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Gold/Mining/Energy : YBM Magnex Intl Sees Revenue Growth 30-35%/Yr In MagnetOp -- Ignore unavailable to you. Want to Upgrade?

To: Mr Metals who wrote (90)	5/17/1998 8:18:00 PM
From: Adrian du Plessis	Read Replies (2) \| Respond to of 314

Russian godfather returns to Britain < picture > Moscow's most powerful crime boss, Sergei Mikhailov: wanted in three countries < picture > A prostitute touts for business near the Czech border with Germany. Russian gangsters make the profits. By Michael Gillard and David Connett The Observer (UK) - Sunday May 17, 1998 Russian mafia bosses are suspected of secretly buying into British firms, using a company at the centre of what threatens to become one of the world's biggest stock market scandals. An Observer investigation has revealed that a Russian godfather described in a confidential British police report as 'one of the world's top criminals' is linked to the US-based YBM Magnex International company whose offices were raided last Wednesday. Sixty FBI, Customs, Immigration and Internal Revenue agents investigating allegations of money-laundering and fraud searched YBM's offices in Newtown, Pennyslvania, removing a lorryload of documents. Three years ago British police believed they had closed down the UK activities of the Russian godfathers linked to the company. But YBM has bought two British businesses in the past year. Detectives from the National Criminal Intelligence Service and National Crime Squad had identified Semion Mogilevitch as being behind the Channel Islands company which sold YBM its core business, making him and his associates major shareholders. Mogilevitch, 51, was a main target for for British police experts on Russian organised crime because of 'the effect of his financial impact on the City of London'. Sergei Mikhailov, who heads the most powerful gang in Moscow, also has been linked to the Channel Islands company and to a Russian company acquired by YBM. Shares in YBM have doubled in recent months, valuing it at more than œ400 million. The raid wiped out a quarter of its value before trading on the Toronto Stock Exchange was halted. Doubts about YBM's profits had been raised before last week's raids. Auditor Deloitte & Touche expressed concern that 'illegal acts' may have been committed. A police investigation, Operation Sword, into a London-based money-laundering ring first exposed the links between Mogilevitch and YBM, which produces magnets at a factory in Budapest. Last year it acquired Crusteel Magnetics in Sheffield and earlier this year two businesses near Southport, Lancashire. All now trade as Crumax Magnetics. YBM acquired the Budapest business by taking over Arigon, registered on Alderney in the Channel Islands. Mogilevitch, described in a confidential police report as the 'leader of Russian organised crime in Hungary and the Czech Republic', was a director and shareholder. The Mogilevitch crime group was said in 1995 to be engaged in 'large-scale extortion, prostitution, arms dealing and drug trafficking'. Its 250 members are mainly from Ukraine and Israel. An FBI report described Russian prostitutes working in Prague and Budapest as the centrepiece of the operation, together with drug trafficking, and described Arigon as the heart of the Mogilevitch empire. In May 1995, while YBM was negotiating to buy Arigon, British police raided the London home and City offices of solicitor Adrian Churchward and his Russian-born wife Galina, described in a police report as a former girlfriend of Mogilevitch. Both were Arigon officials. The investigation uncovered evidence that up to $80m (œ50m) had passed through client accounts controlled by Churchward and a partner at the City branch of the Royal Bank of Scotland. This money was described as 'largely the proceeds of Russian organised crime in Eastern Europe', from the Mogilevitch and Solntsevskaya organisations. Solntsevskaya, the 1,500-strong Moscow mob headed by Mikhailov, 40, has interests in Austria and the Belgian diamond centre of Antwerp. Mikhailov, known as 'Michas', is currently in custody in Switzerland on money-laundering charges and is wanted in the US, Israel and Belgium. Churchward, his wife and his partner in the law firm were arrested but never prosecuted. Warrants were also issued for Mogilevitch and his associate Konstantin Karat, Arigon's company secretary. The prosecution failed because the Russian authorities did not provide sufficient evidence. But Mogilevitch was banned from entering Britain. More than $2m was frozen in bank accounts belonging to Arigon and two other British companies connected to Mogilevitch but had to be returned. It was held Churchward and his partner had not broken the law. Costs were awarded to them against the Crown Prosecution Service. Soon after the raids, British detectives visited Prague to make further inquiries regarding Arigon. Czech police had raided a local restaurant owned by an Arigon company. It was crowded with members of the Mogilevitch and Mikhailov gangs. Despite the raids the YBM deal to buy Arigon and its Budapest business went ahead. The shares issued in that January 1995 deal were initially worth around œ10m. They subsequently became worth, assuming none were sold, œ200m. YBM also acquired Arbat International, a Russian company described as being involved in the sale of consumer goods in Eastern Europe. Arbat had been set up by Arigon as a joint venture in 1991. Reports in Russia and Belgium link Arbat - since sold - to Mikhailov. The 1995 confidential British report on Operation Sword alleged Canada was 'used purely to legitimise the criminal organisation by the floating on the stock exchange of a corporation which consists of the UK and USA companies whose existing assets and stocks have been artificially inflated by the introduction of the proceeds of crime'. YBM said last week in Toronto that an internal investigation had uncovered no wrongdoing or criminal activity. Its directors did not return messages asking to discuss Mogilevitch and Mikhailov's links to Arigon. ------------------------------------------------------------------------ Copyright Guardian Media Group plc 1998 Hi all - The Observer is one of Britain's oldest broadsheets. I think that a lot of people are looking forward to the answers from Mr. Bogatin. If his co-directors David Peterson, Owen Mitchell or others join SI they'll be welcome to contribute also to the discussion.