Friday, October 23, 2009

A Blast from the Past

It may not have the same cultural resonance, certainly, it's not as tuneful, as the recent release of The Beatles remastered, still, I took a few moments to fondly reminisce when a friend mentioned yesterday that Semion Mogilevich was in the news.

Prior to my return to music, I'd been an investigator and white collar crime-buster. My final expose was a billion-dollar stock scam, YBM Magnex, with shares listed on the Toronto Stock Exchange, and an operational base in Newtown, Pennsylvania.

I recounted this case, and Mogilevich's key role, in a post on the earlier blog of mine - Born Every Minute.

(When making the shift from forensic investigation into music management, in '98/'99, at first I wondered, what good would I find my specialized background - understanding criminals and sociopaths in suits - when nagivating today's record industry? It didn't take too long to discover the answer to that...)

The ever resourceful YouTube hosts a BBC Panorama documentary on "The Billion Dollar Don". (You can even see myself in Episode 3 - having a really bad hair day.)

The latest chapter in this story is all over the web - this CNN item hitting most of the key notes:

FBI: Mobster 'more powerful than a John Gotti'

CNN Story Highlights

•Semion Mogilevich accused of taking U.S., Canadian investors for $150 million

•FBI believes he moved on to manipulating international energy markets

•FBI: Mogilevich's business degree, large influence on nations make him dangerous

•Alleged Russian mobster known for his ruthlessness, power, business acumen

From Jeanne Meserve CNN
October 22, 2009

NEWTOWN, Pennsylvania (CNN) -- Semion Mogilevich may be the most powerful man you've never heard of.

The FBI says Mogilevich, a Russian mobster, has been involved in arms trafficking, prostitution, extortion and murder for hire.

"He has access to so much, including funding, including other criminal organizations, that he can, with a telephone call and order, affect the global economy," said FBI Supervisory Special Agent Peter Kowenhoven.

Mogilevich's alleged brutality, financial savvy and international influence have earned him a slot on the FBI's Ten Most Wanted Fugitives list, though he has lived and operated from Moscow, Russia, for years. Watch CNN report on Mogilevich »

"He's a big man. He's a very powerful man," FBI Special Agent Mike Dixon said. "I think more powerful than a John Gotti would be, because he has the ability to influence nations. Gotti never reached that stature."

He is accused of swindling Canadian and U.S. investors out of $150 million in a complex international financial scheme. It centered on a firm called YBM, which purportedly made magnets at a factory in Hungary.

Authorities say the scheme involved preparing bogus financial books and records, lying to Securities and Exchange Commission officials, offering bribes to accountants and inflating stock values of YBM, which was headquartered in Newtown, Pennsylvania.

But there was one thing missing.

"There were no magnets," Dixon said.

It was all a sham, investigators say.

"In essence, what his companies were doing was moving money through bank accounts in Budapest and countries throughout the world and reporting these to the investment community as purchases of raw materials and sales of magnets," Dixon said.

And because the company was publicly traded, anyone owning the stock would have made a lot of money.

"And of course Mogilevich controlled large, large blocks of stock from the outset, and he made a substantial amount of money in this process," Dixon said.

Investors lost millions into the pockets of Mogilevich and his associates. He and his associates were indicted in 2003 on 45 counts of racketeering, securities fraud, wire fraud, mail fraud and money laundering.

Russian authorities arrested him last year on tax fraud charges, but because the United States does not have an extradition treaty with Russia, he remained beyond the reach of U.S. law enforcement. He is now free on bail.

The FBI believes Mogilevich moved on after YBM and began manipulating international energy markets, giving him a large influence on other nations.

Dixon noted that Mogilevich had control or influence over companies involved in natural gas disputes between Russia and Ukraine.

Authorities say Mogilevich, who has an economics degree from Ukraine, is known for his ruthless nature but also for his business acumen, which led to his nickname "the Brainy Don."

"He has a very sophisticated, well-educated, loyal group of associates that he works with," Dixon said. "He hires top-notch consultants, attorneys, risk management firms to assist him and protect him in his criminal ventures."

Louise Shelley, an organized crime expert from George Mason University, says Mogilevich is a new kind of criminal.

"The major criminal organizations in Russia have not only tapped into people with economics degrees," Shelley said. "They've tapped into people with PHDs in finance and statistics who assist them."

The FBI hopes Mogilevich will eventually travel to a country that has an extradition treaty with the U.S.

But, in case he doesn't, his wanted poster will be distributed all over Russia.

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Blogger skythes said...

I'm amazed how you show no fear. I understand this man has literally the power to kill at will almost. I'm scared.

3:30 PM  
Blogger Adrian said...

When I was an investigator, in 1998, at that time I posed a threat to the organization. More rightly, the information I gathered was a threat - and there was incentive to stop it being published widely.

Once the news is out, however, there are more important priorities.

Such characters are very smart and know what is worth their time and energy.

10:33 PM  
Blogger Adrian said...

p.s. and if the theory is wrong, well, then, you just have to have made the most of your life, and be happy each moment - for we never know when it ends

11:20 PM  
Blogger Rohan Jayasekera said...

I live in Toronto and remember well the large amount of coverage this breaking story received in the Globe and Mail. Including the shocker that YBM's board included former Ontario Premier David Peterson.

But until just now I had no idea that you managed to get Toronto indie landmark the Cameron House shown on the BBC!

10:57 PM  
Blogger Adrian said...

Yes, a former premier being on board a front company for the mob is newsworthy. Though, as I recall, Peterson, also, if I recall correctly, associated with a Marco Muzzo scandal years earlier, was treated most delicately by Ontario-based media.

If honesty and integrity mattered, he and the YBM board would be roasted more surely than the peppers at a deli counter.

The BBC at the Cameron House for a Cameron Family Singers session was a hoot. A splendid time was had by all!

11:03 PM  

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