Accessibility links

U.S. Seeks Court Order To Enforce $6 Million Prevezon Settlement


Russian lawyer Natalya Veselnitskaya traveled to the United States in June 2016 as part of the ongoing pretrial maneuvering for Prevezon. It later emerged that during that visit, she met with Trump’s son Donald Jr., along with a Russian-American lobbyist, and Trump’s then-campaign manager, Paul Manafort.

WASHINGTON -- U.S. prosecutors have asked a judge to enforce a $6 million settlement agreement with a Russia-linked company known as Prevezon, the latest chapter in a legal fight that has rippled through U.S.-Russian relations.

In a motion filed on November 15, federal prosecutors said Prevezon had failed to meet a deadline to make payment and was instead seeking to rewrite the terms of the settlement. The prosecutors asked Judge William Pauley to force the company to pay up.

It was unclear if Prevezon’s lawyers had filed a response on November 16. A phone call to the New York firm representing them was not immediately returned.

The Prevezon case officially dates back to 2013 when U.S. authorities sought to seize about $14 million in assets from the company, which was registered in Cyprus and largely owned by well-connected Russian businessman Denis Katsyv.

U.S. officials alleged that the assets, mainly Manhattan real estate, came from a $230 million tax scheme, uncovered seven years earlier, to defraud the Russian government.

That scheme, which Moscow acknowledged occurred, was revealed in part by Russian whistle-blower Sergei Magnitsky, who died in a Moscow jail in 2009 after suffering what his supporters said amounted to torture.

William Browder
William Browder

Magnitsky was accused of committing the fraud and was later convicted posthumously. His employer, British-American investor Bill Browder, has also faced related criminal charges in Russia, and Moscow has repeatedly sought his extradition.

With thousands of pages of evidence, affidavits, and bank records detailing byzantine transfers of money, the Prevezon case had been scheduled to go to trial on May 15. On May 11, in a pretrial conference, attorneys from the prosecution and the defense had sparred over the nature of financial records obtained in Russia and the credibility of a translator used by Prevezon’s Russian lawyers.

On May 12, however, the two sides announced a settlement, with Prevezon admitting no wrongdoing and agreeing to pay $6 million.

The timing of the settlement announcement raised eyebrows for many observers. The settlement came two months after the U.S. attorney overseeing the case, Preet Bharara, was fired after refusing to resign in what the White House said was a routine turnover of Justice Department appointees. It also came amid mounting scrutiny of interactions by President Donald Trump’s associates with Russian officials. FBI Director James Comey was fired earlier that same week for what Trump later said was Comey’s handling of the bureau’s investigation of those Russian ties.

There’s no indication that the timing of Comey’s firing and the Prevezon settlement were connected.

Prevezon’s main Russian lawyer was Natalya Veselnitskaya, who traveled to the United States in June 2016 as part of the ongoing pretrial maneuvering for Prevezon. It later emerged that during that visit, she met with Trump’s son Donald Jr., along with a Russian-American lobbyist, and Trump’s then-campaign manager, Paul Manafort.

Manafort, who has been a focus of the FBI investigation, was indicted last month by Justice Department Special Counsel Robert Mueller on conspiracy, bank fraud, and other charges connected to his years of work for a pro-Russian political party in Ukraine.

Late last month, Veselnitskaya petitioned the U.S. court, seeking permission to travel to the United States in connection with efforts to make the $6 million settlement payment. Lawyers for Prevezon told the court that half of that amount had been scheduled to come from a Dutch bank account that U.S. officials had requested frozen.

Dutch authorities had lifted the freeze in October, but then reimposed it following a legal complaint filed by Browder.

The new filing from U.S. prosecutors said that Prevezon was fully aware of the situation surrounding the Dutch funds and asserted that Prevezon was seeking to retroactively rewrite the terms of the settlement.

The filing also indicated that the two sides had also tried to reach a settlement as early as 2015 and that the government had made an offer for far less than $6 million -- around $2 million.

Veselnitskaya’s 2016 meeting with Trump also included discussion of the adoption ban that the Kremlin instituted in 2013, following the passage of the Magnitsky Act. She was also involved in setting up a secretive lobbying group that sought to undermine the legislation and an expanded version that was passed earlier this year.

XS
SM
MD
LG