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

Because the OSCE PA was voting on a resolution encouraging member states to pass Magnitsky Acts, Browder attended its meeting in Monaco in July 2012. He was somewhat concerned about going to Monaco because Prince Albert, the head of state in Monaco, was pals with Putin. Nonetheless, Browder hosted an event before the vote in which he aired a video about Klyuev. The film “highlighted his criminal record, […] his coziness with the Interior Ministry […], and the fact that he and his associates were surrounded by dead men who’d conveniently been blamed for their crimes” (71).

Russia had a large delegation at this event, and a female FSB agent approached Browder, trying to entice him into a liaison. The FSB is the successor to the KGB, or secret police, in Russia. Browder recognized her sexual interest as false—a classic honey trap. Given that Russians knew his location, though, he had to return to London. On the day of the vote, Pavlov and Klyuev met with Spencer Oliver, the Assembly’s Secretary General. Because Oliver would never have otherwise met with Klyuev, a major crime boss, the Russian government must have made the request. Browder notes that this demonstrated that organized crime and the Russian government were “one and the same” (78). Klyuev’s presence gave Browder’s allies a chance to film him and capture his image. Given that the Russians had “overplayed their hand” (78), the Magnitsky Resolution passed by a margin of 291-18. Based on the publicity, the Swiss froze Klyuev’s bank accounts. This was the second freezing order in the Magnitsky case (78).

Bill Alpert, a reporter interested in the Magnitsky case, uncovered a money trail in Moldova after obtaining a database from an anti-corruption nongovernmental organization (NGO) and notified Browder. This discovery allowed Kleiner to determine where more of the $230 million landed after it left Russia. He discovered deposits in Cyprus, Lithuania, Latvia, and Estonia, which caused Browder’s team to begin working on criminal complaints in those places.

Using a data mining technique, Alpert ran the names of the many shell companies through the New York property database. One of the companies, Prevezon, used $857,764 of the stolen $230 million to purchase properties in New York. All told, the company spent $17 million on New York real estate. Registered in Cyprus, Prevezon was owned by Denis Katsyv, the son of a senior Russian official. Browder hoped that Barron’s would publish Alpert’s story, but it declined for legal reasons. However, the NGO posted the story, and a Swiss compliance officer read it. As a result, the Swiss froze $7 million in Prevezon’s bank accounts, the third freezing order in the Magnitsky case.

Perepilichnyy, the whistleblower, went to Paris in November 2012 for a decadent and relaxing weekend with his mistress. At dinner, he sent his food back, saying it was spoiled. He spent the night vomiting and then returned to his family in London. The next day, he collapsed during a jog. A neighbor, who tried to revive him, reported that green foam bubbled from his mouth (86). Perepilichnyy died on November 10, 2012, yet another dead witness to Russian crimes.

Perepilichnyy’s death terrified Browder given that Russians were sending assassins to Western countries. In addition, the death cast a pall over a major legislative achievement. On December 14, 2012, President Obama signed the Magnitsky Act into law after it passed the Senate and House by large margins. Outraged, Putin retaliated by banning the adoption of Russian orphans by Americans. Additionally, he claimed that Magnitsky and Browder would be put on trial in Russia for economic crimes. Browder notes that this was the first time that a dead person was put on trial in Russian history (91).

Given that his team had found a connection between New York and the stolen money, Browder went to the US attorney’s office to file a criminal complaint with supporting evidence. Kaufmann, his friend who had promised action in the case of such a connection, was leaving the US attorney’s office for private practice. However, the new US attorney was interested and put Browder in touch with an agent from Immigration and Customs Enforcement (ICE). That agency investigates money laundering. However, the agent, Todd Hyman, wouldn’t tell Browder whether a case had been opened.

Finally, US Attorney Duncan Levin contacted Browder and invited him to a meeting in New York about the Prevezon case. At the meeting, Levin explained that the federal government could seize property purchased using illicit funds under asset forfeiture laws (93). Assistant US Attorney Paul Monteleoni was to head up the case, and he immediately asked Kleiner to explain the money trail to him. Kleiner not only obliged but also spent weeks getting more detailed information that Monteleoni requested.

Meanwhile, the Russian government aired a bogus documentary, called Browder’s List, accusing Browder and Magnitsky of stealing funds. Its timing coincided with the start of the show trial in which Magnitsky and Browder were found guilty on July 10, 2013. Browder was sentenced to nine years in absentia, and Russia issued its first Interpol red notice for his arrest. Although Browder’s attorney got this canceled because of its political motivation, Browder now worried whenever he crossed international borders.

On September 10, 2013, the US Attorney of the Southern District of New York (SDNY) formally announced a civil forfeiture complaint against real estate corporations laundering the proceeds of a Russian tax refund fraud (96). The US attorney applied to the court to freeze $20 million in real estate and cash in New York and £3 million in the Netherlands. This was 27 times more than Browder’s team had found, which vindicated their allegations against Prevezon (97). The court approved this application, making it the fourth freezing order.

Not only did the Russians plan to defend Prevezon aggressively, but they hired Browder’s old attorney, John Moscow, to do it. Browder was outraged and argued that Moscow had a conflict of interest. He wrote to the Moscow firm, BakerHostetler, explaining the conflict, and expected the prestigious firm to withdraw. Instead, another attorney from the firm, Mark Cymrot, claimed that there was no conflict of interest and that the firm wouldn’t recuse itself. Browder then filed a complaint with the New York Attorney’s Grievance Committee. That Committee was woefully understaffed and didn’t respond to him. Instead, Prevezon issued a subpoena for Browder to appear at a deposition. The Russians wanted to compel him to provide information about his sources, who would then be in great danger. This subpoena, however, was invalid because it wasn’t served to him personally in New York. It prompted Browder to enlist the legal services of Randy Mastro of New York to be prepared for the next time.

Browder received an intelligence report that people were trying to locate him and take him to Russia. In response, Browder increased his personal security and varied his routines. In mid-July, he went on vacation with his wife and children to Aspen, Colorado. Later that month, he gave a speech at the Aspen Institute about the Magnitsky Act. As he exited the Institute, an uncredentialed woman yelled his name. He rushed to his car, and a man threw something at the window. His driver got him home safely, but clearly, Russia knew his whereabouts. As already planned, he flew to London the next day to promote his new book, Red Notice. His family had stayed in Colorado, and two men approached his children in the yard. They ran inside, and the men rang the bell for several minutes. Browder’s wife was terrified. He sent a friend to guard his family and felt extreme anger toward John Moscow, whom he blamed for disclosing his location to the Russians.

The people chasing Browder in Aspen weren’t kidnappers but were trying to serve him with a subpoena. They threw the subpoena on his windshield. Browder’s attorney, Mastro, promised that he could squash the subpoena because of jurisdictional issues and its being improperly served. Additionally, Mastro sought a hearing to have John Moscow removed from the case given his conflict of interest.

Judge Thomas Griesa, who was 83 years old, presided over the hearing. He hadn’t read the written filings and was confused about the hearing’s purpose and Browder’s role. When it was clear that Griesa would rule in favor of Moscow, Mastro requested a meeting in chambers, where he showed Griesa the transcript of a phone call between Browder and Moscow. The call, which took place right after Magnitsky died, was about the stolen $230 million. Judge Griesa then granted a second hearing on October 23. However, the judge still failed to understand the connection between Moscow’s prior work for Browder and the case against Prevezon. He ruled that Moscow and his firm could stay on the case.