On October 18, the Audiencia National (the Spanish National Court in Madrid) acquitted 17 defendants in the case of Tambovsko-Malyshevskaya gang of all charges of money laundering and organized crime. The Spanish prosecutors were flabbergasted when the court "believed" Russian FSB's reports provided by the defense and ignored the mere fact that two of the defendants had pleaded guilty (the judgment can be appealed, though).While the prosecutors and the court continue looking into the details of the gang's money laundering activities, The Insider has studied over 1000 wiretapped conversations from the case file. The intercepts lead us to believe that the "high-profile businessmen" have had close ties to Vladimir Putin's entourage. In this article, you can listen to selected conversations and study their translated transcripts. Among other things, the conversations and the judgment attest to the following:– Gennady Petrov, Tambovskaya's boss, co-founded and owned a large stake in the Rossiya Bank, where Putin once pompously opened his salary account.– Alexander Bastrykin, a good friend of Petrov's, got his appointment as head of the Russian Investigative Committee through the crime lord's connections. The criminal community welcomed his promotion. Having secured Bastrykin's appointment, Petrov also helped him find a good place for his office.– Petrov's associates keep in touch with Herman Gref and refer to him simply as "Gera"
The judgment: How the Spanish court took FSB reports at face value
Instigated in 2008, the Spanish case of Tambovsko-Malyshevskaya gang was subsequently dubbed "Troika" (from the Russian for "three"). The three individuals in question are Gennady Petrov, Alexander Malyshev, and Sergei Kuzmin, whom the prosecutors refer to as crime bosses (learn more). None of the three kingpins faced trial in person: Kuzmin evaded arrest (got drunk at the airport and missed his flight), and Petrov was temporarily released from prison after a year and a half in custody for a brief visit to Russia, from which he never returned – like Malyshev, who is supposedly suffering from a mental condition. The wanted list also features Ilya Traber (according to his attorney, Vladimir Putin worked for Traber back in the 1990s) and Anton Petrov, Gennady Petrov's son. Charges were laid on a total of 26 individuals; 17 of the instigated cases were heard in this litigation.
In its press release on the Operation Troika judgment, the Audiencia National asserts that the "very unconventional" and "uneconomical" investments imputed to the 17 defendants are not sufficient proof of money laundering unless there is solid evidence that the funds had been obtained through criminal activities.
The "uneconomical" investments are the €50 million from offshore companies in Panama, Liberia, and Liechtenstein that Troika's employees and relatives invested in Spain and then transferred to Russia. At least one transfer was blocked by the bank as a suspicious transaction, and defendants Mikhail Rebo and Leonid Khazin confessed to laundering of criminal money for Sergei Kuzmin and Alexander Malyshev respectively. However, the court ruled that they had no way of determining the exact source of the defendants' income, so they could disregard the confessions and fully acquit the defendants.
The judgment, available in the e-archive of Spanish court decisions, shows that the judges consistently disregarded a protected witness' testimony about the racketeering perpetrated by the Tambovsko-Malyshevskaya gang, the reports presented by experts (Spanish police and intelligence services) on the Russian mafia and corruption in the Russian justice system, and the documents on the gang's activities provided by the Swiss police, declaring the latter "lacking in specifics." By contrast, the judges express their confidence in the report by the Russian FSB of January 29, 2009 ("The FSB has no information on Gennady Petrov's appurtenance to Tambovsko-Malyshevskaya crime group") and a notification by St. Petersburg Directorate of the FSB that Petrov is not currently under investigation.
Gennady Petrov
According to the judicial panel headed by Judge Ángeles Barreiro, the defendants, all of them Gennady Petrov's employees, "had no connection to one another apart from being Russian nationals and working in investment." The court reckons that the Tambovsko-Malyshevskaya gang does exist, but Petrov has nothing to do with it because he was acquitted of charges of its creation in St. Petersburg in 1995. Interestingly, the judgment of 2018 refers to a particular incident during the St. Petersburg trial of 1995 — witness Belikov withdrawing his testimony. Previously, Belikov had claimed that two gangsters had taken him straight to Petrov and Malyshev's office (SP Petrodin, a joint venture company on Kamenny Island) to extort a monthly payment of 100,000 rubles (about $1500) in the immediate presence of the two bosses. However, at the trial, Belikov suddenly said that his abductors "introduced two unknown individuals as Petrov and Malyshev," and the Spanish court has no evidence of the contrary.
However, the defendants demonstratively living beyond their means could also be regarded as money laundering evidence. Petrov owned a huge villa on Mallorca – a sea-view palace with stone lions – kept a couple of yachts, drove a cabriolet, and even bought a 62-thousand-euro crocodile leather jacket, one in three in the world, as a birthday present to his wife. And yet, everything has its explanation. The Spanish court pinpointed several legitimate companies that could explain the origins of Petrov's wealth in Spain. As an example of such a business, the judgment mentions SP Petrodin without, however, going into detail about its activities. The Insider has already covered its history.
Back in the 1990s, SP Petrodin was involved in the municipal casino project, which Vladimir Putin had signed off on. Its half-Swedish, half-Japanese co-owner revealed to The Insider that in 1994 the criminal community was actively extorting money from everyone, even from him, to bribe the local judges and to secure Gennady Petrov's release from prison. In spite of its legitimate status, SP Petrodin was exempt from taxes, which Putin himself admitted in his book "First Person: An Astonishingly Frank Self-Portrait by Russia's President" (currently removed from the Kremlin's website) when commenting on his municipal casino initiative. Judging by the photos, Gennady Petrov's "municipal casino" was small and apparently had uses other than "attraction of foreign tourists," contrary to Putin's announcement at the time of its opening. One of the most widespread money laundering mechanisms is through doctored reports on the number of casino tables. Notably, SP Petrodin was not supposed to render consulting services at all according to the registration data.
Meanwhile, the judges also reproached the Spanish prosecutors for their multiple objections against transferring the case to Russia for investigation under the European Convention on the Transfer of Proceedings in Criminal Matters of 1972, which would supposedly have revealed the origins of the money attributed to the defendants. However, the judge could not have failed to recall a similar incident: the case of Oleg Deripaska and Iskander Makhmudov on money laundering by a subsidiary of Ural Mining and Metallurgical Company. In Spain, the case was severed from other charges, was transferred to the Russian Prosecutor General by Judge Fernando Andreu "for better investigation" and then, by all appearances, ceased to exist. Several sources have confirmed to The Insider that Audiencia National judge Fernando Andreu, who in fact buried Deripaska's case, met the now-deceased Deputy Prosecutor General of Russia, Saak Karapetyan, in Moscow in November 2017. At the time, Andreu was not officially overseeing any cases with a Russian connection.
The Insider has obtained access to thousands of intercepted conversations between Gennady Petrov and his associates, including those who are now in custody, his relatives, and friends. The Spanish court has proclaimed that these dialogs, in particular the ones played during the proceedings, "do not attest to anything specific." At the trial, the Special Public Prosecutor's Office against Corruption and Organized Crime failed to prove Petrov's trade in influence through State Duma deputy Vladislav Reznik, whom he had been using to promote his protégés to Russian security agencies and ministries.
The judge believed defendant Reznik, who asserted that he had been "simply listening to [appointment] requests without doing anything" and accepted Reznik's and his wife's explanations of why they had been purchasing Spanish villas, yachts, and a private jet from Petrov or jointly with Petrov and his son Anton through a blind trust. Supposedly, Reznik was just looking for ways of managing his assets, which had exceeded 60 million euros by 2008.
In the first part of our investigation, we offer you a number of Petrov's conversations that provide illuminating insights into his ties with both the Kremlin and organized crime.
Gennady Petrov and Yury Kovalchuk co-founded the bank where Putin's salary is credited
In the Spanish judgment, Gennady Petrov is listed as a shareholder of the Baltiyskaya Construction Company and over a dozen other entities and, most importantly, as co-founder and holder of a 27-percent stake (from 1992 to 2003) in the Rossiya Bank, also known as "Putin's friends' bank." Incidentally, once sanctions had been imposed on the bank, Vladimir Putin declared that he was moving his salary account there. In July 2011, the Federal Financial Markets Service of Russia exempted the Rossiya Bank from disclosing information about considerable changes in the volume of its assets and profits and the compositions of shareholders.
Another acquitted defendant in the money laundering case is a co-founder too – Vladislav Reznik (presently State Duma deputy) had been on the Bank's board of directors for a long time, as confirmed by his own testimony and an inspection by the Russian MIA, the results of which were also presented to the Spanish court and were reflected in the judgment.
Stating the size of Petrov's stake in the Rossiya Bank, the court referred to a report by the Spanish police from 2009, which had been, in turn, based on the documents obtained during investigation of the presumed criminal organization – searches and wiretaps. Previously, Petrov and Sergei Kuzmin were believed to be minority shareholders with 2.2 percent each. However, in addition to individual ownership, they owned some of the Bank's shares through affiliated companies.
Yury Kovalchuk, a friend of Vladimir Putin's and Gennady Petrov's
Petrov was not a common shareholder. According to a conversation of August 2, 2007, he was on friendly terms with Yury Kovalchuk (the current majority shareholder of the Rossiya Bank). That day, Petrov's son Anton complains to his father: "Savelyev is not meeting his obligations, says they're in the middle of an inventory." (Apparently, they are talking about loan granting and restructuring at Bank Saint Petersburg, which is headed by Alexander Savelyev). Gennady Petrov promises to speak to Yury Kovalchuk when he is in Moscow, saying he and Kovalchuk were once close friends.
Petrov also had a conversation with a Dmitry about the appointment of his associate (an Olga Aleksandrovna) to Gazenergoprombank (acquired by the Rossiya Bank in 2010). "Gena
Petrov picks up the hint about "Yura": "I'm coming and I'll see him, one way or another. We've arranged to talk on the phone on the 15th and to meet on the 15th or the 16th... Yura is our way in. We need to make sure to introduce them." Dmitry: "Besides, you surely realize that he can take it back from Gazenergoprombank to GPB
Dmitry continues: "Alexander Dmitriyevich dropped by...
Petrov: "It's the first time I've heard of him."
Dmitry: "He's Gref's former senior deputy. His right hand at the Ministry of Economic Development. Now he's head of V.V.'s Executive Office. His role is similar to Igor's
"That's right. But we need to make sure we use only one. Going through both of them isn't going to work," says Petrov.
"Well, it'll be confusing, yes," agrees Dmitry.
"That's right. He'll give us the cold shoulder," says Petrov and bursts out laughing.
Petrov also "tackles problems" with Rossiya Bank loans. For instance, on July 2, 2007, Petrov is discussing the 10-million-euro loan issued to a company called Ultra. Entrepreneur Mikhail Mironov, ex-partner in Ultra, is preparing for a meeting with Mikhail Klishin, director general of the Rossiya Bank, and fears that the Bank might demand that he, as a former partner, should repay the loan. So Mikhail Mironov asks Petrov for advice about the debt situation. Petrov recommends insisting that Ultra's director contact Klishin himself.
Mikhail Mironov frequently calls Petrov about construction projects in St. Petersburg, permissions, some sort of shares or bribes to authorities ("Let them tell us how much they want."), and proactive problem-solving. Thus, on August 3, 2007, he calls Petrov in panic: a special police unit is conducting a search in his office. Petrov tells him not to worry, to go to his office and then report to him in Mallorca. Mironov's situation is resolved; as it turns out, it was some sort of misunderstanding. Eventually, "the one in charge of St. Pete's" personally expresses his apologies to Petrov, as he later tells his son. Now Mironov needs "a head of security who can actually do their job."
"I'll ask the incumbents for recommendations," says Petrov. Later, Petrov calls Mironov back and suggests the candidature of his acquaintance, Yury Britikov from the Administration for Economic Security and Combating Corruption, which Mironov accepts.
Petrov and Herman Gref: "I'll tell him, 'Remember the f***ing boat ride? Gena sends his best. Don't forget our share!'"
The intercepts lead us to believe that one of Petrov's most prominent contacts was Herman Gref, who had just headed Sberbank at the time. The defendants refer to him as "Herman," "Gref," or "Gera"
Besides, Gref was in close contact with another defendant, Petrov's right hand and United Russia deputy at the State Duma Vladislav Reznik (more about him in our story "Reznik is no gangster – he's a deputy!" ). On June 29, 2007, Reznik calls Petrov to complain that Herman has been delaying the appointments – "he hasn't said no" but has already hired three other people. Petrov suggests calling Herman and demanding a definite answer, "Either yes or no."
Vladimir Putin anf German Gref
Here are some quotes for you. November 1, 2007. Nail Malyutin:
"How are you, Gennady Vasilyevich? Just to let you know, I went to see Fedorov yesterday at the UAC
Petrov: "That goes without saying; everything's been settled. I'm waiting for the answer now."
Malyutin: "I'm just updating you – any inconsistencies could show that you're not on top of things, and that's detrimental. You are the steering man, and we're just providing ammunition. I'm only good for polishing it... Your friend Gref has invited me to a banquet on November 12 on the occasion of Sberbank's 166th anniversary."
Petrov: "He's only starting on the 20th."
Malyutin: "He's already invited me for the 12th. I'll give him your regards."
Petrov: "Send him my best."
Malyutin: "I'll tell him, 'Remember the f***ing boat ride? You sure do. Gena sends his best. Don't forget our share!'"
Both laugh.
Петров и Сечин. "Не стоит его просить, он сам все отберет"
Petrov and Sechin. "You shouldn't ask him; he'll just take it all away."
Acting in Petrov's interests, Malyutin plans to sit down with an "Igor Ivanovich" and asks for instructions. At first, Petrov does not understand who they are talking about, so Malyutin has to specify, "Sechin of course." However, Petrov and Malyutin are hesitant about approaching Sechin with requests because "he'll just take it all away." At the same time, the two agree that "they can take it away no matter what." Malyutin refers to Sechin as the "supervisor" of shipbuilding.
Igor Sechin and Vladimir Putin
Petrov could have known Sechin and his appetites back from when the latter served as Putin's deputy at St. Petersburg Mayor's Office. With another Putin's deputy, Viktor Ivanov (head of the Federal Service for Drug Control at the time of the conversation), Petrov developed a closer relationship.
Ivanov once said that St. Petersburg's main "fighter against the Malyshevskaya gang" was his deputy Nikolai Aulov. By a curious twist of fate, once the gang had been gloriously defeated – with all the bosses acquitted – Aulov became one of Petrov's primary connection men after Petrov had moved to Spain. Petrov paid Aulov's phone bills and even covered his dentist's services. According to the intercepts, Aulov and Petrov spoke on an almost daily basis. As Putin's second term draws to a close, Aulov asks Petrov on June 27, 2007: "What rumors have we been getting on the reshuffling up there? Will there be any?" Petrov replies: "We don't have any specifics. According to what I have, there will be changes, but everything depends on one person – the top man. To be or not to be – he's the one calling the shots."
Besides, it looks like Petrov had a way in with Sechin after all. One of his contacts was Vladimir Golubev, also known as Barmaley. A tycoon with ties to the Tambovskaya gang, he is believed to be close to Sechin and is frequently mentioned in the intercepts. Barmaley has a reputation of an influence trader, but it looks like Petrov's people liked to throw their own weight around too. For instance, Anton Petrov once tells his father that he saw Malyutin and Burlakov at Barmaley's. The two were bragging that Burlakov had an in with Medvedev with regard to Aker Yards (later Wadan Yards).
Petrov, Zubkov, and Serdyukov
On July 19, 2007, Petrov was celebrating his birthday in Moscow. The guest list was limited to his closest friends. Those who could not make it would phone him with apologies, like Ilya Traber, a kingpin who is currently wanted by the Interpol. He called from Spain twice and advised Petrov to take it easy, to have more vacations, and to think about retiring.
The guest list also featured Anatoly Serdyukov, the then Minister of Defense and presently Sergei Chemezov's associate and industrial director of the Aviation Cluster at State Corporation Rostec, and his father-in-law, Viktor Zubkov, the then prime minister and presently chairman of Gazprom's board of directors. In the intercepts, Zubkov is referred to as "father-in-law" or "Vitya" (Russian short for Viktor), and Serdyukov, as "Number One" or "Tolik" (Russian short for Anatoly).
Anatoly Serdyukov ("Number One") and Viktor Zubkov ("father-in-law")
Number One gets his invitation through his deputy, Alexei Perets. Here is how it went: on July 3, 2007, Anton Petrov calls his father. Anton Petrov: "Perets has gone to see Number One; he'll pass it to him." "He'll ask him to call you?" Anton Petrov: "Yes. Well, I've heard he's already been asking Perets about the 19th."
"Tolik" and Petrov were on familiar terms. Anatoly Serdyukov even presented the crime lord with a saber. Here is an intercept of August 1, 2008.
Gennady Petrov:
"We went to see Tolik and Sashenka
Anton Petrov:
"How's Tolik doing?"
Gennady Petrov:
"Really good. You should come on the eighth and go see him on the ninth. I say, 'I'll go myself.' But he says, 'Don't. Let Anton explain everything. I'll drop by Vitya's or whoever's in charge, and we'll settle the matter right now.' We'll need an official paper for that..."
Anton Petrov:
"The paper's ready."
Gennady Petrov:
"Good. It's a done deal then. You need to be here on the eighth and meet him on the ninth."
Anton Petrov:
"Should I get him something?"
Gennady Petrov:
"Like what? Just get him a bottle of good cognac and some flowers for his wife and daughters. He gave me a saber for my birthday." [Laughter]
How did Petrov acquire such connections?
According to our two St. Petersburg sources, Anatoly Serdyukov and the Malyshevskaya gang go way back. The first source is Natalya Mikhailova, former assistant of Deputy Marina Salye at Petrosovet (St. Petersburg City Council in 1991–1993). According to Mikhailova, Serdyukov would enter the building of Petrosovet "in a crimson jacket with a golden chain" (criminal fashion of the 1990s), hence the suspicion of ties to organized crime. Our second source worked at the Pulkovo Airport in the 90s and has since moved to St. Petersburg Chamber of Commerce and Industry. According to him, "in the 90s, Serdyukov worked out at the gang's gym and belonged to what was euphemistically referred to as 'Malyshevskoye Movement.' Not that he had any actual weight there. When the police detained him yet another time for illegal carrying of arms, they advised him to lay low and to seek employment in a governmental structure. He ended up at the tax service under Viktor Zubkov and eventually married his daughter, which drastically improved his career prospects."
Zubkov, in turn, was the chairman of the town administration in Priozersk near St. Petersburg until 1991. (It was in Priozersk District that the notorious Ozero cooperative emerged a few years later). Until 1993, he served as Putin's deputy at the Committee for External Relations of St. Petersburg Mayor's Office, after which he headed St. Petersburg Tax Office. The latter did not go smoothly, as his predecessor contested his dismissal in court.
As Kinichi Kamiyasu, co-founder of SP Petrodin, recalls, the Tax Service used to be a tool for arbitrary punishment of entrepreneurs. It was under Zubkov that the tax authorities started harassing businessmen, according to Mikhail Mokrousov, an entrepreneur from St. Petersburg who has emigrated to Europe.
Petrov's connection man, Viktor Zubkov, was Prime Minister at the time of the Spanish investigation and currently occupies the post of chairman of Gazprom's board of directors. Serdyukov, former minister of defense, has recovered from a moderate public flogging for his role in the case of Yevgeniya Vasilyeva and Oboronservis and went on to become the industrial director of Aviation Cluster at Rostec. Serdyukov is also on the board of the United Aircraft Corporation (UAC), whose subsidiary, the Financial Leasing Company, was bankrupted by Nail Malyutin and Dzhako "Krovavy" in Petrov's interests. Petrov and Bastrykin: "Tell him he's a good man, solid – dad knows him"
On June 22, 2007, Petrov speaks to Leonid Khristoforov, one of the Malyshevskaya gang's bosses who has done two jail terms for murder (it was from Khristoforov's gun that politician Galina Starovoytova was assassinated). In the conversation, Petrov is hesitant about accepting a certain lump sum "from that Armenian": "What the hell do I need it for?" In the same call, he brags: "The man's been appointed. The one I told you about, remember? So it's done – he's got the position. A real high one too." "Oh, great," approves Khristoforov. The reason why the two kingpins were so happy was Alexander Bastrykin's appointment as Head of the Investigative Committee.
That very day, on June 22, 2007, the Federation Council approved Bastrykin's candidature for the post of the Chairperson of the Investigative Committee. Having discussed the good news, "entrepreneurs" Petrov and Khristoforov move over to their business matters. However, these matters have more in common with racketeering than deal making. Khristoforov: "I scared the hell out of them. The Armenian is in panic, asking where he should bring the 200,000." Petrov: "Rascal. Call Anton, but don't let him get the money in person. Tell him to arrange a pick-up."
Later that day, Petrov receives a call from Nikolai Aulov, Brigadier General of the Militia (the then head of the General Administration of the Russian MIA for the Central Federal District): "You've heard about Sasha
Two months later, on August 22, 2007, Kumarin was arrested and has been imprisoned ever since. Four days after his arrest, Petrov shares with Leonid Khristoforov that it was done at the "King's" behest: "What I mean is the King's will regarding the neighbor is very specific." Khristoforov does not catch on immediately, so Petrov has to spell it out: "Regarding my neighbor in St. Petersburg. My buddy Igor
Petrov fulfills this request by calling his son Anton on July 1, 2007, and asking: "Has Number One
In office, Bastrykin continued approaching his criminal benefactor with requests. In particular, Petrov helped him find an office in St. Petersburg. On April 6, 2008, Petrov calls Igor Sobolevsky, Bastrykin's deputy. "Hey there, buddy," says Sobolevsky. "Listen, you were saying something about a place that Sasha's looking for... I've just discussed it, and it's a done deal, so tell Sasha to give that man a call and that's it. Do you need some sort of guard box?" "Yes, a box, a meter and a half is enough," answers Sobolevsky. Both laugh. "Well, it's just that it's currently occupied by a Viktor Butenko, and we need him to move out ASAP," continues Sobolevsky. "Do you have an official...? Wait, I'll pass the phone," says Petrov.
"Hello!"
"Good afternoon!"
"Good afternoon! I'm Igor Borisovich Sobolevsky. Bastrykin and I are currently looking for a place. The office we have now isn't big enough. Federal Property Management has offered us a building in Kazakova Street, where two of your federal state unitary enterprises are located... The Property Management has provided a good alternative for them."
Summing up, Sobolevsky suggests: "Bastrykin will write an official letter to you, and we'll speak to Butenko and Gerasimenko and ask them to write similar letters."
In the next part of the investigation, The Insider will reveal the origins of the Tambovskaya gang's ties to Putin's entourage and will share more intercepts and details.
To be continued...