Day: February 23, 2024

AUSTIN (KXAN) — Vadim Wolfson, a Russian national and current U.S. legal permanent resident, was arrested earlier Thursday in Austin by local federal task force officers, according to court records.

Documents state Wolfson is the founder of Bank Otkritie, formerly one of the largest privately-held banks in Russia, before he moved to the U.S. around 2018.

The arrest came from a federal warrant issued by the Southern District of New York. According to court documents, Wolfson and others have been indicted on federal charges related to violations of the International Emergency Economic Powers Act (IEEPA) and money laundering.

IEEPA Senate Report 2007Download

Court documents list two co-defendants, Andrey Kostin, a Russian national who resides in Russia, and a U.S. national residing in New Jersey.

Attorney information for Wolfson wasn’t listed as of Thursday evening. KXAN will update this story when that information becomes available.

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Records state the defendants all participated in a scheme using shell companies to own and control assets worth “tens of millions of dollars” to and for the benefit of Kostin, a Russian oligarch who, since 2002, has been the president and chairman of VTB Bank, one of the largest Russian state-owned banking groups.

Among those assets were a luxury home in Aspen, Colorado, which was primarily used by Wolfson, and two luxury superyachts valued at over $135 million, according to the Department of Justice.

In 2018, Kostin was sanctioned and designated a Specially Designated National and put on the Blocked Persons list (“SDN List”) by the U.S. Department of Treasury’s Office of Foreign Assets Control (“OFAC”).

“Unless otherwise authorized or exempt, transactions conducted by U.S. persons, including U.S. financial institutions, or occurring in the United States are prohibited if they involve transferring, paying, exporting, withdrawing, or otherwise dealing in the property or interests in property of an entity or individual listed on the SDN List,” documents state.

According to court records, Kostin was made aware that the U.S. was likely going to impose new sanctions that would target Russian oligarchs as a result of the ongoing Russia-Ukraine war.

A news report cited in the court documents state Kostin was aware there was “a high risk his name would be added to a new U.S. list of people close to Vladimir Putin, but that he was unfazed by the prospect.”

The indictment states Wolfson moved to New York around 2018 where he resided at the time but does not specifically reference why Wolfson was in Austin.

KXAN found two property records in Austin listing Wolfson as the owner, a nearly 4.5-acre ranch in southwest Austin purchased by Wolfson in 2020, and a home in west Austin’s affluent Tarrytown neighborhood purchased by Wolfson in 2022.

The two properties are valued at nearly $10 million, according to property records.

According to the DOJ, U.S. Attorney Damian Williams said:

“As alleged, sanctioned oligarch Andrey Kostin and his co-defendants flouted U.S. sanctions to support his exceptionally lavish lifestyle.  Through complex schemes involving shell companies and illicit transactions, Kostin and his associates allegedly laundered funds and illegally made transactions with U.S. currency for the maintenance and enhancement of Kostin’s superyachts and luxury Aspen home, blatantly disregarding U.S. law.  This investigation highlights the collaborative efforts of this Office and our law enforcement partners around the globe to uphold critical sanctions put in place to support our national security goals and hold accountable those who seek to undermine them.“

For the latest news, weather, sports, and streaming video, head to KXAN Austin.

“We are not a gang. We are not the mafia. We don’t seek revenge like they did in Mario Puzo’s book The Godfather. We are a nation. A nation of laws.” Those were the fulminations of Vladimir Solovyov, a Russian television host, denying that the Kremlin had anything to do with the aeroplane explosion that killed Yevgeny Prigozhin.

Solovyov’s comments are a fine example of that excellent French saying: “Qui s’excuse, s’accuse”. (“He who excuses himself, accuses himself.”) The pro-Kremlin propagandist understands completely that the killing of Prigozhin had all the hallmarks of a mafia hit.

Vladimir Putin follows a mobster honour code. Betrayal and disloyalty are the sins that can never be forgiven. That is why the Kremlin has sent hit-men across Europe, to kill defectors from the Russian intelligence services. As boss of the Wagner militia, Prigozhin — known as Putin’s chef — provided cannon fodder for Russia’s war in Ukraine. But when he turned on Putin in June, he signed his own death warrant.

The mafia code, known to every movie-goer, is that a failure to take revenge makes the don look weak. Two months passed between Prigozhin’s rebellion and his death. But then as Don Corleone remarks in The Godfather — “Revenge is a dish best served cold.”

The suggestion that Russia is a mafia state is more than a literary conceit. Putin’s biographer, Catherine Belton, has shown that as deputy mayor of St Petersburg in the 1990s, Putin cultivated his ties to that city’s criminal underworld. Prigozhin himself spent nearly a decade in prison.

The Russian intelligence services, for whom Putin worked for so many years, has always maintained ties with organised crime — which has useful expertise in smuggling, money laundering and murder. It is telling that when Russia organised a prisoner swap with America — the man they chose to extricate was Viktor Bout, an arms-dealer, alleged money-launderer and former Soviet military officer, who was arrested in 2008 after a long operation by the US Drug Enforcement Agency.

The operations of Prigozhin’s Wagner group in Africa — through a network of front companies — blurred the lines between private business, organised crime and the Russian state. The demands of the Ukraine war have made those lines even fuzzier. Western sanctions have made it much harder for Russia to sell oil or to buy key technologies on the open market. That increases the incentives for Russia to link up with criminal networks, which are experts in illicit trade and smuggling.

Yet before America and the west dismiss Russia as a criminal outlier, it is worth noting that, the day after Prigozhin’s death, a former president of the United States was indicted in Georgia under the state’s version of the Racketeer Influenced and Corrupt Organizations Act (Rico) — a law that was specifically designed to go after the mafia.

The legal merits of the charges against Donald Trump will be decided in court. But, whatever happens there, it is a commonplace that Trump has long adopted some of the mannerisms and mores of a mob boss.

It is not entirely surprising that a man who made his fortune in New York construction — before branching out into Atlantic City casinos — should occasionally sound like a mobster. One of Trump’s most important mentors was Roy Cohn, a lawyer who represented many of the New York crime families. As his legal troubles mounted during his presidency, Trump famously bemoaned the lack of such a figure to represent him.

James Comey, Trump’s first FBI director, later recalled a private dinner with Trump in the White House, in which the newly elected president said: “I need loyalty. I expect loyalty.” In his memoirs, Comey wrote that Trump reminded him of mafia bosses that he had come across in his work in law enforcement: “The demand was like Sammy the Bull’s Cosa Nostra induction ceremony.”

Trump’s emphasis on personal loyalty is reminiscent not just of Sammy the Bull but also of Putin. Both leaders enjoy and even encourage rivalries between factions in their staff. That creates a system in which the leader is the final arbiter of all disputes — the big man whose favour everybody needs.

As president, Trump sometimes conducted foreign affairs as if he was negotiating with rival Godfathers: Kim Jong Un in North Korea, Recep Tayyip Erdoğan in Turkey, Putin in Russia.

The Trump-Putin comparison, however, is not intended as a contribution to that favourite Russian sport of “what-aboutism”. The two men may share certain instincts and mannerisms. But the systems they operate in are very different.

In today’s Russia, there is zero chance that Putin will be investigated for involvement in the murder of Yevgeny Prigozhin — or any of the other crimes he may have committed. There will be no independent prosecutors carefully amassing any evidence that could send the president to jail.

Trump, by contrast, is being held to account. There is every chance that he will eventually be given a jail term — although my guess is that President Biden would ultimately pardon him. In the meantime, Trump remains free to argue his case and even to campaign for the presidency.

The difference is clear. The US can claim the status that Solovyov falsely bestowed on Russia: “A nation of laws.” Sadly, Russia itself is now a mafia state.

gideon.rachman@ft.com

By the time of his death in a plane crash this week, Yevgeny Prigozhin had come to symbolize the criminal trajectory of the Russian state. In the 1980s, he had been imprisoned in the Soviet Union, after which he experienced a rags-to-riches transformation from street vendor in post-Soviet Russia to close associate of President Vladimir Putin. Prigozhin’s remarkable portfolio ranged from elite catering to election meddling in the U.S. to running the Wagner Group, a government-funded private military apparatus.

Haphazardly, the Wagner Group projected Russian power into Ukraine and Syria. In Africa, it did not operate with the ideological zeal and the hope for economic development that the Soviet Union had once championed, gaining the U.S.S.R. networks of loyalty and cooperation. Instead, the Wagner Group erected a vast criminal enterprise, a protection racket on a continental scale, offering security to amenable dictators and warlords. In return Wagner acquired access to resources, which it used to enrich itself. This was not the application of hard power or soft power. It was the application of criminal power.

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