Twist Of Fate

MOSCOW, Russia -- Last week ended with a scandalous arrest of Vladimir Nekrasov, the owner of Russia's largest perfume and cosmetics retailer Arbat Prestige. Nekrasov was arrested near one of his offices and now faces indictment for evasion of tax payments for up to 50 million rubles ($2 million).

Russian mafioso Semyon Mogilevich
However, Nekrasov was not alone on the fateful evening of January 23 - the second man arrested was some Sergei Schnaider, an Evergate company consultant. The only publications in Russia to carry the report about the second convict were opposition Internet news agencies, while in the West his real name has produced a tide of interest.

The real identity of Sergei Schnaider is Semyon Mogilevich, originally from Ukraine. He is considered one of the fathers of Russian mafia and one of the most sought-after criminals in the world - and Interpol has searched for him in vain since 2003.

FBI and Scotland Yard accuse Mogilevich of organizing a crime ring, trading in illegal drugs, fraud, money laundering, smuggling and sales of arms and radioactive materials in Eastern and Central Europe.

The CIA accuses him of attempting assassination of U.S. journalist Robert Friedman who exposed the crook in his publications. In the 1990s Mogi­levich was engaged in laundering "dirty" money from Russia.

For example, in 1998-1999 $10 billion were laundered through his account in the Bank of New York. Research conducted by the U.S. National Institute of Justice claims that Mogilevich controls a prostitution ring in the night clubs of Budapest and Prague.

But none of the above transgressions actually served to bring about Mogilevich's fall because in recent years he had moved to Moscow and became active in the gas export business.

The shady businessman was supposedly involved in the registration of Eural Trans Gas that transited Turkmen gas to Ukraine until the end of 2004, when it was replaced by RosUkrEnergo.

Fifty percent of RosUkrEnergo's shares are owned by Gazprom, while the remaining are held by Raiffeisen bank, which does not own the company but represents the interests of the shareholders.

But as far back as in 2005 the head of the Ukrainian Security Service Alexander Turchinov claimed to have indirect proof that RosUkrEnergo is controlled by Semyon Mogilevich.

RosUkrEnergo has been a genuine pain for Russian-Ukrainian relations for the last three years. It controls all Russian gas exports to the Ukraine and is completely non-transparent.

Yulia Tymoshenko campaigned for her prime minister seat promising to get rid of this intermediary. And it seems that the point has finally been driven home as the current chairman of Gazprom's Board of directors Dmitry Medvedev, who is also seen as Russia's next president, said recently that RosUkrEnergo may be liquidated and Russia and Ukraine may move to direct gas deliveries in order to "simplify the relations."

In a simple twist of fate Semyon Mogilevich is now on the verge of being brought to justice (whatever that means in his case).

The outcome of the story is supposedly positive - a criminal world baron sought by Interpol has been arrested, the non-transparent system of RosUkrEnergo is soon to be dismantled and Russian-Ukrainian relations will be "simplified."

But it somehow bothers me to think that if the accusations by the Ukrainian Security Service are true, then the state-controlled gas monopoly had knowingly cooperated with a well-known criminal figure until this cooperation did not turn against its own interests.

Moreover, the arrest of Semyon Mogilevich may be a sign that the turf wars in the gas market are far from over - a realization that is also far from pleasant.

It is no wonder that the Russian media has downplayed the arrest of Semyon Mogilevich, focusing solely on Viktor Nekrasov.

Yes, the arrest of Mogilevich is good, but it raises more questions than it provides answers. And - as a line from an old anecdote goes - the aftertaste of this story is somewhat unpleasant.

Source: Moscow News