NEW YORK (AP) — It's a case teeming with colorful characters: a reputed Russian mob boss once accused in an Olympic scandal, a wealthy art world impresario who hung out with Leonardo DiCaprio and a woman named Molly Bloom who gained a celebrity following by hosting them at high-stakes poker games.
U.S. authorities allege all had roles in a sprawling scheme by two related Russian-American organized crime enterprises. Prosecutors say in recent years the operations laundered at least $100 million in illegal gambling proceeds through hundreds of bank accounts and shell companies in Cyprus and the United States.
The sprawling case against more than 30 defendants, announced this week by federal prosecutors in Manhattan, illustrates the insatiable appetite for sports betting around the globe — and the enormous potential for illicit profits. The steep rise in wealth among the upper class in the former Soviet Union has driven that potential to new heights, said Mark Galeotti, a Russian organized crime expert at New York University.
"We're seeing higher-rolling businessmen involved in these types of cases," Galeotti said. The high rollers' bookies are left with the problem "of trying to figure out what to do with suitcases full of cash, and that leads to the money laundering," he added.
The tentacles of the scheme reached into Trump Tower, the high rise on Fifth Avenue where prosecutors say a U.S. ringleader was living in an apartment one floor below Donald Trump's own place. There, he oversaw a network of Internet sites that formed "the world's largest sports book" that catered "almost exclusively to oligarchs living in the Ukraine and the Russian Federation," prosecutors said.
On one of the thousands of conversations intercepted on the defendants' cellphones, the leader could be heard warning a customer who owed money that "he should be careful, lest he be tortured or found underground," a prosecutor said.
The ring paid Alimzhan Tokhtakhounov — already under indictment in a separate U.S. case accusing him of bribing Olympic figure skating judges at the 2002 Winter Olympics in Salt Lake City — $20 million in gambling proceeds in a two-month period alone, court papers said. In another transaction in late 2010, the same man wired $3 million from a Cyprus bank account to another account in the United States, the papers said.
The new indictment naming Tokhtakhounov called him a "vor" — a term roughly translated to "thief-in-law" and comparable to a Mafia godfather. His role, the papers say, was to use his "substantial influence in the criminal underworld to resolve disputes among criminals."
U.S. investigators following the trans-Atlantic money trail also uncovered a related scheme involving a swank Manhattan art gallery and high-stakes illegal card games in New York City — one played in the Plaza Hotel. The games attracted professional athletes, Hollywood luminaries and business executives, some who ran up debts in the hundreds of thousands.
Authorities didn't name the players. But press reports linked actors like DiCaprio and Ben Affleck to the games run in Los Angeles by Bloom. And DiCaprio has been photographed with Hillel "Helly" Nahmad, a friend charged in the case.
A spokesman for both film stars declined to comment on whether they had been cooperating with authorities. Playing poker isn't a crime, but it's illegal to profit by promoting it.
Nahmad, 35, comes from an art-dealing clan whose collection includes 300 Picassos worth $900 million, according to Forbes. FBI agents on Tuesday raided his gallery on Madison Avenue — a seller of works by Chagall, Dali, Degas, Monet, Matisse and Warhol — and seized computers and records.
Prosecutors allege that, along with laundering tens of millions of dollars, Nahmad committed fraud by trying to sell a piece of art for $300,000 that was worth at least $50,000 less. He also wired more than $1 million from his father's bank account in Switzerland to a U.S. bank account to finance gambling, prosecutor said.
Bloom, 34, moved her poker games from Los Angeles to New York to cater to Wall Street financiers, prosecutors said. But she reportedly went back to the West Coast in 2010 after two men — described as "Eastern European thugs" in one report — roughed her up at her Upper West Side apartment. Her lawyer at the time said she decided give up poker for her own safety.
Both Nahmad and Bloom pleaded not guilty Friday in a federal courtroom in Manhattan that could barely accommodate all the defendants. Bloom, the only woman charged, entered her plea after rising to stand from the back row. Both she and Nahmad remain free on bail.
"We do not believe Mr. Nahmad knowingly violated the law," his attorneys, Benjamin Brafman and Paul Shechtman, said in a statement. "We anticipate that he will be fully exonerated."
Bloom's attorney declined to comment.
A judge set a trial date for the summer of 2014. But there's one defendant no one should bet on being there: the reputed vor.
The 64-year-old Tokhtakhounov has been living in Russia, where media reports call him one of the leaders of the nation's underworld. He has extensive connections among the Russian business and cultural elite, but has shied publicity.
"We know he's certainly leading a comfortable life with vast amounts of money coming his way," Galeotti said. "No one's going to touch him there."
Scion of billionaire art dealer 'organized $50million high-stakes poker ring attended by Leonardo DiCaprio and other stars... with the help of Russian mobsters'
The scion of one of the wealthiest and most powerful families in the art world is accused of working with Russian mobsters to organize a high-stakes poker ring that was frequented by sports stars, celebrities and other mega-rich clients.
Federal agents yesterday raided Helly Nahmad's exclusive gallery in the Carlyle Hotel on New York's posh Madison Avenue. He was expected to turn himself in to authorities in Los Angeles. Celebrities like Leonardo DiCaprop have haunted the poker ring, according to sources.
Nahmad is one of 34 people indicted in a sweeping multi-year federal investigation that stretched from New York to Los Angeles, Miami, Kiev, Ukraine, and Cyprus.
Nahmad, 34, is accused of operating one of two organized gambling rings that specialized in high-stakes poker games hosted at various locations around New York as well as sports betting.
Nahmad is the son of David Nahmad, who is perhaps the most high-profile art dealer and collector in the world, with a fortune estimated at $3billion
The Helly Nahmad Gallery, which is owned by Helly Naham, carries works by the likes of Wassily Kandinsky and Francis Bacon.
The FBI says agents, alongside investigators from the IRS, were searching for ill-gotten profits from the illegal gambling activities.
Nahmad is also accused of wire fraud for allegedly selling a $50,000 painting for $300,000.
According to the New York Post, Nahmad runs in a dizzying social circle of A-list friends, which include supermodel Gisele Bundchen and her football quarterback husband Tom Brady.
Sources told the tabloid that DiCaprio often participated in the high-stakes poker games.
Also indicted is the infamous Russian crime boss Alimzhan Tokhtakhounov, nicknamed 'the Little Taiwanese.' Mr Tokhtakhounov is already a fugitive from justice. He was indicted for rigging the figure skating competition at the 2002 Salt Lake City Winter Olympics.
He is a a 'vory v zakone' or 'Vor' - translated as 'thief-in-law' - the highest rank in Russian organized crime networks. Authorities believe he provided protection and backing for the gambling rings. He is believed to be hiding out in Russia.
Tokhtakhounovand and Nahmad are accused of running separate gambling and money laundering rings that worked together.
The FBI says Tokhtakhounovand received $10million payment for his services.
Nahmad's operation allegedly brought in $50million since 2006.
Authorities say he made wire transfers from his Swiss bank accounts to help fund the operation.
His clients include high-profile businessmen, celebrities and sports stars. The FBI is not releasing the names of gamblers.
Debts from the gambling operations ran into hundreds of thousands of dollars. One plumber from the Bronx, New York, was threatened by the alleged mobsters after he ran up a $2million debt in 2010.
The gambling rings also included sophisticated money laundering operations that included a Brooklyn, New York, car repair shop and banks in Cyprus.
In addition to Tokhtakhounovan, three other suspects have evaded capture and are fugitives.
Abraham Mosseri, 40, is wanted for his role in operating an illegal sports bookmaking operation.
Donald McCalmont, 45, is wanted for laundering money through Titan Plumbing, a Bronx company taken over to repay a gambling debt.
William Edler, 49, is wanted for his role in operating an illegal sports bookmaking operation.