‘Gang of orderlies’ and billionaires curve up funeral market
The Arbitration Court of St. Petersburg and the Leningrad Region has recently dismissed the claim filed by a private funeral company against the Federal Antimonopoly Service in relation to their dispute over the use of the city morgue. A seemingly ordinary arbitration case stems from the struggle for funeral market between two billionaires and a former member of the ‘gang of orderlies’. Profits totaling 1 billion rubles ($15 million) per year are at stake.
Territory of the dead
For several decades already, St. Petersburg is unofficially called “a city of the dead”. This uncomplimentary nickname is justified in a certain sense. Piskarevskoe cemetery where all Leningrad residents deceased during the blockade are buried is listed in the Guinness Book of World Records. Yuzhnoe cemetery is one of the largest in Europe as well. St. Petersburg burial grounds occupy hectares of land. In the mid-1990s, ‘bros’ put the eye on this ‘gold mine’. Billion-ruble wealth was literally buried in the ground, including endless cash flows from relatives (people continue dying) and funds generously allocated by the municipal budget for cemetery improvement. Of course, the ‘bros’ have embraced such an opportunity.
Piskarevskoe Memorial Cemetery
At first glance, the current funeral market seems pretty respectable. Specialized companies, state unitary enterprises, morgues, and vast infrastructure maintained at the expense of the St. Petersburg budget. Hectares of burial grounds require not less attention from the city administration than all its housing and utility infrastructure. In early March 2018, a scandal has escalated in this well-oiled mechanism. Forensic Medical Examination Bureau State Budgetary Health Care Institution has signed with R.I.P. Limited Liability Company specializing in funeral services two agreements violating the antimonopoly legislation. The Administration for St. Petersburg of the Federal Antimonopoly Service (FAS) of the Russian Federation has identified these violations.
Billionaire Igor Minakov
The first agreement stipulated the collaboration between R.I.P. Limited Liability Company and Forensic Medical Examination Bureau with regards to forensic assessments and provision of funeral services to the public in the city crematorium. The second contract had granted the Forensic Medical Examination Bureau the right to use the state morgue free of charge. In other words, a private company, being not the owner of the premises, had granted a governmental institution the right to operate in a state-owned facility. Such an outrageous situation became possible because Ritual Services State Unitary Enterprise, responsible for the crematorium management, had leased the morgue to above-mentioned R.I.P. Limited Liability Company who, in turn, has signed such a weird agreement with Forensic Medical Examination Bureau.
Valery Larkin, President of the Association of Funeral Enterprises of St. Petersburg and Northwestern Region
The story has resulted in an arbitration litigation: R.I.P. Limited Liability Company and Forensic Medical Examination Bureau State Budgetary Health Care Institution attempted to contest the penalty imposed by the FAS. The arbitration court has upheld the stance of the FAS and dismissed the claim. At first sight, this seems an ordinary dispute between economic subjects. But it is not. As it turned out, the audit of the weird agreements was launched following a complaint filed by prominent St. Petersburg businessman Boris Gladilin, owner of Pokhoronnaya Sluzhba (Funeral Service) Limited Liability Company. His opponents are Valery Larkin, President of the Association of Funeral Enterprises of St. Petersburg and Northwestern Region, and billionaire Igor Minakov. These two persons are directly related to Ritual Services State Unitary Enterprise, St. Petersburg Funeral Company Limited Liability Company, and R.I.P. Limited Liability Company.
Since 2005, Ritual Services State Unitary Enterprise has been managing all the municipal cemeteries. Its only competitor – Pokhoronny Dom (Funeral Home) Limited Liability Company managing Evreiskoe (Jewish) cemetery and Cemetery of Victims of January 9 – had to withdraw from the market, while its Director Valentina Sidorova was convicted in 2007 for swindling on an especially large scale.
On the other hand, Marat Dreizin, a member of the ‘gang of orderlies' that used to terrorize the entire funeral sector of St. Petersburg in the early 2000s, has direct ties with Pokhoronnaya Sluzhba belonging to businessman Gladilin.
In this context, the story involving the complaint and penalty imposed by the FAS looks totally different. According to sources, structures controlled by Gladilin and Dreizin are practicing commercial espionage and the current situation likely reflects a trivial redistribution of the funeral market. In early 2018, Pavel Belyaev, one of the leaders of the ‘gang of orderlies’, has been released from a penitentiary institution. Some sources directly link the above litigation with his return and believe that gang members remaining on the loose are currently striving to regain their former power.
Marat Dreizin (on the right)
The story of this gang is described in criminalistics school books and well-known even abroad. In 1998, the St. Petersburg authorities were concerned with rising death rates in the city and established the City Pathoanatomical Bureau. Eleven mortuaries have been put under its control. The bureau was supposed to identify the reasons behind the high mortality. But instead, a gang practicing murders, swindling, blackmailing, and extortion has been created. First of all, the bureau personnel have quickly ‘spent’ the 33 million rubles ($495 thousand) allocated from the budget. Valery Burykin, an inspector for control of junior medical staff, and Pavel Belyaev, Aide to the Deputy Director of the City Pathoanatomical Bureau, were the gang leaders.
Some 200 people die in St. Petersburg on a daily basis. This translates into some 50 thousand people per year. There are 5–6 funeral agents per each deceased person in the city. An average St. Petersburg resident spends some 35 thousand rubles ($525) on funeral services.
In the 1990s, the gang of morgue orderlies under the leadership Burykin had nearly openly rendered illegal pathoanatomical services. People opposing the criminal business were mercilessly murdered. The ‘gang of orderlies’ has hit the headlines after the murder of Sergei Efimov, Senior Orderly of the City Pathoanatomical Bureau, in September 2001. The Administration for Combating Organized Crime of the Ministry of Internal Affairs (MIA) of the Russian Federation was hunting for the gang – but its members continued the killing spree. In 2003–2004, they made several assaults upon Leonid Shpilenya, Supreme Narcologist of the Northwestern Federal District. The gang wanted to replace him with one of its members – narcologist Sergei Tikhomirov. Terrified Shpilenya has resigned, and then the ‘orderlies’ killed his deputy Larisa Artyukhovskaya. In total, five murders were incriminated to the gang. Valery Burykin and orderly Aleksei Chaban have been charged with the murders of Evgeny Soloviev, member of the regional college of advocates; Roman Arkhipov, Orderly of the City Pathoanatomical Bureau; and lawyer Aleksei Khrapunov. Experts estimate the shady financial flows generated by the mortuaries at 3–4 billion rubles ($45–60 million) per year.
Valery Burykin on the left and Aleksei Chaban next to him
Trial of the gang
All members of the gang led by Burykin have been captured and convicted in 2006. The gang leader initially went on the run. Pavel Belyaev was sentenced to 13 years behind bars; Marat Dreizin – to 4 years for complicity. Valery Burykin was arrested on October 20, 2007 while crossing of the Austrian–Hungarian border and extradited to Russia. Later Burykin was sentenced to 16 years in a maximum security penal colony.
Pavel Belyaev has already been released on parole. The sources believe that even with depleted ranks, the ‘orderlies’ cant do a lot. In the past, they had stopped at nothing.
During the trial of Burykin, presiding judge Irina Tumanova was hit by a car. The gang involvement in this incident was never proven, but the media have immediately linked it with the trial. The defendant had openly called the prosecutor "a dead man".
According to the sources, the jury foreman was intimidated, while other jurors were under surveillance. Even after the conviction of the gang members and their relocation to correctional facilities, journalists still thought that the gang continues its operations. Furthermore, Georgy Kovalsky, the new Head of the City Pathoanatomical Bureau, was named one of its members.
Pavel Belyaev and his ‘bros’
It is necessary to note that up until the 2000s, the criminal funeral system of St. Petersburg was pretty simple. Funeral functionaries of all ranks and municipal officials had received their ‘shares’ in sealed envelopes. Even ‘legends’ of the St. Petersburg criminal world were involved with the ‘burial empire’. For instance, Kostya Mogila (Kostya the Grave) used to work as a grave digger on Yuzhnoe cemetery. Kazan criminal ‘authority’ Artur Kzhizhevich was a member of ‘funeral mafia’ as well.
Kostya Mogila and thief-in-law Timokha
All predecessors of Valery Larkin, President of the Association of Funeral Enterprises of St. Petersburg and Northwestern Region and a party in the current arbitration litigation, have come to a bad end. One of them was killed, a grenade was thrown into the apartment of the other one. Valery Larkin himself had landed up in jail at some point.
The ‘turbulent 1990s’ are over, but the burial empire still lives by its own laws. Everybody is involved in its operations – from nurses and ambulance medics to policemen. The surcharge on rendered services sometimes reaches 50%. Sources believe that the struggle for this market will never end. Profits totaling 1 billion rubles ($15 million) per year are at stake in this game. The outcome of the current scuffle between billionaires and former ‘orderlies’ should be determined pretty soon.
Initially, the defendants in the case had been charged with embezzlement through swindling in the amount of 225 million rubles ($3.3 million). In the final version of the indictment, the article was changed to 1.5-billion-ruble ($22.45 million) embezzlement.