Oligarch strikes back: Dmitry Mikhalchenko turned in largest St. Petersburg broker 

Oligarch strikes back: Dmitry Mikhalchenko turned in largest St. Petersburg broker
Dmitry Mikhalchenko knows the secrets of Kingisepp Customs

Despite his sad situation, the detained billionaire has snatched an opportunity to make a move and shared with the law enforcement authorities some details of the ULS Global cargo transshipment business – Mikhalchenko is very well aware of its criminal nuances.

The story of the high-profile arrest of a ship belonging to Turkish corporation ULS Global, a major player on the St. Petersburg customs market, had certain criminal implications, including the arrest of broker Igor Khavronov, a business partner of the company, and five more people from his ‘inner circle’. The businessman is suspected of creating a criminal community.

‘Skins case’

In early April, operatives of the Economic Security Service of the Directorate for St. Petersburg and the Leningrad Region of the Federal Security Service (FSB) of the Russian Federation arrived to a fancy mansion on Lisiy Nos belonging to the businessman to conduct a search. Concurrently, FSB task forces have searched 50 more locations. All the investigative and operational activities were performed in the framework of a criminal case initiated earlier under Article 210 of the Criminal Code of the Russian Federation (creation of a criminal community (criminal organization) and participation therein). The case is being investigated by the FSB. Its criminal episodes include smuggling operations committed in the Ust-Luga Port and on notorious Kingisepp Customs.

Обыски

After the searches, Igor Khavronov was arrested. The Kingisepp Court has satisfied the motion brought by the investigation and remanded him in custody. Four more suspects have been detained together with Khavronov, including Aleksey Marchukov, General Director of ULS Broker. According to the media, the businessman denies any guilt but agrees to testify. In addition to Article 210, he has been charged under part 4 of Article 194 of the Criminal Code of the Russian Federation (evasion of customs payments collected from organizations or natural person). 

According to some reports, companies of the holding belonging to Khavronov had submitted a customs declaration not matching the shipped cargo. As a result, the budget has sustained losses in the amount of 6 million rubles ($106.5 thousand). The second criminal episode involved transportation of an illegal consignment of fur skins resulting in losses for the budget in the amount of 10 million rubles ($177.5 thousand). Other sources state, however, that the losses might be greater by an order of magnitude. ULS Global had been shipping goods for the total of $2 billion per year. Many consignments were shipped to non-existent companies. Back in summer 2016, the law enforcement authorities were aware of these smuggling episodes. But at that time, Igor Khavronov managed to avoid the arrest: according to him, the involvement of his companies into that story was limited to provision of transport for carriage.

Игоря Хавронова выводят из здания суда после ареста

Igor Khavronov is escorted from the courthouse after the arrest 

Our
notes

It can’t be ruled out that the above arrests are directly linked with the corruption case involving Pavel Smolyarchuk, a former operative of the General Department of Anti-Smuggling of the Federal Customs Service, and Vadim Uvarov, ex-Head of the 7th Department of the Administration “K” of the FSB Internal Security Directorate supervising the customs. Both of them have been detained on suspicion of complicity to giving a bribe in the amount of 2 million rubles ($35.5 thousand) to an official during the cargo customs clearance. It is not a secret that Vadim Uvarov was covering up smuggling operations of ULS Global. Amid that scandal, Viktor Voronin, Head of the Administration “K” of the FSB, had to resign ‘voluntarily’. Another indication that these cases are interrelated is the arrival of reinforcement from the central FSB headquarters to assist St. Petersburg FSB operatives. The ‘anti-smuggling’ department of the Economic Security Service of the FSB Directorate for St. Petersburg and the Leningrad Region provides operational support for the investigation.

   

Turkish trace

As we wrote earlier, Kingisepp Customs is a very special place for players of the foreign trade market. Similarly with Rome, all routes of major commercial companies lead there, as well as smuggling paths. The main freight traffic from Finland and Baltic states goes through Kingisepp. Detained billionaire Dmitry Mikhalchenko a.k.a. ‘governor 24’ preferred to use Kingisepp Customs for his suspicions shipments. According to the CrimeRussia source, the illegal traffic of Turkish goods had always existed there, but it never was as large-scale as now. The crisis and sanctions have equalized the volume of smuggling with the legal turnover. Banned goods had been shipped to St. Petersburg by container vessels using smoothly-running schemes. Profits gained by the participants of this illegal market were astonishing.

Kingisepp Customs Kingisepp Customs Kingisepp Customs
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ULS Global is a key player on that market; experts consider it one of the three influence groups on the Northwestern customs direction. Dmitry Mikhalchenko represented the second group; he was arrested for smuggling elite alcohol through the above-mentioned Ust-Luga Port. The law enforcement authorities were likely aware of these illegal traffic channels long ago – but until recently, the ‘influence groups’ had too high-ranked patrons in the Federal Customs Service.

Our
notes

Turkish businessman Jabrail Karaarslan is a co-founder of ULS Global, a major logistics holding. The entrepreneur was born on October 10, 1976 in the town of Gerger located in Adıyaman Province of Turkey. ULS Global was founded in 1997. This is an association of companies that not only transport cargo almost all over the world, but also create logistics schemes and routes. ULS Global overcomes its competitors by offering lower prices. The company has its own airline, ULS Airlines, and serves such countries as Russia, Turkey, Kazakhstan, Finland, China, Estonia, Italy, and Spain.



Турецкий бизнесмен Джабраил Караарслан

Turkish businessman Jabrail Karaarslan 

After the high-profile arrest of Ferry 1 belonging to ULS Global in the Ust-Luga Port and notification from the Russian colleagues, Estonian customs experts (the ferry had arrived from Estonia) have also become concerned with the operations of the Turkish holding. Law enforcement authorities of other countries having ULS Global representations have shown an increased interest to the company as well. Currently the holding has no ‘cover’ on the Northwestern direction, while the arrest of Igor Khavronov has left the Turkish co-owners without the key player on the cargo transshipment market.

All roads lead to Forum 

It is commonly known that St. Petersburg oligarch Dmitry Mikhalchenko has been arrested for smuggling elite alcohol. It is not so commonly known, however, that Igor Khavronov was also questioned by the law enforcement structures but has been released in exchange for giving testimony against Mikhalchenko. As a result, the ‘alcohol smuggling case’ was instituted. But the point is that even after the ‘close liaison’ with the law enforcement authorities, Khavronov did not stop his smuggling operations. 

According to some reports, the corruption ‘habits’ of Igor Khavronov originate from his friendship with above-mentioned Uvarov and Smolyarchuk and multiyear ‘collaboration’ with them. Players of the cargo transshipment market believe that his ‘service duties’ included elimination of competitors, including arrests of their shipments and reporting ‘unwanted suppliers’ to law enforcement structures.

There were rumors that after the arrest of the Turkish vessel, Khavronov had offered to ‘settle the issue’ and guarantee the immunity of goods shipped by ULS Global for a considerable amount of money. The broker had allegedly claimed that some officers of the above-mentioned 2nd ‘anti-smuggling’ department of the Economic Security Service of the FSB Directorate for St. Petersburg and the Leningrad Region were on his ‘payroll’ and even made a trip to Italy to provide a consultation to his Turkish partner. Only the investigators know whether this is the truth or not. But well-informed sources say that the trace of ‘Dima-Krikun’ (Dima the Crier, one of the nicknames of Dmitry Mikhalchenko) can be seen in that case because Khavronov had ‘broken the convention’.

  Our
notes

Up until 2016, Igor Khavronov had officially owned 17% of shares in Universal Logistics Systems Russia (ULS Russia) Limited Liability Company. Currently ULS Russia belongs to Swiss-based ULS Express Europe whose beneficiaries are unknown. Igor Khavronov also owns 50% of shares in ULS Broker and some 33% of shares in United Construction Systems Limited Liability Company.

According to unofficial information, this was a revenge: despite his sad situation, Mikhalchenko has snatched an opportunity to make his move even being in detention and shared with the law enforcement authorities some details of the ULS Global cargo transshipment business – the oligarch is very well aware of its criminal nuances. The arrest of the broker could be a part of his deal with the investigation. Everybody knows that Mikhalchenko won’t turn friends in without a reason. In that context, the spying scandal around the Consolidated Documents Center belonging to him seems even more interesting. Apparently, more revelations are coming soon. The employees arrested together with Igor Khavronov are actively collaborating with the investigation. The case pertaining to the illegal trafficking through the Ust-Luga Port and Kingisepp Customs might be considerably more complicated than it seemed initially.

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