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.

And you may ask yourself, "How did I get here?"

There's no short answer.

Before returning, in the late 1990s, to my primary passion in life, music, I enjoyed a lengthy career as an investigator. I exposed the culture of crime and corruption all over the world - mostly in Canada, my home and native land.

My last big case file was that of YBM Magnex International Inc. and its web of white collar, and Russian, organized crime. YBM, which claimed to be a marketer of industrial magnets, was valued at close to CDN $1 billion on the Toronto Stock Exchange when I began my research and writing. I revealed that, rather than being a tremendous corporate success, YBM was actually a giant fraud. A former Premier of the province of Ontario, a Vice-President of Canada's largest independent brokerage firm, and other prominent business players on YBM's board served, effectively, as fronts for profiteering and money-laundering by figures linked to the biggest and most dangerous Russian mafia networks.

There's not one common repository for all that I wrote about YBM Magnex. It's a big, sprawling story. Numerous essays were published in 1997/98 on a website that I took offline before this millenia. There were also quite a number of articles I penned for a Canadian trade publication called Canada Stockwatch. Finally, there was a multi-part feature that appeared in The Vancouver Sun newspaper.

Some of my reportage on YBM Magnex remains cached in cyberspace thanks to the Wayback Machine and archives of various financial forums (eg. Silicon Investor), newsgroups, and major media publications.

One finds years of coverage in newspapers and other media that followed my YBM reportage of '97/'98. The scandal - involving godfather Semion Mogilevich, "The Billion Dollar Don", and his network - spawned lawsuits, criminal charges, government regulatory hearings+ - all of which earned extensive, international, press coverage.

RACKETEERING; SECURITIES FRAUD; WIRE FRAUD; MAIL FRAUD; MONEY LAUNDERING

SEMION MOGILEVICH

SHOULD BE CONSIDERED ARMED AND DANGEROUS AND AN ESCAPE RISK

IF YOU HAVE ANY INFORMATION CONCERNING THIS CASE, PLEASE CONTACT YOUR

LOCAL FBI OFFICE OR THE NEAREST AMERICAN EMBASSY OR CONSULATE.

ROBERT S. MUELLER, III DIRECTOR FEDERAL BUREAU OF INVESTIGATION UNITED STATES DEPARTMENT OF JUSTICE WASHINGTON, D.C. 20535 TELEPHONE: (202) 324-3000

From 1986 until 1995, I researched and/or wrote, primarily, for print publications around the world - newspapers and magazines including a range of Canadian journals such as The Globe and Mail, The Financial Times, Equity - and others more distant including The Observer (London), The New York Times, The Washington Post, Forbes and Barron's. Though largely in print, I also worked in broadcast media - researching documentaries for the BBC, Channel 4 in the UK, ABC in Australia, ABC-TV and CNN in the U.S., and, home in Canada, for the CBC's Fifth Estate and CTV's W5 investigative tv programs.

From 1995 to 1998, I created one of the first, and most detailed, investigative journals on the internet. "Back in the day", this was more like posting a book online. My YBM Magnex web-text alone was over 50,000 words - and no flash, and no graphics. Just laborious HTML-tagged text.

Writing online now is much faster and more simple! Witness the fantastic growth of the online community, of bloggers, podcasters and more. When I first launched a blog in this new web-savvy age, a year or two back, it combined my interests - music and investigative research. After looking at one specific recording industry hoax, I decided that was enough - I didn't get back into music to talk about the endemic rot of the industry. I've seen and written enough of the 'dark side". Music, for me, is about beauty and honesty. That's become my preferred focus since about 1999.

For now, if you've a taste for stories like YBM Magnex, here's a page that contains a nice mix of items - a few by myself, and a few by other investigative writers. It's the reporter's equivalent of a mixed-tape or CD song-sampler: Russian Mafia

Here, below is the intro that appeared online in 1998 to:

The Magnex Files

- Eternal Russia. The soul of this country is so deep, the beauty it can create so powerful, perhaps unique in the world. But there is always that other dark, brooding, violent and greedy side that is never far from the surface.

Jennifer Gould -- Vodka, Tears, and Lenin's Angel

The strange case of YBM Magnex International, Inc. is the most extraordinary I've ever investigated. A study of YBM is extraordinary in that it so clearly reveals the essential nature of Canada's stock markets.

The articles on this web-page will, hopefully, shine some public light into corners of the most bizarre affair, and the case most graphically illustrative of the nurturing corporate culture, encountered in close to 20 years work, much of it exploring the dark underworld of Canada's junior financial markets.

The saga of YBM Magnex began to receive expansive coverage through such regional U.S. newspapers as The Bucks County Courier Times, The Philadelphia Inquirer and The Philadelphia Daily News in mid-May 1998. The first American print journal to give extensive national coverage to related subject matter was The Village Voice with its publication of Robert Friedman’s May 26 1998 cover story, “The Most Dangerous Mobster in the World”. However, word of the criminal activities of Russia's Semion Mogilevich (and the alleged use of Arigon/YBM as a money laundering conduit by the Russian mafia) was widely accessible long before May 1998 on the internet and in European print journals. As early as 1995/96 newspapers and magazines in Czechoslovakia, Hungary and countries formerly of the Soviet Union, carried details of such activities. By at least 1997 (and likely earlier) various news articles and police intelligence reports were accessible on-line to anyone with an internet connection.

On this, my own, web-site I began publishing analyses of the YBM Magnex scam in March 1998 (following the first stock market exposes of YBM which appeared in Canada Stockwatch). In April 1998 I alerted virtually all major Canadian media outlets to YBM’s Russian mafia links (including Mogilevich and another “godfather”, Sergei Mikhailov). The story gained international attention when dozens of U.S. federal agents raided YBM’s Newtown, Pennsylvania headquarters on May 13 1998. Within days of the raid, the YBM story (and the history of Mogilevich et al in the U.K.) appeared on television news, and in newspapers and magazines around the world - from London’s The Observer and The Financial Times to Hungary’s HVG and The Financial Post and The Globe and Mail in Canada.

In the mid-1980s, I'd received multiple Western Magazine Awards for my feature writing on scams and scammers. In May of 1999, David Baines, a reporter with The Vancouver Sun newspaper, and I received a National Newspaper Award - Canada’s top print journalism award) for our breaking coverage of the YBM-Russian mafia story.

In handing out the award, the NNA noted:

“The Vancouver Sun’s David Baines, working with freelance securities investigator and writer Adrian du Plessis, unraveled the intriguing tale of YBM Magnex International Inc., the Canadian company that operated as a money laundering vehicle for the Russian mafia. The Sun began its early work on the company’s murky business dealings and links to organized crime even as investors were driving its share prices to record levels on the Toronto Stock Exchange. Judges called it a thoroughly comprehensive effort that combined extraordinary initiative, research, analysis and writing.”