“No crucifixion for fat oligarch”: Prosecution perspectives of Dmitry Mikhalchenko 

“No crucifixion for fat oligarch”: Prosecution perspectives of Dmitry Mikhalchenko
The investigation is reluctant to charge the St. Petersburg oligarch with creation of an organized criminal group Photo: The CrimeRussia

The investigation is reluctant to charge ‘governor 24’ with creation of a criminal community.

Unusual situation

On Wednesday, June 14, 2017, Colonel of Justice Sergei Novikov, Investigator for Special Cases of the Investigations Committee of the Russian Federation (ICR) was supposed either to charge the head of Forum holding with Creation of a Criminal Community (Article 210 of the Criminal Code of the Russian Federation) or announce the completion of the investigation of the elite alcohol smuggling case. A year ago, in March 2016, Novikov, being the head of the investigation team, had stated that “the investigation is at the final stage”. But well-aware sources reacted very skeptically to such statements. In fact, during the last year, the majority of business associates of Dmitry Mikhalchenko were charged with offences of various gravity and remanded in custody.

Still, there was some progress in the case against the disgraced oligarch – but in a totally unexpected way. Accomplices of billionaire Mikhalchenko have been ultimately charged under part 4 of Article 159 (Swindling) and Article 200.2 (Smuggling of Alcoholic Production by an organized group) of the Criminal Code of the Russian Federation – contrary to the expectations of the defense who had anticipated the preliminary investigation to be completed by now and prepared for a serious legal battle in relation to the likely incrimination of offences stipulated in Article 210 of the Criminal Code of the Russian Federation (Creation of a Criminal Community (criminal organization) and Participation Therein).

Our
notes

Dmitry Mikhalchenko, Anatoly Kindzersky, Boris Korevsky, and Ilya Pichko, General Director of the South-Eastern Trade Company, have been arrested by the ICR and Federal Security Service (FSB) of the Russian Federation in March 2016 and remanded in custody by the Basmanny District Court upon a motion brought by the investigation. They have been charged under Article 200.2 of the Criminal Code of the Russian Federation (Smuggling of Alcoholic Production by an organized group). According to the case file, Dmitry Mikhalchenko was the mastermind behind the elite alcohol smuggling. The investigation is ongoing for a year already.

Investigator Sergei Novikov is a worthy opponent to the powers behind the disgraced oligarch. He is in charge of the procedural matters. In fact, the investigation may be concluded at this point and the case transferred to the court without grave Article 210.

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Anatoly Kindzersky    

Unbreakable suspect v. investigation team

According to CrimeRussia sources, the slow pace of the investigation if beneficial for the law enforcement structures. Should the indictment be submitted to the court in the coming months, the operatives won’t have to ask the court to extend the preliminary investigation. It would be sufficient to obtain permissions to transfer the defendants or perform investigative actions in the pretrial detention facility. Technically, this does not create any difficulties for the investigation team. In addition, nothing prevents the investigators from finding grounds for new charges (e.g. above-mentioned Article 210) during the trial and add a separate criminal episode to the indictment.

There is a person, however, standing in the way of these bright investigation prospects. The coolness and persistence of Boris Korevsky, former Deputy Head of the Administration for Combating Organized Crime of the General Administration of the Ministry of Internal Affairs (MIA) of the Russian Federation in St. Petersburg and the Leningrad Region and current Head of the Forum Security Service, are an eyesore for the investigators. The point is that the main ‘smugglers’ – Contrail Logistic company, Anatoly Kindzersky, and Ilya Pichko, the General Director of the South-Eastern Trade Company – have already confessed. But they had never met the owner of Forum holding and claim that they were not familiar with him. They had communicated only with Boris Korevsky who does not admit his guilt and refuses to testify citing Article 51 of the Constitution of the Russian Federation.

Our
notes

In early May, the ICR has completed the investigation of the first criminal case related to the elite alcohol smuggling; the investigators believe that St. Petersburg billionaire Dmitry Mikhalchenko was the mastermind behind this crime. Anatoly Kindzersky, owner of Contrail Logistic Northwest, has made a plea deal and the Kingisepp District Court is to examine his case separately. Currently the defendant and his lawyer are reviewing the case file. Viktor Grin, Deputy Prosecutor General of the Russian Federation, had personally offered Anatoly Kindzersky to make a plea deal. On the basis of the confessions provided by Kindzersky, another criminal case has been initiated against Boris Korevsky under part 4 of Article 159 of the Criminal Code of the Russian Federation (Swindling).

Should the defendant continue sticking to his stance, the case may collapse in court because, in fact, there is nothing to present to Dmitry Mikhalchenko. If Korevsky decides to testify that he was the mastermind behind the alcohol smuggling operation and performed it without notifying his boss, the situation would get even worse for the investigators. They understand this very well and tighten the screws to force the former colleague to testify. But Korevsky is a man of the old police school, he knows all the methods that might be used by the investigation. Being in detention, he neither lost his nerve nor appetite. In addition, the defense of the billionaire was not notified yet about any new charges or about the completion of the current investigation. This means that the law enforcement authorities have one more ace up the sleeve and don’t make a secret of this.

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Boris Korevsky

Circulation of criminal cases in the legal environment

Since the arrest of Dmitry Mikhalchenko, his inner and even not-so-inner circles underwent similar unpleasant metamorphoses. A dozen of businessmen and law enforcement officers are currently under investigation. In addition, after the ‘downfall’ of the oligarch, a series of high-profile resignations have occurred. In March 2016, when Dmitry Mikhalchenko was remanded in custody, Dmitry Sergeev, General Director of Baltstroy, Manager Aleksander Kochinov, and Grigory Pirumov, Deputy Minister of Culture of the Russian Federation, have been arrested and charged with embezzlement of 186 million budget rubles ($3.1 million) allocated for the restoration of the Izborskaya Fortress near Pskov.

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Andrei Kaminov, Director of Ateks Federal State Unitary Enterprise of the Federal Protection Service of the Russian Federation

Following the first wave of arrests among the builders, another group of suspects have been detained in custody in March 2017: Andrei Kaminov, the Director of Ateks Federal State Unitary Enterprise of the Federal Protection Service of the Russian Federation; Stanislav Kyuner, the General Director of Stroyfasad construction company; and businessmen Dmitry Torchinsky, Sergei Litvinov, Aleksander Rodionov, and Sergei Perevalov.

Our
notes

The suspects have been charged with the embezzlement of at least 225 million rubles ($3.8 million) allocated from the budget for the construction of the Reception House of the Presidential Residency. The criminal episodes have occurred in 2013–2015. The investigation believes that the contractors have appropriated a portion of the budget funds allocated for the project. Malicious gossip has it that the case against Ateks is based on testimonies given by some Dmitry Mikhalchenko. Primary suspect Andrei Kaminov used to work in companies affiliated with Forum holding and knew Mikhalchenko personally.

Needless to say that this case is also handled by above-mentioned Sergei Novikov, Investigator for Special Cases of the ICR.

In addition to the ‘construction offences’, the law enforcement structures are actively investigating the smuggling episodes. This spring, Igor Khavronov, well-known broker and business partner of Turkish oligarch Jabrail Karaarslan, co-founder of ULS Global, has been arrested. Four other suspects have been detained together with Khavronov, including Aleksei Marchukov, General Director of ULS Broker. According to our sources, they actively collaborate with the investigation. It is necessary to note that this criminal case has been initiated under Article 210 of the Criminal Code of the Russian Federation (creation of a criminal community (criminal organization) and participation therein). As the CrimeRussia wrote earlier, the law enforcement authorities were tracing Khavronov for a while, but during their last visit, the testimony given by Khavronov against Dmitry Mikhalchenko allowed him to get off the hook. Detained Mikhalchenko, in turn, made a ‘present’ to the ICR by telling them a few stories about the hard life of smugglers operating in Ust-Luga and Kingisepp.

The court has also extended the detention term for Valery Izrailit, Chairman of the Board of Directors of Ust-Luga Company Open Joint Stock Company. According to the sources, he had uneasy relationship with Khavronov and ULS Global.

Our
notes

Valery Izrailit, the Chairman of the Board of Directors of Ust-Luga Company, is suspected of dishonest embezzlement of funds allocated for the port development. According to the investigation, 1.5 billion rubles ($25 million) have been stolen and siphoned off abroad. On May 23, the St. Petersburg court has extended his detention term.

Uncertain outcome

The anti-smuggling crusade has affected law enforcement officers as well. The CrimeRussia wrote earlier that two patrons of Khavronov became suspects in a corruption criminal case: Pavel Smolyarchuk, a former operative of the General Department of Anti-Smuggling of the Federal Customs Service of Russia, and Vadim Uvarov, the ex-Head of the 7th Department of the Administration K of the FSB Internal Security Directorate supervising the customs. With their arrest, the career of Viktor Voronin, Head of the Administration K of the FSB, has ended – he was terminated.

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Pavel Smolyarchuk

It is necessary to note that two more high-ranked enforcement functionaries have fallen from grace due to their ties with the business of Mikhalchenko: Evgeny Murov, ex-Head of the Federal Protection Service (‘Dima Krikun’ had earlier received from him a permit to build a Universal Documents Center in the framework of the Port Bronka Development Project), and Andrei Belyaninov, the ex-Head of the Federal Customs Service of Russia (he was about to put Mikhalchenko in charge of the Electronic Customs Filing Center, thus, making all stevedoring companies dependent on the Forum owner).

Andrei Boiko, the Deputy Head of the MIA Administration for Transport for the North-Western Federal District, is also under investigation: he is suspected of non-service relationship with above-mentioned Igor Khavronov. There are more parallel criminal cases in this story, but the point is that all the above episodes (especially the smuggling one) constitute the elements of a crime stipulated in Article 210 of the Criminal Code of the Russian Federation (Creation of a Criminal Community (criminal organization) and Participation Therein). And the suspects in existing criminal cases may be accused of membership in this unnamed criminal community any time, while Dmitry Mikhalchenko can be named the creator and leader of the ‘smuggling mafia’. The sources state that this requires some supreme political will that hasn’t been expressed ‘from above’ yet. Therefore, the criminal cases are being investigated in an ordinary course and can be completed individually. With regards to the oligarch, even well-informed sources currently have no clue about his further fate – similarly with numerous lawyers of ‘governor 24’. Several groups of attorneys work for the businessman and, according to some information, they are on bad terms with each other. Each group is responsible for a separate ‘piece’ of the criminal case and, most importantly, none of the lawyers is aware whether their client had testified and if yes, what did he say and to whom. It can’t be ruled out that seasoned schemer Dmitry Mikhalchenko has complicated the situation on purpose, and now only himself and the investigator know the real state of the criminal case. Should no supreme political will be expressed, the oligarch is to be tried in the Kingisepp Court where the case might collapse without the “crucifixion of the fat oligarch”. Such a scenario is quite possible, especially taking that nobody demands Mikhalchenko to surrender Bronka anymore.

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