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Prosecutor's Office Probes Ex-State Minister's Alleged Links with Organized Crime


The Georgian chief prosecutor’s office said on September 25 that it had summoned Giorgi (Goga) Khaindrava, former state minster, for questioning into his suspected links with organized crime groups.

Khaindrava was the state minister for conflict resolution issues in 2004-2006 and after that was with various opposition groups; in November, 2007 after the riot police broke up anti-government demonstrations Khaindrava was among those figures who were accused by the authorities of cooperating with the Russian intelligence, but no criminal charges were brought against him. In 2008 he was running for parliamentary seat on a joint ticket with then united opposition block; the last time he was more or less actively involved in political developments was in early 2010. A fierce critic of the authorities, Khaindrava has recently produced a documentary criticizing President Saakashvili’s more than eight years in power.

Georgia’s chief prosecutor, Murtaz Zodelava, announced on September 25 that the investigation was ongoing into the alleged links of Khaindrava, whom he described as “a representative of the Georgian opposition”, with French-based Georgian criminal authorities, ‘thieves-in-law’.

“Several weeks ago we received information from the French National Gendarmerie concerning the issues which are of crucial importance for the security of Georgia’s national interests. Today, on September 25, based on the motion of the Georgian Justice Ministry and under the sanction of the French court, we were handed over this information,” Zodelava said.

“According to the materials provided by the [French] National Gendarmerie, a deal was made between a representative of the Georgian opposition and thieves-in-law in top of international criminal network, which aimed at triggering destabilization and violent actions in Georgia, restoring the influence of thieves in law and setting up criminal groups similar to Mkhedrioni [a paramilitary group in early 1990s].”

“Naturally, law enforcement agencies are carrying out intensive investigation into this case,” Zodelava said.

The chief prosecutor’s office then distributed to media outlets information, which, Zodelava said, was “provided by the French National Gendarmerie” with “precise Georgian translation.” According to this information Khaindrava met in France with a Georgian “thieve-in-law” Revaz Lortkipanidze on November 9, 2011 to ask for criminal authorities’ help in parliamentary elections with finances and possibly with weapons too and in return Khaindrava promised to secure his return back to Georgia and “restoration of influence” of ‘thieves-in-law’ in Georgia.

Less than couple of hours after the announcement of the prosecutor’s office Khaindrava was in Tbilisi-based Maestro TV’s studio being interviewed about the allegations. He said it was “ridiculous and farce”; he said Lortkipanidze was his long-time friend, whom he met in France; he also said that he would appeal in a written form to the French embassy to request “explaining what these materials are all about.”


Russia moving to toughen carjack penalties

MOSCOW, Sept. 22 (UPI) -- Russian lawmakers say they are working on legislation that would toughen the penalties for carjacking, which is increasingly perpetrated by organized crime.

The proposal in the Duma would boost the maximum penalty from seven years to 15 years in prison and would rule out the option of a suspended sentence by classifying carjacking as a "grave" crime.

Vyacheslav Lysakov, first deputy chairman of the Duma committee working on the bill, told Russia's Itar-Tass news agency the measure would go before the committee next month.

Carjacking has become a lucrative enterprise for organized crime gangs in Russia.

Lysakov told Itar-Tass suspects frequently are given suspended sentences and modest fines.

"If we make (carjacking) a grave crime, the judge will have to produce the ironclad arguments for a suspended sentence. It will be really hard to do," Lysakov said.







Problems with trial by jury in Russia

By Alexander Barinov

A bill which aims to reduce the power and scope of juries has failed to receive adequate government support, according to the official conclusions on the draft law published on the State Duma website. The argument draws attention to the fact that trial by jury is the most effective way of ensuring the adversarial principle is adhered to in Russia's justice system.
However, until recently the jury system was criticized for a lack of professionalism and a failure to achieve the goals of justice.
The draft law seeking to curtail the powers of juries to hear cases relating to conspiracy and organized crime was submitted to the lower house of Russia’s parliament in June 2011. Initially, it was widely believed that the bill would be adopted quickly and without too much debate.
Then-president Dmitry Medvedev suggested in August 2009 that crimes of conspiracy and organized crime should be withdrawn from the jurisdiction of juries. “Unfortunately, our juries are not up to the task, for a variety of reasons,” Medvedev said.
The bill’s authors explained their reasoning by citing a lack of necessary legal education and qualifications on behalf of jurors, as well as an “increased probability of pressure in the form of threats, violence, blackmail and bribes.”
In the name of fighting terrorism
Nine types of crimes were excluded from adjudication by jury trial in 2008. They include such crimes as terrorist attacks, hostage-taking, organizing or taking part in illegal armed groups, organizing mass disorder, treason, espionage, coups d’etat, armed uprisings and subversive actions. These crimes have been relinquished to the authority of professional judges.
Officially the decision was explained by the need to improve counterterrorism legislation. But many lawyers and experts find that explanation unconvincing. They argue that the curtailment of jurors’ powers is primarily in the interests of the law enforcement agencies and special services.
These services have long expressed dissatisfaction with the jury system, first of all because juries return verdicts of not guilty more often than professional judges. According to statistics, the acquittal rate in “ordinary” courts is less than 1%, while for jury trials that figure is somewhere between 10% and 20%. Each acquittal is a heavy blow to the professional reputation of the law enforcement agencies.
Jurors usually return acquittal verdicts because of numerous shortcomings and sometimes open violations during the investigation stage. Relevant examples include such high-profile cases as the murders of Novaya Gazeta journalist Anna Politkovskaya and Editor-in-chief of Forbes Russia Paul Khlebnikov, or the attempted murder of former RAO UES Chief Executive Anatoly Chubais.
The law limiting the powers of jurors was drafted and adopted with hardly any discussion or regard for the sharp criticism by human rights advocates, lawyers and even some parties in parliament. Its authors could not even clearly explain the point of the new law. Instead, they said openly that jurors all too often pass light sentences or return acquittal verdicts in cases of grave crimes.
New concept
If cases of conspiracy and organized crime were removed from the jurisdiction of juries, the role of the “people’s court” would be reduced to the same type of “ordinary” crimes as domestic murders and petty white-collar crimes.
However useful the draft law was initially considered to be, it was not submitted for review; it simply gathered dust for almost a year.
The conclusions on the draft law published on the State Duma website reject the authors’ arguments as “insufficiently convincing.” They also state that “compared with other types of courts, the jury system ensures the best possible compliance with the adversarial principle in criminal cases.” Consequently, it can be assumed that the role of juries will not after all be completely nullified.
On the other hand, the reasons behind such radical amendments to the legislation on juries are unclear. The opinions of the experts polled by RAPSI differ on this score.
President of the Moscow Bar Genri Reznik has no explanation for the proposed changes and fully agrees with the official conclusions. “The advantages of trial by jury compared to professional courts have been proven over centuries of practice, so there is nothing more to say,” he said.
Lawyer Vladimir Zherebenkov shares Reznik’s view: “Other countries are expanding the power of juries.” In his opinion, the Russian lawmakers’ decision to limit the jurisdiction of juries is completely unsubstantiated.
“I don’t believe that such conclusions are sincere; an attack has been underway against the rights of Russian citizens over recent years, in particular the power of juries, and it is unlikely to stop,” lawyer Ruslan Koblev said.
Presidential adviser Mikhail Fedotov, Chairman of the Presidential Council for Civil Society and Human Rights, is “absolutely convinced” that the scope of jury trial in Russia should be expanded. At the same time, there are some types of cases which juries should not hear. “But so far the number of crimes which juries can hear is considerably greater than the number of crimes they actually do hear,” the lawyer said.
In his opinion, in the future juries should hear civil cases, such as the division of property, alimony, and the protection of honor, dignity and business reputation.


Beyond Mafia Stereotypes: Organized Crime’s Impact On Security – Analysis

Beyond Mafia Stereotypes: Organized Crime’s Impact On Security – Analysis
The potential for organized criminal networks to foment intra-state violence and terrorism represents a major challenge to security establishments. Yet, as Philip Gounev points out, these networks do not necessarily need to safeguard their activities and maintain their influence by relying on such violence.

By Philip Gounev

While most European countries and the United States see organized crime as posing an asymmetric threat to the rule of law, in other parts of the world criminal networks are perceived as providers of services and livelihoods that far surpass those offered by the state. This in turn reflects that the term ‘organized crime’ is perceived differently throughout the international system. In many Western countries, for example, organized crime is widely regarded as ‘groups’ or ‘networks’ involved in the provision of illicit goods (drugs, prostitution, pirated products) or other common criminal activities. There is also a neat separation between ‘organized’ and ‘white collar’ crime, with the latter considered a less dangerous form of illicit activity.
However, such distinctions are far less clear in countries where economic elites often oversee grey economies and the market for illicit goods and services. For example, should the Chinese owners of a company which manufactures pirated products despite also supplying material to multinational corporations be classified as organized criminals? Is the Russian factory owner of one of the most popular (but illicit) brand of cigarettes in Germany – Jin Ling – guilty of running a criminal enterprise? Providing definitive answers to these questions becomes all the more challenging because in the eyes of many (predominantly) Western commentators, criminal networks are also intimately linked to a host of challenges to national and international security.
A global phenomenon
 Indeed, such commentators would undoubtedly point to Latin America to support their arguments that organized crime fuels intra-state conflict and civil unrest. The sight of 49 decapitated bodies on a highway would certainly shake any country’s sense of security, especially when it comes a week after 18 bodies were also found near a popular tourist area. The dead were among the most recent casualties of Mexico’s drug wars. Over the past six years, conflict between the country’s rival drug cartels has claimed 30,000 victims – a number comparable to many conventional wars. Two years ago, Brazilian police officers attempted to bring down the drug lords of Rio de Janeiro’s favelas. The use of armoured personnel carriers and special forces, as well as the dozens of casualties, made the operation feel more like a scene from a low-scale civil war.
Yet while parts of Latin America appear to confirm the suggestion that criminal networks pose an increasingly significant threat to security, the rest of the international system is by no means immune to this phenomenon. Over the past few years parts of Southeast Europe have also been destabilized by the growing threat posed by organized crime. In 2008, for example, special forces and an AC-130 military plane stormed a village on the Greek island of Crete where a week earlier 40 police officers attempting to search for evidence of drugs production were ambushed by 20 gunmen. Between 2000 and 2005 a spate of contract killings in the center of Sofia shook many Bulgarians’ confidence in the government’s ability to deal with organized crime. More recently, the deaths of a businessman and his bodyguards in an alleged gangland hit shocked Cyprus, an island with relatively low levels of homicide. And, of course, places like Naples and Corsica periodically continue to suffer from extremely high levels of crime-related violence.
War profiteers
The violence associated with organized crime also reflects the reality that criminal networks are often ideally placed to overcome international sanctions or economic embargoes in order to procure weapons. This allows criminals not only to act as middlemen for illicit arms transfers, but also provides them with enough flexibility to act on behalf of intelligence and security services involved in intra-state conflicts. Viktor Bout, the Russian arms dealer recently sentenced to 25 years in prison for terrorist offences, was used by militaries across the world to supply weapons whenever and wherever they were needed.
Bout’s activities further reflect arguments that organized crime provides the distance needed to make it difficult for states to officially blame each other for fuelling conflict. However, criminal networks also expand in size and influence in the aftermath of war and political violence. The modern history of organized crime in Southeast Europe is deeply rooted in the Balkan conflicts of the 1990s. Many ‘oligarchs’ or ‘tycoons’ of the former Yugoslav republics and other Balkan countries built their business empires with profits from the smuggling of oil, arms, cigarettes and other consumer goods. In many cases they were former security services personnel who used their ties to supply the military as well as the population with provisions. Once conflict ceased many continued to be involved in other forms of smuggling (cigarettes, alcohol). They had already developed the smuggling channels (corrupt border guards and customs officers who ensure trouble and duty free border crossing) or relations to high-level law-enforcement or judicial authorities to continue covering their activities. Accordingly, conflict helps to create criminalized profiteering economic elites who often remain in place to abuse development, war-reconstruction and other public funds.
The Crime-Terror Nexus
Finally, criminal networks provide a number of important services to terrorists and separatist movements. The most serious and investigated aspect of the crime-terror nexus are criminal enterprises that help finance terrorist activities. These include, for example, the racketeering activities of terrorist groups in Northern Ireland and Corsica as well as the trade in illicit cigarettes or drugs by groups like the Kurdistan Worker’s Party (PKK). The Kosovo Liberation Army was also regularly accused of funding its activities by securing heroin trafficking routes.
Indeed, the illicit cross-border activities associated with the crime-terror nexus arguably represent the most serious challenge to national and international security. Just as criminal networks are inextricably linked with the smuggling of illicit goods, they have often been accused of trafficking materials used in the production of weapons of mass destruction (WMD), providing counterfeit travel documents and smuggling terrorist operatives across international borders. No one can guarantee, for example, that the 700-meter tunnel recently discovered on the Slovak-Ukrainian border was only a smuggling route for illicit goods and migrant workers and not terrorist organizations. Similarly, dozens of narco-tunnels have been uncovered in recent years that further complicate the United States’ attempts to prevent illicit cross-border activities originating from Mexico.
Accordingly, the corrupting influence that criminal organizations have on border guards is of particular concern. A recent study commissioned by Frontex on corruption along the European Union’s external borders shows that tobacco smugglers are increasingly targeting underpaid border guards. It has also been suggested that Mexican drugs cartels have attempted to corrupt United States Customs and Border Protection personnel, forcing Congress to adopt special measures to prevent cross-border corruption. Despite such measures, Washington nevertheless remains concerned that terrorists may also find ways to take advantage of corrupt border staff.
Beyond violence
Crucially, the problems posed by illicit cross-border activities demonstrates that even in the absence of more overt forms of violence, criminal organizations can have a profound impact upon issues deemed important to national security. Instead of safeguarding illicit activities via shows of force, many criminal networks simply turn to more sophisticated forms of corruption. The book Corruption and Organised Crime in Europe outlines how organized and white collar criminals use corruption in many parts of Europe to undermine the criminal justice process, divert public funds, rig elections and weaken the democratic foundations of the state. Indeed, some of the causal factors of Greece’s economic woes can be attributed to the corrupting role of white-collar criminals who avoided taxes or smuggled billions of Euros worth of oil and cigarettes every year.
It has been estimated that the illicit activities of organized criminals account for only 1.5% of the world’s annual Gross Domestic Product (GDP) (or $870 billion according to UNODC figures). However, as the involvement of white-collar criminals in Greece’s economic decline demonstrates, organized crime networks are particularly influential in small, developing or fragile states and are often integral to national economies. As a result, large informal economies, in developing or economically fragile countries provide criminal organizations with opportunities transform their influence into political power. In such countries, the asymmetric influence of criminal networks and grey economic actors therefore maintains a situation of ‘state capture’ whereby the social and economic security of the state is held hostage to criminal activities.
Philip Gounev is a Senior Analyst at the Center for the Study of Democracy in Sofia and author of a number of policy reports on organized crime for the European Commission. He holds a PhD from the London School of Economics and Master’s degree in Security Studies from Columbia University. His most recent book is Corruption and Organised Crime in Europe: Illicit Partnership (Routledge 2012)

Strange bedfellows: Swindler, Stinger-missile brokers, the CIA

A decade before he launched the celebrated Fort Lauderdale Trump Tower, Felix Sater hatched a bold plan to keep out of prison.
Charged in a New York securities scandal, the 46-year-old businessman traveled to his native Russia where he took on a unique role that went far beyond flipping on dangerous criminals.
He began spying for the CIA.
Tapping into the vast underground of the former Soviet Union, Sater was able to track down a dozen Stinger missiles equipped with powerful tracking devices on the black market.
With the backing of U.S. agents, Sater agreed to buy the weapons — keeping them out of the hands of terrorists. In return, the CIA pledged to keep Sater from going to jail in the stock scam he concocted with New York organized crime figures.
The deal was set.
Damage ‘incalculable’
Now, years after the failure of the Trump Tower, a legal battle has ensued between burned investors trying to reveal Sater’s background and federal agents who say national security is at stake.
“The problem is at scandal level, and the damage done to victims is incalculable,” argued attorney Richard Lerner in a brief before the U.S. Supreme Court.
Next month, a New York federal judge will decide whether to release dozens of documents in a dispute that alleges Sater stole millions from investors while he was given sweeping protections by prosecutors.
Saying the government has a duty to protect witnesses, prosecutors are fighting to keep Sater’s case hidden in a battle that’s expected to be heard by the justices.
Even the federal judge, Leo Glasser, has weighed into the case, arguing in a hearing that revealing some of the secrets could “significantly affect matters of national interest.”
Though the federal prosecutor’s office in Brooklyn has declined to talk about Sater’s role with the government, records just released show he was finally sentenced in 2009 — 11 years after he was charged in the New York stock fraud case.
The outcome: a $25,000 fine, no prison time.
In addition, he was not ordered to pay back his victims — mandatory under federal law — despite losses totaling $40 million.
What remains sealed is the work that Sater performed for the government in the past 14 years that’s now the topic of the court fight.
During one hearing, the judge said the case had reached top members “of a national law enforcement security agency. I should say agencies — plural.” But he didn’t elaborate.
The fight has been taken so seriously the judge is using the name John Doe instead of Sater to hide his identity and to “protect the life of the person.”
Despite the drama over hiding his past, some details have been divulged over the years, including records in the National Archives that show he cooperated with prosecutors in the securities scheme.
Then, another defendant in the scam, Salvatore Lauria, co-wrote a 274-page book in 2003 describing the deal they cut with the CIA to stay out of prison.
“We were hoping for a free ride or a get-out-of-jail-free card for our crimes on Wall Street,” he wrote in The Scorpion and the Frog: High Crimes and High Times.
When Sater was charged in the securities scandal in 1998, he was already in Russia with another defendant, Gennady Klotsman, according to the book, which used a pseudonym for Sater.
A risky realm
In the next two years, the three men would look for ways to stay out of prison with Sater delving into the dangerous world of arms traders and smugglers.
At the time, Russia was teeming with a network of people selling tanks, fighter planes, radar systems and missiles, wrote Lauria, 43.
“The CIA was worried the weapons would be sold to our enemies,” he said.
For Sater, it was the perfect solution.
They would get Russian operatives to buy the anti-aircraft missiles from terrorists — with the CIA kicking in $300,000 for each missile, the book states.
The deal would collapse — with the CIA and FBI at odds over the arrangement — but the crucial contacts in the black market would soon be fruitful for the defendants after the attacks of 9/11.
“Now the information was deemed important enough,” Lauria said in the final chapter of his book.
Though Lauria changed his mind and tried to stop publication, saying it was a work of fiction, co-author David S. Barry said his research for the book was drawn from interviews, court documents, police reports, and federal records, among others.
Barry said he spent months communicating with Lauria, getting intricate details about their foray to snare the missiles with the help of Russian brokers.
“It was a straight effort of reporting on my part,” said Barry, a former Associated Press reporter who has authored two other books.
Though most of the defendants in the stock swindle were sentenced by 2004, prosecutors pressed the court to delay sentencing for Sater so he could keep working with them — his racketeering crimes hidden.
In the ensuing years, he jumped into the real estate business, joining forces with Donald Trump who lent his name to projects in Fort Lauderdale, Phoenix and New York.
Sater was among the most visible members of the development team, interviewing with the media about the ventures, his conviction never revealed.
He would jet back and forth to South Florida, buying a condo on Fisher Island in 2007 while investing millions with his company in the Midtown Miami project the same year, records show.
Word leaks out
Not until a civil racketeering suit was filed two years ago accusing him and others of massive fraud in the Fort Lauderdale tower and other projects did his role in the $40 million stock scheme come to light.
A former finance director for the developers accused Sater and others of diverting millions from the IRS through shell companies.
The developers have vehemently denied the allegations, but the issue that galvanized the court was the fact that the lawyers inserted the sealed information about Sater in their case.
Prosecutors argued that the case could have been filed without tapping into the highly sensitive records that were somehow leaked to the lawyers.
“Something very bad and perhaps despicable was done by the use of those documents,” said Judge Glasser.
Sater’s former lawyer, Kelly Moore, also argued that sealing the records was not just crucial to “protecting human life” but “national security,” records show.
But lawyers pressing the suit have now taken the case to the Supreme Court, saying the judge went far beyond his bounds by hiding a racketeering case for 14 years — including the entire docket.
“A covert dual justice system of secret criminal trials is illegal and can have no place in American law,” wrote Lerner in a brief before the Supreme Court.
Paul Cassell, a former Utah federal judge who joined the appeal, said the victims were deprived of ever knowing whether a ringleader in a major stock scam was punished.
“[Sater] apparently continues to live the high life off of the money that he stole from victims,” he wrote in a brief for the National Organization for Victim Assistance.
Though top suspects in the securities scam were ordered to make restitution, including three of the ringleaders, no such order exists for Sater, according to records just released.
“Just as pirates think that ‘Dead Men tell No Tales,’ the government seems to believe that sealed cases will never be subject to public scrutiny,” Cassell wrote.