The woman offering compromising information about Presidential candidate Hillary Clinton to Donald Trump, Jr is no ordinary Russian aparatchik. She is Natalia Veselnitskaya, whose high-powered Moscow-based law firm represented a concern accused by the US Treasury Department of stealing US$235 million from a US-based investment fund through an audacious plan tied to top Kremlin officials.
Donald Trump Jr. acknowledged publicly in emails on July 9 that he and Jared Kushner, the president's son in law, and political operative Paul Manafort had met with Veselnitskaya in an attempt to find politically embarrassing materials on Clinton. A later string of embarrassing emails by Trump Jr specifically tied the meeting to attempts by the Russian government to subvert the US election.
Robert Goldstone, a publicist and former British tabloid reporter who helped to set up the meeting, called Veselnitskya “simply a private citizen.” She appears to have been a good deal more than that. Veselnitskaya was initially refused entry to the United States in 2016 as a lawyer representing Denis Katsyv and other defendants who the US Treasury Department alleged used money stolen from Hermitage Capital Ltd. to buy property in the United States.
Katsyv is the sole shareholder in Prevezon Holdings Ltd, incorporated in Cyprus, identified as the wild west of global financial shenanigans, as Asia Sentinel reported on July 6. Katsyv is the son of Petr Katsyv, the vice president of Russia's state-run rail monopoly. The following diagram, from the US Justice Department, illustrates the myriad channels that moved the money.
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US prosecutors alleged Prevezon had subverted the Russian legal system to steal the money from Hermitage, whose principal shareholder, William Browder, was once the biggest western stockholder in Russian companies. However, the acting US Attorney, Joon H. Kim, announced in May that his office had settled the case for US$5.9 million. Prevezon was not required to acknowledge wrongdoing.
Other knowledgeable sources in New York say political pressure didn't dictate the end of the Prevezon case. It was a weak case, a source said, that got weaker when the judge ruled that prosecutors had to show a direct relationship between stolen money going into Prevezon accounts and funds going out of the accounts to buy laundering assets. Applying the stricter evidentiary standards, the US could only trace something like U$2 million in stolen money to the United States.
Kim replaced Preet Bharara, the hard-charging US attorney in Manhattan, who was abruptly fired in March by President Trump after first saying Bharara could stay on.
Browder has staged a global fight to get back money that he alleges was stolen by corrupt officials in Moscow through the tax system. In 2007, Hermitage's Moscow office was raided on allegations of tax evasion despite a belief by the company that it had actually paid more than required.
The money subsequently disappeared, with at least some of it thought to have ended up in the Cyprus branch of the Tanzania-based FBME Bank via a series of front companies including Nomirex Trading UK, Balec Trading Ltd., Quartell Trading Ltd., of the UK, Baikonur Worldwide Ltd. and Arivust Holdings of Cyprus. In May, the US Treasury’s FinCEN unit shut down FBME Bank’s Cyprus branch by freezing its ability to move funds through the US financial system.
Arivust in turn is headed by Vladien Stepanov, the ex-husband of Olga Stepanov, the head of the Moscow Tax Office. It is that tax office that is alleged to have been responsible for the trumped-up tax charges that allowed the government to seize the Hermitage assets. In a telephone interview, Browder alleged that substantial amounts of the money stolen from Hermitage Capital had ended up in the hands of Vladimir Putin’s children’s godfather and, by extension to Putin himself.
There is considerably more to Prevezon, whose tentacles reach deep into the upper levels of Russian government. The case was intended to expose how Russian Mafia figures had transferred the money into the US and bought real estate in New York. It was also to highlight the suspicious death of Sergei Magnitsky, a lawyer and auditor for Browder who was beaten to death in a Russian jail cell.
That resulted in passage by the US Congress of what is known as the Magnitsky Act, aimed at blacklisting Russian human rights abusers, and includes freezing Russian funds invested in US assets. The Magnitsky Act is said to have enraged Putin, who put a stop to adoptions of Russian children by American prospective parents.
Another Browder lawyer, Nikolai Gorokhov, representing Magnitsky's family, fell from a fourth-floor Moscow apartment window, supposedly while trying to move a bathtub, a day before he was scheduled to appear in court. He is recovering from his injuries. He was slated to be a witness in the Prevezon money-laundering suit by Bharara. It is unsure whether he will be able to testify. The abrupt conclusion of the case against Prevezon has raised questions whether political pressure had been applied to cut it short although there has been no complaint from the Manhattan office.
"What most concerns me is: Has there been any political pressure applied in this?" Louise Shelley, an illicit-finance expert who was set to testify in support of the US government, told CNN at the time.
Shelley, who founded George Mason University's Terrorism, Transnational Crime and Corruption Center, said the alleged money launderers got off easy. "I think they won something. There's no recognition of wrongdoing," she said.