The Armani-Designed NYC Condo Where Connected Russians Have Bought Apartments
When Soviet-born diamond billionaire Lev Leviev reopened 20
Pine Street as a luxury condominium in the late 2000s, it symbolized the
ongoing transformation of New York City’s famed Financial District into a
partly residential neighborhood: a place where money and the moneyed rub
shoulders.
An “art-deco jewel” that went up a year before the 1929
stock market crash and long anchored Chase Manhattan Bank, the building
overlooking Wall Street was converted into 409 condos, with Armani/Casa design
and amenities such as a swimming pool, sauna, and gym to draw buyers. The
weightiest reminder of its banking past, perhaps, is the massive metal vault
door that leads to the billiard room.
But 20 Pine, just steps from the New York Stock Exchange --
the epitome of U.S. capitalism, where tens of billions of dollars changes hands
daily before the gavel goes down – also reflects a murkier facet of the city’s
real estate industry: inflows of cash from the former Soviet Union.
This is the building where three Russian investors, at least
one of them politically connected, have purchased 18 apartments for a sum
totaling more than $18 million, New York property records show. They are
Aleksandr Udodov, the brother-in-law of new Russian Prime Minister Mikhail
Mishustin; Denis Katsyv, a businessman whose money intermingled with the
massive alleged tax fraud exposed by whistle-blower Sergei Magnitsky, who died
in jail a year after 20 Pine opened; and Valentin Laskov, a Moscow home builder
who coinvested in a casino business with Michael Cohen, the now-imprisoned
former personal lawyer for U.S. President Donald Trump.
There is no immediate indication that any of the sales or
purchases of the units involved illegal activity, though at least one of the
buyers drew the attention of federal prosecutors in the Southern District of
New York.
But the transactions offer a glimpse into New York real
estate’s role as a magnet for investors, some of them seeking to hide
questionably sourced profits from the prying eyes of regulators and tax
authorities.
This particular New York attraction was enough of a concern
that the U.S. Treasury Department issued an unprecedented order in 2016
requiring that the buyer be identified in some cases when real estate is
purchased in an all-cash transaction in Manhattan or Miami.
The purchases by Laskov were part of a two-year, nearly $22
million buying spree that included 24 condos in New York City. He had also
snapped up a $1 million condo on the famed Las Vegas Strip by 2010.
Laskov, Udodov, and Leviev, who has ties to Russian
President Vladimir Putin, were all active in Moscow’s real estate industry –
one that, like in many big cities around the world, including New York, has
been a hotbed of corruption.
Mishustin, who headed Russia’s tax service for 10 years
before Putin made him prime minister in January, supervised Moscow land as head
of Russia’s Federal Real Estate Cadastre Agency from March 2004 until December
2006.
New York City real estate has for years been an investment
haven for foreign buyers, including those from Russia and other former Soviet
republics, seeking a safe and liquid asset -- a parking space for some of their
wealth.
Russian billionaire Roman Abramovich owned at least six New
York City apartments worth nearly $100 million before he gave them to his wife
as part of a divorce settlement. Yekaterina Rybolovleva, the daughter of
billionaire fertilizer magnate Dmitry Rybolovlev, bought an apartment in 2011
for $88 million. (In 2008, Rybolyovlev made headlines when his daughter’s trust
bought an 18-room Palm Beach, Florida, mansion from Trump for more than twice
what the future president paid for it four years earlier.)
Many other buyers from the former Soviet Union have
purchased New York apartments ranging from half a million to a few million
dollars.
But the right to hide behind limited liability companies,
LLCs, has also made New York City an attractive destination for foreign buyers
seeking to launder ill-gotten gains.
Between 2008 and 2014 -- the period during which the three
Russian men completed their purchases at 20 Pine -- nearly 1-in-3 condos in
major Manhattan developments like 20 Pine were snapped up by people who had a
foreign address or were shielding their identity behind an LLC, Property Shark
data showed.
While the United States has been scrutinizing LLCs more
closely lately, it has not taken the steps needed to better fight real-estate
money laundering, said Ross Delston, a Washington-based attorney who
specializes in the topic.
U.S. real estate lawyers and brokers are still not held to
the same anti-money laundering requirements as bankers, he said.
Leviev’s Ties
Marketing of 20 Pine was led by Michael Shvo, who would
later team up with Russian real estate developer and billionaire Vladislav
Doronin on the conversion of the Crown Building, on Fifth Avenue in Midtown
Manhattan, into a condo and hotel that is expected to open later this year.
Gennady Perepada, a New York real estate agent catering to
the wealthy from the former Soviet Union, told The New York Times in 2013 that
his clients were buying condominiums in buildings that were either new or still
under construction, including in the Financial District.
He said some building owners were sending representatives to
foreign capitals, including Moscow, to market their properties.
Leviev, who converted 20 Pine with a former business
partner, had extensive connections to Russia’s wealthy. An Israeli born in
Soviet Uzbekistan in 1956, he was enlisted by Putin to create the Federation of
Jewish Communities of Russia and owned AFI Development, a major real estate
company operating in and around Moscow. He also had interests in Russia’s
diamond industry. Leviev, whose name is sometimes spelled Levaev, also had
interests in Russia’s diamond industry.
Magnitsky Money?
Katsyv, whose father was the Moscow Oblast transport
minister and later rose to become vice president of state monopoly Russian
Railways, bought five apartments for a total of $4.7 million through his
company Prevezon Holdings from November 2009 through March 2011, including Unit
1816, court records show. Prevezon also bought stakes in subsidiaries of
another Leviev property business, AFI Europe.
U.S. investigators later accused Katsyv of financing the
purchases with some of the $230 million they say was stolen from the Russian
budget by a criminal group through a complicated tax refund scheme. In May
2017, however, the United States settled the case against Katsyv, who admitted
no wrongdoing and paid less than $6 million in fines.
Sergei Magnitsky, who detailed the alleged scheme while
working as a lawyer for former Russia investor Bill Browder, was later arrested
by Russian police and died in jail on November 16, 2009, after repeated
complaints that he was denied medical care, following an apparent beating, and
in conditions rights activists said amounted to torture.
His death led to legislation including the Global Magnitsky
Act, a U.S. law that allows the president to impose visa bans and targeted
sanctions on foreigners deemed responsible for gross human rights violations or
significant corruption.
Katsyv contracted to buy his first two apartments at 20 Pine
on November 10, 2009, six days before Magnitsky’s death.
About a month after that, Udodov -- who told the newspaper
Izvestia last month that he married Mishustin’s sister in 2008 -- bought five
apartments at 20 Pine for a total of $5.1 million. He bought a sixth in June
2010 for $1.3 million.
Udodov’s statement that he was married to Mishustin’s sister
came shortly after media reports showing that he gave her expensive land raised
questions about potential impropriety.
Udodov’s purchases were first reported by Russian opposition
politician Aleksei Navalny’s Anti-Corruption Foundation, which has harried
Putin and his governments with allegations of extravagant graft.
The source of Udodov’s wealth has come under intense
scrutiny ever since Putin made Mishustin prime minister in January in the
biggest government shake-up in years.
Udodov owned two luxury shopping centers in the center of
Moscow valued at more than $100 million as well as three mass-market shopping
malls.
Yet, in a 2011 article about an investigation into an
illegal tax refund scheme, the Russian newspaper Kommersant said Udodov was
“officially unemployed.” The same article also described him as a person
capable of getting problems resolved in the tax sphere.
The little-known Mishustin was head of Russia’s tax agency
from April 2010 until he was tapped by Putin to replace Dmitry Medvedev.
Swiss media reported in 2012 that Udodov was under
investigation for possible money laundering by Swiss authorities after buying a
$4 million hotel in 2007 with promises to invest another $45 million to expand
it. It is not clear when the Swiss opened the investigation; they dropped it
after Udodov sold the property in 2013.
When Navalny’s Anti-Corruption Foundation published the
findings of its investigation into Mishustin’s wealth and his ties to Udodov,
the Kremlin foe asserted that it was impossible to separate the two men’s
wealth.
Udodov sold the New York apartments over 2015-18, a time
during which Washington was imposing sanctions on Russian officials and
businessmen, including seizing their U.S. assets, in response to Russia’s
seizure of Crimea, interference in eastern Ukraine, and alleged meddling in the
2016 U.S. presidential election.
Udodov did not respond to two messages sent by RFE/RL
through his website.
$20 Million
Udodov bought his six apartments at 20 Pine from Valentin
Laskov, who cofounded Russian real-estate company Peresvet-Invest in the 1990s
with Oleg Pronin and an unidentified third individual, according to a
Kommersant article. Laskov served as the chairman.
Just prior to the global financial crisis in 2008-09, Laskov
went on a condo buying spree in New York City, snapping up 13 apartments at 20
Pine, eight at 340 East 23rd Street, and three more at another two buildings.
The price tag was nearly $22 million, according to New York City property
records.
Laskov contracted to buy the apartments in 2006 and 2007,
receiving ownership of them later when they were completed. He completed the
purchase of a $1 million apartment in the Vdara, a 57-story tower between two
of Las Vegas’ biggest casinos, in 2010, Nevada property records show.
In February 2006, Laskov -- with the help of his New
York-based realtor Sergei Perotine -- created 18 LLCs corresponding to 18
apartments at 20 Pine, including Pine 1816 LLC.
Katsyv eventually bought 1816 in 2011, though there is no
indication that he and Laskov know each other.
Most of Laskov’s LLCs are registered to a modest, two-story
attached home at the end of a dead-end street in a working-class neighborhood
on Staten Island, a borough of New York City that is a 25-minute ferry ride
from Manhattan. Perotine continues to rent or sell Laskov’s NYC properties.
RFE/RL sought to contact Laskov through Perotine but the
broker did not respond to e-mails and calls.
Russian Boom
Like Leviev, Laskov owned a major real estate company
operating in Moscow and its suburbs. He, however, has kept out of the spotlight
and there is little in the Russian media about his background.
His Peresvet-Invest transformed from a simple realtor in the
1990s into a holding by the mid-2000s that included a developer with close ties
to the Military-Industrial Bank, according to archived pages of the company’s
now-deleted website.
Peresvet-Invest’s five-man board consisted of at least three
graduates of the FSB Academy, the main educational institution of the Federal
Security Service (FSB), the chief domestic successor of the Soviet KGB: academy
co-founder Pronin, Vladimir Melnik, and Oleg Grinko.
Fivedays.ru, a former news website dedicated to Russian real
estate, quoted Laskov as saying that 90 percent of Peresvet-Invest’s staff were
graduates of the FSB Academy. In the same article, Fivedays said that former
military officers owned or ran many Moscow real estate developers.
Peresvet-Invest’s transformation into a major player in
Moscow’s real estate coincided with the rise of Putin, a longtime Soviet KGB
officer who headed the FSB in 1998-99.
Source Of Wealth
Russians reportedly snapping up U.S. residential real estate
worth more than $20 million usually seem to be super-rich tycoons who made
their fortune during the privatizations of the 1990s, when they acquired the
Soviet Union’s best assets for pennies on the dollar.
Nonetheless, Moscow real-estate developers like Laskov were
seeing their net worth – at least on paper -- skyrocket in the early 2000s amid
an oil-driven home-price boom.
Leviev, for instance, sold shares in his AFI Development for
$14 a piece in 2007, valuing his company at more than $7 billion.
But AFI nearly went bankrupt in the midst of the global
financial crisis that clobbered Russia’s real estate market in 2008, sending
the shares falling more than 90 percent.
Peresvet-Invest also struggled in the crisis’ aftermath,
leaving people hanging who had paid for apartments that were still in the
construction phase.
But just 10 days after Lehman Brothers filed for bankruptcy
on September 15, 2008, setting off the financial crisis, a Peresvet-Invest
subsidiary registered a company in Belize, a Central American nation known as a
money-laundering haven.
Peresvet-Invest co-founder Pronin was arrested by Moscow
police in 2018 on suspicion of laundering 1.1 billion rubles ($18 million) from
Russian bank Peresvet through Cyprus. Peresvet-Invest was declared bankrupt in
2019.
Russian media reported that Udodov bought a high-end mall in
the center of Moscow from Peresvet-Invest as it struggled to pay its debts in
the early 2010s.
Russian media reports often identified Udodov as a vice
president of Peresvet-Invest, though the biography on his personal website makes
no mention of it.
Peresvet-Invest was one of the largest borrowers from the
bank Peresvet, which had to be bailed out by the Russian state amid mounting
bad loans. Aleksandr Shvets, the bank’s president, fled Russia.
Pronin is not the only business associate of Laskov who has
run afoul of the law in the United States, Russia, or both.
Laskov created a New York-based LLC called R-Stail in the
1990s with his friend Vladimir Siforov. A close friend of Pronin’s, Siforov
fled to Russia before he was charged by the FBI in 2010 with one count of wire
fraud in connection with what U.S. authorities said was a $200 million real
estate pyramid scheme run by Eli Weinstein out of New Jersey. Weinstein was
convicted and sentenced to 22 years in prison in 2014 while the charge against
Siforov remains pending.
In the early 2000s, Weinstein helped Soviet-born U.S.
businessman Lev Parnas raise money for his company Aaron Investments, court
records show. Parnas was a key figure in the events that led to President
Donald Trump’s impeachment by the U.S. House of Representatives in December
2019; Trump was acquitted by the Senate last month.
Siforov’s company, SIF Transportation, was also registered
at the Staten Island address used by Laskov. RFE/RL visited the Staten Island
home at the end of a workday, but no one answered the door.
Cohen Connection
The media outlet Buzzfeed first reported in 2017 that Laskov
coinvested in a casino business with attorney Michael Cohen in the early 2000s
– before Cohen, a personal lawyer for Trump from 2006-18, joined the Trump Organization.
Cohen was sentenced in 2018 to three years in prison for crimes that included
arranging payments during the 2016 U.S. election campaign.
Laskov received a 10 percent stake in the entities that
controlled Atlantic Casino, a gambling cruise line that operated off Miami
waters, in return for his $800,000 investment, according to a copy of the
shareholders agreement.
Perotine acted as Laskov’s “attorney-in-fact” during a
lawsuit against the Atlantic, according to court records. Cohen and two Ukrainian-born
men each owned 30 percent. It is unclear whether Cohen and Laskov knew each
other personally.
Laskov has sold off a few more of his condos, including an
apartment on the 47th floor of 123 Washington Street, a few steps from One
World Trade Center, the skyscraper built to replace the Twin Towers destroyed
in the September 11, 2001, terror attacks.
Laskov, who contracted to buy the apartment in 2007 for $1.7
million, sold it last year for $1.3 million to a couple named Andrey and
Natalia Gudkov, according to New York property records.
A couple with the same name were among nine Russians
suspected in the mid 2010s of laundering millions of dollars through Australian
banks, according to The Courier Mail, an Australian newspaper that published a
photo of the Gudkovs.
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