Accessibility links

Russia Leverages Western Courts To Chase Wealthy Fugitives

  • Carl Schreck

Janna Bullock has been accused of stealing Russian state funds.

Janna Bullock has been accused of stealing Russian state funds.

WASHINGTON -- On a balmy morning in August, Janna Bullock steered a light-blue convertible into the driveway of her oceanfront mansion in the swanky hamlet of Southampton on New York’s Atlantic Coast. Waiting for her was a man bearing a stack of documents.

Bullock, a prominent Manhattan-based real estate tycoon and socialite, accelerated toward the house, hopped out of the car and hustled for the door. The man gave chase and touched her with the documents, saying she’d been served with legal papers, according to a U.S. federal court affidavit.

The documents, part of a civil action lodged against Bullock by state-owned Russian banking giant Gazprombank, fell to the steps in front of the sprawling home and remained there as Bullock sequestered herself inside.

From the gilded shores of the Hamptons and the French Riviera to the London stomping grounds of the super-rich, Russia is pursuing ex-officials and entrepreneurs like Bullock who amassed wealth in Russia and then fled the country after falling afoul of powerful officials.

And despite Moscow’s chilled relations with the West over the Ukraine crisis, these efforts in recent months have yielded several favorable rulings for Russia in U.S. and European courts.

The targets of these legal campaigns claim they are victims of a corrupt Russian state, though some critics say they are merely assuming the mantle of political refugees to protect illicit gains purloined in murky business dealings.

Bullock, whom Russia accuses of stealing state funds to bankroll a lavish lifestyle, now faces potential fines or jail time, legal experts say, if she fails to comply with a U.S. court order to reveal details of her wealth to Gazprombank, the lending arm of Russian energy giant Gazprom.

A Manhattan federal court issued the December 10 order in connection with a Cyprus lawsuit lodged by Gazprombank claiming more than $20 million in damages due to alleged embezzlement by Bullock and her ex-husband, Aleksei Kuznetsov, the Moscow Oblast's former finance minister. Kuznetsov is currently in French custody.

The bank’s allegations echo criminal charges against the duo in Russia, which is trying to extradite Kuznetsov and has vowed to apprehend Bullock as well.

A Cypriot court has issued a worldwide freeze on $26.3 million of Bullock’s property and ordered her to provide an extensive account of her global assets to Gazprombank. A copy of that order was among the documents served to Bullock outside her beachside Hamptons home in August.

Gazprombank petitioned the Manhattan court for assistance after Bullock, 47, failed to abide by the Cyprus court's directive, which she claims to have not received.

Neither Bullock nor her lawyer responded to requests for comment. Bullock has publicly denied any wrongdoing and said that her business holdings in Russia were illegally seized and looted by so-called corporate “raiders” colluding with corrupt officials.

Gazprombank declined to comment when contacted through a spokesman, citing “the ongoing nature of the civil case and its sensitivity.” A source close to the case, however, told RFE/RL that “those bringing legal action against [Bullock] are determined to relentlessly pursue the case to successful conclusion.”

Go West

Rights Activists and Western officials have accused the Russian government of using its courts to mete out selective justice against political opponents and wrest assets from entrepreneurs. Some critics say both Western courts and Interpol are abetting Russia's efforts.

After a French appellate court in October paved the way for fugitive Kazakh banker Mukhtar Ablyazov to be extradited to Russia, Russian chess legend and Kremlin opponent Garry Kasparov called the ruling a “disgrace for France.”

The same court in October authorized the extradition of Bullock’s ex-husband, Kuznetsov. Ablyazov and Kuznetsov were arrested separately by French police on Interpol warrants in 2013 in what they call politically motivated cases. Both are appealing the recent French rulings.

Interpol “Red Notice” for the arrest of Aleksei Kuznetsov

Interpol “Red Notice” for the arrest of Aleksei Kuznetsov

Russia has also mounted a campaign against self-exiled banker Sergei Pugachyov, once one of Russia’s richest men, who has been dubbed “Putin’s Banker” in the media due to alleged close ties he built with Russian President Vladimir Putin in the 1990s.

In November, Russia secured an Interpol warrant against Pugachyov based on allegations that he looted the bank he controlled. London’s High Court last month upheld a $2 billion worldwide asset freeze issued against Pugachyov at the request of a Russian state-controlled liquidator.

Pugachyov, who fled to Britain in 2011, denies the allegations and has portrayed himself as a victim of Russian intrigue. "Today in Russia there is no private property. There are only serfs who belong to Putin," he told the Financial Times in October.

But skeptics say he and other wealthy exiles wanted in Russia claim they are targets of political persecution only after a ruthless system they benefited from turned on them.

“I know most of these guys personally. Believe me: I’ve been investigating things against them for 10 years at least,” Russian tycoon Aleksandr Lebedev told RFE/RL.

“There’s not a penny in their claims that they’re political victims. It’s just a defense which is suggested by their lawyers.”

Lebedev, a banker and co-owner of the independent Moscow-based newspaper Novaya Gazeta, has called for the establishment of an “international anticorruption force” similar to Interpol to crackdown on “crooked businesspeople working with corrupt officials.”

He has cited the allegations against Bullock, Kuznestov, Pugachyov and Ablyazov as worthy of Western law enforcement authorities’ attention.

Russian opposition leader and anticorruption activist Aleksei Navalny, who last month was convicted for the second time on fraud charges widely seen as retribution for his political activities, has also called for Russia to prosecute Kuznetsov.

Discerning legitimate victims of political persecution from corrupt former insiders seeking shelter abroad is difficult given a Russia business landscape in which success is often based on informal guarantees from officials, said Maxim Trudolyubov, opinion editor at the Russian business daily Vedomosti.

Only if Russia establishes a “functioning legal system” in “some uncertain future” will it be possible to establish who acted in “good faith and who was just a regular criminal using this murky environment to line his pockets,” Trudolyubov told RFE/RL.

Interpol Intrigue

Interpol has declined to help Russia in some politically charged cases: The agency, for example, twice rejected Russian requests for the arrest of U.K.-based businessman William Browder, calling Russian accusations against him "predominantly political in nature."

Browder,whose asset management fund was once the largest foreign investor in Russia, was barred from entering the country in 2005.

He later spearheaded a campaign that led to a 2012 U.S. law sanctioning alleged Russian rights abusers, including those implicated in the death of his employee, Sergei Magnitsky, who exposed a $230 million tax fraud purportedly committed by Russian law enforcement and tax officials.

An undated phtograph made available by Interpol showing Sergei Pugachev, who has been described as Putin's banker.

An undated phtograph made available by Interpol showing Sergei Pugachev, who has been described as Putin's banker.

Russia has filed a third request for an Interpol warrant against Browder, who in 2013 was convicted in absentia by a Moscow court on tax evasion charges he says were fabricated to punish him for his global activism against Russian officials.

He says Interpol told him it would consider Russia’s appeal at a November 21 meeting of the agency’s relevant commission but that it has yet to inform him of a decision. The delay concerns him.

“This is very different from their behavior in May 2013, when they informed me on the second day of the [commission] meeting that Russia's request was politically motivated,” Browder told RFE/RL.

Interpol did not respond to a request for comment on the matter. Browder says the France-based agency informed his lawyers last month that according to its rules, it has until January 20 to communicate the decision to him.

“I'm still in the dark about whether they caved to Russian pressure or not,” he said.

‘A Matter Of Time’

It is unclear whether Russia has convinced Interpol to issue an arrest warrant for Bullock, a native of the Belarusian town of Pinsk who emigrated to the United States during the twilight of the Soviet Union.

Her name does not appear on an abridged version of the agency’s so-called “red notice” list on its website, meaning either no such warrant has been issued against her or Russia has requested that it not be publicized.

But Russian authorities appear to be escalating their pressure against the businesswoman. In October, Russian Investigative Committee spokesman Vladimir Markin said “it’s just a matter of time” before Bullock is returned to Russia to face charges alongside Kuznetsov.

Investigators allege that Kuznetsov used his position as regional finance minister to facilitate the embezzlement of hundreds of millions of dollars from state coffers, including to companies controlled by Bullock.

Bullock, who split time between Moscow and New York before the couple fled Russia in 2008 amid corruption allegations, told The New York Times in 2010 that her real estate empire stretching from Manhattan to Moscow was at one point worth $2 billion.

Days before the Lyon appellate court authorized Kuznetsov’s extradition in October, Russia’s Investigative Committee said it had discovered hundreds of paintings, antiques, and rare books in a St. Petersburg warehouse that were slated to be shipped to Bullock in the United States.

The agency said in a statement that there is “sufficient evidence to presume” that the cache was purchased with money allegedly embezzled by Bullock, Kuznetsov, and other conspirators.

Kuznetsov’s French lawyer, Gregoire Rincourt, told the Russian newspaper Kommersant that the collection did not belong to his client or to Bullock, an art collector who was elected to the board of the world-renowned Guggenheim Museum in 2007 but stepped down three years later.

“Janna Bullock long ago took everything she could out of Russia,” Kommersant quoted Ricourt as saying. Russian investigators also say France has seized two hotels owned by Bullock in the posh French resort town of Courchevel in connection with the criminal case.

It is unlikely that U.S. authorities would hand Bullock over to Russia given her U.S. citizenship and the lack of an extradition treaty between the two countries, though Moscow has reportedly sought American help in its investigation.

Interfax cited an unidentified source last year as saying that Russian authorities have asked the U.S. Department of Justice to assist in questioning Bullock and “seizing her property.”

"Our U.S. colleagues have assured [us] they will treat the Russian request as seriously as possible," Interfax quoted the source as saying.

Justice Department spokesman Peter Carr declined to comment on the Interfax report or to what degree the department is cooperating with its Russian counterparts on other matters.

“We generally do not comment on whether a foreign government has made request for assistance,” Carr told RFE/RL.

In the meantime, Gazprombank is using the U.S. court system to target the Hamptons mansion where Bullock was handed court papers in August, as well as a second one she owns down the street.

Following media reports that Bullock is trying to sell the two homes for a total of $51 million, the bank filed a petition in the Manhattan federal court suggesting the sales could violate the worldwide asset freeze issued against her by the Cypriot court.

Gazprombank is now seeking to serve subpoenas on the New York realtors reportedly handling the listings, according to a December 22 petition filed with the court.

Bullock’s lawyer has challenged the motion, arguing that it is “premature” because she has not yet been properly served with the Cypriot freezing order.

XS
SM
MD
LG