Denis Katsyv, the son of the vice-president of the company “Russian Railways” (RZhD) Pyotr Katsyv, will pay $ 5.9 million to the US Treasury in connection with the first case in the West linked to the Magnitsky Case on laundering 5.4 billion rubles (230 million dollars) stolen from Russian citizens. Sergei Magnitsky, a Russian lawyer who uncovered the massive corruption perpetrated 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. (Details of Denis and Pyotr Katsyvs’ financial scams are given here).
The stipulation to pay US$5.9 million to the US Treasury was signed on 12 May 2017 by 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 real estate properties in New York (a lower Manhattan condominium) purchased by the Katsyv-owned Cypriot company, Prevezon Holdings.
The attempt to seize a lower Manhattan condominium acquired by the Russians and other assets began in 2013 with then-Manhattan U.S. Attorney Preet Bharara filing the claim. In March 2017, Bharara was fired by President Donald Trump.
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. On May 10, 2017, five days before the trial, United States District Judge William Pauley III dismissed Prevezon’s motion. Two days later Acting Manhattan U.S. Attorney Joon Kim, Bharara’s successor, announced the signing the settlement.
The next day James Margolin, a spokesman for the Manhattan U.S. Attorney’s office, stated: “The nearly $6 million represents three times the money that flowed to Prevezon from the Russian treasury fraud and more than 10 times the portion they invested in U.S. real estate. However, they want to rationalize it, Prevezon agreed to give up multiples of the laundered money they brought into New York.”
Bill Browder, leader of the global Magnitsky Justice campaign and whose employee Magnitsky was, commented on the settlement:
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.
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.
Browder described the Magnitsky justice campaign in his 2015 New York Times best-seller, “Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice.”
Denis Katsyv also considers the settlement his victory. Natalia Veselnitskaya, his lawyer, stated: “It was very painful, but we achieved full justification in return for $ 5.9 million. It’s worth it. The US government made the first deal with a Russian citizen on his terms.” Ms Veselnitskaya also expressed her confidence that the outcome of the current proceedings would put an end to Browder’s attempts, with the help of the Magnitsky case, to provide his own alibi in those criminal stories in which he was, in her opinion, really involved.
It is necessary to keep in mind that Alexander Perepilichny, another whistle-blower connected with the case, who moved to the U.K. to help Browder with his investigation, died in November 2012, apparently, from poisoning by a rare plant toxin.
Additionally, on March 21, 2017 Nikolai Gorokhov, a Russian lawyer representing Magnitsky’s family who had turned over documents, including those on the Denis Katsyv case, about the tax fraud to Browder, fell (evidently, was thrown) from a window of his 5th floor Moscow apartment building. The fall occurred the day before he was scheduled to appear in a Russian court in a case tied to Magnitsky’s death.