherney and various government officials. A top U.S. embassy staffer in Moscow said the U.S. believed Trans World was "an indirect beneficiary of laundered funds," according to a 1997 Mayer Brown report. The news given to Burke by the FBI was even worse: It believed Michael himself was an organized crime figure.

Burke recommended that the Reubens sever their ties with Michael, and in 1997, Simon reveals to FORTUNE, they did exactly that, giving him about $400 million just to go away. Lev, who remained with Trans World and continued to run the show from Israel, says the payoff was "almost all the profit" earned overall by the Chernoy half of the partnership.

But if the Reubens thought they could buy peace, they miscalculated. Instead, civil war broke out. Michael, feeling underpaid and humiliated after all he'd done for Trans World, proceeded to plot revenge on his brother and the Reubens. At his villa in Israel later that year, he assembled a group of Trans World's plant managers (as well as Malevsky, according to one Trans World insider) to lay the groundwork for a coup. In the end, it proved easy enough: Lev's relations with the managers had been deteriorating since he left Russia, and some of them controlled blocks of stock that had been parked in their names as a way for Trans World to skirt Russia's antimonopoly laws. It didn't take much prodding from Michael to induce the managers to combine their shares with his; by year's end Trans World had lost control of half its empire.
Damn that Mickey Kantor gets around! First in a law firm that helps Swaleh Naqvi during the BCCI scandal, then helping Terry McAuliffe and John Huang during the Lippo Bank Scandal, arranging financial aid for Webster Hubble and then helping the Reubens with their problems in Trans Commodities. After that he would go to China for a meeting in Beijing in 2003 as part of the International Finance Forum: after all the financial folks coming to him that are in hot water financially, he should know a lot about the subject. The Reubens would insist that they put up the money to start Trans Commodities, but the lack of evidence and the connection of stolen cash to the Chernoys makes that difficult:
But it remains unclear to this day exactly how Trans World financed its start in Russia. David Reuben insists that he and Simon put up their own money for the launch, but they have produced no records showing they were the source of any initial financing. Which brings us back to that oft-mentioned central bank caper. At its core, the scam involved multilayered deals wherein dollar-ruble conversions and false letters of credit delivered government money--through Russian banks--to a number of companies, including Trans World. In the middle of the transactions sat two similar-sounding entities: Trans-CIS Commodities, run by Lev and formed with the help of David Reuben, and Trans Commodities, a firm based in New York in which Michael was a 50% partner. (Michael's partner in Trans Commodities was an American emigre named Semyon "Sam" Kislin, later named in an FBI report as an associate of a now imprisoned Russian "godfather," and whose nephew, according to Joel Bartow, eventually went to work as Michael Cherney's right-hand man. Kislin has since become a member of the Economic Development Board in New York City as well as a big donor to Bill Clinton, Al Gore, and Rudolph Giuliani. He denies any links to either the mob or Trans World.)
Those connections to Sam Kislin seem to be pointing in a different direction. The Reubens, however, would be cleared of charges and take their billions to the West and start investing in businesses that have a bit better oversight and management, but they would point out the connections of the Chernoy borthers as being the problem:
Today the Reubens say that while Michael was close to "dubious individuals" in Russia, he and Lev had split over Michael's relationships with those individuals. Additionally, the Reubens are currently pursuing criminal proceedings against Michael and others in Switzerland.
So, just who else are the Chernoy brothers connected to? A 2003 Pravda article on the outflow of money and the role of 'facilitators' to help organized crime and Western companies is pointed out as the main area of growth for the Russian Mafia. They give us a quick run-down of the most well known of those in Russia doing the 'facilitating':
Between these two groups there was another layer of 'facilitators'; people who knew the parallel system. They set up the deals. They traded the hard earned cash from aluminium into cigarettes and vodka which could be brought back into Russia and sold for cash, providing liquidity to the system. These facilitators were among the first private businessmen in Russia. They had ties to the very independent private sector who had access to the raw materials and the internal organizations which could deliver on the agreements made; the Izmailova (the late Anton Malevksy), Soltsnevo, Long Pond groups to name but a few. The facilitators included the Chernoy brothers (Mischa and Lev), Sam Kislin, and the 'institutionals' Gregory Luchansky, Semyon Mogilevich (Lyubarsky and Long Pond) or Vadim Rabinovich in the Ukraine. Most of these, too, were Jews. Without these men the Russification of Russia couldn't have taken place. They provided the only working system in Russia. Even in the far reaches of Siberia or the outposts of the Far East one could always find someone who could provide what was needed.
These 'private businessmen' would look at legal and illegal activities as the same thing, and utilize their knowledge of both areas to their own advantage. A bit earlier on the article points out to some of the trades that had been 'facilitated' with Western organized crime:
In early 1990 trainloads and truckloads of roubles left Russia, escorted by KGB police guards, for Western Europe. In Italy the Mafia, the Camorra and the 'Nhdragheta purchased millions of dollars worth of roubles from their illicit profits. Russia became the greatest laundry for money that was ever known. Bankers in the West were offered letters of credit in roubles with a Russian guarantee that these could be brought back into Russia. Santo Pasquale Morabito, a notorious Italian drug dealer and launderer for Pablo Escobar of Colombia swapped US$4.6 billion for 70 billion roubles (or less than half the official rate). The main Sicilian outlets were Ciccio Madonia's family in Palermo and Nitto Santapaola's in Catania. Everyone got into the act. A Sicilian Castellamarese capo called Tommy Marsala bought half a billion roubles for the Lebanese Druse leader Walid Jumblatt, who used them to buy small arms and rockets from Russia.
This sort of transaction does gain its own cast of characters, and the entrepreneurial spirit and a good set of contacts helps to select who will be able to deal with outside organizations. For awhile Russia was the money laundering capitol of the world, as its banks emptied and the Nation was looking for anything to support it. One of the prime individuals from the US that was pardoned for some of this work was Marc Rich, former DARPA employee working with various individuals in Russia on both sides of the legal fence.

Now back to Sam Kislin and that 1995 donation to Bill Clinton. Notice where it came from? Trans Commodities, a company in Russia that he, apparently, had not ties to. But that seems not to be the case as the Knut Royce article of 1999 we get to see some of the problems of law enforcement and intelligence agencies and how the wall constructed between them by the Clinton Administration would hamper investigating or even knowing about the activities of those of interest to either or both communities:
Kislin is not alone among emigres from the former Soviet Union who have successfully established themselves in the United States while law enforcement agencies, particularly the FBI, track their alleged associations with organized crime. The Center for Public Integrity has obtained confidential law enforcement documents detailing the activities of dozens of the emigres, but authorities rarely make cases and still less share the intelligence outside their departments.

A 1996 Interpol report claims that Kislin's firm, Trans Commodities, Inc., was used by two reputed mobsters from Uzbekistan, Lev and Mikhail Chernoy, for fraud and embezzlement. And a confidential 1994 FBI intelligence report on the Brooklyn, N.Y., mob organization headed by Vyacheslav Ivankov, the imprisoned godfather of Russian organized crime in the United States, lists Kislin as a "member/associate" of Ivankov's gang. It claims that his company co-sponsored a Russian crime boss and contract killer for a U.S. visa and asserts that he was a "close associate" of the late notorious arms smuggler Babeck Seroush, who later settled in Russia.

In a telephone interview on Dec. 17, Kislin confirmed he had employed Mikhail Chernoy at Trans Commodities, but said he didn't know Ivankov. "I never met this guy; I never saw him in my life," he said. He said that someone had forged his signature to obtain the hit man's visa. And, he confirmed, "I used to do business with Babeck Seroush."
Sam Kislin did, indeed, continue to have holdings in the Trans Commodities business in the view of Interpol, at least, and by Sam's own donation record. A very interesting thing to have left the business and still be in it. This was a very chaotic period in Russia, so keeping track of who is involved with what is more than a bit difficult, and many articles published globally, even from Russia, had a hard problem keeping track of which companies and individuals where doing what. No thanks with that to Simon Reuben, throwing in a few hundred paper fronts that he tracked in his head and kept no records on. But an article from the Capital site in Russia would collect a bit more on the Chernoys and Kislin and some of the involvements that Knut Royce was trying to track down in the US. Those connections seen from the Russian side are more than a bit interesting, with the following taken from the 1999 article The World against Chorny Family at the Capital site:

According to a Swiss police investigation, dated 1996, Michael Chorny is very close to the Russian criminal group Solntsevskaya and to its boss Sergey Mikhaylov. In the end of 1998, there was a law suit against Mikhaylov, which had to prove his participation in the money laundering but it was not successful and Mikhaylov was discharged. The same report, which investigates Russian companies says:

"Vyacheslav Ivankov-Yaponchik is closely connected with the following persons...Michael Chorny, born on January 16, 1952 and his brothers Lev and David. Chorny is Yaponchik's partner in Trans Commodities, which serves as a cover for controlling the laundering of money through Blond Management Group, a company, which is also registered in New York and whose president is Alik Kislin - a member of the Kislin family". Allegedly, this family ensured Yaponchik's control over the organised Russian gangs in the USA. It is considered that Chorny is also closely connected to the scandalous Russian businessman Grigory Luchansky, manager of Nordex. Rumour has it that it is from Luchansky's companies that Chorny bought the Bulgarian GSM operator MobilTel.
Send in the blondes! There are times when the names of organizations seem to be taken as some sort of tagline to let you know that this is an alternate reality as no one, in their right mind, would try to run an outfit known as Blonde Management Group. But the co-owner of Blonde Management, as seen in the donation records, is Arik Kislin, nephew of Sam, the man who saw contributions to Randy "Duke" Cunningham AND Hillary Clinton in his donation history? Really I can't find much of a similarity between Cunningham and Clinton, beyond the easy donation acceptance qualities of both candidates, and the implication of the Russian Mafia supporting both and the facts of that, or not, in the Cunningham case will be at trial. The only other thing to note from the article, is that this would be part of the Yukos oil deal that would build up the Russian petro-giant over time. That company, it appears, utilizes legitimate and illegitimate funding sources for expansion.

But back to Michael Chernoy, Trans Commodities and Blonde Management as the Capital article points out one of the schemes used by Michael to launder money from Bulgaria to New York. The Russian National Oil Company was buying out its Bulgarian counterpart and Michael Chernoy, who was going to supply $6M for the deal in standing capital. That money was supplied by Blonde International and went into a subsidiary of the Bulgarian National Bank and then disappeared: no paper trail on its whereabouts. What a sweet deal! Get money sent to you and then have it disappear in a Bank without a trace. Then Michael Chernoy is able to get the Bulgarian Central Co-Operative Bank to reimburse him for those funds, and the feeling by some are that he, somehow, not only was able to launder his money that way but actually got his hands on the original $6M and then asked for reimbursement of that since it was 'lost'. That is 100% pure profit, if true.

What Blonde Management did, then, was serve as a money conduit for the Chernoys from the West. Attention was turned to this aspect of things due to the Commercial Bank of San Francisco suddenly attracting large amounts of money from the old Soviet Bloc. The 09 NOV 1999 article by Knut Royce looks at this before heading into Blonde Management, and it serves as a major problem point in Western banking. By a group of Bulgarian emigres coming to San Francisco in 1991 and buying a 10% interest in the Commercial Bank of San Francisco, they were able to utilize it for money laundering schemes between the US, Bulgaria and Russia. One of these emigres, as referenced in the Royce article, sat on the board of directors of the bank and headed up its international department, thus putting him in a prime position to ensure that no proper oversight into such transactions would happen.

Soon after taking that spot, Russian deposits in the bank increased 9% over two months, bringing with it scrutiny from the FDIC. When the investigations started they ran straight into the Simon Reubens shell companies, shell banks and paper internetwork of same sitting off-shore to move money from legitimate channels with oversight to ones without oversight and low levels of accountability. Because such companies 'cross-own' in a complex web, investigators are stymied by that web in tracing out exactly *who* owns any part of it. If you have created three companies to pay your rent, then exactly how many would you dedicate towards laundering tens of millions of dollars?

Part of this transaction network went between the Commercial Bank of San Francisco and the Bank of New York via a husband and wife couple of emigrees. On 19 OCT 1999 the NYT published The Money Movers, by Timothy L. O'Brien and Lowell Bergman, which looked at the background of this couple and the dealings they were involved in:

Peter Berlin's venture, Benex International Company, got off to a slow start. But after a few years of arranging shipments of stereos and other electronic products to Russia, Mr. Berlin hit on something simpler and more lucrative to move around the world: money.

It proved an inspired choice. Nearly everyone in Russia with any money, from businessmen to gangsters, was searching for ways to hide their cash from onerous taxes or overly inquisitive investigators. Mr. Berlin offered a fast, discreet vehicle for moving dollars offshore -- lots of dollars.

Mr. Berlin's companies opened accounts at the Bank of New York, where his wife, Lucy Edwards, was an executive, and began whisking billions of dollars a year out of Russia. Ms. Edwards was in an ideal position to help. Just as he began his new business in 1996, she was promoted to a prestigious job at the bank in London drumming up commercial clients in Russia.

The couple prospered. According to people involved in the investigation, they earned millions of dollars from Benex's dealings, depositing the money offshore in accounts in the British Channel Islands and elsewhere. Mr. Berlin and Ms. Edwards, who had previously owned a small home in upstate New York, bought a $500,000 apartment in central London and enrolled her daughter in an expensive private school.

[..]

Nonetheless, the couple is now at the center of the biggest Federal money laundering investigation in history as law enforcement officials try to sort out how more than $7 billion sluiced through Mr. Berlin's companies over three years. Much remains unknown.

Federal investigators, for instance, suspect that Mr. Berlin's transformation from small-time businessman to leader of a widely used company was orchestrated by someone in Russia with ties to business or political leaders. But so far, neither they nor British investigators have been able to figure out who that might be.

Ms. Edwards' role remains equally unclear. British investigators who raided the couple's apartment in London in August found business cards and stationery for the Benex company that carried the Bank of New York logo. Prosecutors assert that Ms. Edwards was directly involved in expediting at least one transfer through Benex. And Western financiers say she ran financial seminars in Russia in which Benex's consulting services were promoted using the Bank of New York name.

Investigators are still trying to unravel whose money washed through Mr. Berlin's companies. Some of the more than 87,000 electronic transfers, they say, appear to involve legitimate Russian companies financing the purchase of imported goods and evading taxes. Some have been linked to Russian racketeers.
Or the old 'new kids make good' story, but with a twist to it, involving the movement of funds between the West and Russia for organized crime. This was lost in the transaction business due to lack of oversight by Bank of New York. Part of this was not due to regulatory problems, but volume of transaction and the type of transaction involved:

On a winter day three years ago, Mr. Berlin took a step that would change his life: He strolled into the Bank of New York's Wall Street headquarters and opened an account in the name of Benex International. Six months later, in July 1996, he opened an account in the name of Becs International at the same branch.

Closer scrutiny by the Bank of New York would have revealed corporate records on file with the State of New Jersey showing that one of its employees, Ms. Edwards, was one of two officers at Benex (Mr. Berlin was the other). The bank's own records noted that Ms. Edwards had authority to withdraw money from the Becs account.

Both of those facts should have been red flags at the bank. Banks typically restrict employees from playing a direct role in customers' businesses. The Bank of New York allows such arrangements only with permission of its chairman. Ms. Edwards's formal links to her husband's ventures, the bank says, did not surface until late 1998, after the Federal inquiry began.

Bank employees knew that Mr. Berlin and Ms. Edwards were married, but this apparently served only to shield the accounts from scrutiny. In Congressional testimony last month, the bank's chief executive, Thomas A. Renyi, said the fact that Mr. Berlin was married to ''a well-regarded bank officer'' had dissuaded bank auditors from looking more closely at the money in the accounts. He described that as ''a lapse on the part of the bank.''

There was plenty to look at. It is not clear precisely when the companies began moving money out of Russia, but by 1996 they had become one of the more heavily used pipelines for sending out cash. Millions of dollars a day coursed through the network, pouring through the Bank of New York unchecked.

Banks do not typically make much profit transferring money from one country to another. They charge their better clients as little as a few dollars per transaction.
The inter-institutional money transfers are electronic and even with the post-9/11 security systems in place, these types of transactions from apparently legitimate business to legitimate business still swamps the system. Making a few dollars on a multi-million dollar money transfer was, and is, chickenfeed. Even when 'flags' are put in place, the only thing they are good for are distractions as the utilization of seemingly legitimate front companies allows the actual destination to be masked. The bank records are good for transaction destinations, but for active tracing of funds there must be suspected accounts and activities to gain attention for them.

And if a company is made just to finance rent payment for property and is one of three in a 'holding agreement', then how does one actually determine if or when *any* of them are doing illegitimate business?

What Simon Reubens did was not illegal, per se, but the utilization of such methods to filter funds past financial barriers and restrictions makes the ability of the origin Nation to actually follow those funds nearly impossible. This is the high-end version of security through obscurity: being one moderately sized fish in a school of same is not out of place, especially if the fish is of a similar species as the larger amount of motion detracts from finding the one that is different.

By not being a 'high-flyer', the couple lived a relatively moderate life and gained little attention to their financial dealings and, unlike Simon Reubens, employed more computers than people:
Russian investigators have told their American counterparts they believe that crime groups in Russia exercised some form of control over the operation. American officials say they have no evidence of that, but are still trying to understand how Mr. Berlin corralled so much of the money-moving business so quickly.

The customers appear to have covered the entire range of Russian commerce. Some of the money, Federal investigators say, was moved by Russian criminal groups. Italian prosecutors have found that Russian gangs operating out of northern Italy, for instance, used Benex to transfer several million dollars out of Russia.

More than half of the $7 billion handled by Mr. Berlin's companies moved through the accounts before any suspicions arose. But in early 1998, investigators in two countries, working on different cases, began asking questions about Becs, Benex and Mr. Berlin.

The Manhattan District Attorney office, working with British officials on a money laundering and stock manipulation case, found that a Russian emigre they were investigating, Roman Amiragov, was moving $300,000 to $500,000 a week through Benex into the Bank of New York.

A few months later, the Russian Government separately asked the Federal Bureau of Investigation for help in tracing the ransom in a kidnapping case. The money, it turned out, had moved through a Benex account at the Bank of New York on its way to Russian organized crime figures, prompting the bureau to open its own inquiry.

The inquiry focused more closely on Mr. Berlin in August, 1998, after Republic Bank told the F.B.I. that $10 million had passed from Russia through an account controlled by one of his companies.
By living a relatively obscure life and serving as a digital financial hub, the Berlins were able to keep a high level of money throughput going, which would then disperse into a network of companies. Most of the companies were legitimate, and actual, real business was performed. Russian and US investigators, however, point to that part of the organized crime business that was not legitimate, but was masked by the throughput coordinated by the Berlins. In a later report in the NYT by Timothy L. O'Brien and Raymond Bonner on 16 FEB 2000, we would find one Bank of New York official charged with accepting a bribe and the investigation itself would narrow things down to the small portion of the transfers that were illegal, amounting only to $8M and an addition $1M in financial transaction servicing they garnered from moving such money. By 15 NOV 2000 Elizabeth Olson would report for the NYT that the amount frozen due to this activity would grow to $16.8M overseas and the Swiss would then cite $500M involved in money laundering and tax fraud by the Berliner couple.

In testimony to Congress on 09 MAR 2000, Jonathan Winer, Former Deputy Assistant Secretary of State, would testify on the magnitude of the Benex transaction scheme:
That briefing took place a year ago, in March of 1999. It revealed a complex international network of shenanigans involving a typical infrastructure for commiting international financial crime and money laundering, involving an Ambassador from a West African country, members of the French mafia linked to a well-known Italian financial institution, Canadian lawyers, British soliciters and accountants, and various off-shore financial locations, such as Liberia and the Channel Islands. All interesting, but not so different from international money laundering schemes I had seen before.

The briefing then took on a more disturbing aspect. The British officials told me that they had run across a company called Benex International, Inc., based in Queens, New York, owned by a Russian named Peter Berlin. Benex was a small business, nothing more than a couple of people with a couple of personal computers. Yet Benex intersected in a number of ways with the money laundering infrastructure the British were investigating. It also had apparently sponsored U.S. visa applications for known members of the Semion Mogilevitch crime organization of Russia, and acted in false receivable scams with a firm known as YBM Magnex, in frauds involving the Toronto stock exchange.

The Semion Mogilevitch organization had been a priority target of law enforcement agencies throughout Western Europe and North America. Public accounts concerning Mogilevitch suggested the involvement of his criminal organization in almost every major form of organized crime: contract killings, drug trafficking, prostitution, extortion rackets, and frauds, extending to a substantial number of countries in Western and Central Europe, the Americas, and the Middle East.

Details about YBM Magnex's frauds, and Semion Mogilevitch's substantial interest in the company, were already publicly available from newspaper articles after regulatory and enforcment action were taken against it in the U.S. and Canada in 1998, leaving investors holding some $500 million in worthless securities. Ultimately the firm pled guilty to commiting both securities and mail fraud. Additional information I received in the United Kingdom suggested that Benex's accounts at the Bank of New York including funds from drug smuggling, extortion and contract killings. Benex thus appeared to be part of the infrastructure in the United States that the Mogilevitch organization, among others, was using to launder the proceeds of serious crimes and to commit serious frauds.

This in turn raised the question, in my mind, of what kind of volume of funds Benex was moving, and how large the company was.

In response to my questions, I learned that the Benex account at the Bank of New York had moved more than $4.2 billion, with over 8,000 transactions a month for an average of one wire transfer every five minutes, night and day, 24 hours a day, for 18 months. I learned that Benex with its couple of employees and personal computers was operated by Peter Berlin, a Russian who had married a U.S. citizen named Lucy Edwards, herself Russian-born, who had divorced her first, American husband after acquiring U.S. citizenship. I learned that Ms. Edwards worked at the Bank of New York, where Benex maintained its account and through which Benex undertook its money laundering activity. I learned that Ms. Edwards' job at the Bank of New York was to head the East European Trade Finance Department at the Bank of New York's London offices, and that she remained in daily contact with her husband Peter Berlin, who was still in New York, running Benex.

Mr. Chairman, my jaw literally dropped open when I was provided this information. In the past I had investigated the Bank of Credit and Commerce International, BCCI, and a lot of other big international money laundering cases, but this case had stunning implications. It suggested as a serious possibility that Benex was a multibillion dollar money laundering business operated by a couple of Russians, including one insider at a major United States money center bank, and that Benex was among other things laundering funds in New York City for the some of the worst elements of the Russian mob. In various capacities, I had prosecuted, investigated, analyzed, or undertaken oversight of many major money laundering cases over the previous 20 years. I had never heard of any money laundering case of this magnitude.
And BCCI was huge! He would later go on to cite the very problems of these accounts being difficult to trace and transactions to have oversight, and that if the Benex or the Berliners had become a licensed money transfer institution there would have been no laws that could touch them: those transfers would be inherently legitimate. The World Bank would also cite the high level connections of these deals as part of the capital flight from Russia during the early 1990's in this 2001 article on Foreign Loans Diverted in Monster Money Laundering?:
Russia's national police agency, the MVD, conservatively estimates that $9 billion illegally flees the country each year. A study by the Institute of Economics of the Russian Academy of Sciences and the Centre for the Study of International Economic Relations at the University of Western Ontario, published this May, suggested that up to $70 billion disappeared in 1992 and 1993 alone. Other specialists argue that total capital flight in 1994-98 amounted to more than $140 billion and currently is running at more than $15 billion a year. Overall, some $350 billion in capital has fled the country since the fall of the Soviet Union, with nearly a third of it landing in the United States, intelligence sources told the U.S. News and World Report. And investigators believe that the flow of funds has accelerated since the crash of the ruble in August 1998. As Russian companies face bankruptcy, their motivation to preserve assets tends to vanish.

During an August 21 raid on the Bank of New York, U.S. federal investigators seized the files of Natasha Gurfinkel Kagalovsky, a senior vice president who supervised the bank's East European division. She and the bank's vice president in London, Lucy Edwards, were suspended. Ms. Kagalovsky is the wife of Konstantin Kagalovsky, Russia's representative to the IMF in the early 1990s under Prime Minister Yegor Gaidar's government. After Gaidar was replaced, Kagalovsky moved to Russia's Bank Menatep, headed by Russian oil and banking baron Mikhail Khodorkovsky. Menatep snapped up a number of enterprises during Russia's controversial "loan to share" privatization, including a controlling stake in the country's second-largest oil company, Yukos. Menatep failed last year amid Russia's financial crisis (see box on page 16). Kagalovsky is now deputy chairman of Yukos.

[..]

Also under the scrutiny of U.S. federal and local investigators is Russian businessman Peter Berlin and his wife, Lucy Edwards. Berlin, British corporate records show, is listed as a director of Benex Worldwide Ltd., the company that kept several of the suspicious accounts at the New York Bank. Benex maintained close ties to Semion Mogilevich the alleged head of Solnetsevo, Russia's largest organized crime group. Mogilevich has built a $100 million empire from arms dealing, extortion, prostitution, and other rackets. Before submerging in recent years, he lived in Budapest, Hungary, but is thought to have moved to Moscow in recent weeks. Mogilevich allegedly is the principal target of a strike force assembled in early 1998 by the U.S. government. The force is comprised of the FBI, the Treasury Department, the State Department, the Central Intelligence Agency, and the Hungarian Interior Ministry.

A senior U.S. government official said there were "substantial links" between Benex and YBM Magnex International Inc., a Newtown, Pennsylvania, maker of industrial magnets. Mogilevich was a founding shareholder of the company. Founded in 1994 by a Russian emigre scientist, YBM Magnex, a magnet and bicycle manufacturer, rose from an obscure penny stock to a multinational worth nearly $1 billion in less than four years. Its numbers astonished competitors and delighted stockholders. Net sales quadrupled from 1994 to March 1998, net income jumped ninefold, earnings rose by a factor of five, and the future looked just as promising. Benex became a distributor of YBM Magnex's magnets. By March 1998 YBM was boasting of plans to become "the world's leading producer of high-energy permanent magnets."

But six months later, in June of last year, YBM Magnex pleaded guilty to conspiracy to commit securities fraud and has since filed for bankruptcy-law protection. In December 1998 the company's new board, composed of outside investors, admitted to U.S. authorities that there was evidence of YBM's criminal wrongdoings, possibly involving links to organized crime. YBM had faked customer lists showing money laundering activity in accounts and business dealings in Eastern Europe and the Caribbean. (Money laundering means moving ill-gotten gains through a series of bank accounts to make them look like legitimate business proceeds).

Earlier this year, the FBI and other federal agents raided YBM's world headquarters in Newtown. The confiscated documents suggest that Russian mobsters may have used the company's Eastern European operations to launder millions in dirty money through a web of related enterprises.

[..]

Mogilevich disappeared from Budapest following a Hungarian-American coordinated raid. Officials confiscated documents and computers in his Budapest offices that well-informed sources link to the FBI's New York investigation. The Hungarian authorities declined to discuss the results of these raids. The Hungarian tax police have extended an ongoing inquiry into companies controlled by Mogilevich.

Investigators in New York estimate $6 billion zipped through the Benex accounts in the short time since authorities began monitoring the transactions last fall. They told the New York Times that the Berlins may be involved in one of the largest money-laundering operations ever conducted in the United States. Some $4.2 billion passed through a single account in more than 10,000 transactions between October and March, the New York Times reported. The cash in question appears to have passed through European and U.S. banks before landing in an offshore account in the Channel Islands that was controlled by a Russian commercial bank.

Some of the accounts Berlin established at the Bank of New York weren't regular deposit accounts but "micro/CA$H-REGISTER" accounts. These accounts are typically used by businesses for cash management purposes and are designed to make international fund transfers simpler. Account holders access their accounts and can conduct numerous transactions, including wire transfers and payment orders in foreign currencies, via a personal computer.
Computers do make fraud so much easier than ever before! And a major worry is that IMF funds were diverted by the Russian banking system into organized crime. At the Moscow Telegraph, they have the forward to the book Redwash An American Coverup looking into the Bank of New York scandal, ties to organized crime and the ease with which money flows through the banking system. Of note this is a post-9/11 book that also points out that the Bank of New York has not severed its ties with multiple banks in problematic areas of the world including, at the time the site was put up, Afghanistan. But that is jumping upscale of the problem when scoping out the fine detail still needs some work. So to get an idea of what sort of things would go through the accounts at Bank of New York, one need look no further than the chicken leg scandal.... chicken leg scandal? Yes, indeed, NYC had a chicken leg scandal that, unlike the duplicating $6M in the Yukos deal this would involve chicken legs. From the NYT article by Katherine E. Finklestein we get Same Chicken in Every Plot? on 18 JUL 2000:
Using forged documents and shipments of frozen chicken legs to Eastern Europe, a father and son from Westchester County with links to Russian organized crime stole more than $35 million from banks and financiers in Latvia and the United States, Manhattan prosecutors said yesterday.

The men, Nickolai and Serguei Kouznetsov, who already face a half- dozen civil lawsuits in Florida, Illinois and New York, and an accomplice were indicted yesterday on charges that they sold -- and resold -- the same chicken legs to multiple buyers.

According to court records, one Latvian bank lent them $3.5 million on the basis of forged documents stating that six million pounds of chicken were in a Florida warehouse, when they had already been sold abroad and shipped to Tallinn, Estonia.

The indictments mark the first stage of a continuing investigation into the scheme, which exploited a Russian love of dark-meat chicken, one of America's largest exports to that country, said Robert M. Morgenthau, the Manhattan district attorney.

[..]

The authorities said the elaborate scheme began on Long Island, where the Kouznetsovs sold frozen chicken-leg quarters, along with whole chickens, beef liver, turkey thighs and hot dogs, to various chicken exporters. Among those exporters was one of the largest such American company, Trans Commodities Inc., based in New York City and run by Sam Kislin, who has been a contributor to Mayor Rudolph W. Giuliani and other New York politicians.

But according to the indictment, the Kouznetsovs did not stop at selling the chicken legs once. They obtained a loan from the Paritate Bank in Latvia by giving the bank false warehouse receipts showing that more than six million pounds of chicken were being held for the bank as collateral in a warehouse in Pensacola, Fla.

On the basis of the warehouse receipt, the Paritate Bank wired $3.5 million to the Kouznetsovs account at the Bank of New York in New York City. But the chicken had already been sold to another purchaser and was on a ship on its way to Estonia.

It was not clear yesterday whether investors had made any independent effort to verify whether the chicken actually existed. As John W. Moscow, deputy chief of the Manhattan district attorney's investigation division, said of the loan from Paritate, ''There are a lot of suckers at that bank.''
More than just suckers, apparently, as the chicken legs find a way to get sold a couple of times all the while remaining in the deep freeze. The same Bank of New York that had Lucy Edwards (aka. Lucy Berlin, born Ludmilla Pritzker) and the very same one where she met Natasha Kagalovsky who was her boss at BoNY, as seen in Chapter 2 of Nick Kochan's work, The Washing Machine. Natasha was married to Konstantin Kagalovsky, one of the financiers of Russia during its post-Soviet era, and Natasha and Lucy would travel to Russia to show off the "micro/CA$H-REGISTER" system there. The wonderful thing about that system is once cash got into the BoNY system, it would be in a safe haven and easily shifted to any other part of the system, no matter where it was. So the Edwards and Kagalovsky formed up Benex in 1995 and got the Depositano Klearingovi Bank (DKB) into the system. Suddenly there was a quick and easy way to transfer funds from, say, San Francisco to Moscow via the "micro/CA$H-REGISTER" system. Semion Mogilevich, aka The Red Don or The Most Dangerous Mobster in the World, would utilize this for his YBM-Magnex company that served as a front company for financial manipulation of the Canadian markets. As banking consolidation in Russia moved forward, multiple other banks were pulled in by DKB and the transfer system would also reach out to other banks, like American Bank, which would have contacts with Inkombank which, itself, had offices in places like Cyprus. The ease with which money could move in this system quickly and become untraceable is looked at by Mr. Kochan in the following:
Step One: Inkombank made a bogus United States dollar "loan" to Company A, which was secretly controlled by bank principals.

Step Two: Company A in turn "lent" or "invested" the proceeds in Company B, also secretly controlled by bank principals.

Step Three: When the original loan from the bank to Company A fell due, Company A defaulted.

Step Four: Rather than take a bad debt charge on its books for the original loan to Company A, Inkombank assigned the defaulted loan to Company C, also controlled by bank principals, in exchange for promissory notes of Company C. In this way, the loan was carried forward on the bank's records; in effect, it was "extended" rather than defaulted on.

Step Five: Company A dissolved. Ultimately, Company C also dissolved, when its promissory notes fell due. Proceeds of the "loan" remained in Company B, or were transferred through additional shell companies controlled by the bank's principals.
Luckily that sort of thing could become highly automated, so that criminals could quickly and easily launder their funds. In the charges against BoNY, it is put forth that the system also allowed the bankers to skim money off of the financial transactions in secret via fabricated accounts, and move those funds out to other accounts. And here is how that sort of operation worked to remove the auditing trail or obfuscate it to the point of secrecy:
In much the same way as the bankers allegedly fabricated names and accounts to keep safe their own shares of the laundered money, so they allegedly fabricated paperwork and false auditing trails for their punters to explain unusual transfers and losses. The complaints later indicated how the alleged scheme worked. One alleged: "the conspirators established 'independent' offshore companies to which they caused their banks to make unsecured loans, never intending the loans to be repaid. The conspirators also caused offshore companies to engage in fictitious business transactions using bogus sales contracts, letters of confirmation for electronic funds transfers, and other documents . . . It was precisely these types of transactions, in high risk locations such as Russia and offshore havens that FinCEN (the U.S. Financial Crimes Enforcement Network), the agency responsible for administering the Bank Secrecy Act, had specifically identified as being potential money laundering schemes."
That is what happens when bankers go bad. Now, as if that wasn't enough, Lucy Edwards would *also* be involved in human trafficking, and would inform authorities in 1999 that she had helped hundreds of Russians to get into the US illegally ( American Russian Law Institute cache of Reuters article 16 FEB 2000). Unlike Simon Reubens, however, the Berlins had need of multiple companies to handle different cash networks, thus the formation of Becs International LLC, Lowater and Torfinex Corp, beyond Benex. One can imagine the problems facing those trying to trace Trans Commodities through its web of 300 or so companies and into the distributed network of banks through to other parts of the paper-company venue and then out again.

This is getting to be a bit of a tangled web, to say the least! First starting with Arik Kislin, and his interesting donation pattern to Randy "Duke" Cunningham a month before he reisgned from the House, Charles Schumer, Berley Shelley, the DNC and Hillary Clinton. That leads to the rest of the Kislin family, and its donations and holding a fundraiser for Rudy Giuliani, and then that donation pattern switching over to Charles Schumer and Hillary Clinton. This appears to have been headed up by Sam Kislin, uncle of Arik, who has ties to the Chernoy brothers. Additionally, Arik worked in the same office as part of Blonde Management as Trans Commodities and that helps to tie him to the strange incident of trying to get a hitman into the US. Now the FBI clears Sam Kislin (the forged signature on the document to get him a visa is that of Sam Kislin) and it appears to be forged possibly by one of the Chernoy brothers, to whom Sam Kislin is close. Of course Sam Kislin also admits to the Chernoys being more than a bit on the corrupt side and perfectly able to forge his signature. Strange that no one ever asked Arik if *he* had signed the the visa application.

Tracing back Sam Kislin's ties to Trans Commodities and the Chernoys has him showing up when the Chernoys need cash to expand, and getting an infusion of cash after meeting up with Sam Kislin. At about the same time it is revealed by the Russians that a wad of money is missing out of their Central Bank, and they can't figure out who stole it. Be that as it may, Sam Kislin and the Chernoys get a bit of triangular trade on a coke deal in which they can start spiralling up production at the Krasnoyarsk plant in exchange for consumer goods from the Chernoy's factories. With a steady flow of western cash from Austria, Sam Kislin departs from the scene to head up getting offices established in NY for Trans Commodities.

Meanwhile the Chernoys meet up with the Reuben brothers, who then begin the large scale aluminum processing concept going. That combined business venture will put Trans Commodities right behind Alcoa and Alcan as the #3 supplier of aluminum on the planet. During this time Michael Chernoy gets involved in the Yukos expansion by getting $6M from New York to put into the deal in Bulgaria, only to see that money disappear and having to be reimbursed by the Central Bank. And most folks suspect that, somehow, Michael Chernoy was able to spirit the money out of the commercial bank, and then bring suit to get it *again* from the Central Bank.

That money transfer happened just as Lucy Edwards was taking charge of the BoNY international group, and she and her husband Peter Berlin had set up a "micro/CA$H-REGISTER" arrangement with DKB in Russia via her boss' husband having connections with Boris Yeltsin. One of the first major organized crime figures to use that system was Semion Mogilevitch (The Brainy Don/Red Don/Most dangerous criminal on the planet) in his YBM Magnex and other companies attempting to control parts of the Canadian stock market. The Berlins would have a relatively small office that would process 8,000 financial transactions with Russia per year, which is about 1 every 5 minutes.

As part of that they would corrupt the bank manager, and set up disposable dummy accounts to skim money from transactions and to create an entirely false accounting setup, so as to clean the trail of the skiming *and* the auditing system. Starting at pleading guilty to $6.5M in fraudulent transactions, and Mogilovitch leaving $500M (estimates range up to $1B) in worthless securities behind as part of his entire Magnex scheme when he fled the country just ahead of the warrants for his arrest. The $35M Kouznetzov chicken leg scandal would also work through the BoNY system to a Latvian bank, all part of the problematical 'easy money transfer' concept that was going on at the time. And the ransom money for kidnapped Russian lawyer Eduard Olevinsky appears to have gone through the lovely BoNY money transfer system (Moscow News, 2005).

Semion Mogilovich is also associated with Vyacheslav Ivankov (the Godfather of the Russian Mafia in the US) who is associated with the Chernoys, Kislins and Blonde Management. Thus completing the circle of nefarious activity started out with Arik Kislin.


So back to start and to see where some of these players went after all of this!

The Berlins went to jail after pleading guilty to all sorts of bank fraud.

There, that is the *easy* set!

Vyacheslav Ivankov was sentenced to 60 years for extortion in a New York court, but the organization he was a part of was very extensive. To give just a taste of that, an excerpt from Donald N. Jensen's paper, The Boss: How Yury Luzhkov Runs Moscow, is most telling when talking about the major organized crime groups of Moscow:
The largest and most powerful criminal association originally based in a city neighbourhood is the Solntsevo gang. Founded about 1988, Russian organized crime experts believe the group bribed local police and ran racketeering operations before branching out into drug trafficking, money laundering and prostitution in Europe, the United States, and Israel. The group is believed to control an extensive array of legal business companies, including the firm Maxim, Arbat International, the Magnex company in Hungary, and Empire Bond in Israel, through which the organization allegedly launders money. The Solntsevo group has about 1,7000 members, and some group members, according to the FBI and other law enforcement authorities, specialize in assassination. A Russian crime expert has claimed that Solntsevo today unites more than 300 crime groups and is active in the Russian regions, Europe, and North America. There is reportedly no formal hierarchy within Solntsevo, though key figures are personally powerful and have roles as mediators, arbitrators and ambassadors.

Despite this organizational fluidity, many law enforcement officials believe that Moscow businessmen Sergey Mikhaylov (Mikhas) and Viktor Averin are the overall Solntsevo bosses. Mikhaylov is suspected of links to the Russian mobster Vyacheslav Ivankov, nicknamed Yaponchik, who in 1997 was sentenced to 60 years in jail for extortion by a New York court. Mikhaylov has denied he has anything to do with the Solntsevo gang. He has been convicted of violating the law only once, in December 1994, on a relatively minor charge, though in 1989 he spent 18 months in a Moscow detention centre charged with racketeering. On the eve of that trial, however, key witnesses changed their testimony and Mikhaylov was released. Despite Interpol and FBI support for Swiss law enforcement authorities, in December 1998 Mikhas was acquitted of charges that he belonged to a criminal organization.
One does get the feeling of an on-going concern here. As seen previously the Magnex company is associated with Semion Mogilevitch, as a semi-separate concern under the umbrella group. That said by 2000 CBS reported that Ivankov was only serving 9.5 years for extortion ( Russian Mafia's World Grip, 21 JUL 2000 by Bill Plante). In 2004 Vyacheslav Ivankov would be estradited to Russia for the 1992 murders of two Turks in a Moscow restaurant, after being charged in absentia (13 JUL 2004, Pravda), after skipping out on probation in Russia. Strange how 60 years moves to 9.5 years and then, as cited in the Pravda article, down to a bit over 7 years with 'good behavior' and bad behavior only getting a few months put back on. That's right, in 2004 or so, Ivankov was going to walk out a free man in the US and only getting sent to Russia stopped that. Just to get a feel for how Ivankov got to that point, here is how it looks from the Pravda side of things:
In 1981 Yaponchik was jailed again for 14 years, but was released in 1991. After that he spent less than a year in Russia and left to the US with a filming crew of the famous Russian director Rolan Bykov. To legalize his stay in the States, Ivankov married an American woman. As soon as Yaponchik appeared in New York, the number of assassinations of Soviet immigrants abruptly increased in Brooklyn. As a rule, they were the people standing in Ivankov's way.

FBI was watching Yaponchik from the very start, but federal agents did not manage to arrest the Russian mob until 1995. Ivankov's friends came to ask his help in a financial matter. They said two entrepreneurs, closely linked with Chara Bank, received a large sum of money from him and then disappeared in the US. Yaponchik asked the businessmen to return the money. Vyacheslav Ivankov was arrested on the allegation of extortion. In 1997 an American court sentenced the Russian crime boss to 9 years and seven months in jail.
Go to America, extort funds and leave a trail of bodies behind you and you get: time off for good behavior! Mind you in 2005 Ivankov would be set free as a jury would not convict him there (Kommersant, 19 JUL 2005) due to things like the statute of limitations running out, inability to find some witnesses and an eyewitness being unable to identify him. Basically an incompetent prosecutor... not that we haven't heard that before. What is he up to these days? No idea, but he has to be getting pretty close to 70.

Sermion Mogilevich, has had an interesting career, what with heading out of the US just before a couple of FBI Warrants could be served to him for the securities fraud surrounding YBM Magnex and some other companies in the US. In a Moscow News article from 2003, Russian Scam without Borders, we get the lowdown on how the Magnex deal worked:
The hand of the U.S. law rarely reaches as far as Yekaterinburg or Vladivostok or Tyumen or Odessa or Gomel or Chisinau. But those of our former compatriots who begin playing games with the U.S. penal code on U.S. territory sooner or later end up in the dock.

A report from Pennsylvania says that FBI agents arrested Yakov Bogatin, 56, former president of YBM Magnex International Corp., a naturalized U.S. citizen of Soviet origin. According to Philadelphia Daily News, Bogatin was charged with securities fraud. The fraud involved persons known for their connections with Russian organized crime. Bogatin was set free on a $1 million bail and is now under house arrest and electronic surveillance.

In another report, the paper provides a more detailed account of the machinations and identities of Russian organized crime figures. The Pennsylvania-based YBM Magnex International Corp., manufacturing industrial magnets, was founded by the ill-famed Semyon Mogilevich, a former Kiev resident whom British law enforcers described in the second half of the 1990s as one of the world's most dangerous criminals: According to Western reports, he made a fortune from drug trafficking, arms smuggling, prostitution, and extortion rackets. By using double-entry bookkeeping, bribes, blackmail, and suchlike methods, Mogilevich and his sidekicks - Yakov Bogatin, Igor Fisherman, and Anatoly Tsura - showed investors non-existent super-profits, within a short time span inflating company stock prices from 10 cents to $20 apiece. The bubble burst in 1998; the company was slapped with stiff fines, and the share trading operation stopped.

Defrauded investors sank $400 million in YBM, of which, according to the indictment, Mogilevich pocketed more than $18 million; Bogatin, more than $10 million; Fisherman, $3 million; and Tsura, over $1 million.

Of the four suspects only Bogatin has been arrested. Mogilevich, Fisherman (51, a naturalized U.S. citizen from Ukraine), and
Tsura (54, a Russian national) are on the run someplace in Russia. Recently Jeffrey Lampinski, head of the FBI Philadelphia division, enlisted the support of Russian and Ukrainian authorities in tracking them down.
Yes the group of them did their best during the 'internet bubble' to push a company that made permanent magnets, and artificially inflated its value. They did, indeed, take the money and run, save for Bogatin who was stuck in the US. Ahhhh... the 1990's and the Clintons and the 'internet bubble' and being able to get cash for any harebrained idea! The US Senate has a very brief rundown in this testimony by Stewart Ash, Associate Deputy AG on 14 FEB 2006, on page 8.

An interesting place that Mogilevich popped up was in a briefing on a presentation to Congress from Professor Stephen Blank of the US Army War College on Radical Islamic Challenges in Central Asia (OCT 2003 via GlobalSecurity.org):
In Russia's recent gas deal with Turkmenistan the firm chosen to move gas from Turkmenistan to Russia and Ukraine is Trans-Ural, a firm chartered in a Hungarian village named Csadba and headed by one of the most notorious crime lords in Russian organized crime, Semyon Mogilevich. Mogilevich's firm stands to make from $320 million to $1 billion on this deal. Thus this raises the most disturbing implications. First it attests to the commingling of government, major energy corporations, and criminal enterprises in Russia and to the mutual enrichment of each of these actors at the expense of the citizens of the CIS, not just Russia. As these firms are already contributing significant sums to President Putin's reelection it is impossible to pretend that he and his colleagues are unaware of Trans-Ural's background. And given the long-standing ties between Gazprom and Russia's special services, the widely reported collaboration of these institutions with organized crime and Russian energy and other firms that has been widely reported throughout Central and Eastern Europe, and the involvement of those services in the earlier attempted coup in Turkmenistan in 2002, not to mention earlier ones in Georgia and Azerbaidzhan, the implications of this deal become much more stark for all concerned.
Mogilevich made his early entry into organized crime via arms sales to Iran as seen in the Robert Friedman article in the Village Voice, 20-26 MAY 1998. Really, in an article this lengthy I can't do justice to his criminal career, which spans from the Golden Triangle to Iran to San Francisco: a true Transnationalist organized crime figure if ever there was one and encompasses arms dealing, narcotics trafficking, prostitution... a long, long list to say the least. One of his cronies shows up in Ukrainian deal where the Russian petro giant Gazprom was looking to buy out RusUkrEnegro, in which Firtash owned 45% of RUE by owning a major part of it called Centrogas from Austria. That connection came forward in a Moscow News item of 16 APR 2006, The Orange Boomerang:
An experienced politician, Yulia Tymoshenko managed not only to make the "presidential steps" but also ensured that the Ukrainian people remember to whom they owe the real improvement in their living standards. Experts believe that this is the main factor in Yushchenko's declining ratings amid the growing popularity of the "iron lady."

It is true that the Ukrainians' attitude toward their president has also been affected by the latest round of rumors and speculation that the opposition timed for the upcoming parliamentary election: e.g., when he became president, Yushchenko worked hard to hush up the investigation of his purported poisoning; that Boris Berezovsky funded his election campaign in 2004, also writing a version of his inauguration address; and that Yushchenko's mother-in-law traveled from Philadelphia to Kiev for the inauguration ceremony on a charter flight paid for by businessman Dmitry Firtash, the right-hand man of Semen Mogilevich who is on the FBI's wanted list, but recently took part in discussing the Russian-Ukrainian gas agreement in Moscow.

In short, the Orange boomerang that Yushchenko threw at corrupt officials in the form of his "All Felons Will Be Jailed!" calls never hit anyone. As it turns out, only Yushchenko was hit.
Interesting that such a close connection to Mogilevich is made especially to post-Orange Ukraine. Apparently getting rid of the crooks is a bit harder to do than just getting a popular government in power. A part of this deal is also Eural Trans Gas, and the US DoJ started to look into the dealings of ETG and the entire Gazprom situation (26 APR 2006, St. Petersburg Times), and found that Raiffeisen Bank of Austria held 50% of RUE. From the previous Moscow News article that was reported at $53B from Petrohaz, a company in the United Arab Emirates which was owned Ukrainian President Viktor Yushchenko's older brother Petro Yushchenko. RUE was set up to replace ETG and subsume its structure, and that original structure (from the St. Petersburg Times article) was started by Zeev Gordon, an Israeli lawyer, who's claim to fame was representing Semion Mogilevich for 20 years before founding ETG in Hungary. Dmitry Firtash was also involved in that, so that his Cypress based Highrock Holdings could control ETG.

Firtash has a regular conglomerate empire under him, including: Nitrofert, an Estonian fertilizer factory and a Crimean Soda Plant, both owned through ACI Trading from Cypress; co-owner of one of the largest real estate companies in Kiev, JV Mandarin Plaza for $500-560M, Heritage Properties International AB (source: Developer Project, Ukraine website); Parus Office project for approximately $300M and the Obolon housing development project for $200M, and has become the owner of the Hungarian natural gas trading company, Emfesz, for $779M (source: Serkalo Nedeli article 06-12 OCT 2007 by Alla Yeremenko) along with cable television channels in Ukraine K2, K2 and Megasport as well as the Kyiv basketball team. He is selling off the television channels, however, so as to properly consolidate his other real estate and industrial holdings (Kommersant, 27 JUN 2007).

That is what happens when you are the right-hand man of one of the most capable underworld figures around! Mogilevich is trained in economics and has been utilizing that to his advantage for decades, and it is paying off with the RUE deal, and other subsidiary companies and organizations. By putting Firtash in control of those, and looking to handle some of the Far East oil and gas trade, Gazprom becomes an effective subsidiary company between them, and RUE becomes a government/criminal investment opportunity to exploit that. So far we have crossed the paths of two extremely competent and effective individuals in this entire affair: Semion Mogilevich and Simon Reubens, each of them highly competent in areas of money laundering of criminal enterprises.

On 17 MAY 2007, Forbes' reporter Liz Moyer reported that the connection between Mogilevich and BoNY were about to come back and haunt BoNY:
In a move worthy of the Dr. Evil character from Mike Myers' Austin Powers movies, an official at Russia's Customs Service has decided to sue Bank of New York for an astronomical figure--a cool $22.5 bil-lee-on dollars.

It is the latest chapter in a decade-long intrigue involving an international money laundering ring allegedly connected to the Russian mob and reputed gangster boss Semion Yukovich Mogilevich.

The suit, confirmed to wire services by a spokeswoman for the Russian Customs Service, has yet to be received by Bank of New York , according to the company. In a statement, the bank said "any such suit would be totally without merit, if not frivolous, and we would expect to defend it vigorously."

The proposed damages represent nearly three-quarters of Bank of New York's $31 billion market capitalization.
Well, they did become 'well capitalized' by processing so much in the way of Russian money during the 1990's and having it reside in their system. This may also come back to haunt Republic New York bank which was picked up by HSBC Holdings which, itself, was part of the money laundering operation run by Berlin/Edwards. Which is, as they say, how the cookie crumbles.

But this entire thing was not brought to my attention by any of this, believe it or not!

No, I first got interested by the mention of Kislin in the Center for Public Integrity article and then the thing that got me really interested in this is the blog by Margie Burns and her view of what was happening between Mogilevich and the individual that I have done a lot of looking at: Monzer al-Kassar. Her two reports of 08 AUG 2007 and 09 AUG 2007, got me started on the inverse approach of the low-level operatives (the Kislins) and how their connectivity spread. Most compelling is her reporting in the second article of Semion Mogilevich having a transport locus in Marbella, Spain the exact same town that Monzer al-Kassar lives in and the one, extremely compelling connection she cites:
By coincidence, a little less than two weeks before September 11, 2001, a plane crashed at Spain's Malaga airport carrying a passenger from Morocco on his way to meet with both Mr. Al Kassar and Mr. Mogilevich. According to the London Sunday Express, the passenger was believed by Israeli intelligence to be a "bag man" for Osama bin Laden. He was being monitored by the Israeli intelligence service Mossad but was released after being treated for minor injuries at a nearby hospital, in the confusion after the plane crash.

[..]

In the years lapsed since 2001, Mr. Mogilevich himself seems to have turned up in northern Virginia - safe haven for U.S. government contractors, the military-security-surveillance complex, gun sellers, and the lawyers and lobbyists who protect them.

A little background: Mogilevich's name has several variant spellings, and Mr. Mogilevich has gone by numerous aliases,
listed by the FBI as Seva Moguilevich, Semon Yudkovich Palagnyuk, Semen Yukovich Telesh, Simeon Mogilevitch, Semjon Mogilevcs, Shimon Makelwitsh, Shimon Makhelwitsch, "Seva."

I discovered in 2006 that companies linked to Mogilevich had set up shop in Virginia.

I published my discovery of these entities, registered in the Virginia database, in Online Journal
on March 24, 2006 ("Semion Mogilevich, wanted by FBI, in northern Virginia?").

I also published articles about the apparent Mogilevich-Commonwealth of Virginia connection on March 23, 2006 and April 20, 2006 on this blog site ("Semion Mogilevich in Virginia?" and "Virginia is for Mogilevich"), and around the same time in the small community weekly that I was writing for at the time, the Prince George's Sentinel.

This goes beyond the two definite pathways that I have been able to uncover between OBL and Kassar (the UK firm that he put under after dealing with OBL and tainting the company with that, and the head of Iranian Intelligence that, apparently, has decent ties with OBL and Zawahiri). This is supported by Jason Freier's article from SEP 2005 on Arms and the Terrorist from The Journal of International Security Affairs which starts out talking about Victor Bout:
Victor Bout is a key player in this game. A former Soviet KGB officer of Tadjik origin, Bout-like many of his former Soviet military colleagues-was forced out of the military when his air force regiment was disbanded at the end of Cold War. But Bout had the experience required to connect the demand for weapons with the abundant supply that dotted the landscapes of Eastern Europe and Central Asia. Bout created his first airline, Air Cess, just as the Soviet Air Force was reducing its forces. Drawing from old Soviet cargo planes, he managed to create what experts describe as "one of the world's largest private fleets of aircraft."7 Bout used these aging but still operable aircraft to ferry various and sundry military supplies to conflict zones worldwide. And Air Cess proved to be just the beginning; as of 2001, the U.S. government has been able to identify at least five airlines owned by Bout, and approximately 300 people directly employed by him.8

Today, Bout specializes in busting sanctions, and he does it well. He has flown weapons to the Philippines in support of Abu Sayyaf, and is known to have provided the Libyan government with weapons.9 Likewise, Bout has facilitated the shipment of small arms to various rebel movements in countries such as Liberia, Angola, and the Congo. Bout's chief motive is financial profit, and he sees no problem with supporting a number of warring factions against one another.

Bout, moreover, is not alone. In Europe, a Ukrainian named Semion Mogilevich smuggles weapons from Russia through an elaborate network that ends in Spain.10 Routinely, they travel by air or land through Ukraine to Bosnia, Kosovo, and Albania. They traverse the Mediterranean Sea by boat through Gibraltar for a brief stop in Spanish Ceuta and Melilla in Morocco, and then double back across to the Spanish resort of Marbella.11

These operations are just a small sampling of the numerous weapons trafficking networks that exist throughout the world, but they provide an illustration of the complexity of the phenomenon-and its worldwide reach.

[..]

During the 1990s, Bout became a key player in the long and bloody Liberian civil war, and in Liberian dictator Charles Taylor's active support of the Revolutionary United Front (RUF) in Sierra Leone. Earning a reputation as "someone who could fly virtually anything anywhere in Africa," Bout was the natural choice to provide Charles Taylor with the weapons he needed to fight for control over Liberia and support the RUF as it pillaged neighboring Sierra Leone.13 These operations, however, also connected Bout's organization to an industry deeply infiltrated by Islamic radicals, ranging from Hezbollah to al-Qaeda. Combined with his alleged support of the Abu Sayyaf group in the Philippines, his provision of the surface-to-air missiles fired at an Israeli airliner in Mombassa in 2002,14 and his documented support of the Taliban in Afghanistan, Liberian connections display a tangled relationship between Bout's weapons trafficking networks and terrorist organizations. Bout-and others like him-either provide the actual weapons that terrorists use to conduct their training and operations, or indirectly supply the arms and logistical backbone used by those who support terrorists with havens from which to conduct attacks.

Mogilevich's activities tell a similar story. Just before the attacks of 2001, the Ukrainian mobster emerged at the center of a European investigation into the arrest of an al-Qaeda-linked group in Paris. When apprehended in August 2001, the group had in its possession a suitcase containing uranium-235.15 Subsequent investigations into the incident have determined that the group attained the uranium via Mogilevich's Ukraine-Marbella route-a transit corridor that, prior to September 11th, had been a favorite among transnational criminals and terrorists entering Europe from the Maghreb.16
This puts together the entirety of the WMD capability now available via the arms trafficking and organized crime operations. The various factories owned by individuals like Firtash, the Chernoys and Kislins, along with Mogilevich's extensive contacts all the way to radioactive materials, plus the ability of Monzer al-Kassar to add in-roads to corrupt South American arms and munitions manufaturers points to a nasty coalition able to deliver nearly anything to anyone who has the cash. By being able to utilize Syrian weapons expertise and development for chem/bio weapons and long range missile technology from al-Kassar and the rest of the bulk supply capability for industrial stand-up from Russian and Eastern European Mafias, the exchange capability to allow distributed production of WMDs of the chem/bio/radiological sort is at hand. Syria obviously gets support on raw materials via this system, and in exchanging its own processed raw materials (yellowcake and phosphorus) for better technology and other raw materials utilized in furthering the nuclear capacity beyond yellowcake. Iran is a direct recipient of that, and can utilize Syria as a front to Western underworld or go by its ties to al-Kassar as seen in the 1992 and 1994 bombings in Argentina.

Needless to say, this was *not* what I expected when I first started looking at source documents a couple of weeks ago! I was looking for another Hsu-type network and, instead, run across what appears to be 20% or so of the Russian Mafia networking. No such luck!

Now a final bit on where all this started: Arik Kislin.

After Blonde Management he became involved with MC Holdings and an owner of Ronnybrook Farms, and rented that out to a friend. He would later be implicated in trying to defraud a group of investors in the Falchi Building on Long Island (if I am reading my legal documents correctly, always a hazardous thing!) so as to have the group take the loss for it while he would then pick it up at half-price once the foreclosure had gone through. He has also been involved with a recission happening with Edulink, Inc. and having his company,Mega Media Holdings LLC, shift from Edulink support.

One of the final oddities is Arik Kislin's ownership of Air Rutter which saw one of its jets crash earlier this year in Mexico (source: NY Post, 01 OCT 2007), and the plane had recently been sold by Hotel Gansevoort, is where Arik Kislin is currently associated, to someone a bit less capable in piloting. The plane itself appears to have been on an illegal flight and had 3.2 metric tons of cocaine on-board (airliners.net has pictures). Apparently the jet in question had flown to Guantanamo Bay as part of its past service record with Oxford, CT being its round-trip destination, which tends to get the conspiracy theorists going. And the man who bought the plane from Kislin/Gansevoort? Alex Rodgriquez! Great on how its first charter it gets crashed...

And that is a great cue for the NY Post and its quickie article on 15 APR 2007, on the Shady 'Inn' Crowd:
YOU never know who owns what these days. Case in point: the Hotel Gansevoort. Arik Kislin, one of seven principals in the trendy, 187-room Meatpacking District inn, once ran a firm with ties to a suspected Moscow hit man, The Post's Dan Mangan reports. In the early 1990s, a Manhattan company called Blonde Management, of which Kislin was chairman, co-sponsored a U.S. visa sought by a Russian named Anton Malevskiy. The FBI believed Malevskiy to be a professional assassin and head of one of Moscow's leading criminal gangs, according to a 1999 article by the Center for Public Integrity, which cited an FBI report. Gansevoort flack Nancy Friedman at first denied Kislin had an ownership role in the hotel or that his name was on its liquor license, despite being told of a state agency document that shows otherwise. When we pressed for an explanation about Kislin's relationship to the hotel, Friedman said she would check with the Gansevoort's owners. But in a subsequent conversation, she suddenly clammed up, telling us, "I don't think there's going to be any response."
The places you will stay and the people who work for them! The Hotel Gansevoort apparently liked the other work that Arik Kislin had been involved in:
Arik Kislin is a principal in the projects of Gansevoort Hotel Group, LLC. His primary responsibilities are deal selection and acquiring capital for future/current projects. Arik has a broad background. He has been involved in real estate for over 13 years. His real estate investments prior to joining GHG include properties in Sheepshead Bay (land meant for residential development); Bridgeport, Connecticut (Commercial office building rented to the State of Connecticut); and a piece of land on the border of Queens and Nassau (residential development is underway on the site), across from J.F.K. Airport.

Most significantly, in 1992 Arik arranged the equity for the purchase of a portfolio including Manhattan and Queens properties. This purchase included the Chelsea Markets complex, which was part of a 3.6 million square foot industrial/commercial/retail package. Arik Kislin was the managing member of the group. Arik was responsible for negotiating the various stages of the project financing and purchase as well as creating the strategy for the leasing and redevelopment program.

And that brings up Sam Kislin's son, David Kislin! Isn't this wonderful? David Kislin has been an investor/developer in the High Line 519 towers (source: NY Observer), which will abut the old elevated railway in New York. This is one of those urban renewal/gentrification projects started to give a 'better quality of life' and 'unique living experience' for those that can afford such. David Kislin and Leo Tsimmer invested $28.25 fro Canyon Capital Realty Advisors (source: Highbeam article cache). David Kislin has been interested in this development area since at least 2003, when he bought property there to refurbish and resell (source: NYT ):
Mr. Jefferson bought the apartment from a pair of real estate investors who had paid $1.5 million for it in November 2003, with a plan to fix it up and resell it. One of the investors, Daren Herzberg, said that he and his partner, David Kislin, had spent $600,000 on the renovation.

''It was a total wreck,'' Mr. Herzberg said, referring to the condition of the apartment when he bought it a little more than a year ago. The apartment was unfinished, with no kitchen or bathroom. He said that the building, which was being converted from a warehouse, had not yet received a permanent certificate of occupancy, which made it difficult to get financing.

Mr. Herzberg, a sales agent with the Corcoran Group, and Mr. Kislin, the son of Semyon Kislin, a prominent Russian-émigré businessman, bought the apartment from the development company that was converting the building into condos. The development team included Samuel D. Waksal, the former chief executive of ImClone Systems, who is now serving a seven-year sentence in federal prison for securities fraud and other crimes.

Mr. Herzberg and Mr. Kislin hired Suk Design Group to create an apartment with four bedrooms, three-and-a-half bathrooms, a fireplace and hardwood floors. The ceilings, which have exposed beams, are 10 feet high, a plus for Mr. Jefferson, who is 6-foot-7.

Other condo owners in the building include the rap music impresario Sean Combs and Christopher D. Heinz, a son of Theresa Heinz, the wife of Senator John Kerry.
Purely pocket change to this crowd, that $600,000 investment, but you get to rub shoulders with the Heinz clan! But even more interesting is how the finances for Bogatin's properties got through the Chelsea area:
Bogatin is no stranger to the mob, however. His brother, David, a top Russian crime figure who once served in North Vietnam for the Soviets in an anti-aircraft unit, is now serving an eight-year term in a New York State prison for a multimillion-dollar gasoline tax fraud scheme. Just prior to trial, he had jumped bail, fleeing to Poland. There he set up the first commercial banks, which moved vast sums of money controlled by Russian wiseguys. (This after handing over his mortgages for five pricey Trump Tower apartments to a Genovese associate. The mortgages were liquidated and the funds were moved through a mafia-controlled bank in Chelsea.) Eventually he was caught and returned to the U.S. In the meantime, he lived like royalty in a five-star Viennese hotel, surrounded by a praetorian guard of 125 Polish parachutists, some of them bedecked in shiny gold uniforms.
Yes the Chelsea branch of the Bank of New York. So handy to have your own ability to use a bank like a global ATM! And Chelsea wasn't first looked at for furthering a criminal enterprise by the Russians. No the first group to look at it in that light is a bit further back than that:
BCCI's initial attempt to obtain a bank in the United States was notably unsuccessful. Initially, BCCI decided it would begin with a small acquisition, that of the Chelsea Bank, a national bank with a state-chartered holding company in New York. In order to keep the transaction low-key, BCCI decided to proceed through a nominee, a member of the Gokal family, whose shipping empire could be characterized as much BCCI affiliate as BCCI customer. Unfortunately, the nominee chosen had few resources of his own, and was a transparent alter ego for BCCI, prompting the very regulatory scrutiny in New York that BCCI had sought to avoid. As recounted by former Comptroller of the Currency John Heimann:
My first supervisory contact with BCCI occurred when I was New York Banking Superintendent. New York law requires the Superintended to approve the change of control of a New York chartered bank. . . A young Pakistani national was the proposed purchaser. His uncertified financial statement showed total assets of $4.5 million, of which $3 million was in the form of a loan from his sister. His reported annual income for the prior year was, as I recall, approximately $34,000.
Since he was not an experienced banker . . . and since BCCI was his primary banking relationship, he indicated that he would be relying upon that institution for advice and counsel.
BCCI had an interest in the Chelsea area long before the Russians and that comes from the BCCI 1992 Report, Chapter. 6 (via GlobalSecurity document cache) which is, apparently, just one of those coincidences of life. BCCI wouldn't make it through Chelsea or another bank in NY, but they would wait for Carter to get into office and then go through Bert Lance.

For a bit of fun and frivolity one can, indeed, hook up the Chelsea development at the pier with Norman Hsu! Yes, on the "Speak Truth To Power" night of 06 OCT 2006, Norman Hsu was a co-chair of the event!

And that should do it.

No great wrap-ups, but just looking at how folks are connected, more done for my information than for your enjoyment.
[UPDATES 26 NOV 2012: a number of minor spelling corrections and relinking to at least one article due to link rot, removal of one name by request so as not to imply criminal activity of the innocent]

14 comments:

dalailama said...

Congratulations for your blog because it's really done well, if you are pleased passes by me-even if you are not Italian and I think that speaks Italian, soon Fabione

http://filmdimafiaetantoaltro.myblog.it/

A Jacksonian said...

dalailama - Thank you! You are correct that Italian is not a language in my background, although film mafia page was interesting... I doubt any of the Red Mafia will make it to the big screen... although the stories are just strange enough to give an audience some different views of organized crime of the more brutal sort.

Thank you for stopping by!

cui-b0no said...

The new *Firtash project*:

http://i50.photobucket.com/albums/f350/habahabahaba/save_our_sity.jpg

A Jacksonian said...

That doesn't look like a gas pipeline, steam plant, titanium plant expansion, or portside facility... leaving the Mandarin or other commercial properties picked up by Firtash... the low cost housing or cottage project? Or is this the downtown gas works... have to start reading up a bit more, been too distracted by other things to keep updated.

Hope Firtash can handle it all with Mogilevich sidelined for awhile.

cui-b0no said...

You know, even the neighbours of this construction site have a very vague idea what is happening there, and what has already happened...

these two articles can get you started(startled?):

http://www.arcoreal.com.ua/index.php?id=67&L=1&tx_ttnews%5Btt_news%5D=75&tx_ttnews%5BbackPid%5D=9&cHash=2ab6b2e11a

http://www.day.kiev.ua/175442

A Jacksonian said...

cui-bono - That is disturbing, to say the least... while things like it have happened in the US, it has rarely been on this scale and involved so many historical sites. It is almost like the erasure of the past is the intent (as the Saudi funded groups are doing in Kosovo), but there is no real rhyme or reason in Kiev for this. It is beyond brazen 'land development'... these could have been low cost *profit centers* to a decently run commercial organization: support history, philanthropy, bring in tourists, etc.

But no commercial organization goes ahead and just destroys historical sites and museums - the PR is lethal and the bad blood hard to wash away.

I am at a loss... have to do some digging to get the full context and scope of what is going on. My guess is that the Firtash organization is doing this because it *can*. A power demonstration... and that is very worrying.

cui-b0no said...

It would probably be an exaggeration to say that all current construction in Kiev is Illegal. However, such statement would hold same truth as to say that all Ukrainian politics are corrupt. it is pity for me to say as Ukrainian, but where else in this world would one find such wide-scale wipeout of heritage sites of its own, being approved at the highest echelons of power...
http://www.mediaisland.org/en/rebel-carnival-ukraine-0

Awesome how money can change people. But the most awesome thing is, how people can and do change to oppose such brutal acts of vandalism.
What we need now is to get the attention of all public that is still detached, especially on the international level...

A Jacksonian said...

I took a look on Google Earth and finally found the site where the panorama was taken... took me awhile to trace down a street map or three... and fix the buildings in the panorama shot... right next to the Kommersant publishing house?

That is a *huge* development!

It is right next to a number of other recent high-rises and near the olympic sports complex. I had read somewhere that Kommersant was going to expand, but got the idea that it will be into new offices elsewhere, not in its present location. Otherwise I would look at Firtash buying an 'in' with the publishers. As it is, if Kommersant is moving, then he will most likely get those buildings and start in on a large project of some sort. Those trucks, I would hazard, are getting cores to find the water table, any underground riverbeds, and seeing what the bedrock is like there. Perhaps a mixed apartment/commercial space? It is situated right on a rapid transit line, making that an optimal site for such. If it were my old home town of Buffalo, NY, I would say 'parking garage' as the mafia there tended to tear down historical buildings for those... but here, in a bustling part of town, there is revenue to be made.

Even though the History Channel is US based, they have done a number of Lost Worlds episodes on places that are relatively modern (even just 20th century) and a medieval fortress part of the larger sweep of history in the region would be a *natural*. If it had underground facilities from any time in that era forward to recent history, that would also make Kiev interesting to them for their Lost Cities of the Underworld (I believe is the name of the program).

I am guessing this is no worse than a bit of money-grubbing development for immediate profit... which is bad enough.

Without any political overlays in Google Earth or other developments, I can't really tell if this is systemic and politically aligned or just plain old beauracratic incomptence and corruption at work.

cui-b0no said...

I'm not sure how well you seak Russian or Ukrainian (compared, say, to Italian ;) but you have all it takes - you speak your native language, and live in the Land of Free accross the ocean,
and, what is more important... you are not indifferent :)

P.S.
the site in my first post is located here: http://www.fortification.ru/upl2007/basz51.jpg (circa2006 however)
the site from my previous post that is now under heavy fire, you can find it here: http://archunion.com.ua/img/2007/09/s_09_016.jpg (located at the top of Andreyevskiy Spusk)

A Jacksonian said...

cui-bono - I am barely fluent in one language - English. Therefore I must be an American!

That said I have a smattering across a few different languages and the only thing that gets me is not having a ready reference for cyrillic letter transposition (like a cyrillic - romantic letter equivalency). So I bypassed a large number of local maps until I found one with a few recognizable street names and used Google Earth to finally pin down the site. Using the references of nearby works in the articles (local knowledge) I transposed that into street maps and those onto Google Earth. That panoramic photo was an immense help as is any on-the-ground reference. Plus so many folks have uploaded photos to a GE referenced system that I could go along the trolly car stops until I got the vicinity right.

I am not only a deep history buff (trained geologist) but also one of human history and the era in question (11th - 13th century AD) plays an important role as Kiev served as a cross point between Nordic climes (Sweden, Finland, Norway, Denmark) and the Byzantine Empire. The Byzantines tended to indicate everyone in the region as Varingian, but the Nordic works talk of direct contact with Byzantine authorities and the remnants of that is found along the old trade route including Kiev. Thus, for its era, Kiev was a pretty important cultural and trade hub in west asia (although not up there with Jerusalem or Constantinople to be admitted) but was a formulary ground for views of culture and law to mix north to south, with influences from eastern Europe and central Asia going through it. To me this is as important as the more southerly trade routes as the form of the law was directly influenced from Byzantine works and then adapted northward to more localized conditions, along with the adaptation of old Roman sea law which would become Admiralty Law a couple of centuries later. Between these two points sat Kiev which, as a trade hub, would need to enforce its own local laws which would also be observed by those going through it.

That is my 'thumbnail' appreciation of Kiev as part of Ukraine before the modern era. Having some Polish extraction I have heard stories from that part of the family, during the Cold War, of how Ukraine saw itself as different from Russia and also wanting liberation from overlords of all sorts. Some of that must come from that earlier North-South trade and views by others having an impact on localized populations. While there would be some ethnic migration between the 13th century and modern times, the population has remained remarkably resilient to shifts, even of enforced migration under later totalitarian rule.

Reading up on the exploitative works of post-Soviet crime syndicates and their ability to work their way into those Nations freed from Soviet rule is highly worrying to me. One of the few things that I press my fellow countrymen about is that America should reach out hard and fast to those that are long time friends and allies and those that have freed themselves from tyranny and despotism and seek the path of liberty and freedom. To support liberty we must, in actuality, *support those practicing it*. Trade and cultural work between peoples so that they can seek their own paths to liberty and freedom and yet support each other is a foundational concept placed down in the US and our non-practicing of it is worrying to me in the extreme.

As it is the mapping out of the Firtash conglomerate trade organization in its various parts is a damned difficult thing to do. Because of its interconnects via governments and organized crime, some parts will be difficult to even *find*, and yet it is an organization stretching from China to Hungary if not further, and nearly unique in that scope. It took me well over a month to get this Red Mafia article put together and three months to scope out the Syrian WMD complexes - time, research, and organizing information and cross-relating it to find anomolous information or sources so compromised as to be worthless is difficult. As with my views on Kosovo, Kenya and elsewhere, I will utilize such sources if they have a unique insight or view, but only in those realms and they do not serve as a sole part of any view.

I will have to think on this as my own Nation is about to put forward individuals so deeply flawed by ideology for the position of President that I can only see an unrecoverable error ahead... which does not bode well for anyone.

My thanks and deeply so to you!

Understand that my list of physical ailments all leave me with little physical or mental energy and I must prioritize those things I examine... not a great life but its the only one I have!

cui-b0no said...

i knew i came the right place :)

Let me know when you'll be around in Kiev to show you the nice sights!!

A Jacksonian said...

cui-bono - My deepest thanks!

If my body were in better shape you would have to worry that I might take you up on that.

As a side-note on Firtash, I had put an article out looking at the Turkmenistan flow of natural gas to Iran (and stoppage thereof) and had speculated that this sounded more like something done to play havoc with the Iranian economy and infrastructure by Mogilevich. Looking at Firtash's holding company I note that there are, indeed, natural gas facilities in Turkmenistan under the control of Firtash's organization. The fun, apparently, never stops...

Carlos Lombardi said...

These people are the Mafia house bank in Austria.

Raiffeisen is so dirty it makes the soil of the earth look clean:

http://rbentlarvt.blogspot.com/2011/03/mafiabank-osterreich-raiffeisen.html

A Jacksonian said...

Carlos - I take a further look at Raiffeisen in my post on the natural gas trade. They have had a few dirty deals go through them fronting for Mafioso. There are a few of those in Europe... and their effects on the integrity of international banking makes the system highly vulnerable to fraud.