The Looting of Russia
An FBI agent and an honest Moscow cop stop the plundering of the national treasury
Kozlenok's ex-partners, the Shagirians, fled the United States. Ashot was deported to San Francisco from the Caribbean and pleaded guilty to tax evasion last January. David is believed to be hiding in Europe. Chernukhin is wanted for questioning in Moscow and San Francisco; he is said to be ensconced at homes in Cyprus and Montreaux, Switzerland.
Kozlenok proved as poor a fugitive as he did a diamond merchant. After fleeing to Belgium, he traveled to Athens last January using a fake Greek passport and was promptly arrested. He pleaded not to be extradited: His knowledge of corruption among top Russian officials, he argued, put his life in danger. "It's obvious that if I come back, I won't live longer than two or three days," he warned. In fact, only days later, one of his Moscow business partners was found hanged by his sweater in a prison cell. "He was suicided," noted one Russian official dryly. But a Greek judge was unimpressed with Kozlenok's legal appeals, and last month he was extradited to Moscow, where the big question is whether he will name names. "He's a pawn being played by competing interests--those that want to use him to attack their enemies and those who want him dead," an FBI source says.
As Viktor Zhirov's investigation moves into its fifth year, he finds that his case is increasingly in the hands of prosecutors who may cave to political pressure. With Russia's presidential election in 2000--and with the possibility that several contenders could be implicated--he fears that the case may well end up in dusty file cabinets.
Whatever happens, Zhirov and his Untouchables have set an enduring precedent. "They've lessened the bleeding," a top FBI agent says. "And they're getting better at it." The small band of Untouchables has grown to more than 50, and their impact is being increasingly felt not only in Russia but in America. Today U.S. and Russian law enforcement agencies are cooperating on more than 300 investigations.
For his efforts in Golden ADA, Zhirov has been promoted to colonel. While he continues to monitor the Kozlenok case, he has shifted his focus to other criminal activities. "Golden ADA is only the first affair," he says. "There are many such deals."
Looting Mother Russia Experts say Russia is being plundered through the sale of its natural resources. In a typical scheme, a seller, aided by corrupt officials, sells Russian commodities overseas for high prices than he reports to the government, and pockets the difference. One scholar compared reports of such sales filed with the Russian government with known market prices of the same commodities. The difference, shown below, is the amount believed to have been stolen.
Estimated illegal profits from commodity sales
[in $ millions]
1992 1993 1994 1995
Crude oil * 61 972 828
Petroleum products 642 1,272 2,148 1,528
Natural gas 364 * 885 1,152
Aluminum 59 655 1,419 899
*No net theft
Sources: Vladimir Tikhomirov, Europe-Asia Studies