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Published in Stream:
Russia Update: November 4, 2015
Press by
The Interpreter
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Russian Businessman Detained on $1.6 Million Money-Laundering Charges Could Be Involved in $46 Billion
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Russian businessman Aleksandr Grigoryev has been detained on suspicions of money-laundering $1.6 million from banks that lost their licenses, and could be involved in as much as $46 billion, Moscow Times reported, citing Kommersant.

The Moscow Times reports:
Grigoryev — the co-owner of several banks, including the failed Zapadny and Doninvest banks — was detained Friday in a central Moscow restaurant where he was dining with his girlfriend, the report said.

The 44-year-old entrepreneur was denied bail and is being held in detention on two counts of fraud involving a sum of 105 million rubles ($1.6 million), Kommersant reported.

Investigators also suspect Grigoryev, who was at one time vice president of the Moscow Boxing Federation, of leading one of Russia's largest organized crime groups, involving around 60 banks and more than 500 people, the report said.

In the past four years, the ring could have sluiced more than $46 billion abroad through the banks — some of which are partly state owned and some of which were declared bankrupt after Grigoryev became co-owner, the report said.

Kommersant reported that after he was arrested and law-enforcers had sat Grigoryev down at the table, they asked if he didn't want to return the money voluntarily. But he said he didn't have the cash and knew nothing about it. Earlier he had asked to be released on bail and said he had 105 million rubles ($1.6 million) he could put up for the bail -- which happens to be the amount of the damages sought from him now.

Police in Rostov region have been investigating the case since last April. They say that when Doninvest lost its license, Grigoryev was given "shadow control" over the finances. Then he and two accomplices, Alla Kalitvanskaya and her deputy Svetlana Gulenovay, allegedly organized the removal of more than a billion rubles ($16 million) from the bank into groups controlled by their companies, and concluded fictitious real estate deals in the Crimea totaling more than 150 million rubles ($2.4 million).

Why Grigoryev is only charged with $1.6 million now, given these other deals, is a mystery.

Grigoryev's capers were organized through fictitious offshore companies involving citizens of Moldova. In one scheme, parties to a contract would sue the firms for non-fullfulment in Moldovan courts and the courts would order damages to be paid to Grigoryev's account. According to Moldovan law-enforcement involved in combating money-laundering, this type of scheme has led to $18.5 billion in settlements, which were only a cover for withdrawing cash.

Grigoryev denies the charges, although before his arrest, he had learned about a possible case against him and reportedly paid a "fixer" 300 million rubles ($4.8 million) to "make it go away." Just days before his arrest, the fixer had reassured Grigoryev that everything was fine.

Grigoryev's case involving the three banks that lost their license is not even the main interest of the authorities, says Kommersant. Grigoryev was involved in high-risk loans and junk assets as well as getting cash out of Russia. But what's more serious, despite these staggering sums, is Grigoryev's role as the leader of the large organized crime network of 500 people  involved in obnalichka, a slang term which grew popular in Russia during the 1990s for fake deals involving unreported cash and avoidance of taxes.

According to Kommersant, this network involving 60 banks was said to turn over 1 trillion rubles ($16 billion) annually, and which reportedly took out about $46 billion from Russia in the last 4 years. Some of these banks have already lost their licenses.

-- Catherine A. Fitzpatrick