On sale now at amazon.com

Russian Diplomat Loses Defamation Claims


     (CN) - Investigative journalists who wrote about off-shore money laundering did not defame a former Russian diplomat and his company, a Maryland appeals court ruled.
     At issue is a series of articles called "The Proxy Platform," which examined "the persons and entities that, unwitting or otherwise, form a platform used for money laundering by organized crime."
     The nonprofit group Journalism Development Network released the series as part of its Organized Crime and Corrupting Reporting Project.
     Its article "Opening the Door" described criminal investigations and an allegedly fraudulent business deal in the European country of Moldova.
     In "The Invisible Empire of the Diplomat," the network described "a constantly changing set of shell companies that are channeling huge volumes of money to one another."
     One company mentioned in that article was Midland Consult, a company founded by Maxim Stepanov, the former consular secretary and embassy attaché for Russia in Panama.
     Midland director Edward Aslanyan is quoted in the article as saying, "Imagine that we are a plant that produces bricks. Somebody buys bricks to build a house. But another bought a brick, wrapped it in the paper and hit somebody's head. Who is guilty?"
     "Russian Laundering Machine" discussed Oscar Augusto Cedeno, who ran a company linked to money laundering. The story called Cedeno a "partner with Maxim Stepanov, head of Midland Consult."
     The final article in the series, "The Proxy Platform," described a system that is "built on hundreds, maybe thousands of ever-morphing phantom companies."
     "Many of the companies involved were registered by GT Group in New Zealand and Midland Consult in London - two companies that have registered many companies for organized crime," the article said.
     Midland and Stepanov filed a $10 million defamation lawsuit, but the Circuit Court for Baltimore City dismissed the complaint after finding that the publications, "when read as a whole ... do not defame the plaintiffs.
     The Court of Special Appeals of Maryland affirmed on June 17.
     "Two of the articles make only passing references to appellants, while the other two articles accurately describe, appellants concede, how the companies were created and later used," Judge Robert Zarnoch wrote for a three-member panel.
     The articles also did not defame Stepanov personally, according to the ruling.
     "Stepanov is identified only as the principal of Midland; indeed, every mention of him in 'The Invisible Empire' includes a reference to Midland," Zarnoch wrote. "As the owner of Midland, Stepanov does not have a cause of action for defamation.'
     The ruling notes that "Midland's primary business appears to be creating companies for its clients: the entity is created and put on a 'shelf' until it is ready to be purchased by Midland's clients."