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INFO-RUSS: The Most Dangerous Mobster (fwd)
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Subject: INFO-RUSS: The Most Dangerous Mobster
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"The Village Voice" May 20 - 26, 1998
by Robert i. Friedman
http://www.villagevoice.com/features/9821/friedman.shtml
The Most Dangerous Mobster in the World
According to the FBI and Israeli Intelligence,
Semion Mogilevich Rules Over an Arms-Trafficking,
Money-Laundering, Drug-Running, and Art-Smuggling 'Red Mafia'
In two posh villas outside the small town of Ricany, near
Prague, one of the most dreaded mob families in the world
savagely murders its terrified victims. The mob's young
enforcers, trained by veterans of the Afghanistan war, are infamous
for their extreme brutality. Their quarry, usually businessmen
who have balked at extortion demands, are repeatedly stabbed
and tortured, then mutilated before they are butchered. The
carnage is so hideous that it has scared the daylights out of
competing crime groups in the area.
The torture chambers are run by what international police
officials call the Red Mafia, a notorious Russian mob family that
in only six years has become a nefarious global crime cartel.
Based in Budapest, it haskey centers in New York,
Pennsylvania, Southern California, and as far away as New Zealand.
The enigmatic leader of the Red Mafia is a 52-year-old
Ukrainian-born Jew named Semion Mogilevich. He is a shadowy
figure known as the ''Brainy Don''--he holds an economics
degree from the University of Lvov--and until now, he has never
been exposed by the media. But the Voice has obtained hundreds
of pages of classified FBI and Israeli intelligence documents
from August 1996, and these documents--as well as recent
interviews with a key criminal associate and with dozens of law
enforcement sources here and abroad--describe him as someone
who has become a grave threat to the stability of Israel and
Eastern Europe.
''He's the most powerful mobster in the world,'' crows Monya
Elson, who is listed in classified documents as one of
Mogilevich's closest associates and partners in prostitution and
money laundering rings. The Brighton Beachbased Elson, who
once led a pack of thugs and killers known as Monya's Brigada,
is currently in the Metropolitan Correctional Center in lower
Manhattan awaiting trial for three murders and numerous extortions.
In July 1993,after Elson was grievously wounded by rival
mobsters in a bloody shoot-out outside his Brooklyn apartment
building, Mogilevich spirited him out of the country. Mogilevich
then set up his Russian Jewish refugee friend in an alleged
massive money-laundering scheme in Fano, Italy, where he was
eventually arrested and extradited back to America.
Elson, an integral part of the Red Mafia, had been one of the
most feared mobsters in Brighton Beach, ground zero for Russian
organized crime in America, which has exploded here following
perestroika.
''If I tell on Mogilevich, Interpol will give me $20
million,'' boasted Elson. ''I lived with him. I'm his partner,
don't forget. We are very, very close friends. I don't mean
close, I mean very, very close. He's my best friend.''
Nevertheless, after extensive interviews over the course of the
last six months, Elson ultimately confirmed some of the details
about Mogilevich contained in the classified FBI and Israeli
documents.
Allegations of Mogilevich's devilish array of criminal
activities are extensively detailed in the reports:The FBI
and Israeli intelligence assert that he traffics in nuclear
materials, drugs, prostitutes, precious gems, and stolen art.
His contract hit squads operate in the U.S. and Europe. He
controls everything that goes in and out of Moscow's Sheremetyevo
International Airport, a ''smugglers' paradise,'' says
Elson. Mogilevich bought a bankrupt airline in a former
Central Asian Soviet republic for millions of dollars in cash so he
could haul heroin out of the Golden Triangle. Most worrisome
to U.S. authorities is Mogilevich's apparently legal
purchase of virtually the entire Hungarian armaments industry,
jeopardizing regional security, NATO, and the war against terrorism.
In one typical criminal deal, Mogilevich and two Moscow-based
gangsters sold $20 million worth of pilfered Warsaw Pact weapons
from East Germany, including ground-to-air missiles and 12
armored troop carriers, according to the classified Israeli and FBI
documents. The buyer was Iran, says a top-level U.S. Customs
official who requested anonymity.
In another deal, an FBI informant told the bureau that one of
Mogilevich's chief lieutenants in Los Angeles met two Russians from
New York City with Genovese crime family ties to broker a scheme to
dump American toxic waste in Russia. Mogilevich's man from
L.A. said the Red Mafia would dispose of the toxic waste in the
Chernobyl region, ''probably through payoffs to the decontamination
authorities there,'' says a classified FBI report.
Mogilevich is particularly intrigued by art fraud. In early
1993, he reached an agreement with the leaders of the powerful
Solntsevskaya crime family in Moscow to invest huge sums of
money in a joint venture: acquiring a jewelry business in
Moscow and Budapest. The business, according to classified
FBI documents, was to serve as a front for the acquisition of
jewelry, antiques, and art, which the Solntsevskaya mob had stolen
from churches and museums in Russia, including the Hermitage
in St. Petersburg. The gangsters also robbed the homes of art
collectors and even broke into synagogues in Germany and Eastern
Europe to steal rare religious books and Torahs.
Mogilevich's operation, again in collusion with the Solntsevskaya
mob, also purchased a large jewelry factory in Budapest.
Russian antiques, such as Faberge eggs, are sent to Budapest for
''restoration.'' Mogilevich's men ship the genuine Faberge eggs to
an unwitting Sotheby's auction house in London for sale, then
send fake Faberge eggs as well as other ''restored'' objects back
to Moscow.
Mogilevich's early years are murky. Soviet authorities first
learned of his criminal activities in the 1970s, when he
was a member of the Liubertskaya crime group that operated in the
Moscow suburb of the same name. He was involved in petty thefts
and counterfeiting.
But Mogilevich made his first millions fleecing fellow Jews. In
the mid 1980s, when tens of thousands of Jewish refugees were
hurriedly immigrating to Israel and America, Mogilevich made
deals to buy their assets--rubles, furniture, and
art--cheaply, promising to exchange the goods for fair
market value and send refugees the proceeds in ''hard''
currency. Instead, he sold their valuables and pocketed the
considerable profits.
In the 1980s, he established a petroleum import-export company,
Arbat International, and registered it in Alderney, one of
the Channel Islands, which is known to be a tax haven. One of
his partners--with a quarter share of the company--was
Vyacheslav Ivankov, the legendary Russian criminal who in March
1992 became Godfather of the Russian mob in America. Ivankov
was convicted in 1996 of extorting two Russian-born Wall
Street stockbrokers. He now resides in Raybrook, a Federal
prison in upstate New York.
In early 1990, Mogilevich fled Moscow, as did many other dons,
to avoid the gangland wars that were then roiling the capital.
Mogilevich and his top henchmen settled in Israel, where they
received Israeli citizenship. He ''succeeded in building a
bridgehead in Israel'' and ''developing significant and influential
[political] ties,'' says an Israeli intelligence report.
Mogilevich is married to a Hungarian national, Katalin Papp.
That marriage allowed him to legally emigrate to Budapest,
Hungary, in 1991, where he began to build the foundations of his
global criminal empire. He bought a string of nightclubs in Prague,
Riga, and Kiev--called the ''Black and White Clubs''--that
has become one of the world's foremost centers of prostitution.
Monya Elson is a partner in the clubs, according to his own
admission and classified FBI documents. The Black and White
Club in Budapest became the hub of Mogilevich's operations. He
quickly built a highly structured criminal organization, in the
mode of a traditional American mafia family. Indeed, many of the
organization's 250 members are his relatives.
To the consternation of international law enforcement
officials, Mogilevich began to legally purchase much of Hungary's
arms industry. The legitimate companies he bought include:
* Magnex 2000: a giant magnet manufacturer.
* Digep General Machine Works: an artillery shell, mortar, and fire
equipment manufacturer, which was financed by a $3.8 million loan
from the London branch of Banque Francaise De L'orean.
* Army Co-op: a mortar and anti-aircraft gun factory. Army
Co-op was established in 1991 by two Hungarian nationals, both in
the local arms industry, who were looking for a partner. Mogilevich
has bought 95 per cent of Army Co-op through another Channel
Island holding company, Arigon, Ltd., and also deals extensively
with the Ukraine, selling oil products to the Ukrainian railway
administration.
These transactions enabled the Mogilevich organization to become
a direct owner of the Hungarian armaments industry. In 1994, he
purchased a license enabling him to buy and sell weapons. Now a
legitimate armaments manufacturer, one of his companies participated
in at least one arms exhibition in the U.S., where it
displayed mortars modified by Israel.
Like mob bosses everywhere, Mogilevich couldn't sustain his
empire without the help of corrupt police and politicians.
There is one documented example of a criminal associate of
Mogilevich mingling with American politicians. In March 1994,
Vahtang Ubiriya, one of Mogilevich's top lieutenants, was
photographed by the FBI at a tony Republican Party fundraiser in
Dallas, says an FBI report. Ubiriya, a high-ranking official
in the Ukrainian railway administration, has a prior
conviction for bribery in the Ukraine.
In Europe and Russia, the ''corruption of police and public
officials has been part of the Semion Mogilevich Organization's
modus operandi,'' says a classified FBI document. ''The
corruptive influence of the Mogilevich organization apparently
extends to the Russian security system. During 1995, two
colonels from Department of the Russian Presidential Security
Service . . . traveled to Hungary under commercial cover to meet
with Mogilevich . . . seeking information for use in the
Russian political campaign.'' An Israeli associate of Mogilevich
met with the two colonels and provided intelligence. Mogilevich
also paid off a Russian judge to secure Vyacheslav Ivankov's early
release from a Siberian prison, where he was doing hard time for
robbery and torture, according to U.S. court records and classified
FBI documents.
On April 28, the German national television network ZDF reported
that the BND (the German intelligence agency) had entered
into a secret contract with Mogilevich to provide information
on the Russian mob. The charges were made by several sources,
including Pierre Delilez, a highly regarded Belgium police
investigator who specializes in Russian Organized Crime. Because
of this deal with the BND, police in Belgium, Germany, and Austria
have complained that it is now impossible to investigate the
''Brainy Don.'' If the television report is accurate, one possible
motive for BND's deal, says a U.S. law enforcement expert on
the Russian mob, is that the Germans recently ''pulled their
people out of Moscow because they didn't like the level of
cooperation they were getting from the Russian authorities on
the Russian mob.'' Gangsters, said this source, often talk to
intelligence agencies about their rivals.
Mogilevich's main activity in the U.S. appears to be money
laundering, says a classified FBI report. He has set up companies
in Los Angeles--FNJ Trade Management--and Newton,
Pennsylvania--YBM Magnex International--as well as dozens
of shell companies, which have received more than $30 million
from Arigon, Ltd., the center of Mogilevich's financial operations.
Last Friday, U.S. Attorney Robert Courtney, head of the
organized-crime strike force, led a a joint FBI, IRS, INS, and
Customs raid of YBM's offices in Newton. Cartons of documents were
seized, with Canadian and U.S. police citing the company's
alleged ties to Russian organized crime. YBM is publicly traded on
the Toronto Stock Exchange, and two days before Friday's raid,
trading in its stock was suspended by Canadian authorities.
The president and CEO of YBM is Jacob Bogatin, a professor of
physical metallurgy. In May 1996, he contacted the FBI in
Philadelphia to find out why the INS had denied visas to YBM
employees arriving from Hungary and the Ukraine. When he was
rebuffed, he had intermediaries step forward and pester the FBI.
The State Department has banned Mogilevich himself from obtaining
a U.S. visa because he's on the department's watch list of
international organized-crime figures. Nevertheless, he has
surreptitiously entered America under aliases and on visitor
visas issued in Tel Aviv to visit Elson and Ivankov.
Bogatin admitted during a telephone interview that
Mogilevich owns his company. When asked if he knew that numerous
law enforcement agencies here and abroad considered Mogilevich to
be a leader of one of the most ruthless organized-crime families
in recent times, Bogatin replied, ''We have an investors relations
guy. You want to talk with him about this stuff.'' He added that
he had read allegations in the Eastern European press that his
boss was a Mafia don, but didn't believe them. YBM vehemently
denies that it is connected to Russian organized crime or has
engaged in any criminal activities.
Bogatin is no stranger to the mob, however. His brother, David,
a top Russian crime figure who once served in North Vietnam for
the Soviets in an anti-aircraft unit, is now serving an
eight-year term in a New York State prison for a
multimillion-dollar gasoline tax fraud scheme. Just prior to
trial, he had jumped bail, fleeing to Poland. There he set
up the first commercial banks, which moved vast sums of money
controlled by Russian wiseguys. (This after handing over his
mortgages for five pricey Trump Tower apartments to a Genovese
associate. The mortgages were liquidated and the funds were
moved through a mafia-controlled bank in Chelsea.) Eventually he
was caught and returned to the U.S. In the meantime, he lived
like royalty in a five-star Viennese hotel, surrounded by a
praetorian guard of 125 Polish parachutists, some of them
bedecked in shiny gold uniforms.
Mogilevich has not refrained from associating with known killers in
America, prime among them Elson and Ivankov. A confidential
informant told the FBI that Vladimir Berkovich, an L.A.
resident, is a chief lieutenant in Mogilevich's organization and
has arranged contract killings here, supplying the weapons and
spiriting the killers out of the country. The visas, says the
report, were obtained through the Palm Terrace restaurant, a
watering hole for Russian gangsters, which Berkovich owns.
Berkovich told the Voice that he is aware of the government's
charges, and that they are ''total bullshit.'' Although he
has no criminal record in the U.S., Berkovich's son, Oleg, was
convicted in Los Angeles of solicitation to commit murder on
October 11, 1989. He was sentenced to four years. Oleg's
business card identified his employer as Magnex, Ltd., a
company owned by Mogilevich in Budapest. Oleg was recently
arrested in Hungary on unspecified charges but was released.
Oleg's uncle, the colorful Lazar Berkovich, whose last known
address was New York City, arrived in the Big Apple after
having survived a shootout with Italian gangsters, says his
brother Vladimir. The FBI report claims that Lazar was head of
Russian criminal activities in Italy prior to his coming to
America to recuperate from his wounds, though Vladimir Bercovich
denies that Lazar was ever connected to the Russian mob.
Israeli and U.S. law enforcement sources agree that the Red Mafia,
though in existence for a mere six years, has become one of the
most formidable Russian organized-crime families in the
world. Strongest in the Ukraine, Hungary, the Czech Republic, and
the U.S., Mogilevich has increased his strength by forging
ties with other powerful Russian mob groups as well as with the
Italian Camorra. His reported ties to the German BND and
expolice officers in Hungary keep him informed of police
efforts to penetrate his organization. ''He also
ingratiates himself with the police by providing information
on other [Russian crime] groups' activities, thus appearing to be
a cooperative good citizen,'' says a classfied FBI report.
This, along with his strong leadership qualities, his acute
financial skills, his talented and highly educated associates,
and his use of cutting-edge technology, has so far made the
''Brainy Don'' impervious to prosecution.
==============================================================
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