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by John Helmer, Moscow 

Vadim Belyaev (lead image)  is not the first Russian bank robber to take Cyprus citizenship on his way to safe haven in New York City, and then find himself facing a billion-dollar recovery lawsuit from his Russian pursuers in New York Supreme Court.  He is, however, the very first to attempt to slip into New York’s Jewish community by renaming himself Wolfson after his father. The next step will be an interview with Masha and Konstantin  (Keith) Gessen of New Yorker to explain how he’s being persecuted on trumped-up charges by President Vladimir Putin.

In the annals of Russian bank robbery Vadim Belyaev is a relative newcomer, but he has been a quick learner; as of today he is the biggest scorer.

The personal thieving now charged against him in the New York Supreme Court – and in a parallel case in the UK High Court where he has joined Boris Mints in the defendants’ line-up – started in 2015 and ran until 2017.  Sergei Pugachev’s crimes at Mezhprombank began in 2008; by 2014 he had fled to London.  Andrei Borodin had already beaten him to London by three years after fleeing indictments for the looting of the Bank of Moscow.  Pugachev and Borodin started long ago to tell the western press they are Kremlin victims.

As for how much money Belyaev stole from the banks he controlled  before doing a runner, papers just filed by National Bank Trust (NBT) and Otkritie Bank in the New York Supreme Court have added his takings from fraudulent loans, fake Eurobond and securities transactions to a total of $1.203 billion. This figure is still under investigation, the recovery Complaint says: “Plaintiffs reserve their right to pursue additional claims.” At the conclusion of the 48-page paper,  Trust (NBT) and Otkritie apply for an “award of monetary damages and compensation in an amount to be determined at trial [and] pre-judgment and post-judgment interest, and attorneys’ fees.”

The case against Belyaev was filed on August 28. Read it in full here.  Belyaev has yet to file his defence or give interviews to the New York press; so far there is no mention of President Putin. Forbes Russia reports what happened when it tried asking Belyaev to respond. “Forbes sent a request to Otkritie Holding [Belyaev’s entity], passed questions to Vadim Belyaev through his lawyers, and also left the request in the mailbox of his apartment in New York. Belyaev’s lawyers did not comment on the lawsuit.”

Source online: https://iapps.courts.state.ny.us/

The New York Supreme Court in lower Manhattan is not particularly sympathetic to runaway robbers from Russia. In 2014 Leonid Lebedev applied for $2 billion against Victor Vekselberg and Leonid Blavatnik.   After five years Lebedev was dismissed before trial; branded a dishonest liar by the judge; and ordered to pay the defendants’ costs of about $50 million.  The pro-Putin side won; the New York press didn’t report the affair.   

Ilya Yurov, Belyaev’s predecessor in control of NBT, lost his claim against Otkritie Bank in the New York Supreme Court in November 2017. In that case, when Yurov was pressing him for evidence, earlier the same year, Belyaev testified: “I have only sporadic connections to New York…I do not believe I should be subjected to discovery procedures.” Yurov has called Belyaev a liar and a thief many times over. He declines to comment on the new case in New York.

Yurov was  the pioneer in large-scale loan stealing schemes through Cyprus; at the moment he is facing more than $800 million in recovery claims in the London courts. For the dossier of Yurov’s cases and claims, read this.

In the new case by NBT and Otkritie against Belyaev, the court papers say “Defendant Belyaev is a citizen of the Russian Federation and Cyprus, residing in New York County in the State of New York. On information and belief, Belyaev’s primary residence is located at 74 Wooster Street, New York, New York 10012.”

The outside of Belyaev’s home in Manhattan – 74 Wooster Street, in the SoHo district.

Belyaev’s name has not surfaced as the recipient of a Cyprus passport in the recent press disclosures  of Russians who have obtained Cyprus passports.  One of the runaway Russian bankers who has been identified in the Cyprus publicity, Dmitry Ananiev of Promsvyazbank,   has used the beach outside his villa at Limassol  as his platform for blaming “KGB-trained officials with little understanding of the market [who]are ruining Russia.”   

Cyprus sources warn that both men’s Cyprus nationality applications are under investigation. The evidence in the New York case that Belyaev was stealing Russian Central Bank funds and moving them through Cyprus front companies, run by Cypriot accountants, lawyers and managers, and may have used this money to pay the investment requirements for his passport, is worrying to Cyprus regulators. According to a Limassol business source, “this is a US case, and they will jump to attention for that reason. It’s the US angle that scares them the most.”

For ruining the Russian banking system, the New York court papers reveal Belyaev’s modus operandi. “As Otkritie Holding’s largest shareholder, Belyaev exercised close control over Otkritie Holding and its subsidiaries, and repeatedly used his control to siphon off assets from entities owned by Otkritie Holding for personal use and the use of his associates. Specifically, in the time period leading up to Bank Otkritie’s and NBT’s collapse in August 2017, Belyaev engaged in a number of schemes, many of which involved the same pattern and sequence of transactions, to divert money out of Bank Otkritie and NBT and into entities that he and his associates controlled.  This pattern of transactions was complex, but essentially, Belyaev would have NBT and Bank Otkritie issue loans that would then be transferred across various entities inside and outside of the official Otkritie Group … Belyaev’s collection of loyal subordinates within the Otkritie Group would paper and process the loans as if they were legitimate, but Belyaev authorized the loans knowing that they would not be repaid.”

“The loan proceeds would then be divided, combined, and transferred through an intricate network of shell entities in a series of transactions designed to obscure the source of the funds. These funds could go through dozens of transactions within a few weeks before ultimately ending up in accounts controlled by Belyaev or his associates.  As a result of Belyaev’s fraudulent loan schemes, and other acts of misconduct by Belyaev, Bank Otkritie went from being one of the top five private banks in Russia to having a deficit of US $8 billion, requiring the Central Bank of Russia to place it into temporary administration. NBT and other companies within the Otkritie Group also experienced severe financial distress, which caused some of them to declare bankruptcy or to become subjected to financial rehabilitation sponsored by the Russian state.”

“One of the primary mechanisms by which Belyaev and/or those acting at his direction engaged in fraudulent and improper transactions was through the use of a network of more than 150 shell companies, which were not officially disclosed as part of the Otkritie Group.” In the court papers, of the 150 – called “unofficial perimeter companies” – 26 were robber hideouts, 125 were get-away vehicles.

“On information and belief, at the direction and/or with approval of Belyaev, persons responsible for management of the Unofficial Perimeter Companies created two subgroups of such companies. The first subgroup was known, among Belyaev and his associates, as ‘OH+’ and consisted of 26 operating companies the primary purpose of which, on information and belief, was to act as counterparties in transactions with entities within the Otkritie Group for the ultimate benefit of Belyaev and other shareholders and executives of the Otkritie Group. On information and belief, the second subgroup of approximately 125 Unofficial Perimeter Companies served primarily as pass-through entities through which Belyaev and his associates funneled funds for the sole purpose of concealing the source, nature and ownership of those funds.”

When Yurov was running NBT in the years before Belyaev took over from him, a controlling manager was needed, sitting at a command post in Cyprus, to operate the vast number of entities and vaster number of transactions through hundreds of millions of dollars were moved. For Yurov, that manager was an Englishman named Benedict  Worsley. His role and rewards have been reported here.  

Right: Benedict Worsley in the disguise of himself he arranged with the Wall Street Journal;  over his shoulder in the illustration is Ilya Yurov, Worsley’s employer until Worsley accepted an engagement from Otkritie’s administrators to testify against Yurov.  Left, a real picture of Worsley, at least 20 years out of date because Worsley is now 52, can be found here

Tracing the names of the perimeter Cyprus companies to the Cyprus company registry records  identifies a half-dozen Cypriots, mostly accountants with their home apartments as business addresses. There is almost no overlapping between them and the entities they were signing for. None of the major Cyprus law firms or related management and accounting firms appears to have been engaged in the Belyaev schemes. “This could also mean,” comments a Limassol investigator, “ that the top lawyers are using their employees or junior partners when they know a big scam is taking place. Finding all these individuals, signing relationships with them, and operating the whole scheme without a central command and control center would be impossible. The key would be to find who is the central figure in all this. If the US Embassy in Cyprus decides there is political value, the FBI will already be on to him.”

The court papers spell out several types of Belyaev robbery. For example, “Symbolic Purchase and Sale of Securities: After receiving the loaned funds from Plaintiffs, the borrower (usually Otkritie Holding or OCAP [Otkritie Capital]) almost immediately (usually on the same day) used the borrowed funds to purchase the securities specified in the original loan agreement. However, in every instance, the borrower held those securities for just a few days and then sold them. In most instances, the borrower never used any of those sale proceeds to repay any of Plaintiffs’ loans that financed the stock purchases.”

Another example: “Fraudulent Loans to OICL [Otkritie Investments Cyprus Limited] and/or the Unofficial Perimeter Companies: Instead, after completing the symbolic purchase and sale of securities in Step 2, the borrower transferred the entirety of proceeds from those stock sales to other companies, often OICL or shell entities within the Unofficial Perimeter. Usually, each such transfer was papered as a ‘loan’. Thus, each time the borrower effectively re-lent the funds that it borrowed from Plaintiffs [NBT, Otkritie], which was usually prohibited under the terms of the loan agreements described in Step 1.”

Otkritie Investments Cyprus, registered in Cyprus in 2012, was a pass-through entity, owned by Elinova Holdings Ltd., which in turn was owned by Otkritie Holdings.   In correspondence with the US Securities and Exchange Commission, dated June 30, 2017,  three Russians were identified as responsible:  Alexander Tarabrin and Dmitri Dubenetskiy for the holding name, and Kristina Khakhulina for Otkritie Investments Cyprus.   An SEC document issued weeks later, on November 1, 2017, confirmed the names of several Cypriot and Russian directors working with Belyaev, each with legal responsibility to know and approve what he was doing.    


Click on link to enlarge: https://www.sec.gov/

Except for Belyaev, none of these names appears in the New York court documents so far. The Cypriots are minor functionaries. Next to Belyaev’s name, however, are two  Russian business figures  with notable political connections — Ruben Aganbegyan and Kirill Androsov. Aganbegyan’s role in the NBT and Otkritie affairs has already been documented here.  

Androsov’s involvement in Belyaev’s operations has not been reported. Androsov is a former Russian government official and protégé of  German Gref, when he was in charge of the federal  Ministry of Economic Development and Trade. When Gref moved on to run Sberbank, Androsov shifted into lines of business which have attracted heavy financing from Sberbank. The record of Ruspetro, a problematic oil driller in northwestern Russia,   was revealed here.   Androsov’s Luxembourg entity, Altera Capital,  has also acted as go-between for other failing Russian companies.

At far left, Kirill Androsov appears on the government side of the table, seated next to Prime Minister Mikhail Mishustin, President Vladimir Putin, and Economic Development Minister Maxim Oreshkin, March 11, 2020.  The meeting was devoted to state support for high technology investments. According to the Kremlin record, “the President noted, in particular, that the state will create all the necessary conditions for investors to work, including lifting excessive pressure from the administrative and law enforcement bodies.”

The US court papers describe a scheme using a Cyprus front called Atesolia   through which an estimated $641 million was transferred in “a series of sham transactions, employing the overall scheme described above, to transfer funds from NBT through OCAP [Otkritie Capital] to OICL [Otkritie Investments Cyprus Limited], which then went through a chain of 83 transactions and were ultimately transferred to Atesolia.”  A diagram of how Belyaev moved the money illustrates the operation:

Another group of diversion schemes, worth an estimated $509 million,   have been reported through Nemyna Trading.  Cut-out entity names used by Belyaev in these operations include other Cyprus-registered companies  Rafinha, Forcar, Jelburg, Baynil, Faces Investments, Frekidol, and Spesipa Trading; together with the British Virgins Islands entities,  Denian and Highway Investing.  Schemes associated with an entity called Vefidana   added up to $162 million. Wardbase Trading  was used to  divert $188 million.  

Altogether, avoiding double-counting, the claims now tabled in court against Belyaev have totalled $1,203 million.

The Central Bank began its intervention after the horse had bolted. “On August 29, 2017, Otkritie Holding’s debt to NBT—which Otkritie Holding assumed on August 16, 2017…—was rapidly restructured as follows: (i) Otkritie Holding’s loan repayment deadlines were extended by 3 to 6 years to November 2025, and (ii) the deadline by which Otkritie Holding had to make its first interest payment to NBT was extended until the end of third calendar quarter of 2020. On information and belief, the restructuring of Otkritie Holding’s debt to NBT was devised, orchestrated, and/or authorized by Belyaev in his capacity as Otkritie Holding’s then President, with the intent to render the supposed loans effectively unrecoverable.”

“Mere hours later on August 29, 2017, the Central Bank of Russia formally placed Bank Otkritie into temporary administration, during which Bank Otkritie’s then-existing management was removed and the controlling stake in Bank Otkritie was transferred to the Central Bank of Russia.  In the fall of 2017, the Central Bank of Russia determined that Bank Otkritie’s liabilities exceeded its assets by a staggering RUB 350 billion (approx. US $5 billion), which, at  the time, was described as one of the largest deficits posted by any Russian bank in the nation’s history.”

The archive of Belyaev’s wrongdoings, as they were first uncovered, can be followed here.

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