Less than an hour later, FBI agents took the 48-year old Kuznetsov into custody from a restaurant in Bronx.
The indictment alleges that Kuznetsov set up an off-shore company named Nikal and opened a bank account in its name in the Caribbean island of Antigua. The co-conspirator [“CC-1”] then transferred funds into that account between 2000 and 2005.
The reason for such transfers, the indictment says, is Kuznetsov’s agreement not to turn “CC-1” over to the authorities for his kick-back schemes.
At his arraignment yesterday Kuznetsov appeared at the U.S. Federal Court in Manhattan dressed in a green polo-shirt, khaki shorts, and moccasins. He pleaded not guilty to the single charge of money laundering conspiracy.
Marie Okabe is the UN secretary-general's deputy spokesperson. She said yesterday that this inquiry [Kuznetsov’s] comes as a direct consequence of the investigation into another UN official, Alexander Yakovlev.
“We have been cooperating with the U.S. authorities on this inquiry, which comes out of an investigation that had been initiated by OIOS [UN Office of Internal Oversight Services] against Mr. Yakovlev. We don’t know more in terms of how widespread it is, we don’t know at this point if more will be uncovered,” Okabe said.
Yakovlev, a former UN procurement officer, was indicted on 8 August after a report of the Independent Committee investigating corruption charges in Iraq’s Oil-For-Food Program accused him of receiving more than $1 million in bribes. He pleaded guilty to all charges pressed against him.
Marion Seltzer is Kuznetsov’s defense attorney. She told RFE/RL that despite indictment allegations she did not see connection between Yakovlev’s and her client’s cases, and the oil-for-food program.
“I am aware of its existence [Yakovlev’s case]. I am not sure that this case [Kuznetsov’s] involves the oil-for-food program. I believe that it doesn’t,” Seltzer said.
Despite some similarities between Yakovlev’s and Kuznetsov’s cases, there are at least two important distinctions. Before his arrest Yakovlev was under internal UN investigation. Kuznetsov was not.
Yakovlev worked as a procurement officer at the UN, a position by appointment. Kuznetsov on the other hand held since January 2004 the more senior position of an elected chairman of the UN General Assembly's budget watchdog committee. Candidates for such elected positions are recommended by their own countries.
Alexander Demkin, Russia’s vice-consul in New York, said that at the time of his arrest Kuznetsov was not employed as a Russian diplomat. He said, however, that the Russian Foreign Ministry is trying to establish whether he has some sort of other immunity apart from the one waived by the UN.
Okabe of the UN again.
“His status as whether he is an active member of the Russian government, we are still trying to, I don’t know what his status is. We, as I mentioned to you, waived his immunity from our [UN] side because of his status has been covered under [UN charter] article five. Is there has been communication? Yes, I believe the [UN] secretary-general has spoken to [Russian Foreign Minister Sergei] Mr. Lavrov,” Okabe said.
Marion Seltzer told RFE/RL after the arraignment that she has been in contact with the Russian consular officials in New York and that they are going to look into this matter.
“We’re investigating whether or not he has immunity despite what the United Nations said and despite the position that they took. It’s not confirmed one way or another yet. We’ve discussed it [with Russian consulate officials] and we’re waiting to see if in fact he does have diplomatic immunity because of his position with the Russian government,” Seltzer said.
Kuznetsov's bail has been set at $1.5 million. He has been ordered to surrender his travel documents and not leave New York.