Freezing Order: A True Story of Money Laundering, Murder, and Surviving Vladimir Putin's Wrath

by Bill Browder

Freezing Order: A legal procedure that prevents a defendant from moving their assets beyond the reach of a court.

“I’m sorry, Mr. Browder, but you must go with these men.” “What for?” I asked, looking past the manager. He turned to the larger officer and rattled off something in Spanish. The officer, staring directly at me, stated, “Interpol. Russia.” Fuck. The Russians had been trying to have me arrested for years, and now it was finally happening.

“If something like this ever happens again,” she said, “and you can’t reach anyone, post it on Twitter.” I’d started using Twitter a couple of years earlier, and now had some 135,000 followers, many of them journalists, government officials, and politicians from around the world. I followed her instructions, tweeting: “Urgent: Just was arrested by Spanish police in Madrid on a Russian Interpol arrest warrant. Going to the police station right now.”

“Do you want to leave your bag with us, Mr. Browder, while these men take you to the police station? I’m sure this will be sorted out quickly.”

What if, instead of driving me to the police station, they drove me to an airstrip, put me on a private plane, and whisked me off to Moscow? This was not just a paranoid fantasy. I had been subjected to dozens of death threats, and had even been warned several years earlier by a US government official that an extrajudicial rendition was being planned for me.

“I’ve been arrested,” I whispered. “I’m in a squad car.” The officers heard me. The driver jerked the car to the side of the road. Both men jumped out. My door opened, and the larger officer hauled me onto the street. He aggressively patted me down and confiscated both of my phones. “No phones!” the smaller officer shouted. “Under arrest!” “Lawyer,” I said to him. “No lawyer!” The larger one then pushed me back into the car and slammed the door. We took off again, coursing through the streets of old Madrid. No lawyer? What the hell did that mean? This was an EU country. I was sure I had the right to a lawyer.

I thought of my 12-year-old daughter, Jessica. Only a week before, I’d taken her on a long-promised father-daughter trip to England’s Cotswolds. I thought of my 10-year-old daughter, Veronica, whom I had promised a similar trip, but who might now have to wait a very long time. I thought about my eldest child, David, a junior at Stanford who was already making a life for himself. He’d dealt with all my Russian troubles so well, but I was sure he was following this ordeal on Twitter, overcome with worry. I thought of my wife, and of what she must have been feeling at that moment.

“What’s going on?” I pleaded. She ignored me and left. A few minutes later, the senior officer who’d presented the charge sheet re-entered the room, translator in tow, both with heads bowed. He said something to her in Spanish, and then she turned to me and said, “Mr. Browder, the Interpol general secretariat in Lyon has just sent us a message. They’ve ordered us to release you. The warrant is invalid.” My spirits soared. My phone buzzed. I stood. “Can I use my phone now?” “Sí.” No translation necessary. I snatched up the charge sheet along with my phones. I had 178 missed calls. There was a message from the British foreign secretary, Boris Johnson, asking me to call as soon as possible. Every news outlet—ABC, Sky News, the BBC, CNN, Time, the Washington Post—all of them wanted to know what was going on. Same with Elena, David, and friends from all around the world, including several in Russia. I texted Elena that I was fine and would call her soon. I did the same with David and my colleagues at the office in London.

What saved me was Twitter. My tweets had generated hundreds of phone calls to Interpol and the Spanish authorities, who soon realized the mess they’d waltzed into.

I told him the story about Sergei Magnitsky, my Russian lawyer, that I’d told so many times before. I explained how, in 2008, Sergei had been taken hostage by corrupt Russian officials and ultimately killed in jail as my proxy. I talked about the people who had murdered Sergei and profited from the $230 million tax rebate fraud he’d exposed. I explained how some of that money had been used to purchase $33 million of property along the Spanish Riviera. By the glint in Prosecutor Grinda’s eye, I could see that he would take what I was telling him seriously. When our meeting was over, I felt confident that we had gained another ally in the West—and that Putin’s Russia had lost a few more shreds of its tattered credibility.

I graduated from Stanford Business School. It was 1989, the same year the Berlin Wall came down. Three years after that, I joined the East European desk of the US investment bank Salomon Brothers in London. The opportunities were so great in that part of the world that, in 1996, I moved to Moscow to set up a hedge fund called the Hermitage Fund. I named it after the Hermitage Museum in St. Petersburg, where Russia keeps its most precious art treasures. Running the fund wasn’t smooth sailing. The companies we invested in were being robbed blind by Russian oligarchs and corrupt officials.

I didn’t have to put a complete stop to the stealing, I just needed to create enough pressure for marginal change. The share prices of the companies were so undervalued that any improvement would push up their valuations dramatically. This naming-and-shaming approach turned out to be remarkably profitable, and the Hermitage Fund became one of the best performing funds in the world. At the height of my career, I was responsible for $4.5 billion invested in Russian equities. But, of course, exposing corrupt oligarchs didn’t make me very popular in Russia. And in time, my actions led to a cascade of disastrous consequences. In November 2005, Putin declared me a threat to national security and expelled me from Russia. In order to protect my clients’ assets, my team liquidated the fund’s holdings in Russia. I also evacuated my team and their families, including our chief operating officer, Ivan Cherkasov, and our head of research, Vadim Kleiner, to London. This evacuation turned out to be prescient.

Because we’d liquidated our assets, these holding companies were empty, so their theft wasn’t a major financial blow. I might have left it at that, but the Russian authorities had opened a criminal case against my colleague Ivan Cherkasov as a pretext for the raids. If Ivan had still lived in Russia, this case would have been disastrous for him. He would surely have been arrested and detained. However, even if he was safe in London, we still had to defend him, or it would come back to bite him.

In the process, though, our lawyers made a shocking discovery. The people who had stolen our holding companies had also forged documents to claim those companies owed $1 billion to three empty shell companies. The shell companies then sued our stolen companies in three separate Russian courts for that fictitious $1 billion. Lawyers working for the criminals represented both plaintiffs and defendants, who pleaded guilty. Corrupt judges then approved the fraudulent claims with no questions asked in five-minute hearings. We didn’t know what they would do with these fraudulent claims, but because corrupt police officers were involved in this case, we hoped that once we reported them to Russian law enforcement, they and their criminal partners would be arrested and prosecuted, and the case against Ivan would be closed.

The picture was now crystallizing. Our adversaries were going to frame us for the theft of the $230 million, and our lawyers were on the front line. Two of our lawyers quickly fled Russia for London under cover of night, but one stayed—Sergei Magnitsky. We begged him to leave as well, but he wouldn’t. He believed Russia was changing for the better and that the rule of law would ultimately protect him.

There was no other explanation. The paper trail was definitive. The same criminal group had used the same bank, the same lawyers, the same tax office, the same courts, and the same technique to steal $107 million from the Russian Treasury a year earlier. They had even used some of the same documents, just changing dates and company names. Jason’s article came out a month later. It created a whole new set of problems for our adversaries. They were now at risk of being exposed not just for the $230 million, but for a separate $107 million fraud as well. Sixteen days after publication, the Interior Ministry raided Sergei’s home, arresting him in front of his wife, Natasha, and seven-year-old son, Nikita. Lt. Col. Artem Kuznetsov, the same officer who’d led the raid on our office and whom Sergei had testified against, was assigned to carry out Sergei’s arrest.

But then, on December 11, Bernie Madoff was charged in New York with running the world’s largest Ponzi scheme, defrauding investors in his hedge fund of an astonishing $64.8 billion. Why mention Madoff here? Because this scandal was oddly connected to our story. It was right around this time that John Moscow became almost impossible to reach. I would call him, and sometimes it would take weeks for him to respond. Other times he simply never called back. At first, I was confused. We’ve all had friends who’ve stopped speaking to us for unknown reasons, but John Moscow wasn’t a friend. He was my lawyer and I was his client, and I was paying him $600 an hour. My confusion quickly grew into frustration since we needed him. Sergei needed him. When he continued to ignore my calls, my frustration grew to outright anger. It was one of the strangest things I’d ever seen a lawyer do. It was like being ghosted by a teenage crush. Sometime in January, it all became clear. John Moscow’s law firm, BakerHostetler, had become the trustee responsible for unwinding the Madoff bankruptcy. The rumor was that BakerHostetler was going to earn $100 million for this work. (At the time of writing, BakerHosteler has actually earned upward of $1.4 billion for its work on the Madoff bankruptcy.) Next to that, our paltry $200,000 in legal fees wasn’t even a rounding error.

What made his conduct even worse was that by the late spring of 2009, we were getting bits and pieces of news that Sergei was being tortured in detention. Sergei’s jailers put him in cells with 14 inmates and eight beds and kept the lights on 24 hours a day to impose sleep deprivation. They put him in cells with no heat and no windowpanes in the winter in Moscow, where he nearly froze to death. They put him in cells with no toilet, just a hole in the floor, where the sewage would bubble up. His hostage-takers seemed to have two objectives. One was to compel him to drop his testimony against Kuznetsov and Karpov. The other was to force him to sign a false confession saying that he had stolen the $230 million and had done so at my direction.

After 365 days, the Russian government either had to put the defendant on trial or release them. But in Sergei’s case, they couldn’t risk a trial. If they did, he would have had an international platform to expose the $230 million fraud, the $107 million fraud before it, and all the Russian government officials involved. The court could find him guilty—and it would—but that wouldn’t silence him. They had to silence him. On the night of November 16, 2009, 358 days after his arrest, Sergei went into critical condition. The Butyrka authorities didn’t want to have responsibility for him anymore, so they put him in an ambulance and transferred him to a different detention center across town, which had a medical wing. But when he arrived there, instead of putting him in the emergency room, they put him in an isolation cell, chained him to a bed, and eight riot guards with rubber batons beat Sergei until he was dead. He was only 37 years old.

That call remains the most heartbreaking, traumatic, and devastating moment of my life. Nothing had prepared me for losing a colleague in this way. Sergei had been killed because he had tried to do the right thing. He’d been killed because he’d worked for me. The guilt I felt and continue to feel permeates every cell of my body. When I was able to clear my mind from the fog of hysteria and sorrow, there was only one thing for me to do—put aside everything else in my life and devote all of my time, all of my resources, and all of my energy to making sure that anyone involved in Sergei’s false arrest, torture, and murder, as well as anyone who had received any of the $230 million, would face justice. Since then, that is precisely what I’ve done.

This time the banks took us seriously and sent us every single dollar payment for dozens of banks in Russia and the former Soviet Union over a 28-month period. It was a windfall. In all, we received a database with over 1.3 million transactions from multiple Russian banks. Initially, we thought this would be the key to unlocking the money laundering mystery, but when we started looking at it, we realized it was actually too much information. We had tens of thousands of company names, account numbers, and amounts, but absolutely no context. Without some sort of roadmap linking this data to the $230 million fraud, we were lost.

Every time someone does something in Russia, that information gets filed in quadruplicate with four different ministries. The people working at those ministries make only a few hundred dollars a month. As a result, nearly everything is for sale. Most of this data ends up at the physical epicenter of Russia’s information market, a low-end shopping mall just west of the Moskva River called Gorbushka. Inside is a chaotic hodgepodge of kiosks selling everything from pirated Fast and Furious DVDs to Star Wars figures to Chinese cell phones. But if you go into the back of some of these stalls, you’ll find disks of government databases for sale. They contain things like salary information, cell phone registries, and travel records, and the most you have to pay for any of these is a few dollars. Gorbushka Market, Moscow. (© HERMITAGE) At the higher end of the information market were specialized brokers who had nothing to do with Gorbushka. They sold more sophisticated databases like those belonging to the Russian Central Bank or the State Customs Committee. Back when I was running the Hermitage Fund, Vadim and I used these sources to ferret out multibillion-dollar scams at the companies we invested in. Now that we were conducting a money laundering investigation, these resources became invaluable in a completely different way.

When Vadim ran these company names through this database, both popped up. These each led to another shell company. And another, and another. Vadim was ultimately able to trace the path of this $11 million from the Russian Treasury, to Universal Savings Bank, through Moldova and Latvia, and into Switzerland. As John Moscow had promised, every dollar transfer touched New York for a split second. And even though that money went through 11 different steps, our database picked it up. If our adversaries thought they’d obscured their footprints in the snow by laundering the money through so many countries and accounts, they were wrong. We’d discovered the power of our dollar payment database, and this wouldn’t be the last time we would use it.

Money laundering is typically regarded as a victimless and faceless crime. But in this case, we had a victim, Sergei, and we had the smug, smiling faces of the police officers who’d profited from the crime that Sergei had exposed and was killed over.

This idea slowly evolved into a legislative proposal called the Magnitsky Act, which would ban visas and freeze assets of Russian human rights violators, including those who had tortured and killed Sergei. This idea got immediate traction in Washington when Sen. Ben Cardin, a Maryland Democrat, took it on as one of his top legislative priorities. It would soon have broad bipartisan support, with Senators John McCain, Roger Wicker, and Joe Lieberman coming on board as original cosponsors. The support for the Magnitsky Act in the United States was gratifying, but corrupt Russian officials spend the majority of their time and money in Europe, enjoying luxury vacations in places like Courchevel, Marbella, and Sardinia.

The magnitsky act!

Boris Nemtsov became my partner in getting justice for Sergei and advocating for the Magnitsky Act all over the world.

“If you ever find a connection to New York, I’d be interested,” he said. I had to contain my excitement. As John Moscow had told me at the very beginning, we had a New York connection—all the dollar payments that passed through JPMorgan and Citibank, even if they’d only touched New York for a split second. But when I mentioned these, Adam shook his head. “I’m afraid that’s a little too tenuous. But if you find money in accounts in New York, or if anyone bought property there, we’d have a real New York nexus. Then we could do something.” If a New York nexus existed, we were going to find it.

In 2007, a year before the incident at the apartment building, a third man, a former musician and an out-of-work security guard from Baku, Azerbaijan, who spent his days drinking vodka in the courtyard behind his Moscow apartment, died at his home on October 1. The cause of death was recorded as heart failure. This man’s name was Oktai Gasanov. He was 53. What did these three untimely and seemingly unrelated deaths have to do with us? A lot, according to the Russian authorities. On November 15, 2010, a day before the first anniversary of Sergei’s murder, as I sat in my London office reflecting on all that had happened, Vadim walked in. I was lost in thought and barely noticed him. “Bill?” he said. I snapped out of it. “What?” “The Russian government just officially blamed Sergei for stealing the two hundred and thirty million.”

Taken together, these laid out an elaborate conspiracy theory. According to the Russian government, Sergei had prepared the documents used in the illegal tax refund. The government then claimed that Sergei gave these documents to the drunk, Oktai Gasanov, who passed them to their co-conspirators. One of these was the ex-convict, Valery Kurochkin, who signed one of the fraudulent tax refund requests and submitted it to the Russian tax authorities. Once the money was paid, the man who later would fall to his death, Semyon Korobeinikov, used a bank which the Interior Ministry claimed belonged to him to launder the money. That bank was Universal Savings Bank, which we knew in fact belonged to Dmitry Klyuev.

“A Russian iron ore company. This isn’t the first time the Interior Ministry got Klyuev out of a bind. In 2006 he was caught using his Universal Savings Bank to try to steal one-point-six billion dollars of shares of Mikhailovsky GOK from a Russian oligarch.”

“No, two guys went down. Klyuev’s driver, and some kind of administrative assistant.’ ” “Were they actually involved?” “Who knows? Both died before the trial. One was thirty-nine and the other was forty-six.” “Let me guess. ‘Heart failure’?”

We took Aslan’s warning seriously. We knew for sure they were going to blame us for their crimes; we feared that they would attempt to kill us too. I didn’t know how to stop mobsters from trying to kill us, and that weighed heavily on me, but I was confident that if the Swiss successfully prosecuted the Stepanovs, the Russians could no longer credibly blame us for their crimes. This might also reduce the incentive to kill us. It wasn’t much, but it was all we had. By early 2011, we had produced a complaint that we were now ready to file with the Swiss authorities.

The official motto of the World Economic Forum is “Committed to Improving the State of the World,” but in reality, many attendees are billionaires, dictators, and Fortune 500 executives who have little interest in improving the state of the world. A few are interested in exactly the opposite. To justify their noble mission, the World Economic Forum regularly invites a handful of people who do take their motto to heart.

“Can you substantiate all of this?” he asked. “Yes. Hundred percent.” “Where does the data come from? I assume Russian law enforcement didn’t provide this to you.” “We have a whistleblower who’s given us the Credit Suisse statements, and the dollar payments come from a New York subpoena.” “This is impressive work, Mr. Browder.” “Thank you. Most of the credit belongs to my colleague, Vadim Kleiner. I’m planning to file this in Bern, but it would make a big difference if someone like you could represent us and file it on our behalf. Would you consider that?” He placed his elbows on the table and leaned forward. “Let me read it carefully and think it over. This is just the kind of thing I’ve spent years fighting. If it’s valid, I might very well be interested.”

Although the evidence was irrefutable, the Swiss knew that any case involving Russians was sure to be excruciating. The Russians are notoriously uncooperative, they throw up constant smoke screens, and they lie at every turn.

Barron’s reporter named Bill Alpert, whom he described as one of the best investigative reporters in New York. Bill’s day job was as a market reporter covering health care and technology stocks, but he also wrote long-form, hard-hitting investigative pieces exposing corruption and malfeasance.

Before becoming a reporter, Bill trained as a lawyer—he’d graduated from Columbia Law School in the ’80s—and one of his hobbies was poring over legal documents in search of corporate scandals. His bosses at Barron’s weren’t particularly enthusiastic about his investigative pet projects, but so long as he filed his regular stock market stories on time, they let him pursue them.

A week later, on April 23, the Swiss announced that they had done exactly that. They froze the $11 million the Stepanovs held at Credit Suisse. This was the first freezing order in the Magnitsky case. It would not be the last.

Switzerland is renowned for its neutrality. That may sound nice, but often it’s not. Yes, the Swiss bring together warring countries to sign peace treaties, and Switzerland serves as headquarters for multilateral organizations like the World Health Organization and the UN Human Rights Office, but they also abuse their “neutrality” to support some of the world’s most heinous dictators. Rarely a year goes by when you don’t hear about a scandal involving some African potentate or Central Asian kleptocrat hiding hundreds of millions of dollars in Swiss banks. The Swiss almost take pride in the fact that they welcome everyone—good or bad, it doesn’t matter so long as the country continues to accrue the economic benefits.

The reporter asked what I expected of the Swiss investigation and whether I would be bringing any new evidence. I kept it general, predicting this thread would eventually unravel the whole money laundering network used by the criminals who had stolen the $230 million.

As part of our arrangement with Alexander Perepilichnyy, we’d committed to keeping his identity confidential, so I didn’t name him. I simply called him a “person” who’d contacted us. He’d taken a big risk in giving us his evidence, and I wasn’t going to increase that risk any further. Prosecutor Bino let it go, and the interview ended a short while later. My caution surrounding Perepilichnyy turned out to be for naught. Our Russian adversaries had been keeping tabs on the Swiss proceedings, and on that same day in Moscow, Olga Stepanova’s husband published a full-page paid ad in a Russian business daily that outed Perepilichnyy. “I’m confident Alexander Perepilichnyy played a role in my ‘notoriety,’ ” he wrote, “since only he knew certain details and nobody else.” Stepanov promised to “seek redress.” The next day, an SRF reporter confronted Russian president Dmitri Medvedev about our case at a press conference in Moscow. (Medvedev served as the Russian president from 2008 to 2012, while Putin served as prime minister. Of course, Putin retained all the power behind the scenes.) The reporter asked, “Mr. President… regarding the case of Hermitage Capital and Sergei Magnitsky. The Swiss Federal Prosecutor’s Office is investigating the case at the request of Hermitage Capital, and it involves charges of tax fraud in Russia and possible laundering of those funds in Switzerland. Will Russia cooperate with Switzerland on this matter?”

Perepilichnyy set down his drink and let out a sigh. “I think someone wants me dead.” “How do you know?” Vadim asked. “My family got a call from the anti-terrorism police in Moscow. They’d recently searched a hit man’s house in another investigation, and found a file on me.” “A hit man?” “Yeah. Some Chechen.” “How do you know this is even real? They’ve been trying to scare you for months.” “Because they had all kinds of details about me and my family and our lives in the UK. The only thing that gives me any comfort is that the home address they have for me is an old one.” “That doesn’t sound very comforting,” Vadim said. Afterward, it emerged that the hit man was Valid Lurakhmaev, a well-known Chechen assassin who went by the street name of “Validol”—the Russian translation for Valium—a not-too-subtle play on the idea that he was good at calming his victims by killing them.

Whatever his fears, they didn’t prevent him from testifying. That spring, he made the same trip I had to Lausanne. On April 26, 2012, Perepilichnyy sat with Prosecutor Bino and gave a formal witness statement in the money laundering case targeting the Stepanovs. The die was now cast.

Prince Albert, Monaco’s head of state, was notoriously chummy with Vladimir Putin. He was the only foreigner on the 2007 Siberian hunting trip that produced the infamous picture of a shirtless Putin on horseback. Because of their friendship, Prince Albert enthusiastically supported the Russian president and occasionally did his bidding. I’d heard stories about Putin’s enemies checking into Monaco hotels, presenting their passports, and finding themselves arrested within minutes by the local police.

I was the first to speak after the movie finished. I made my pitch for the Magnitsky resolution, and concluded, “As you can see, there’s now no difference between the Russian government and organized crime.”

“Who’s the hot blonde?” “A Russian girl interested in fashion and human rights,” I answered flatly. Mark smirked. I was exhausted and didn’t stay at the reception much longer. I took a cab back to my French hotel, leaving Mark to work the crowd. Once in my room, I checked my email. As I scrolled through the messages, a new one arrived. It was from one “Svetlana Melnikova.” “Dear Mr. Browder,” it read, “I very much enjoyed meeting you earlier this evening. I thought we had a very strong connection. I was wondering if you’d like to meet for a drink at your hotel? Where are you staying?” She signed it, “Kisses, S.” Strong connection? We’d spent all of two minutes standing in line together, what was she talking about? I didn’t respond. An hour later, as I was getting into bed, another email arrived. “William, are you still awake? I am. I can’t stop thinking about you. I’d really like to see you this evening. More kisses, S.” I had to laugh. I’m a five-foot-nine middle-aged bald man. Six-foot, busty blond models don’t throw themselves at me. This couldn’t have been a more blatant honey trap. But as I lay in the dark, my mind spun. Our adversaries were actively framing us for their crimes in Russia. I was a wanted criminal there. Alexander Perepilichnyy was a known target of a Chechen assassin. And now here I was at a conference in Monaco getting hit with a honey trap. Sure, it was ham-fisted and clumsy, but it meant that I had been standing next to an FSB operative that very ni...

I called Mark, waking him. I told him what had happened with Svetlana and my fear that the FSB knew our whereabouts. I told him to meet me at the British Airways desk at Nice Airport. “It’s not safe here. We’ve already shown our film. We can do the rest from London.”

Klyuev’s unexpected presence in Monaco was almost too good to be true. There was no way that Spencer Oliver would have agreed to meet with Dmitry Klyuev unless the Russian government had formally asked Spencer to take the meeting. All of this proved our point: the Klyuev Organized Crime Group and the Russian government were one and the same. With only hours before the vote, Mark swiftly made the rounds, showing the Klyuev clip to MPs throughout the Assembly. Any of the doubts aired at our screening had now evaporated. When the Assembly convened, the vote on the Magnitsky resolution wasn’t even close. It passed 291–18. The only delegations to vote against it were from Russia, Belarus, and Kazakhstan. The Russians had spectacularly overplayed their hand. In fact, they had done our job much better than we ever could have done it ourselves. Not only had they failed to stop the Magnitsky resolution, but their actions cemented their defeat. Moreover, we’d succeeded in forcing Dmitry Klyuev out of the shadows. Mark came home triumphant, but then the news got even better. Based on the reporting coming out of Monaco, Swiss law enforcement had taken it upon themselves to freeze Klyuev’s Swiss bank accounts. This was the second freezing order in the Magnitsky case. It too would not be the last.

Yet there was another way to use this data, one that Bill Alpert had come up with. Instead of connecting the dots linearly, following the money from Russia, through all the transit countries, to wherever it ended up, which could take years, he developed a clever data-mining strategy. The Moldovan file contained references to dozens and dozens of shell companies with meaningless names like Dexterson LLP, Green Pot Industrial Corporation, Prevezon Holdings, and Malton International. Bill decided to run these names through every New York property database he could get his hands on, operating on the idea that one or more of the thieves might have bought Manhattan real estate using some of the $230 million. For many nights, after he was done writing his stock market reports, Bill would stay up late, dutifully slogging through databases and decoding arcane legal jargon in the hope that something would pop up. Now, it seemed, something had. “One of these companies hit,” he told me on the phone that morning. “Prevezon. Whoever it belongs to has been grabbing New York property like candy.”

When Vadim got to the office that morning, he soon found Prevezon Holdings in our copy of the Moldovan file. Two Moldovan shell companies had sent $857,764 from the stolen $230 million to Prevezon, which was registered in Cyprus. This was a lucky break. Unlike places such as the British Virgin Islands or Panama, where beneficial ownership of shell companies is secret, Cyprus has an open registry. All you have to do is go online, punch in a company’s name, and you’ll find out who it belongs to. When Vadim did this, he learned that Prevezon Holdings was owned by a Russian man named Denis Katsyv. In a typical money laundering scheme, ownership is like a Russian Matryoshka doll. You open one shell company to find another, and that leads to another and another and so on. Whenever you do land on an actual name, ninety-nine times out of a hundred it belongs to an unemployed alcoholic or a peripatetic yoga instructor or some other random person willing to hand over their passport in exchange for a few hundred dollars. Little do they know, they then become nominal owners of shell companies that can launder millions, and sometimes billions, of dollars.