https://theamla.com/wp-content/uploads/2017/11/170711-zavadski-russian-lawyer-tease2_ajqwvl.jpg 833 1480 Jon McGauley https://theamla.com/wp-content/uploads/2017/02/amla-logo-web2017.jpg Jon McGauley2017-11-03 11:36:262017-11-03 11:36:26Russian firm that promised to pay US millions after money-laundering settlement misses deadline
(CNN)-There’s a curious new twist in the international money-laundering case which first propelled Natalia Veselnitskaya, the Russian lawyer who met with senior members of the Trump campaign in June 2016, into the American spotlight.
The Russian company that became widely known after disclosure of the Trump Tower meeting declared that it would have to miss the deadline this week for paying the US government nearly $6 million dollars in a civil settlement because it is now under investigation by Dutch authorities.
Word of Prevezon Holdings Ltd’s professed inability to meet the deadline for payment came in a court filing in New York’s Southern District. The Cyprus-registered company had been accused in a civil asset forfeiture case by the US Justice Department of having laundered millions in stolen Russian taxpayer money through the Manhattan real estate market. Shortly before the case was to go to trial, Prevezon settled with the government and agreed to pay $5.9 million without admitting guilt. The deadline for that payment was October 31, 2017.
Prevezon, which has been represented by Veselnitskaya in its case with the US government, has claimed that its refusal to pay on time is related to a hold placed on its funds held in the Netherlands in connection with a separate money laundering complaint filed in that country.
According to a letter from US Attorney Joon H. Kim to Judge William H. Pauley III, the US government had agreed to request that the government of the Netherlands allow payment of a debt, amounting to 3,068,946 Euros, or about $3.6 million dollars, owed to Prevezon by AFI Europe, a Netherlands-registered company.
The Dutch authorities had originally frozen that transaction as part of the US civil litigation. Upon relinquishment of the funds to Prevezon, as per the settlement, the company was granted 15 days to remit the full $5.9 million to Uncle Sam.
While the Netherlands complied with the Justice Department’s request to unfreeze the debt in relation to the New York case on October 10, that same day, Kim writes, “Netherlands authorities seized the AFI Europe Debt based on their own independent investigation of Prevezon for money laundering, which relates to similar subject matter to this case …The [US] Government did not request this seizure, the Netherlands authorities did not seek, or require, the Government’s approval, and it is not part of or dependent on this action or the previous US-requested restraint, which has been fully released.”
The letter continues that Prevezon has “advised the [US] Government that, in light of the seizure, it may refuse to make the required payment as due, and has requested extra time for its owner to ‘consider his options,’ including a possible motion to relieve Prevezon of its payment obligation.” If that deadline is missed, letter said, the US Attorney intends to “file a motion seeking enforcement — including appropriate relief for late payment.”
This is the first documentary evidence that Natalia Veselnitskaya’s client is not quite free and clear of its legal troubles. The US alleged that Prevezon was the beneficiary of some of the funds acquired in a 2007 tax fraud perpetrated by a Russian state-backed transnational criminal organization known as the Klyuev Group.
Prevezon, which is owned by Denis Katsyv, the son of Pyotr Katsyv, a powerful Russian government official, has maintained that it was never the recipient of any purloined money. But rather than take the money laundering case to trial, it settled out of court in May.
Veselnitskaya hasn’t just represented her client faithfully in the New York legal system; she has tirelessly lobbied US Congress and also the then Trump campaign to do away with a US sanctions law named after Sergei Magnitsky, the Russian whistleblower who uncovered the alleged 2007 tax fraud.
Magnitsky’s findings of a criminal conspiracy, which he argued was abetted by agents of the Russian interior and tax ministries, constituted the foundation upon which the Justice Department’s case was constructed. (Magnitsky himself was arrested for tax evasion by the very authorities he implicated in this conspiracy; he died in Moscow pre-trial detention in 2009. In spite of a Russian presidential human rights council finding that Magnitsky had been physically abused in prison and denied urgent medical care, the Kremlin has maintained that his cause of death was “heart failure.”)
As part of her legal counsel for Prevezon, Veselnitskaya helped retain the services of Fusion GPS, the Washington private intelligence firm, to conduct research aimed at strengthening Prevezon’s defense, a rather awkward business arrangement, in light of the ongoing controversy over the Fusion-retailed Trump “dossier,” as I noted last week in this space. Veselnitskaya has been particularly outspoken about the primary campaigner for the Magnitsky Act, the dead lawyer’s former client William Browder, the CEO of Hermitage Capital Management, a hedge fund whose properties were allegedly stolen and used in perpetrating the 2007 tax fraud.
According to a response letter written to Judge Pauley, written by Faith Gay of the New York-based law firm Quinn Emanuel Urquhart & Sullivan, Prevezon’s other counsel, the Netherlands complaint was filed by Hermitage Capital Management, “the same William Browder-managed entity that instigated this action,” referring to the US civil asset forfeiture case.
Browder confirmed with me that Hermitage did indeed bring the case to the Dutch authorities’ attention, which he says is criminal in nature, as opposed to the civil litigation pursued by the US. He insisted, however, that a decision to pursue the investigation was solely up to the authorities themselves. Marieke van der Molen, a media officer in the anti-money laundering unit of the Netherlands public prosecutor’s office, did not return my request for comment on the case in time for publication.
Veselnitskaya has previously celebrated the resolution of the Prevezon case in the US as vindication of her client’s innocence, even though that innocence was not technically established under the terms of the settlement.
On May 15, she posted on her personal Facebook page the following in Russian: “Just now, an almost 4-year battle of the American state with a Russian citizen is over. On the terms of the Russians. The deal in the case that was initiated four years ago by a fugitive tax fraudster has been approved today by Judge Pauley. The United States abandoned Browder and did the right thing. The thief should be in prison, and not walk around the corridors of Congress.”
Veselnitskaya still represents Prevezon. Her name is also mentioned in Faith Gay’s letter to Judge Pauley, seeking to “direct the [US] Government to seek immigration parole (or any other necessary temporary immigration status)” to permit her, as the defendant’s Russian counsel, to attend further court proceedings in the New York Southern District.
A spokesman for the press office at the Southern District’s Civil Division declined comment for this story.