Son of Senior Russian Government Official to Pay US$5.9 Million to the US Treasury in the First Money Laundering Action Linked to Magnitsky Case
May 13, 2017
Press Release
For Immediate Distribution
Son of Senior Russian Government Official to Pay US$5.9 Million to the US Treasury in the First Money Laundering Action Linked to Magnitsky Case
13 May 2017 – Denis Katsyv, the son of a senior Russian government official, will pay US$5.9 million to the US Treasury in the first case in the West linked to the $230m proceeds from the Russian fraud that Sergei Magnitsky exposed and was eventually killed over.
“This is a huge victory in our campaign for justice for Sergei Magnitsky. The amount to be paid is more than triple the amount of money laundering proceeds that was thus far identified by the US government in New York connected to Prevezon,” said William Browder, leader of the global Magnitsky Justice campaign.
“This sends a clear message to the people who received that money that it’s not safe in the West and will be seized. I believe that this case will give the green light to other countries to follow suit,” said William Browder, who described the Magnitsky justice campaign in a New York Times best-seller, “Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice.”
The stipulation to pay US$5.9 million to the US Treasury has been signed on 12 May 2017 by Russian national Denis Katsyv, in his capacity as owner of Cyprus-based Prevezon Holdings and a web of other offshore companies, including IKR, Martash Holdings, Ferencoi Investments Ltd and as “legal representative” of Kolevins Ltd. The stipulation will have to be approved by the US court to go into effect.
After US$230 million had been stolen by a group of Russian officials and organized criminals, a wide “Byzantine” network of shell companies and conduit accounts was used to launder the stolen proceeds, some of which have been traced by the US Department of Justice to the real estate properties in New York purchased by the Katsyv-owned Cypriot company, Prevezon Holdings.
In 2013, the US Department of Justice froze Prevezon’s assets, and the case was scheduled to go to trial on Monday, 15 May 2017. Denis Katsyv tried to dismiss the US Justice Department’s action on the eve of the trial, challenging the basis for the money laundering allegations against him.
In an opinion issued five days before the trial, on 10 May 2017, United States District Judge William Pauley III dismissed Prevezon’s motion.
The court found sufficient basis to try the case on four different wrong-doings identified by the US Department of Justice, including (1) fraud against HSBC, (2) transportation of stolen property, (3) bribery of a Russian official, and (4) money laundering.
In its 10 May 2017 opinion, the US court also upheld the US Justice Department’s money tracing analysis in relation to the US$230 million fraud proceeds. The court found that the US Government presented evidence that “the money laundering scheme was designed to conceal the illegal nature and source of the $1.9 million [traced to Prevezon] at issue,” including that “some of the accounts of the conduit entities were opened a few months before the transfers at issue, at the same bank on the same day;” two intermediary accounts had “strikingly similar pattern[s] of activity in their bank accounts;” “the majority of their incoming transfers came from three senders, one of whom routed money from an account at a bank designated by the U.S. Treasury as money laundering concern;” “a total of five accounts reflecting similar patterns of activity were repeatedly accessed from the same IP address,” and that “dividing proceeds to avoid detection is a hallmark of money laundering.”
Two days later Prevezon signed the stipulation to pay US$5.9 million to settle the US Justice Department’s money laundering action and avoid going to trial.
Sergei Magnitsky, a Russian lawyer who uncovered the massive corruption perpetrated systematically by Russian officials and organized criminals, including the theft of US$230 million in 2007, was tortured and killed in Russian police custody after exposing it. The Russian government prosecuted Sergei Magnitsky posthumously and exonerated all officials involved in the US$230 million fraud.
Sergei Magnitsky’s colleagues have been able to continue his investigation, and uncovered the vast money laundering network spanning multiple jurisdictions and hundreds of conduit accounts.
Denis Katsyv’s and Prevezon’s accounts remain subject to a criminal money laundering investigation in Switzerland conducted by the Swiss Attorney General. Switzerland was the first country to act in relation to the US$230 million fraud proceeds going to Prevezon accounts imposing account freeze in 2012.
For more information, please contact:
Justice for Sergei Magnitsky
e-mail: info@lawandorderinrussia.org
twitter.com/Billbrowder
Comments
Got something to say?
For more information please visit