‘Entrance fee’. Fugitive deputy minister Bazhanov accuses FSB general Voronin of raidership
Aleksei Bazhanov, ex-Deputy Minister of Agriculture, who is currently hiding from the Russian law enforcement authorities in London, submitted letters to the Investigative Committee of the Russian Federation (ICR), Prosecutor General’s Office, and Presidential Executive Office. The former official claims that Viktor Voronin, ex-Head of “K” Directorate of the Federal Security Service (FSB) of the Russian Federation, had assisted businessman Arkady Fosman in the raiding takeover of a business created by Bazhanov. According to the fugitive, the takeover was committed in the interests of a company belonging to relatives of Voronin, while Bazhanov has been criminally prosecuted for his refusal to provide to the FSB general information compromising the Minster of Agriculture, Vice Premier Viktor Zubkov, and Governor of the Voronezh Region. Why didn’t Bazhanov mention the name of Voronin in London courts during his attempt to recover £30 million from Fosman through legal action? And why is he accusing the FSB general now – in anticipation of his possible return to Russia?
In his letters to the ICR, Prosecutor General’s Office, and Presidential Executive Office, Bazhanov claims that he decided to address the authorities after a number of arrests among high-ranked law enforcement officials, including the arrest of Dmitry Frolov and Kirill Cherkalin, former Heads of the 2nd (‘banking’) Department of “K” Directorate of the FSB Economic Security Service subordinate to Viktor Voronin, for bribery and swindling.
Кстати, член семьи экс-губернатора распоAleksei Bazhanov was born on December 9, 1974 in Voronezh. In 1993, started working as a vendor on the Central Market of Voronezh. In 1994, became a shipping agent of Nadezhda (Hope) Farming Enterprise. In 1995, graduated from the Moscow State Academy of Physical Culture. In 2000, established Masloprodukt Trade House later transformed into Masloprodukt Closed Joint Stock Company; was in charge of it until 2008. In 2005, was elected a Deputy of the Voronezh Regional Duma. In 2006, graduated from the Voronezh State University of Engineering Technologies. In 2008, was appointed a Deputy Head of the Federal Forestry Agency of the Russian Federation; was responsible for the financial block. In 2009, completed an upgrade training course entitled "Management of State and Municipal Order Placement" at the Russian Presidential Academy of National Economy and Public Administration. In 2009, was appointed a Deputy Minister of Agriculture of the Russian Federation; supervised forestry and hunting spheres. In 2010, became a Vice President of the Association of Financial and Industrial Groups of Russia. In 2011, became the founder and President of "Domestic Innovations" Fund for Promotion of Innovation Consolidation, Development, and Introduction.
On April 10, 2013, Aleksei Bazhanov was detained, together with two top managers of Masloprodukt, for embezzlement of 1.1 billion rubles ($16.7 million) from Voronezh-based Rosagrolizing company. Initially, Bazhanov was charged under part 4 of Article 159 of the Criminal Code of the Russian Federation (swindling on an especially large scale). Later, the charges laid against him were reclassified under less grievous Article 159.4 of the Criminal Code (swindling in the business sphere). According to the investigation, Bazhanov has siphoned off funds provided by Rosagrolizing to Masloprodukt for equipment acquisition via Vita Limited Liability Company controlled by him. Shortly after that, Bazhanov was charged under Article 159.1 of the Criminal Code (swindling in the credit sphere). The investigators believe that the suspect has embezzled some 10 billion rubles ($151.5 million) received by Masloprodukt as loans from Russian Agricultural Bank, Moscow Industrial Bank, and Sviaz-Bank for the acquisition of raw materials. Later, the banks have partially assigned their claims to Blago Group belonging to Arkady Fosman. Then Bazhanov was charged under part 3 of Article 174.1 (legalization (laundering) of monetary funds on an especially large scale). On December 20, 2013, he was released under a written pledge not to leave the city and absconded to the UK. The Russian law enforcement authorities claim that the fugitive was put on the international wanted list; however, the name of Aleksei Bazhanov cannot be found in the open Interpol database.
In his letter, Bazhanov describes the raiding takeover of Masloprodukt in detail. Overall, this story is consistent with the version presented by the ex-deputy minister to the London High Court of Justice in the framework of his lawsuit filed against structures of Fosman to recover from them £30 million as a compensation for the seized assets of Masloprodukt. However, this time, Bazhanov provides new details about the role played by Voronin.
According to Bazhanov, in 2014, he has offered his old acquaintance Arkady Fosman, owner of Blago Group, to perform together the financial sanation of Masloprodukt-BIO Closed Joint Stock Company. The partners agreed to jointly purchase assets of the bankrupt enterprise created by Bazhanov and then divide its shares. The fugitive official claims that he was supposed to get 45% of the business, while Fosman had to retain the remaining 55% of the shares. Fosman received from Bazhanov the company’s documentation and stopped answering calls.
Bazhanov believes that Fosman had relied on ‘patronage’ of Viktor Voronin, then-Head of “K” Directorate of the FSB Economic Security Service. The owner of Blago Group had close ties with the high-ranked FSB officer and flaunted their friendship at any opportunity. Bazhanov explains the ‘patronage’ granted by Voronin to the businessman by material benefits: general’s sister Larisa Voronina is a co-owner of Blago Group; according to the official documents, 10% of company’s shares belong to her.
Not only was Bazhanov aware of the friendship between his partner and Head of “K” Directorate – but was familiar with Voronin, too. The fugitive official claims that Fosman has introduced him to Voronin and his subordinate Frolov on purpose. Back in 2009, Bazhanov was a Deputy Minister of Agriculture, and Fosman has arranged several meetings between the official and his ‘FSB patrons’ in Hyatt Regency Moscow Hotel. The officers were interested in the performance of Elena Skrynnik as the Minister of Agriculture of the Russian Federation and as the Head of Rosagrolizing. They had also asked Bazhanov about Viktor Zubkov, then-First Vice Prime Minister of Russia, and Aleksei Gordeev, then-Governor of the Voronezh Region. Bazhanov claims that he refused to provide compromising information against the above persons, and this was the true reason behind the institution of criminal proceedings against him.
According to Bazhanov, he “hadn’t expected any risks” to stem from his partnership with Fosman and their joint ownership of Masloprodukt-BIO because of the ties between Fosman and Voronin. However, this was a mistake: Fosman decided to use the support and administrative resource of the high-ranked FSB official to seize the enterprise.
The takeover scheme described by Bazhanov in his letter is consistent with the version provided by him to journalists in the London court. Blago Group of Companies belonging to Fosman has signed with Sviaz-Bank a claim assignment agreement in relation to the debt of Masloprodukt-BIO to Sviaz-Bank in the amount of some 9 billion rubles ($136.3 million) at an understated price of 1.9 billion rubles ($28.8 million) – while the estimated value of the assets pledged as the security was over 13 billion rubles ($196.9 million). Blago Group has made an advance payment in the amount of 20% of the above price – 382 million rubles ($5.8 million). The remaining balance of 1.5 billion rubles ($22.7 million) had to be paid by “a non-existing yet promissory note of VEB.RF Bank in the amount of 7.5 billion rubles ($113.6 million)”. As a result, Blago Group has sold the assets of Masloprodukt-BIO to Akvilon Limited Liability Company affiliated with it for 1.5 billion rubles ($22.7 million). The founder and General Director of Akvilon is Olga Fosman. The money has been paid to VEB.RF Bank for the promissory note dated October 20, 2016; on the same day, the promissory note was transferred to Sviaz-Bank.
Bazhanov describes the takeover scheme without changes – but this time, he claims that Fosman managed to seize the control over the enterprise and inflict damages to Sviaz-Bank Joint-Stock Commercial Bank in the amount of 7.1 billion rubles ($107.5 million) thanks to “the support and patronage of his high-ranked friend in the FSB”.
Arkady Fosman denies any arrangements between him and the former deputy minister. According to the businessman, Bazhanov had repeatedly asked money for his former assets – but Fosman “could not find grounds to satisfy such requests”. Bazhanov claims that the FSB general was involved in the raiding takeover; Fosman has commented on these allegations as follows: “It is nonsense to link Viktor Gennad’evich Voronin to this story”. The owner of Blago Group explains the claims of Bazhanov by the criminal case instituted against him and legal proceedings launched to bring him to subsidiary liability.
It cannot be ruled out however that, by accusing Voronin, Bazhanov is laying the groundwork for his return to Russia. Back in February 2018, Boris Titov, Presidential Commissioner for Entrepreneurs’ Rights, has named 16 Russian businessmen forced to live abroad due to ungrounded – in his opinion – prosecution but ready to return if the criminal cases against them are revised. Bazhanov was on this list, too.
Since then, seven businessmen from the ‘Titov list' have returned to Russia. Almost all of them were acquitted in court – or the criminal proceedings instituted against them were terminated. Only one ‘Russian Londoner' – Yekaterinburg businessman Sergei Kapchuk – was convicted. On May 27, 2019, the Verkh-Isetskiy District Court of Yekaterinburg found him guilty under part 3 of Article 159 of the Criminal Code of the Russian Federation (swindling) and sentenced to two years behind bars conditionally – even though Kapchuk had insisted on his innocence. The businessman was released of serving the penalty in the courtroom under the amnesty. Still, Kapchuk is displeased with the outcome. "I expect this conviction to be annulled; I am ready to appeal it in every instance, including the European Court of Human Rights in Strasbourg," – he said.
Even though Kapchuk was not acquitted, the Presidential Commissioner for Entrepreneurs’ Rights announced in June 2019 that five more fugitive businessmen from the ‘Titov list’ are ready to follow his example. “We expect five more people to return, one by one, in the foreseeable future,” – Titov said on the sidelines of the St. Petersburg International Economic Forum.
Bazhanov may be on this ‘waiting list’: he was unable to recover the lost assets acting from abroad. The London court dismissed the lawsuit filed by the former deputy minister against structures controlled by Fosman. Bazhanov has filed an appeal – but in vain.
Aleksei Bazhanov (in the center)
In fact, Bazhanov has won a litigation in foreign judicial instances only once: in December 2017, the Swiss prosecution terminated criminal proceedings instituted against him. The investigators failed to found elements of money laundering in the account activities of the Russian native and concluded that his wealth “could not be obtained by criminal means”. As a result, the Swiss authorities unfroze 7.195 million CHF kept on accounts of the former deputy minister. However, at home, Bazhanov is still charged with swindling in the amount of some 10 billion rubles ($151.5 million). In April 2018, the court has satisfied a motion brought by the investigation and extended the conservatory attachment imposed on Swiss accounts belonging to him, his wife, and 22-year-old son.
Perhaps, Bazhanov hopes to improve the state of his affairs in Russia – but is not 100% confident of the termination of criminal proceedings instituted against him or acquittal in court. In February 2019, the Arbitration Court of the Voronezh Region has ruled to re-examine the lawsuit filed to bring Bazhanov to subsidiary liability in relation to a debt in the amount of 2.2 billion rubles ($33.3 million). Therefore, to be on the safe side, the fugitive official decided to testify against Voronin – either by his own initiative or not.
Who may be interested in the prosecution of the former FSB general? The head of the ‘banking’ directorate has submitted a resignation letter back in summer 2016 – after a corruption scandal involving his subordinate Vadim Uvarov, Head of the 7th Department of “K” Directorate of the FSB Economic Security Service. On August 1, Voronin was removed from the post he had held for 12 years. His occupation after the resignation is unknown. In 2018, during a questioning at the trial of billionaire Dmitry Mikhalchenko, Voronin – who was, according to his own words, an old friend of Mikhalchenko – introduced himself as the President of Moslizing company. However, the name of Voronin is not on the list of the company’s top managers. Sources of RBK Group claim that the former FSB officer was an advisor to his old friend Vladimir Kogan, owner of UralSib Bank. After the death of Kogan on June 19, 2019, Voronin has relocated to Israel.
In July 2019, Kirill Cherkalin, Head of the 2nd Department of "K" Directorate of the FSB Economic Security Service, has been charged with swindling on an especially large scale. Two other former subordinates of Voronin – Andrei Vasiliev and Dmitry Frolov – were detained together with Cherkalin. According to VChK-OGPU (@rucriminalinfo) Telegram channel, after receiving guarantees that he won’t be remanded in custody, Voronin returned to Russia and was questioned in the framework of the criminal case against Cherkalin and Frolov. The former Head of "K" Directorate said that he is not aware of any wrongdoings committed by his subordinates. Perhaps, the investigators were dissatisfied with the refusal of Voronin to testify against the suspects and decided to put pressure on him via Bazhanov?
Or maybe, somebody is displeased with the return of the FSB general into the game? On July 1, 2019, Voronin was appointed a Deputy General Director of Fizpribor Moscow Plant for Liaison With Governmental Bodies. Rosatom State Corporation has been the sole customer of this enterprise in recent years. Voronin has resigned from the FSB together with Yuri Yakovlev, ex-Head of the FSB Economic Security Service; currently, Yakovlev is a Vice President of Rosatom for Security. It cannot be ruled out that the alliance between these two former FSB officers may disturb the existing balance of power – and somebody is trying to break it up.