Red Notice: A True Story of High Finance, Murder, and One Man's Fight for Justice (30 page)

None of this made any sense. First, Hermitage hadn’t done any business with Renaissance in years. Second, how could I give him permission to liquidate our companies if we didn’t own them anymore? And third, even if I could give him permission, how would that benefit us, and specifically Ivan, who still had a criminal case open against him? I silently concluded that Sagiryan was either stupid or that he had another agenda. I suspected the latter.

I tried to draw him out as far as I could for the recording. Unfortunately, every direct question I asked was countered with an evasive or incomprehensible answer, similar to the way he’d spoken to me on the phone when he’d first called.

Our conversation ended when he looked at his watch and stood abruptly. “I’m late for dinner, Bill. I hope you have a happy holiday.” We shook hands, and just as quickly as he had arrived, he left. I followed him through the lobby, went out the door, and hopped into a taxi to return to the office to share the recording.

When I got to Golden Square, the entire team, plus Steven and one of his surveillance guys, was waiting for me in the conference
room. I pulled the recorder from my pocket, disconnected it from the wire, and handed it to Steven. He placed it on the table and hit play.

We leaned in. We heard the sounds of me talking to the first cabdriver and the ride to the Dorchester. We heard my footsteps on the pavement and the greeting from the hotel’s doorman. We heard the sounds of the Dorchester’s lobby. And then, at 7:10, we heard a burst of white noise that drowned out everything.

Steven took the recorder, thinking something was wrong with it. He rewound it a few seconds and pressed play again. The result was the same. He fast-forwarded, hoping to pick up something later in the conversation, but the white noise persisted. It disappeared only when I left the hotel and asked the doorman for a taxi. Steven hit stop again.

I looked at him. “What was that?”

He frowned, turning the recorder over in his hand. “I don’t know. It could either be that this thing is faulty or that Sagiryan was using some kind of high-pitched jamming equipment.”

“Jesus Christ. Jamming equipment. Where do you even get that?”

“It’s not easy. But it’s commonly used by special services like the FSB.”

I found this extremely unsettling. I thought I was being clever by hiring Steven and playing the spy, but it turned out that I might just have sat down with an
actual
spy. I decided then and there that this would be the end of my naive foray into cloak-and-dagger tradecraft.

Sagiryan was a dead end, and we were no closer to understanding what the bad guys were up to. All of our hopes now rested with the complaints we’d filed with the Russian authorities.

The day after the Sagiryan meeting, we received our first official reply from the Saint Petersburg branch of the Russian State Investigative Committee. Vadim printed it, skimmed the legalese, and got to the punch line. “Listen to this, Bill. It says, ‘Nothing wrong happened in the Saint Petersburg court, and the request to open a criminal case is declined due to lack of a crime.’ ”

“ ‘Lack of a crime’? Our companies were stolen!”

“Wait, there’s more. They helpfully point out that they won’t
prosecute our lawyer, Eduard, for filing our complaint,” Vadim said sarcastically.

The next day we received another response. This time it was from the Internal Affairs Department of the Interior Ministry, which should have been
very
interested in Kuznetsov’s and Karpov’s dirty business.

“Get this,” Vadim said, reading over it. “Internal Affairs is passing our complaint to Pavel Karpov himself to investigate!”

“You can’t be serious.”

“I am. It says so right here.”

Over the next week we received three more responses, all of them equally unhelpful.

By the New Year, only one complaint was left outstanding. I had no reason to think the response would be any different. But on the morning of January 9, 2008, Eduard got a call from an investigator named Rostislav Rassokhov from the Major Crimes Department of the Russian State Investigative Committee.
¹
Rassokhov had been put in charge of dealing with the complaint and asked Eduard to come to the Investigative Committee’s headquarters to go over it.

When Eduard arrived, he was greeted by a man roughly his age. Rassokhov wore a wrinkled polyester suit and a cheap watch and had a bad haircut—all encouraging signs in a land as corrupt as Russia. They walked to Rassokhov’s office, sat down, and went line by line through the complaint. Rassokhov asked detailed questions with a look of stone-cold seriousness. At the end of the meeting he indicated he was going to open a preliminary investigation into our allegations against Kuznetsov and Karpov and bring them in for questioning.

This was excellent news. I could only imagine the looks on Kuznetsov’s and Karpov’s faces when they were invited to the Investigative Committee for questioning. After all the terrible things they had done to us, it felt as if the tables were about to be turned.

I enjoyed this feeling for nearly two months, until one evening in
early March when Vadim walked into my office looking very anxious. “I just got a message from my source Aslan.”

“What about?” I asked nervously. I was getting uncomfortably used to Vadim being the constant bearer of bad news, especially when it came from Aslan.

He thrust Aslan’s message in front of me and pointed at the Russian words. “This says, ‘Criminal case opened against Browder. Case No. 401052. Republic of Kalmykia. Tax evasion in large amounts.’ ”

I felt as if someone had just knocked the air out of me. It looked as if Kuznetsov and Karpov were getting their revenge for being called in for questioning. I had a hundred questions I wanted to ask, but it was 7:30 p.m. and, annoyingly, Elena and I were obligated to be at a dinner in half an hour that had been planned for months. An old friend from Salomon Brothers and his fiancée had made a big deal of securing an impossible-to-get reservation at a new London restaurant called L’Atelier de Joёl Robuchon, and I couldn’t cancel on such short notice.

On the way to the restaurant I called Elena to share Aslan’s message. For the first time since this crisis started, our emotional rhythms were in sync and we panicked simultaneously. When we arrived at the restaurant, our friends were already there, sitting in a booth and smiling. They announced that they’d taken the liberty of ordering the seven-course degustation menu for the four of us, which would take at least three hours to consume. I soldiered through dinner, trying to hide my raw panic as they blithely talked about wedding venues, honeymoon plans, and other fantastic London restaurants. I couldn’t wait to leave. The moment the
second
dessert course was served, Elena squeezed my knee under the table and made an excuse about getting home to our children. We rushed out. On the way home, Elena and I just sat in the cab in silence.

This new criminal case against me required immediate attention. The next morning, I told Eduard to drop everything and go straight to Elista, the capital of Kalmykia, to find out as much as he could.

Early the next day Eduard flew to Volgograd, hired a taxi, and
made the four-hour trip to Elista. The landscape of Kalmykia—a southern Russian republic on the Caspian Sea populated by Asiatic Buddhists—was the most desolate he had ever seen. It was flat and barren with no grass or trees, just brown land and gray skies for as far as the eye could see. The only breaks in the monotony were a few dilapidated buildings every ten or twenty miles.

When he arrived in Elista, he went straight to the Interior Ministry building on Pushkina Ulitsa. The clean, modern four-story building was across from a public square containing a golden pagoda.

He entered, introduced himself to the receptionist, and asked if he could see the investigator in charge of criminal case number 401052. A few minutes later, a short, middle-aged Asiatic man with bowlegs and a leather vest emerged and said, “How can I help you?”

Eduard shook his hand. “Do you have a case opened against William Browder?”

The investigator, Dmitry Nuskhinov, gave Eduard a searching look. “Who are you?”

“I’m sorry. I’ve just come down from Moscow. I’m Mr. Browder’s lawyer.” Eduard then showed the investigator his power of attorney and asked, “Can you please tell me about the case against my client?”

The investigator relaxed. “Yes, yes, of course. Please come to my office.” The two men walked down a long corridor to a small and cluttered room, where the investigator allowed Eduard to inspect the case file.

The Russian authorities were charging me with two counts of tax evasion in 2001. Kalmykia had tax breaks not unlike those in Delaware or Puerto Rico, and the fund had registered two of our investment companies there. The case was clearly trumped-up. Inside the file Eduard found audits from the tax authorities that showed that everything had been correctly paid.

Eduard pointed this out to the investigator, who sighed heavily. “Listen, I didn’t want to have anything to do with this. They forced me back from vacation to meet with a high-level delegation from Moscow.”

“What high-level delegation?”

“There were four of them. They demanded that this case be opened. They said it was an instruction right from the top, and it had to do with worsening relations between Britain and Russia. I didn’t have any choice,” Nuskhinov said, clearly worried about all the laws he’d broken by following their orders. We later learned that the delegation consisted of Karpov, two of Kuznetsov’s subordinates, and an officer from Department K of the FSB.

“So what’s the status of all this?” Eduard asked.

“It was opened here and we issued a federal search warrant for Browder.”

When Eduard got back to Moscow the next evening, he called and told us everything. Aslan had been absolutely right. The criminal case against Ivan was just the beginning, and we had to believe that many more would follow.

1
 Russia’s FBI.

On October 1, 1939, Winston Churchill made a famous speech in which he discussed Russia’s prospect of joining the Second World War: “I cannot forecast to you the action of Russia. It is a riddle wrapped in a mystery inside an enigma; but perhaps there is a key. That key is Russian national interest.”

Fast-forward to 2008. Churchill’s observations about Russia were still correct, with one big proviso. Instead of the national interest guiding Russia’s actions, they were now guided by money, specifically the criminal acquisition of money by government officials.

Everything about our situation was a riddle. Why would Karpov and three of his colleagues jump on a plane and fly hundreds of miles to Kalmykia to open a criminal case against me just for revenge? Why would they pursue the case against Ivan if it accomplished nothing for them? Why go through the trouble of raiding all those banks if the Hermitage assets weren’t in Russia?

I couldn’t figure it out.

The more I thought about it, the more convinced I was that the answer to this riddle lay in the remains of our former investment companies that had been fraudulently reregistered. They didn’t have much economic value, but if we could somehow regain ownership of them, we would have the right to request all the relevant information from the government. From that, we could piece together exactly who—for this clearly went beyond Kuznetsov and Karpov—was behind the fraud.

To do this, we took legal action in the Moscow arbitration court to
have our companies returned to us. This must have come as a surprise to the people behind the fraud because they immediately countersued us in the Kazan arbitration court, forcing the case to be relocated to Tatarstan. Presumably, they thought that the Kazan court would be friendlier to them.

I wasn’t sure about our chances in a provincial Russian court, but I was happy to see our opponents reacting so quickly and defensively. We’d obviously touched a nerve. Eduard and one junior lawyer immediately got on a plane to Kazan. They arrived there on a cold day in March and went to the courthouse, an elegant building inside the “Kremlin” of the Republic of Tatarstan. Eduard was used to spending his time in grimy criminal courts where people were aggressive and tension permeated the air, but this was a civil court. The surroundings were nicer and the people were, well, much more civil.

On the day before the hearing, Eduard went to the clerk to request the case file. She typed the names of our companies into her database and helpfully said, “There are two lawsuits involving these companies. Would you like both of them?”

This was the first time Eduard had heard of a second lawsuit, but he deliberately showed no reaction to her question and only smiled. “Yes. I’d like both, please.”

She went into the file room and returned with a box full of documents, suggesting that Eduard might find it easier to study them at a table down the hall. He thanked her, walked to the table, and went through the case files. The first case was the countersuit for which Eduard was there. But the second case was one he had never seen. A
$581 million
judgment against Parfenion, another of our stolen investment companies.

He rifled through the paperwork completely mesmerized. The judgment was a carbon copy of the Saint Petersburg one. They’d used the same bogus lawyer and the same forged contracts containing the same information seized by the police.

The moment I heard about the additional $581 million judgment,
I wondered how many other Russian courts had similar fraudulent judgments against our stolen companies. I shared my concerns with everyone on the team, and Sergei began searching the court databases throughout Russia. Within a week he discovered one more—a $232 million judgment in the Moscow arbitration court.

In total, roughly $1 billion of judgments had been awarded against our stolen companies using the same exact scheme.

These discoveries only made the riddle that much more complicated. It still wasn’t clear how the criminals would make any money out of these claims. Just because they were “owed” this money didn’t mean it would magically appear in their bank accounts.
There was no money to pay them!
I was convinced that they had another agenda. But what was it?