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Ousted U.S. Prosecutor Bharara A Thorn In Russia's Side For Years

  • Carl Schreck

Preet Bharara was appointed U.S. attorney for the Southern District of New York in 2009. (file photo)

Preet Bharara's supporters may be criticizing his firing as a federal prosecutor, which the Trump White House characterizes as a routine renewal of ranks among U.S. attorneys under a new president. But it is unlikely that any tears are being shed in Moscow.

The former U.S. attorney for the Southern District of New York, appointed in 2009, led numerous high-profile prosecutions that rippled through the corridors of power in the Russian capital -- and eventually he found himself blacklisted by Moscow.

Here's a look at several Russia-related cases spearheaded by Bharara's office during his seven-year run.

The 'Merchant Of Death' And The Pilot

Arguably no two cases under Bharara's watch have publicly riled Moscow like those of notorious arms dealer Viktor Bout, a former Soviet Air Force officer dubbed the "Merchant of Death," and pilot Konstantin Yaroshenko. Both are Russian citizens, and are currently serving long U.S. prison sentences after being convicted on conspiracy charges related to trafficking in arms and narcotics, respectively. Both men were nabbed in third countries and subsequently extradited to the United States, a practice that Moscow has likened to kidnapping.

Russian arms trader Viktor Bout (file photo)
Russian arms trader Viktor Bout (file photo)

In what was widely seen as retribution for his involvement in these two cases, Bharara was included in a 2013 Russian sanctions list issued in response to the U.S. Magnitsky Act blacklisting alleged Russian rights abusers. In its announcement of the blacklist, the Russian Foreign Ministry accused Bharara of violating "the rights and freedoms off Russian citizens abroad."

The Hackers

Bharara's office prosecuted numerous cases against Russian hackers and other cybercriminals during his tenure, including several that outraged Moscow. The cases targeted Russians accused of large-scale theft involving compromised credit cards and bank accounts. One of these suspects successfully prosecuted by Bharara's office was Nikita Kuzmin, the son of Russian rock star Vladimir Kuzmin, whose website boasts that American Adult Contemporary icon Michael Bolton once praised him as a "super-talented musician."

Cyberfraudster Vladimir Drinkman attends a court hearing in The Hague in January 2015
Cyberfraudster Vladimir Drinkman attends a court hearing in The Hague in January 2015

Russia's main public bone of contention with cybercrime prosecutions led by Bharara's office against Russians, however, is the practice of third-country detentions. One such case involved Vladimir Drinkman, whom the Netherlands handed over to U.S. authorities in 2015 and who ultimately pleaded guilty to involvement in a massive cybercrime scheme that targeted NASDAQ, Carrefour, Dow Jones, Jet Blue, and other major American and multinational companies.

Following Drinkman's extradition, the Russian Foreign Ministry issued a warning to its citizens about the dangers of traveling to countries that have extradition treaties with Washington.

"By believing that it is allowed to do all it wants, Washington goes as far as kidnapping our citizens," the ministry said.

'Vigilant' Against Spies

Bharara's office was deeply involved in the most famous U.S.-Russian spy case since the fall of the Soviet Union: the 2010 arrest of 10 undercover Russian agents who were eventually handed over to Moscow in a spy swap. It was the Southern District that prosecuted the case, in which the Russians pleaded guilty to acting as unregistered foreign agents, though the terms of the deal were negotiated at the highest levels of the two countries' respective governments.

"These arrests and prosecution send a message to every other intelligence agency that if you come to America and spy on Americans in America, you will be exposed and arrested," Bharara told reporters after the Russians were handed over to their government on an airport tarmac in Vienna in July of that year.

Bharara would cite that case as federal prosecutors announced charges against Yevgeny Buryakov, who in 2015 was accused of working for Russian intelligence in New York under the cover of the Russian state-owned development bank, Vneshekonombank.*

"Following our previous prosecution with the FBI of Russian spies, who were expelled from the United States in 2010, … the arrest of [Y]evgeny Buryakov and the charges against him and his co-defendants make clear that -- more than two decades after the presumptive end of the Cold War -- Russian spies continue to seek to operate in our midst under cover of secrecy," Bharara said in a statement.

Moscow lashed out following Buryakov's arrest, accusing the Americans of carrying out an "anti-Russian campaign" and "resort[ing] to their favorite practice of pumping up spy passions."

Buryakov eventually pleaded guilty and was sentenced to 2 1/2 years in prison in May 2016.

Russian Diplomats 'Picking Pockets'

One of the more bizarre cases against Russian citizens in the United States was announced by Bharara's office and the FBI in December 2013, when they accused dozens of Russian diplomats and their spouses of mooching off Medicaid, the federal U.S. health-care program for the poor and disabled.

Prosecutors alleged that a total of 49 defendants -- each of whom was either a current or former Russian diplomat, or the spouse of a diplomat -- of involvement in a nearly 10-year "fraud scheme" to obtain some $500,000 in Medicaid benefits.

"Diplomacy should be about extending hands, not picking pockets in the host country," Bharara said, adding that "the charges expose shameful and systemic corruption among Russian diplomats in New York."

The defendants allegedly underreported their incomes in order to obtain Medicaid benefits, while at the same time splurging on "cruise vacations and purchases such as watches, shoes, and jewelry, at stores such as Tiffany & Co., Jimmy Choo, Prada, Bloomingdale's, and Burberry," prosecutors said.

Only 11 of the defendants at the time were still living in the United States, and they were protected by diplomatic immunity. Bharara said that the State Department would ask Russia to waive this immunity, and that if no such waiver was granted, the charged diplomats would be forced to leave the country.

Russia denounced the charges as a "cheap PR stunt" and blamed "Russophobic forces" in the United States. It also accused Washington of violating the Vienna Convention on diplomatic relations, "as well as just ordinary rules of diplomatic courtesy."

Prevezon

One of the most politically explosive cases handled by Bharara's office is not even a criminal action. It is a civil asset-forfeiture case, still ongoing, against a Russian-owned company accused of laundering part of the proceeds of a massive Russian tax fraud.

The funds in question are allegedly part of a $230 million scam uncovered by Russian auditor Sergei Magnitsky that potentially sheds light on high-level government and law-enforcement complicity in the audacious tax-fraud scheme.

Magnitsky died in a pretrial detention facility in November 2009 while being held on charges his family and friends say were retribution for implicating tax and law-enforcement officials in the scam.

Russian lawyer Sergei Magnitsky died in custody in 2009. (file photo)
Russian lawyer Sergei Magnitsky died in custody in 2009. (file photo)



Magnitsky's family says he was tortured and denied medical treatment while in jail, a claim rejected by the Kremlin. His death ultimately led to the 2012 U.S. Magnitsky Act blacklisting Russians deemed by Washington to be complicit in rights abuses -- the same sanctions that Moscow responded to by blacklisting Bharara.

Bharara's office in 2013 moved to seize pricey U.S. real estate held by a company called Prevezon, which was owned by the son of a senior executive with state-owned Russian Railways. The claims against the Manhattan properties are based on U.S. prosecutors' allegations that they were purchased with funds originating from the fraud that Magnitsky blew the whistle on.

"While New York is a world financial capital, it is not a safe haven for criminals seeking to hide their loot, no matter how and where their fraud took place," Bharara said in announcing the action.

While the amount of money involved in the Prevezon case is a modest (for high-profile Russian corruption cases, at least) $14 million, Kremlin-loyal media and a murky Russian lobbying effort in Washington has sought to use the civil case to undermine the narrative of Magnitsky's death that is broadly accepted in the West.

"We are observing the case with interest," Russian Prosecutor-General Yury Chaika said in December 2015.

One name that has surfaced as Bharara's possible successor is Marc Mukasey, a lawyer and an associate of former New York Mayor Rudy Guiliani, one of President Donald Trump's most prominent supporters during last year's presidential campaign.

Mukasey's father, a former U.S. attorney general, has represented Prevezon in an appeal in federal court related to the civil asset-forfeiture case.

*This story originally gave the wrong name of the bank where Buryakov was employed at the time of his arrest and charging.
With reporting by AP, Reuters, Bloomberg, Kommersant, and The New York Times
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