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The Mob

Alleged Russian mob boss in Latvia. Ivan Kharitonov

Reputed Russian Mobster Boasts Of Putin Wristwatch Honor

By Carl Schreck

September 30, 2014

Russian President Vladimir Putin has repeatedly denounced the chaos, criminality, and gangster capitalism that beset his country in the so-called "wild 1990s" following the Soviet collapse.
But one of that era's most notorious alleged gangsters is claiming that the Russian leader recently honored him with a presidential wristwatch -- an assertion the Kremlin flatly denies.
Sergei Mikhailov, widely believed to be a leader of the powerful Solntsevo organized crime group, boasts on his website that Putin awarded him the prestigious timepiece on May 14.
As evidence of the accolade, Mikhailov has posted photographs of the watch, which is embossed with Russia's double-headed eagle and Putin's signature, with an accompanying certificate purportedly signed by the Russian president.
Mikhailov wrote on his website that Putin honored him with the presidential watch in part as recognition for his charity work with World War II veterans and the widows of recipients of Soviet and Russian state honors.
Putin's spokesman, however, denied that the Russian president had given a gift to Mikhailov, who is also known by the nickname "Mikhas."
"It's fake," Dmitry Peskov told RFE/RL, though he said the Kremlin would not contact Mikhailov about the claim on his website.
"Why would we?" Peskov said. "We haven't [publicly] said anything about this, which means that it didn't happen."
Mikhailov has been identified by law-enforcement authorities in Russia, the United States, and Europe as one of the most influential players in Russia's criminal underworld, though he has never been convicted in connection with his alleged mob ties.
He appears to be standing by his claim about the presidential watch.
RFE/RL reached out to Mikhailov through an associate, who wished to remain anonymous. Mikhailov said he did not wish to comment because his statements on the issue are available on his website, the associate told RFE/RL.
The supposed award from Putin went largely unnoticed until earlier this month, when the well-known Russian blogger and Kremlin critic Andrei Malgin reposted photographs of the presidential gifts published on Mikhailov's site.
The attention prompted Mikhailov to publish an open letter to journalists defending his reputation. "It's true; I have been detained, both in Russia and abroad. But in the end they always apologized to me," he wrote.
Mikhailov added that his charity organization has donated more than $100 million over the past 20 years and that no one should be surprised that such largesse would be noticed by the Kremlin.
"Why, esteemed journalists, have you raised such a ruckus about the recognition that [Putin] has granted me? Was it not deserved?" he wrote.
Solntsevo And The Swiss
Mikhailov was allegedly a top figure in the Solntsevo crime group at the inception of the gang in the late 1980s.
Named after a Moscow neighborhood, the group was one of numerous extortion and racketeering gangs that preyed on a nascent entrepreneurial class during the Soviet Union's twilight and in the years following its disintegration, according to experts and law-enforcement officials.
"The first time I heard of Mikhailov was in 1987, when his Solntsevo group was extorting protection money from street kiosks in Moscow," Nikolai Uporov, a former Moscow police official specializing in organized crime, testified in Mikhailov's 1998 trial in Geneva, according to a Reuters report at the time.
Mikhailov was arrested and charged with extortion along with other alleged Solntsevo members in 1989, though the case fell apart when witnesses reportedly refused to testify. The crime syndicate would go on to expand its operation into arms and drug trafficking, Uporov testified at the trial.
Mikhailov later moved to Europe and settled in Switzerland, where he was arrested in October 1996 and charged with belonging to an organized crime group. The following year, a witness Swiss prosecutors had planned to call, Vadim Rozenbaum, was shot dead at his home in the Dutch town of Oirschot.
The Swiss jury acquitted Mikhailov due to a lack of evidence in a trial held under unusually tight security measures -- including witnesses wearing bulletproof vests while testifying. A Geneva court later ordered cantonal prosecutors to compensate him for loss of income due to his detention to the tune of several hundred thousand dollars.
Swiss authorities reportedly complained about a lack of cooperation from their Russian counterparts in the investigation. Russia's prosecutor-general said in 1999 that the acquittal resulted from a lack of coordination between the two countries.
In 2002, Russian organized crime police raided Mikhailov's summer home in connection with an investigation related to extortion and kidnapping, though he was never charged with a crime in the probe.
More recently, the Solntsevo group was mentioned in a February 2012 U.S. State Department cable obtained by WikiLeaks and published by the British newspaper "The Guardian."
In the cable, an expert is cited as saying that both the Russian Interior Ministry and the Federal Security Service (FSB) have "close links" to the crime syndicate but that the FSB provides the "real" cover for Solntsevo.
Mikhailov has repeatedly insisted that he is an honest businessman and denied any links to the Solntsevo crime syndicate.
'Shocked, Shocked'
Mikhailov appears to have successfully integrated himself into elite political, military, business, and religious circles in Russia during Putin's 15 years in power.
He has been photographed together with senior lawmakers and Russian Orthodox Church officials, including the now deceased Patriarch Aleksii II. (Mikhailov's website also features photographs of him together with former world heavyweight boxing champion Mike Tyson.)
Mikhailov also claims on his website that four days before Russia formally annexed Ukraine's Crimea territory in March, he received a medal commemorating Russia's "reunification" with the peninsula from Admiral Vladimir Chernavin, the former commander in chief of the Soviet and Russian navies.
Despite Mikhailov's movements in these circles, it would be surprising if Putin personally allowed his signature to confer an honor on someone whose name is consistently linked with organized crime both in Russia and internationally, said Mark Galeotti, an expert on Russian organized crime.
"It's not a kind of situation where the Kremlin could in the future declare itself 'shocked, shocked' to discover that crime was going on within Mikhas's business empire," said Galeotti, a professor at New York University.
Sergei Kanev, a veteran crime journalist with the independent Russian newspaper "Novaya Gazeta," suggested Mikhailov could have received the watch from an organization that hands out awards "supposedly from the president or from the prime minister."

"I don't think Putin set himself up like that," Kanev said.

Russia Scaling Back Help on Fighting Mafia, Germany Says

By Patrick Donahue

Russian authorities have shown “significant” restraint in cooperation with investigations into organized crime in Germany since the outbreak of the crisis in Ukraine, Germany’s top law enforcement officer said.
Joerg Ziercke, head of the Federal Crime Bureau, said Russian counterparts had backed off joint probes into mafia networks in Germany since relations between the two countries became overshadowed by the conflict in Ukraine.
“It’s taking a relatively long period of time before we get answers,” Ziercke said today in Berlin at a joint press conference with Interior Minister Thomas de Maiziere to present an annual report on organized crime. “One does notice that the atmosphere isn’t as it was before.”
The German officials outlined the increasingly international dimension of organized crime and the necessity of cooperation across Europe, such as a joint German-Italian task force to uncover syndicates tied to groups such as ’Ndrangheta, the Calabrian mafia. Most such crime involved the drug trade, theft, real-estate fraud or tax and customs violations.
German-Russian relations have plummeted since Ukraine’s pro-Russian president was ousted and Russia seized Crimea this year. Chancellor Angela Merkel has coordinated the European Union’s sanctions against Russia, which Germany accuses of masterminding unrest in eastern Ukraine. Russia has said repeatedly that it’s not behind the conflict.
Without specifying how much organized crime or mafia activity originates in Russia, the report said that German authorities opened 580 investigations related to organized crime last year, up from 568 in 2012.
A 20 percent increase last year in the number of mafia-related crime suspects to 9,555 was attributed to a jump in groups stemming from Lithuania, Poland and Albania. Domestic activity centered on “rocker” motorcycle gangs involved in drug smuggling and other activity, the report said.
To contact the reporter on this story: Patrick Donahue in Berlin at pdonahue1@bloomberg.net
To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Chad Thomas, Leon Mangasarian

Russian Hackers Steal From U.S. Banks

 By Inigo Monzon 

Russian hackers reportedly carried out a cyber attack on JPMorgan Chase and other banking institutions based in the U.S. on Wednesday, according to Tech News World.

Despite the report, JPMorgan did not confirm the attack or the theft of the institution's vital information. Spokesperson Michael F. Fusco did state, however, that JPMorgan's network is equipped with sophisticated defense systems designed to counter cyber attacks, Bloomberg reported.

"Companies of our size unfortunately experience cyber attacks nearly every day," Fusco said. "We have multiple layers of defense to counteract any threats and constantly monitor threat levels."

Currently, the FBI is looking into the matter and is collaborating with other government organizations for its investigation process.

"We are working with the United States Secret Service to determine the scope of recently reported cyber attacks against several American financial institutions," FBI Special Agent Joshua Campbell explained.

Sources close to the investigation suggest that based on the evidence from the attacks, the hackers could be linked to either Russian government organizations or organized cyber criminal gangs.

Scott Borg, the CEO of the United States Cyber Consequences Unit explained that Russian authorities sometimes tolerate the acts of crime groups that are carried out for patriotic reasons, according to E-Commerce Times.

He added that the government and crime groups both have an army of hackers at their disposal. However, he clarified that the services of these hackers will only be utilized if it will benefit the current political environment of Russia.

In other words, he doesn't believe Russian authorities are the ones behind the attacks on the U.S. banks.

"Political events have shaped the target and the type of attack, but this is organized crime making a profit," Borg said.

"It's extremely unlikely that these attacks were carried out directly by Russian government or Russian military," he added. "It's just not their style."

Based on the type of information stolen from the banks, Borg believes the hackers plan to use the data to benefit from insider trading in the U.S. stock market.

"It's quite likely that what the attackers were after was not information that they'd use for bogus credit card charges or thefts from customer accounts, but information to be used to anticipate movement in the markets," he said.

"We've seen an increasing number of cyber attacks over the last three years that were directed at stealing information that could be used to make profit in the financial markets," Borg added.   

Moldova: Criminal Underground Feeds Ukrainian Civil War With Russian Weapons

By Mihai Munteanu

CHISINAU, Moldova - One of the most powerful criminal groups in Moldova offered a reporter from the Organized Crime and Corruption Reporting Project (OCCRP) Russian army weapons including rocket-propelled grenade (RPG) units last month.
The reporter purchased one RPG from the group to demonstrate the ease of getting weapons.
The flow of such weapons into Ukraine has fueled separatist tensions, and the transaction offered a glimpse into a black market that has revived since Russia annexed Crimea and ignited conflict in eastern Ukraine this year. Pro-Russian forces have shot down Ukrainian helicopters and planes with similar heavy weapons.
The unusual deal began last February. Amidst breaking news about Yanukovich, the former Ukrainian president, fleeing Ukraine, a clipped, mechanical sound from his mobile phone alerted an OCCRP reporter to a new message.
He opened it to find a photo of Al Pacino from the movie “Scarface” emptying an automatic weapon.  The text read: "Don't you need these? I believe the war in Ukraine is only now starting." P9
The message was unusual for several reasons:
•           It came from Ion Anton Druta, 42, an organized crime figure who was serving time in a high security prison for a triple homicide.
•           Druta knew the reporter was a journalist, but believed he had connections with intelligence agencies who might be interested in buying lots of guns to influence the conflict in Ukraine.
The weapon OCCRP bought was Russian-made. Druta said it came from the armories of the Russian 14th Army. This unit has been stationed for more than 20 years with a peacekeeping mission in Transdniestr, the Russian-speaking separatist region wedged between the Republic of Moldova and Ukraine.
The UN and other international bodies have expressed concern that Transdniestr for years has outfitted Eastern European organized crime with weapons, but no definitive proof has ever been provided.
OCCRP initially contacted Druta’s group last year in Moldova as part of a wider investigation into a network of hired killers operating across Europe.
This time, journalists put down € 1,000 (US$ 1,365) to buy an RPG anti-tank weapon system from the group in Chisinau, the capital of Moldova, which is 180 kilometers from the Ukrainian Black Sea port of Odessa. Druta threw in a semi-automatic pistol for free.
Civil War, the Weapons Dealer and the Criminal Group
The transaction took place 10 days after the Odessa massacre in which 40 people died and hundreds were wounded in street fighting between pro-Russian and Ukrainian forces. Ukrainian security forces claimed that paramilitary groups from Transdniestr were involved in the Odessa fights.
The man offering the weapons for sale has a long and violent history with police. Nearly a year ago, in July 2013, Druta, or Vanea the Writer as he’s known, was taken into custody to begin a 20-year prison sentence imposed by the Chisinau Court of Appeals for his part in a triple homicide in 1998.
Moldovan authorities held a press conference to mark the event.