STOPCRIME.RU - London – the Hotbed of a New Russian Revolution… or When Boris met Misha

Boris Berezovsky’s fortune is shrinking…

No, you couldn’t exactly call him poor, but he is getting there, compared with the fortunes of his former Forbes list-mates. Today Mr. Berezovsky is worth about $500 mil, and that figure isn’t coming from some nameless business analyst with a crystal ball, but from Mr. Berezovsky’s close friends, colleagues and partners. If he is reading these lines, Mr. Berezovsky will know who I mean.

The stream of visitors from Russia continues to flow steadily for the moment: some come for advice or an interview, others want money – toward “new political content.” Still, the latter contingent isn’t what it used to be. Rumors that the ex-oligarch is breaking bank have jumped Sadovoe and spread to the very backwoods of Russia. That Mr. Berezovsky is greedy, ahem! thrifty – is common knowledge. I won’t go into Papa Boria’s – as he is known to the gals of Eldorado – peculiar attachments. Naturally, attachments can be pricey, but I doubt that Baltic nymphs and white powder occasionally mentioned by some of my colleagues are sufficient to break the oligarch. Maybe it was copier powder, and the girls were students, attending one of his democracy seminars. I don’t know. I don’t have his bedroom tapped – Mr. Berezovsky has his own people for that. Speaking of which, the ranks appear to have thinned somewhat with the bizarre deaths of the oligarch’s two close associates: Litvinenko and Badri. But they are set to swell again in the near future, ever since Mr. Berezovsky has met his new business partner. And he’s rich, which, I might add, is a godsend for the poor man. Actually, he’s not exactly new, this partner, but of that later.

We’ll start at the top.

In 2006 a certain Mikhail Chernoy thrice descended on Ukraine in Berezovsky’s private jet. Mr. Chernoy is a fugitive oligarch from Tashkent, presently residing in a suburb of Tel-Aviv. The Israelis may soon revoke his citizenship, like they did with Anton Malevsky, Chernoy’s friend and former kingpin of the Izmailovo crime ring, who had concealed from the authorities his erstwhile run-ins with the law. Chernoy’s fame is probably no less scandalous than that of his new pal in London: Ukraine is one of the few civilized countries that still lets him in. France is off, America is a definite no-no, even Bulgaria won’t grant him a visa. To find out what makes Mr. Chernoy “non grata” around the world see my book D-Day. Now, what business does he have in Ukraine?

The fact is that Mr. Chernoy controls several Ukrainian companies, including Kiev’s biggest developer First Ukrainian Development. FUD is about to start on the construction of several high-end residential and commercial complexes in and around the Ukrainian capital to the tune of about $1 bil. Incidentally, Ukrainian reporters tell us that these days construction is #1 laundering scheme for crime fortunes, something Mr. Chernoy has heard plenty about from American and European law enforcement.

Berezovsky’s interests in Ukraine are also well-known, though he tends more toward political projects than business per se. This is why the newly late Badri Patarkatsishvili was not simply Berezovsky’s partner, but also his top financial advisor. Mr. Berezovsky just doesn’t have a head for managing capital: he’s not so much a businessman as a political engineer, ideologue and schemer. So, who is there to help him now? Not just as manager, but also as financier…
“How much are you worth these days?” an Israeli reporter once asked Chernoy.

“Depends on how you count and who you ask,” retorted Chernoy. “Someone wrote that I have $5 billion, and someone else said $40 bil. Frankly, I couldn’t tell you myself. If the coal mine I own was in the States then it would all be pretty clear: a couple dozen billion. But it’s in Russia, where the situation, the market, the value of something are all total mysteries to me. The value of my mining concerns in heavy metals, copper, coal, aluminum, etc. are difficult to estimate…

Not bad. I have a feeling Boris Berezovsky had read that interview and even jotted down the figures. If I were the Israeli reporter I would have asked a follow-up: and where did all this money come from? But that opportunity was not realized, and Mr. Chernoy chose not to elaborate. As for Mr. Berezovsky, he doesn’t care one way or the other where the money’s coming from. It means we have to do some independent research if we want to know anything about these gentlemen’s business practices.

Mikhail Chernoy started doing business back in the Soviet days as a “tsekhovik” [black market manufacturer]; during the 90’s he controlled Russia’s biggest ferrous and non-ferrous ore mining concerns through the parent company TWG, a conglomerate of offshore companies scattered around the world. How did Chernoy manage to become the top dog in metal ore mining? Where did the former manufacturer of black market flip-flops find sufficient starting capital to build an empire?

Mikhail Chernoy’s starting capital is still largely a matter of speculation even at this late date, but the dominant theory has been voiced in the media a number of times: it started with fake letters of advice – the biggest financial scheme of the early 90’s that had drained the national economy to the tune of several billion.

Mikhail Chernoy was in fact indicted in several cases involving fake letters of advice, but none of those cases was ever concluded. A series of fairly banal errors in those investigations is still a fairly sore point for some of out former federal investigators. Meanwhile foreign law enforcement did their own homework and came up with some curious results.

Operation “Copperfield,” carried out by the British intelligence, as reported in the media, uncovered well-established ties between Chernoy and Viacheslav Ivankov (aka notorious crime boss Yaponchik), described as the godfather of the Russian Mafia in America. British agents have traced the greater part of telephone calls coming out of the TWG offices in London to known mafia figures involved in money laundering, contraband and various other criminal activity. Subsequently, Mikhail Chernoy was no longer welcome in the UK. The US followed suit. What happened next is the stuff of crime novel…

In February of 2006 a conference took place in Alexandria, VA called Intelligence Summit, which brought together former and active members of 16 US intelligence agencies. Mikhail Chernoy, still banned from entering the US, was on the list of conference sponsors! Moreover, around the same time Mr. Chernoy made a number of trips to London, where he is strictly verboten. I won’t say who helped him slip past the guards. The answer should be fairly obvious; and besides, it was already given before me by the former tax officer Viacheslav Zharko, who was nearly recruited by MI-6 under Mr. Berezovsky’s watchful eye…

Chernoy, waiting to hear the likely decision of the Israeli High Court of Justice (Bagatz) on the matter of his citizenship, is probably already packing his bags and looking for a new home. And behold, he finds one…

According to sources in the Russian-speaking community of London familiar with his plans, Mr. Chernoy was initially looking at the Trevor House mansion in the posh neighborhood of Belgrave, worth about £25 mil. He was also considering Beachwood House, an 11 acre estate in London’s Hampstead suburb (about £65 mil).

Mr. Chernoy finally settled on the more modest Oakland House in Weybridge, Surrey, on Granville Road, St. George’s Hill. According to our source the property was purchased on March 3 2008 for £7.5 mil.

In his purchase Mr. Chernoy had undoubtedly availed himself of the services of Timeline Estates Ltd (BVI), with offices located on the 2nd story of 79 Knightsbridge, London – i.e. the address of Pettman Smith, a law firm representing Mr. Chernoy and his friend and consultant Frank Newman.
Records indicate that on March 3, 2008 Oakland House was in fact sold to Timeline Estates, Ltd for £7.5 mil. The mortgage holder of the property is the National Bank of Abu-Dhabi, which also manages all transactions for none other than Boris Berezovsky!

Another curious coincidence: on January 9, 2006 a property down the street from Oakland House – Woodley Manor, Weybridge, Surrey KT13 0QJ – was purchased through OMIA Holdings, Ltd, c/o Trust Offices PO Box 3540, Tortola (BVI) by another Russian. The price – £5.7 mil. Looks like Berezovsky’s moving in next door. And somebody had to have put up that money… but who?

Naturally, it could all be a product of an over-excited imagination of some investigative journalist. But this matter happens to interest other people, not just journalists…

Mr. Berezovsky is not so naïve as to imagine that his troubles are no more, what with a change in the Kremlin and a partial reshuffling in national security and intelligence leadership. He knows that the past cannot be erased. Mr. Berezovsky doesn’t forget. Nor is he forgotten. Right?

Now, why am I still harping on the 90’s? Because the fortunes of people like Berezovsky and his friend Chernoy were made in those days, on the ruins of the collapsed empire. That is also when the two had met for the first time. There is a saying: an old friend is worth two new ones…
I
n the lofty heights of Russian law enforcement agencies I was told on more than one occasion: Chernoy has been living in Israel since 1994, he has no interest in Russia, he had no money here. The same goes for Berezovsky, with a different date of departure, of course.

This is an error.

And I will tell you why.

Story #1
On July 20, 1998 the general manager of OAO Altai Coke S. Khachaturian and its chief engineer V. Kochkin departed for London, on a business trip. According to our sources there they held talks with representatives of certain companies controlled by Chernoy and Berezovsky. In the course of the talks Chernoy made them an offer: either you sell us 33% of your corporate shares, or we will buy them from the shareholders, without your assistance. If you try to block us – we’ll squeeze you. Khachaturian got scared: it sounded like a physical threat.

Chernoy had another sad news for his guests: as things stand we are already controlling your company, and moreover, we have in our possession some documents of a rather sensitive nature, including transcripts of Mr. Khachaturian’s telephone conversations.

Khachaturian and Kochkin promised to give the matter some serious thought. Then there were two hits on Khachaturian – he survived, but never went back to the company.

Well, in August of the same year the management of OAO Altai Coke voted “to sell 32.2% of corporate shares (318,209,070 shares in total) to a Chernoy-Berezovsky concern.” In September of ’98 the new owners bought up a controlling stake in OAO Altai Coke, also picking up 33% of the shares of OOO Alfoks, not without “exerting pressure” on the management of both companies. Subsequently, Chernoy broke up existing supply contracts with companies in Kazakhstan, effectively closing off international destinations for Altai’s production, disrupting contracts with existing international partners. But the new owners weren’t especially troubled by these developments. The main thing was – they were now in charge…

Story #2
In late December ’99 Mikhail Chernoy paid a friendly visit to the city of Ekaterinburg. In the course of his stay in the regional capital Chernoy held meetings with the local “elite” – i.e. leaders of the Uralmash crime ring and crime families of the Cheliabinsk Oblast. Police reports typically refer to this “elite” as criminals. Khabarov, Kruk, “Dump Truck” – some gone, some wandering far…

Does Mr. Chernoy recall such meetings? I suspect he does, since the “old gang” was debating some serious financial issues: “redistribution of economic influence in the Ural region.” Chernoy “was unhappy with Khabarov’s efforts in beefing up the common cash fund, and announced that if things continue to move in the same direction Khabarov will be cut out of any further serious negotiations.”

At the end of his journey Mr. Chernoy visited Nizhnii Tagil, where he “dined with the boss Karo,” who introduced Chernoy to his henchman, the finance director of Uralvagonzavod. At dinner they discussed “embezzling government funds allocated for the production of a new tank.” And Karo is not Chernoy’s sole “business contact.” The same year there were rumors floating around Moscow that Mikhail Chernoy was getting together with the crime boss I.I. Burilin to take over all coal supplies coming out of Kiselevsk (Kiselevskugol).

No, Ural hasn’t forgotten Chernoy – not after all the hoopla! Incidentally, a security guard at Uralvagonzavod happened to tape a conversation between Chernoy and the finance director (presumably for sentimental reasons), which transpired on Dec. 28, 1998 and in which Mr. Chernoy states openly that a) I’m here with Berezovsky’s blessings, and b) I’m here to transfer part of the money coming from the government coffers toward a new tank to a bank account of a certain business venture.

And that’s the business, in a nutshell!
Chernoy always said that he doesn’t deal in big-time politics.

This is another lie.
In February of 1999 his proxy, Meston Holding CEO D. Buriak – now in charge of a controlling stake of OAO Altai Coke – formed and registered with Russia’s Justice Department a political party named “Civic Initiative.” Back in those days a party could spell some sort of political future, albeit vaguely. But nothing came of it. Berezovsky wasn’t there to help, and soon after he had departed for – or rather fled to – London.
Now they’re back together. This time in London…

Civic Initiative, part 2?
It’s a real shame, though: Boris will be the ruin of Misha in the end. First he’ll ask him to invest in some new political scheme, put him on a plane to Kiev, show him around London (presumably in return for a friendly stroll about Tel-Aviv), and then what?
Ask him to bankroll a revolution?

That joke is really getting a bit old…

ondon is not the hotbed of a “new Russian revolution.” Simply because there will be no revolution. Oh, sure, we’d like to see these boys go at it and play revolutionaries. I bet they couldn’t even march with Lenin a few steps without lifting his wallet.
Too bad. London’s a nice city. It’s just had some real bad luck with Russians.

Andrey Kalitin