Russia: Suspected crime lord arrested

January 25, 2008 1:00:40 PM PST
Police in Moscow have arrested a suspected crime boss with alleged links to Russia's multibillion dollar gas business who has long been sought by the FBI and Interpol, officials said Friday.Semyon Mogilevich, a Ukrainian-born Russian citizen whom the FBI has identified as a major figure in international crime, was detained in Moscow late Wednesday, said Angela Kostoyeva, spokeswoman for the Russian Interior Ministry's anti-organized crime unit.

Mogilevich was detained under the alias of Sergei Schneider, the spokeswoman said, adding that he has used 17 other names and holds passports from several countries. A Moscow court approved his formal arrest Thursday.

The arrest was made in connection with an investigation into an alleged tax evasion scheme by the owners of Arbat Prestige, a successful chain of Russian cosmetic stores.

Police grabbed Mogilevich on the street near a supermarket, along with Vladimir Nekrasov, the majority owner of Arbat Prestige. The two men, who were accompanied by a large group of bodyguards, surrendered without resistance.

Russian state television on Friday showed video of Mogilevich as police held him and some bodyguards up against a car. They also broadcast video of the seldom-photographed figure in custody, wearing jeans, a cap and leather jacket.

Police said Arbat Prestige was suspected of evading about $2 million in taxes.

A spokesman for the U.S. Embassy in Moscow said that neither the FBI nor any other American law enforcement agency was involved in Mogilevich's arrest. The United States has no extradition treaty with Russia.

Interpol said it would not comment on Mogilevich's arrest because it has never put him on publicly accessible wanted lists. Interpol also has wanted lists that are accessible only to law enforcement authorities.

Mogilevich is wanted by the FBI on charges of racketeering, securities fraud, mail fraud and money laundering, according to the bureau's Web site. He described himself as a commodities trader in a 1999 interview with the British Broadcasting Corp.

The U.S. charges stem from a 2003 indictment in Philadelphia, in which Mogilevich and an associate were accused of manipulating the stock of a Pennsylvania-based company, YBM Magnex Inc. The billion-dollar corporation collapsed in May 1998.

In its "wanted" notice on Mogilevich, the FBI says the businessman set up a complex network of companies based in more than 20 countries to "create the illusion that YBM was engaged in a profitable international business, primarily the industrial magnet market."

Ukrainian officials said in 2005 they were investigating Mogilevich's alleged connections to several companies involved in gas exports to Ukraine.

Media reports in 2006 linked Mogilevich to RosUkrEnergo, a Russian-Ukrainian joint venture that acts as a middleman in Ukrainian gas purchases. RosUkrEnergo officials said their company had no relationship with the fugitive.

Mogilevich, who has an economics degree, has lived in Moscow for the past several years, according to news accounts. The 61-year-old businessman lived in Israel before moving to Hungary in 1995.

The businessman moved again, this time to Moscow, in 1999, after the FBI set up a task force in Budapest targeting his activities there.