ALSO INVOLVED IN WALLSTREET STRATEGIES IS IAN RICE. HE IS MENTIONED IN THIS STORY
The major vendor of RussIAN Dawn was London-based AustralIAN businessman IAN RICE, the controlling shareholder and chairman of AMC before the proposed Kremlyovskaya Group deal.
Attempts to contact RICE, who is not suspected of any wrongdoing, were unsuccessful.
But in mid-August 1996 the AMC deal collapsed due to what RICE called a "mutual mistake". AMC disclosed there had been "breaches of certain of the representations and warranties" made by Fanchini and the other vendors of Kremlyovskaya Group. As a result suitably audited statements could not be produced to satisfy the US Securities & Exchange Commission watchdog.
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RussIAN mafia in double vodka share scam
By Michael Gillard
The threat to the City of London from the godfathers of RussIAN organised crime is not restricted to money laundering through its banks as indicated by the recent Bank of New York investigation.
The Express can today reveal how the RussIAN mafia was involved in an attempt to make millions from two companies listed on the London and New York stock markets.
A RussIAN crime group wanted to exploit the companies to sell one of Russia's most popular brands of vodka which promoted international sales by sponsoring a Formula One motor racing team, international tennis tournaments and other sporting events that were unaware of their real benefactors.
However, investigations by American stock market regulators and the BelgIAN police exposed the involvement of the RussIAN mob, leading to the collapse of both deals.
At the heart of the scheme was an Antwerp-based company which then owned the rights to Kremlyovskaya vodka. Antwerp is a major centre for RussIAN organised crime groups attracted by its diamond business.
Kremlyovskaya Group was controlled by a syndicate of mainly RussIAN businessmen headed by Riccardo Fanchini.
Fanchini's RussIAN contacts had close connections to the circle around RussIAN president Boris Yeltsin. This facilitated a legitimate deal to export the "Kremlin's vodka" to Russia under a partnership with Moscow's National Sports Foundation which received a royalty from every bottle sold.
The foundation was supposed to use the royalties from importing tax-free alcohol to fund RussIAN sport. Instead it became a magnet for the mobsters. Its director survived an assassination attempt in 1996 only to die mysteriously this year.
Fanchini, 43, came to Belgium from the "Little Odessa" neighbourhood of Brooklyn, the centre for the RussIAN mafia in New York.
Kremlyovskaya Group was formed in 1992, two years after the vodka was launched. In March 1996 Fanchini and friends negotiated for the company to be injected into a NASDAQ-listed "shell" company, Asia Media Communications. They were to receive 89million AMC shares.
Internal documents seen by The Express show it was intended to raise up to $100million by loans and further share sales to finance a RussIAN vodka distillery and the export of cigars, chocolates and other luxury goods to Russia. Most of the AMC shares were to go to a maze of offshore companies in various tax havens. Some of these companies were managed by a London-based company administrator who declined to be interviewed by the BelgIAN police about his work for RussIAN gangsters.
Investigators believed their secret aim was a "pump and dump" scam whereby the AMC share pRICE would have been grossly inflated, enabling the offshore companies to unload equity and cash while at the same time the vodka business provided an opportunity to launder money.
Sergei "Mikhas" Mikhailov, the leader of Moscow's Solntsevo organisation, the largest RussIAN crime group, who has substantial interests in Belgium, and fellow RussIAN godfather Semion Mogilevich, who featured in last night's BBC-TV Panorama programme, carried out a similar operation with YBM Magnex. This CanadIAN-listed "shell" company acquired magnet businesses in Eastern Europe. YBM was worth £400million on the Toronto stock market before the bubble burst last year when the FBI raided its headquarters. Mogilevich money from YBM was among the $10billion laundered through the Bank of New York.
In July 1996 it was announced that Greenhills, a "shell" company listed on the AIM market in London, was to acquire the rights to sell Kremlyovskaya in Britain, Ireland and Cyprus. Greenhills was to take over RussIAN Dawn, a private British company that had acquired these rights, for up to £1.35million to be paid in Greenhills shares.
The major vendor of RussIAN Dawn was London-based AustralIAN businessman IAN RICE, the controlling shareholder and chairman of AMC before the proposed Kremlyovskaya Group deal.
Attempts to contact RICE, who is not suspected of any wrongdoing, were unsuccessful.
But in mid-August 1996 the AMC deal collapsed due to what RICE called a "mutual mistake". AMC disclosed there had been "breaches of certain of the representations and warranties" made by Fanchini and the other vendors of Kremlyovskaya Group. As a result suitably audited statements could not be produced to satisfy the US Securities & Exchange Commission watchdog.
A day after the purchase of Kremlyovskaya Group was rescinded, the Greenhills deal also collapsed. RICE and the other vendors of RussIAN Dawn said they no longer wanted to proceed. Greenhills went into liquidation later in 1996. RussIAN Dawn collapsed in 1997 with debts of £250,000. Kremlyovskaya Group became bankrupt in December 1996. The vodka is now sold by an unrelated company and owners.
Fanchini was convicted earlier this year in Antwerp of bankruptcy fraud in relation to the company's collapse. He was given a two-year prison sentence, most of it suspended. Two associates were also convicted. Others, including director Yacov Tilipman, remain wanted in Belgium. Next month Fanchini will appeal against his conviction while prosecutors will appeal against his acquittal on money-laundering charges on the basis of new information about the Kremlyovskaya scam.
© Express Newspapers, 1999 |
