The Looting of Russia
An FBI agent and an honest Moscow cop stop the plundering of the national treasury
Davidson learned that the situation at the company was growing increasingly chaotic. Kozlenok had a falling-out with the Shagirian brothers and demanded they leave the firm. Kozlenok, they claimed in court records, offered them $5 million or "a bullet to the head." The Shagirians took the money. Some of Kozlenok's own employees flew to Moscow and begged Bychkov to fire him. While Bychkov was away, one of his deputies quietly slipped out of Moscow for a look at Golden ADA's operation. He returned home shocked at the waste and extravagance. Stories soon surfaced in Moscow about a runaway U.S. diamond center set up by the national treasury.
When word reached Kozlenok that the FBI was asking questions, he was surprised; he thought he was well protected in San Francisco. He was skilled at creating a krysha--literally, a roof--which has come to mean the web of contacts and protection that enables one to get things done in Russia. That was why he had chosen Immendorf, who was both politically connected and a veteran private investigator, to oversee security. Kozlenok had made donations to local politicians, hired off-duty San Francisco cops, offered police his helicopter--all this was designed to build his krysha in America. But he seemed not to understand the United States. The Russian was puzzled at why Immendorf couldn't tap into FBI and police files. "He thought you could get anything if you had the juice," says Immendorf. "These guys thought they were still in Moscow."
Worried that Golden ADA would be taken away from him, Kozlenok turned to Immendorf. He asked him to become CEO and straighten things out. Attracted by a million-dollar salary, the 54-year-old Immendorf agreed. He, in turn, hired as the firm's general counsel State Sen. Quentin Kopp, another fixture in San Francisco politics. The two men were shocked when they got a close look at Golden ADA. The company was in chaos, with vaults filled with treasure, sets of double records, and money hemorrhaging everywhere. "I was squandering the company's assets, and I couldn't stop it," Immendorf recalls. Immendorf brought in Arthur Andersen, the consulting firm, which found that the company had disbursed over $130 million with few clear records. After six months as CEO, Immendorf quit. "These guys were all stealing from each other," he concluded.
Back in Moscow, Bychkov saw Golden ADA careening out of control. The original plan, say police, may have been to pressure De Beers with Golden ADA, while skimming enough off the top to satisfy everyone involved. But Kozlenok seemed to have gone crazy, in effect killing the goose that laid the golden--or diamond--egg. So Bychkov turned to a Russian businessman named Andrei Chernukhin, a man whom one FBI agent bluntly referred to as "the cleaner."
Chernukhin was a short, stout fellow with a faint resemblance to Khrushchev and a reputation for cleaning up messy situations. His business card read simply: Consultant to the Russian Federation. Chernukhin called in Alex Security, among the largest of the Russian security firms that have proliferated in recent years. Composed heavily of ex-KGB and special-forces personnel, Alex guards soon appeared at Golden ADA dressed in green fatigues and armed with semiautomatic weapons. Chernukhin then turned his attention to Kozlenok, and he was not in a charitable mood. As he said to Immendorf: "Kozlenok betrayed us all."
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