By Steve Weinstein
By Devon Maloney
By Tessa Stuart
By Alison Flowers
By Albert Samaha
By Jesse Jarnow
By Eric Tsetsi
By Raillan Brooks
"He would create a company in New York and subsidiaries outside the U.S., typically in the Caribbean," explained New York State police captain David L. McNulty of the Bureau of Criminal Investigations, who helped collect evidence. "Sometimes he was creating a couple of hundred corporations a week all over the country. People came to him and said, 'I need four companies outside the U.S. that the IRS can't get access to.' "
To incorporate U.S. "subsidiaries," Yegmenov would dummy up supporting documents to show that companies existed in Russia. O'Connell said, "I have 16 boxes and filing cabinets of his papers. I have two boxes full of Russian stamps and seals he made for every Russian entity, from federal police agencies to universities to hospitals. They bought a modem for the stamping company and were modeming them images of the stamps they wanted. We seized a Russian typewriter. They use thin paper and bind it with white string. He had all that stuff." The Grand Jury indictment called Yegmenov "a master forger."
He promised fast service. O'Connell said, "He was buying people at the New York State Department of State drinks and dinner to expedite the incorporation process. At one time he had a box of blank New York State certificates of incorporation that an employee at the Department of State gave him. They had a watermark and seal. (Two state clerks were disciplined.)
Yet Yegmenov was sloppy. Some clients wanted to use the companies to back up requests for business visas, claiming that the "American subsidiaries" of their "companies" needed them to work here. The INS got suspicious about the large number of applications Yegmenov was filing. Investigators discovered that he had printed business cards for many of the companies at the same two addresses,1 Columbia Place and 283 State Street in Albany.
They tapped his fax machines and hit pay dirt. They learned that he had set up thousands of shell companies. They would find 4000 in New York, a thousand in Delaware, a few hundred in Pennsylvania, Massachusetts, Ohio, and other states, and a couple of dozen in havens such as the Isle of Man and the Cayman Islands.
The faxes led authorities to a Yegmenov client named Mikhail Syroejine and the $2 million embezzlement case. Syroejine was 28 in 1993 and had just been appointed deputy director of St. Petersburg's GTRK Channel 5, a government television station. He was responsible for company purchases.
Prosecutors charged that Yegmenov helped Syroejine set up TV & Radio of St. Petersburg, Inc., which was registered in August 1993 in Albany in the name of Syroejine's wife, Anna Potyomkina. Syroejine was secretary, and his real boss, TV station director Bella Kurkova, and her deputy chief, Victor Pravdyuk, were listed as shareholders. Yegmenov that day also established several other shell corporations to use in the scheme. And Syroejine opened an account for TV & Radio of St. Petersburg at Chase Manhattan Bank in Manhasset, New York, with a $200 deposit. Then, Syroejine arranged to "purchase" new Sony TV equipment from TV & Radio of St. Petersburg, also known as Channel 5. Channel 5 paid $2 million into the account of thephony company between December 1993 and February 1994.
St. Petersburg TV officials would later insist that Syroejine had persuaded them that the cheapest way to buy the Sony equipment was via a three-way contract between GTRK, V.N. Express (one of the New York shell companies), and Jojan Consultants, Ltd., a company registered in Dublin. (Dublin offers corporate secrecy, hiding owners' names from government investigators and courts.)
But as it often does in these cases, some of the money ended up fueling the U.S. economy. In April 1993, Syroejine had gotten a nonimmigrant visa from the U.S. consulate in Vienna, and in March 1994, he disappeared from St. Petersburg and showed up in America to micromanage the scam. On March 18, 1994, half a million dollars was wired from a Liechtenstein account to a New York Citibank account he controlled, and between March and May, checks drawn on Citibank paid for a $20,000 Rolex watch, a 1994 Jeep Grand Cherokee, and a Chris Craft 380 Continental pleasure boat.
Money launderers move cash through multiple accounts to obfuscate paper trails. Between August 1993 and May 1994, Syroejine opened accounts at Chase, Chemical, Citibank, and the Bank of New York, and shifted hundreds of thousands of dollars between them until he sent nearly $2 million out of the country. Some $430,000 went to Barclay's Bank in Limassol, Cyprus. Another $400,000 was sent to an account called Mand Stifftung, opened in the name of Valeri Martioukhine at Verwaltung Und Privatbank Vaduz in Liechtenstein. More than a million dollars went to Jojan Consultants at Lloyd's Bank in the U.K.
By May 1994, close to delivery time for the illusory Sony TV equipment, V.N. Express had replaced the now defunct TV & Radio of St. Petersburg as the "supplier" and taken over its $600,000 banked assets. Syroejine sent a fax from V.N. Express stating that because of the "provocative behavior" of one of Channel 5's representatives, V.N. Express refused to deal with it anymore. Channel 5 never got more of an explanation or the equipment, nor could it get in touch with V.N. Express or Syroejine.