Russian Accused of Stealing Millions, Lawyers Say

[FaGal]

Russian Accused of Stealing Millions, Lawyers Say
www.nytimes.com - By DAVID STOUT - May 4, 2005


WASHINGTON - Federal authorities are accusing Russia's former atomic energy chief of stealing up to $9 million from the Department of Energy that was supposed to be used to help Russians improve their nuclear safety, his lawyers said Tuesday.

The atomic scientist, Yevgeny O. Adamov, 65, will soon face an indictment in Pittsburgh charging him with multiple counts of fraud and money-laundering, felonies that could lead to many years in prison if he is convicted, his lawyers said.

Prosecutors accuse Mr. Adamov, 65, of diverting the money into bank accounts in Delaware and Pennsylvania, according to his chief lawyer, Lanny A. Breuer of Washington, who called the charges "baseless." Mr. Adamov is being charged by the United States attorney's office in Pittsburgh because he is part owner of a consulting firm there, Mr. Breuer said.

An assistant United States attorney in Pittsburgh, Bruce Teitelbaum, said he could neither confirm nor deny that an investigation of Mr. Adamov was under way.

The charges against Mr. Adamov are coming to light as President Bush prepares for a trip to Eastern Europe and Russia to meet Baltic leaders and President Vladimir V. Putin of Russia.

Mr. Breuer said his client, who lives in Moscow, was arrested Monday in Bern, Switzerland, after traveling there to confer with the Swiss authorities who had frozen some of his daughter's bank accounts. Mr. Adamov was jailed and is awaiting extradition to Pittsburgh, Mr. Breuer said.

Since the end of the cold war, the United States Energy Department has worked with Russian officials to recover nuclear material from old warheads and to make Russian reactors safer.

The worst nuclear accident in history occurred on April 26, 1986, when the Chernobyl reactor in Ukraine blew up, killing more than 30 workers and spewing radiation that some experts believe will kill many more people as years go by. Documents declassified after the collapse of the Soviet Union revealed problems with the construction of the reactor and complaints of shoddy equipment.

Mr. Adamov supervised the cleanup at Chernobyl, Mr. Breuer said. Before becoming Russia's atomic energy chief, Mr. Adamov headed a Moscow institute that developed the Chernobyl-style reactor, a type widely considered by Western specialists to be outmoded and dangerous.

Mr. Adamov has had an unsteady relationship with the West. When the Soviet Union collapsed in 1991, the institute he headed started aggressively to seek Western government aid and commercial contracts. But American government officials complained that his institute was selling nuclear technology to Iran.

Despite the Chernobyl accident, Mr. Adamov remained a strong supporter of the reactor model used there and nuclear power in general, and he became atomic energy minister under President Boris N. Yeltsin in 1998. In December 2000, he criticized the government of Ukraine for closing the Chernobyl plant and insisted it was safe.

President Putin ousted Mr. Adamov early in 2001 in a shake-up of his year-old government. The ouster coincided with an investigation by an anticorruption unit of the Russian Parliament in which Mr. Adamov was accused of benefiting from business dealings while serving as minister.

Mr. Adamov insisted the accusations were in retaliation for his refusal to be corrupted. "Many times I was offered million-dollar bribes," he said in a 2002 interview with The Moscow Times, an English-language daily. "But I always refused."

At the time, the United States government was investigating the relationship between Mr. Adamov's Pittsburgh-based consulting firm and a company that buys bomb-grade uranium taken from old Russian warheads, reprocesses it and sells it to American nuclear power plants.

[FaGal]

Ex-Russian Minister 'Refuses Quick Extradition to U.S.'
news.scotsman.com - May 4, 2005

Former Russian Nuclear Energy Minister Yevgeny Adamov refused to accept quick extradition to the US to face charges that he diverted up to £4.7 million from funds intended to improve Russian nuclear security, an official said today.


Adamov, a nuclear physicist who worked with Chernobyl-style reactors and sales of nuclear technology to Iran, was arrested on Monday at the request of US authorities while he was visiting the Swiss capital, Bern, said Justice Ministry spokesman Folco Galli.

Adamov is accused of diverting the money, provided by the US Energy Department, to US firms that he controls or to investments in various projects, Galli said.

Adamov’s refusal today to accept quick extradition means the US government has 40 days to file a formal extradition request, starting a process that could take many months before a final decision is reached on sending him to the US.

Adamov is wanted by US authorities on several counts of fraud and money-laundering, he said. The Justice Department sought the arrest based on a warrant issued by the US District Court for the Western District of Pennsylvania.

Galli said Adamov had come to Switzerland to see his daughter, but he declined to give further details. He refused to comment on a report in The New York Times that he was in Switzerland to negotiate with Swiss officials about several bank accounts belonging to his daughter, which the authorities had blocked.

Russia’s Foreign Ministry said its consular officials in Bern were still trying to meet Adamov, but that diplomats have been in contact with his lawyer. Moscow said the charges were unconnected to Adamov’s tenure in the Russian government.

“The accusations are not connected to Adamov’s activities during his time as minister,” a Federal Atomic Energy Agency statement said. “Yevgeny Adamov faces accusations in connection with a number of commercial contracts concluded between the Dollezhal Institute and various US organisations in the early 1990s in the area of atomic energy security.”

Adamov headed the Dollezhal Institute, a government organisation based in Moscow that has developed nuclear weapons and reactors, following the Chernobyl clean-up in 1986 until he was appointed minister by President Boris Yeltsin in 1998. He returned to the institute after he was fired from his post in 2001 during a Cabinet reshuffle under current President Vladimir Putin.

During Adamov’s tenure as a government minister, he came under increasing criticism in connection with corruption allegations against him and his proposal to import nuclear waste for reprocessing.

In 2001, the anti-corruption committee of Russia’s State Duma, or lower house of parliament, accused Adamov of illegally setting up companies inside and outside Russia, including a consulting firm called Omeka, registered in Monroeville, Pennsylvania.

While he was Cabinet minister, Adamov angrily shrugged off US objections to Russia’s building a nuclear reactor in Iran.

Since rejoining the Dollezhal Institute, Adamov has focused primarily on modernising Russia’s 11 Chernobyl-type reactors still in operation.

Adamov said Russia’s Chernobyl-type reactors – which use graphite to cool its fuel rods instead of pressurised water used at more modern reactors – were designed to serve 30 years, but that their service could be extended to 45-50 years.

One of four reactors at Chernobyl, in northern Ukraine, exploded and caught fire in April 1986. About 4,400 deaths in Ukraine alone are considered to have been caused by the accident. The plant was closed in 2000.

[FaGal]

Swiss arrest former Russian energy minister
news.independent.co.uk - By Balz Bruppacher in Berne - May 5, 2005


Swiss authorities have held Yevgeny Adamov, the Russian former nuclear energy minister, after Washington charged him with diverting $9m (£4.7m) from US funds to improve Russian nuclear security.

Mr Adamov, a nuclear physicist, was arrested at the request of US authorities while he was visiting Berne, Folco Galli, a justice ministry spokesman said. He is accused of siphoning the money to US firms he controls or to investments.

The former minister was wanted by US authorities for fraud and money-laundering, Mr Galli said. A warrant was issued by the US district court in Pennsylvania. Mr Galli said Mr Adamov travelled to Switzerland to see his daughter, but refused to comment on a New York Times report that he was trying to negotiate with Swiss officials about his daughter's bank accounts which had been blocked.

Russia's foreign ministry said its consular officials in Berne were still trying to meet Mr Adamov. Moscow said the charges were unconnected to his tenure in its government.

Mr Adamov had run the Dollezhal Institute, a government organisation in Moscow that developed nuclear weapons and reactors. He was appointed minister by President Boris Yeltsin in 1998. He returned to the institute after he was fired by President Vladimir Putin three years later, facing corruption claims.

In 2001, a Russian government committee accused him off illegally setting up companies in and out of Russia, including a consulting firm, Omeka, in Monroeville, Pennsylvania.

Swiss authorities are asking Mr Adamov whether he is willing to accept simplified extradition to the US. If he refuses, Washington will have to file a formal request. Extradition could take six months.

While Mr Adamov was a minister, he angrily rebuffed US objections to Russia building a nuclear reactor in Iran.

[FaGal]

Calls to Return Ex-Minister Who Was Privy to State Secrets
www.sptimes.ru - By Oksana Yablokova - STAFF WRITER - May 6, 2005


MOSCOW - Yevgeny Adamov, the former nuclear power minister arrested in Switzerland at the request of U.S. prosecutors Monday, should be returned to Russia to protect the state secrets he knows relating to nuclear power technologies, Adamov's lawyer and lawmakers said Thursday.

"I think at present the Russian Foreign Ministry is making every effort to regulate this issue, given the fact that we are not just talking about a citizen of Russia but a person who controls huge secrets in nuclear power," lawyer Timofei Gridnev told Ekho Moskvy radio.

Adamov faces extradition to the United States on charges of fraud and money laundering. U.S. prosecutors suspect Adamov of diverting some $9 million in U.S. aid earmarked for improving safety at Russia's nuclear facilities into U.S.-based companies he controls. Adamov was dismissed as nuclear power minister in 2001 amid a storm of allegations that he had received kickbacks through his U.S. companies.

Gridnev said that Adamov is maintaining his innocence of the charges. Adamov contested the extradition Wednesday, meaning that U.S. prosecutors have 40 days to file a formal extradition request.

State Duma Deputy Nikolai Kovalyov, a former director of the Federal Security Service, or FSB, said Thursday that Adamov should not have been allowed to travel abroad, citing the rule that officials can be barred from making foreign trips for five years after being exposed to state secrets.

"Given that five years have not yet passed since his dismissal and that he still works at the Research and Development Institute of Power Engineering [NIKIET], the travel ban is still valid for him," Kovalyov said, Interfax reported.

Before his appointment as minister in 1998 Adamov headed NIKIET, which designs nuclear reactors. After his dismissal, he returned to the institute as its head of research.

Dmitry Rogozin, leader of the nationalist Rodina party, said that the government should demand the Swiss authorities immediately hand over Adamov to Russian law enforcement agencies.

"This is outrageous, it is unclear why the government has not yet demanded his extradition to Russia," Rogozin said, Interfax reported.

"As a minister with access to the holy of holies, Russia's nuclear security, Adamov is the bearer of important state secrets and his trips outside Russia must be strictly regulated by law and his personal obligations," Rogozin said.

Colonel General Nikolai Solovtsov, commander of the Strategic Missile Forces, doubted whether Adamov was well informed about state secrets relating to strategic missiles.

"As far as the missile forces are concerned, I think that Adamov is not valuable," Solovtsov told Interfax.

Konstantin Kosachyov, head of the Duma's Foreign Affairs Committee, said that Adamov's arrest was an extreme and unnecessary measure that could have been avoided.

"Theoretically, such measures are possible, they do not contradict international laws. In high-profile cases such as this one there is always the element of an underlying political cause," Kosachyov said, Interfax reported.

Kovalyov said that in 2001, as head of the Duma's anti-corruption commission, he had written to President Vladimir Putin and the Cabinet about Adamov's continued business activities after becoming a minister. Kovalyov said he received no answer to his letter, but Adamov was fired soon afterward.

Former Nuclear Power Minister Yevgeny Adamov has been arrested in Switzerland and faces extradition to the United States on fraud and money-laundering charges, Swiss officials said Wednesday.

Swiss Justice and Police Ministry spokesman Folco Galli said Wednesday by telephone from Bern that the U.S. sought Adamov on charges of diverting some $9 million in funds that the Energy Department provided to improve safety at Russian nuclear facilities. U.S. prosecutors believe Adamov invested the money into various projects and diverted the rest to U.S.-based companies he controls, Galli said.

Among the companies that Adamov controls is Omeka, a consulting firm registered in Monroeville, Pennsylvania. The U.S. Justice Department obtained the arrest warrant for Adamov from the district of Pennsylvania that includes Monroeville.

The United States has been investigating Adamov's activities for years.

Gridnev said Adamov knew about the investigation but did not expect to be arrested in Bern because he has traveled extensively in recent years and faced no problems.

"He was aware of the probe, but he considered and considers himself innocent, and he could not imagine that such radical steps would be taken against him," Gridnev said by telephone.

Adamov headed the Research and Development Institute of Power Engineering, or NIKIET, which designs nuclear reactors, from 1986 to 1999, and he returned to the institute as its head of research after leaving the government. The United States slapped sanctions on NIKIET in 1999 for its work with Iran, barring it from doing business with American companies.

President Vladimir Putin fired Adamov in 2001 amid a storm of corruption allegations that he had received kickbacks through his U.S. companies.

[FaGal]

Evgeny Adamov Faces 60 Year Sentence
www.kommersant.com - May 6, 2005


Evgeny Adamov

U.S. federal attorney has charges him in absentia


Late Thursday evening Moscow time, U.S. Attorney for the Western District of Pennsylvania Mary Beth Buchanan announced the exact charges against former Russian Minister of Atomic Energy Evgeny Adamov and that, if found guilty, he faces 60 years in prison. Adamov's lawyer, Lanny Breuer, told Kommersant that he intends to prove his client's innocence.

“Evgeny Adamov and his business partner Mark Kaushansky have been charged with 20 offenses, including embezzlement money provided in the early 1990s by the United States and other countries for the protection of Russian nuclear facilities. Buchanan stated at a press conference. “He is also accused of tax evasion and conspiracy to transfer embezzled funds out of the country. The basic accusations are connected with the organization by Messrs. Adamov and Kaushansky of the Energo Pool Co. in the U.S., to which a total of $15.5 million was transferred that had been allotted to Russia.” Buchanan also said that, if found guilty, Adamov could be sentenced to 60 years in prison and fined $1.75 million. His partner Kaushansky could be sentenced to 180 years in prison and fined $5 million. Buchanan continued that there may be other people charged in the case. “We know that the accused had accomplices,” she said. She emphasized that the U.S. government has no relationship to the case. The investigation of it was begun in 2001 by the FBI. An FBI special agent at the press conference thanked the bureau's attache in Bern for his assistance. Adamov will not be tried in an American court in the near future. But the first hearings in the case against his partner Kaushansky, a Russian immigrant who worked in the research institute Adamov headed before his appointment as minister, will begin on Tuesday. When asked by Kommersant whether he is being held, Buchanan answered that “it is unlikely that anyone will arrest him.”

All of these charges are completely ungrounded,” Adaom's lawyer Breuer told Kommersant. “He [Adamov] never took a ruble or a dollar illegally. All the projects that the government of the United States allotted money for were successfully completed. We intend to show his accusers documents in court that will confirm this. We will also invite them to Russia so that the federal attorneys can see for themselves how Mr. Adamov lives, how the research institute he headed for many years works, and what the American taxpayers' money was spent on.”

Adamov was arrested on May 2 when he arrived in Switzerland to help his daughter Irina after her bank account was frozen. After taking the former minister into custody, Swiss police explained to him that he would be handed over to the United States under a simplified scheme, without a court procedure, and thus spend much less time in preliminary custody. After Adamov consulted with his Swiss lawyers, however, he expressed his preference for the extradition to be handled through the courts. “Such cases usually take months,” Folco Galli, a representative of the Swiss Federal Office of Justice, told Kommersant.

Breuer considers his client's refusal of the simplified extradition procedure a mistake since “his case can't be lost” in the U.S. “Adamov admitted that the deposited money in a personal account in the U.S., Breuer continued, “but said that the implementation of the American program to improve security at Russian nuclear power plants was paid for out of his accounts in Russia.” Breuer added that keeping money in dollars in foreign bank accounts and drawing on ruble accounts in Russia “is a completely normal practice in Russia to avoid excessive tax payments and problems with organized crime.”

Adamov is now being held in the regional prison in Bern, one of the oldest holding facilities in Switzerland (it was built in 1913). The prison can hold up to 118 inmates, but most of the cells in it are for a single person. Prisoners not accused of violent crimes, such as Adamov, are usually kept in minimum-security cells with showers, air conditioning, refrigerators, televisions and other conveniences. They are allowed access to the prison library, can take courses in foreign languages and typing, play ping pong and engage in handicrafts. Adamov received permission for those activities only on Friday, however. On Thursday, the prison management, like all of Switzerland was observing Ascension Day.

How Russians Have Fought American and Swiss Justice

On August 19, 1996, U.S. Federal Immigration and Naturalization Service agents arrested Russian banker Alexander Konanykhin in Washington for violations of immigration law. On August 27, 1997, authorities dropped the charges and granted him residency. On November 18, 2003, the INS rescinded Konanykhin's residency, leading to his deportation. On December 18, the businessman was arrested while trying to flee to Canada and imprisoned in Alexandria, Virginia. On January 27, 2004, a court released Konanykhin and ordered the INS to grant him asylum.

Businessman Sergey Mikhailov was arrested in a Geneva airport on October 15, 1996. The Swiss prosecutor pressed a number of charges against him, including membership in an organized criminal group and money laundering. On December 11, 1998, a Geneva court acquitted the businessman of all charges except illegally obtaining real estate and did not punish him due to mitigating circumstances. In December 1999, Mikhailov filed suit against Geneva authorities for compensation for $530,000 in lost profits from 778 days of imprisonment. He won that suit on July 24, 2000.

On October 29, 1996, retired colonel of the Russian Internal Intelligence Service Vladimir Galkin was arrested in a New York airport for attempted espionage. On November 14, Prime Minister Viktor Chernomyrdin, at the request of Galkin's wife, called U.S. Secretary of State Albert Gore and the charges were dropped.

On November 27, 1997, INS agents in Miami arrested president of the Russian Gold Co. Alexander Tarantsev on charges of failing to indicate his conviction for fraud on his visa application. They were unable to prove that the deception was premeditated, and a Florida district court released him on March 5, 1998.

On January 27, 2000, the Geneva prosecutor's office issued an international warrant for the arrest of State Secretary of the Union of Russia and Belarus Pavel Borodin on charges of money laundering. On January 17, 2001, he was arrested in New York. On April 7, Borodin, after agreeing to extradition, was taken into custody in Geneva. On April 12, a Geneva court freed Borodin on 5-million Swiss franc's ($3 million) bail and he returned to Russia. On March 5, 2002, prosecutor of the Canton of Geneva Bernard Bertrossa closed the case after fining Borodin 300,000 francs ($175,000) for violating that country's financial laws.

On July 16, 2001, FBI agents arrested Russian computer Dmitry Sklyarov in Las Vegas on charges of infringing on the intellectual property rights of the Adobe Co. On December 17, 2002, a court in San Jose, California, withdrew all charges against him.

Russian citizen Alimzhan Tokhtakhunov (Taivanchik) was arrested in Italy on July 31, 2002, at the request of the prosecutor general of New York. American authorities accused him of pressuring judges at the Salt Lake City Olympics. In April 2003, the International Olympic Committee officially acknowledged that Tokhtakhunov had no connection to conspiracy or bribery of the judges. In June 2003, an appeals court in Italy refused to hand Tokhtakhunov over to the Americans.

On March 4, 2004, the Swiss prosecutor's office search and confiscated documents from offices of firms affiliated with YUKOS Oil Co. at the request of the Russian Prosecutor General's Office. On March 11, the bank accounts of a number of subsidiaries of YUKOS and MENATEP and their stockholders, worth $5 billion, were frozen. YUKOS lawyers appealed that decision in a federal court. On June 10, the Swiss federal court unblocked $1.6 billion in the account of YUKOS subsidiary Pecunia Universal and, on June 14, unblocked stock in the YUKOS Veteran Petroleum Fund.

[FaGal]

YEVGENY ADAMOV'S DAUGHTER UNDER INVESTIGATION BY SWISS AUTHORITIES
en.rian.ru - RIA Novosti, Yekaterina Andrianova - May 7, 2005


GENEVA - The Swiss authorities have opened an investigation in connection with a money-laundering case involving the daughter of former Russian Nuclear Energy Minister Yevgeny Adamov detained by Swiss Police at the U.S. request.

According to the Swiss Telegraph Agency, the authorities have blocked Irina Adamova's personal bank accounts and the accounts that belong to her consulting company.

Irina Adamova's lawyer insists her case is not related to charges against her father pressed by the U.S. Department of Justice.

30-year-old Adamova has lived in Switzerland since 1992.

Adamov, who headed the Russian Nuclear Energy Ministry in 1998-2001, was arrested on May 2 at the request of the U.S. Department of Justice while he was visiting Bern. At present he is being detained in Bern awaiting extradition to the United States.

Switzerland has already asked the U.S. to present a formal extradition request, which takes 40-60 days to process. Meanwhile, Adamov was offered a quick extradition to the U.S. but refused to accept it.

Adamov and his business partner, U.S. citizen Mark Kaushansky, are being accused of diverting up to $9 million from funds intended to improve Russian nuclear security.

In the United States Adamov might face up to 60 years in jail and a $1.75 million fine.

[FaGal]

Evgeny Adamov's Case Becomes a Family Affair
www.kommersant.com - May 11, 2005

The daughter of the ex-minister is suspected of laundering her father's money


Yesterday, a court in Pittsburgh was to have selected a measure of restriction for Mark Kaushansky, one of the people charged with embezzling $9 million allocated to Russia by the U.S. government for research on nuclear safety. Kaushansky is a business partner of Evgeny Adamov, the former head of the RF Ministry of Atomic Energy, who is now in a Swiss prison awaiting a decision on his extradition to the United States. Meanwhile, it was learned that the Swiss prosecutor's office is also investigating Adamov's daughter, Irina Adamova.

Thirty-year-old Irina Adamova lives with her Swiss husband and daughter in the small town of Bremgarten on the outskirts of Berne, where she raises Chow Chows on her property enclosed by a two-meter-high hedge. Adamova arrived in Switzerland in 1992, and three years ago obtained Swiss citizenship. She studied social pedagogics in Switzerland. She is also listed in the business register of the Canton of Zug as the owner of two firms: Omeka, registered in Berne, and Bellum Group (investments and real estate sales).

The reason for starting the criminal investigation of Adamova was an American request for legal assistance, on the grounds of which Evgeny Adamov, the former head of Russia's Ministry of Atomic Energy was taken into custody in Berne on May 2. Shortly before this, investigative judge Urs Furer froze Adamova's personal accounts and the accounts of the two companies registered in her name.

The investigators were primarily interested in the movement of funds in the accounts of Omeka, which is the representative office of a firm of the same name registered in Pennsylvania by the parents of Adamova and Mark Kaushansky.

According to the accusation filed by Mary Buchanan, the prosecutor for Pittsburgh's Western District Court, Adamov and Kaushansky registered a company called Energo Pool in Pennsylvania in 1993 and a company of the same name in Delaware in 1998. According to the prosecutor's information, these dummy companies received funds from public and private companies in the United States for research on nuclear safety, which were assigned to a Russian company, also called Energo Pool. Funds from the accounts of the two American companies were directed to the family firm Omeka Ltd.; and from there, they flowed to the American and European accounts of the accused. According to the prosecutor, Omeka Ltd. alone received nearly $4.5 million, which was then “invested in various projects in the United States, Russia, Ukraine, and Kazakhstan.”

Adamova's lawyer, Christof Dumortier, said that from the standpoint of time and the merits of the case, the investigation of Adamova is not connected with the charges brought against her father. “The fact that she received money from her father means nothing,” the lawyer maintained. “This is insufficient to establish a connection between the two cases [of Adamov and his daughter. “ This opinion was shared by Adamov's lawyer, Lenny Brewer, who called the charges groundless. “Doctor Adamov was interested more than others in aiding Russian science,” he told Kommersant. “He launched the companies in the United States at a time when Russia was in a period of transition. There's nothing new in the information mentioned in the indictment. Everyone knows that Evgeny Adamov was involved in Omeka and Energo Pool. Russia's State Duma investigated Evgeny Adamov's activities and found no formal elements of a crime.” Brewer also said he had invited members of the Pittsburgh Federal Prosecutor's Office to Russia to question Adamov, but they refused.”

It is unknown when Adamov's extradition hearing will begin; his lawyer was supposed to fly to Switzerland only today. Meanwhile, Fred Bretman, vice president of the PR firm Hyde Park Communications, arrived in Zurich yesterday. Kommersant has learned that his company was hired by the legal firm Covington & Burling, where Brewer works, to provide informational support for Adamov's case.

Hyde Park Communications is a conspicuous PR market player in the United States. Its clients include Pfizer, one of the world's largest pharmaceutical firms, best known as the manufacturer of Viagra, and Johnson & Johnson, the world's leading manufacturer of household chemical products.

Yesterday at 22.30 Moscow time, Kaushansky and his lawyer, Frederick Timan (from 1993 through 1997, he was prosecutor for Pittsburgh's Western District, that is, the predecessor of Mary Buchanan, who is conducting the Adamov–Kaushansky case), were to appear at a court session in Pittsburgh. As a source in the Pittsburgh prosecutor's office told Kommersant, “at the preliminary hearings, the judge must determine the measure of restriction of the accused. If he agrees to cooperate with the investigators, he will be released on bail.” As Brewer noted, even in this case, his client has nothing to fear, because he is not guilty of anything.

[FaGal]

Adamov's U.S. Partner Released on $100,000
www.moscowtimes.ru - The Moscow Times - May 12, 2005

The business partner of former Nuclear Power Minister Yevgeny Adamov was released on bail by a U.S. federal court Tuesday pending his arraignment next week.

Mark Kaushansky, 53, whom U.S. federal prosecutors have accused of helping Adamov divert some $9 million in U.S. aid earmarked for improving safety at Russia's nuclear facilities, made his first appearance in the court in Pittsburgh, Pennsylvania, on Tuesday and was released on a $100,000 bond, the Pittsburgh Post-Gazette reported Wednesday.

Kaushansky, who emigrated to the United States from the Soviet Union in 1979, declined to comment, the newspaper reported.

Swiss officials announced on May 4 that Adamov, 65, had been arrested in Switzerland and faced extradition to the United States on the fraud and money-laundering charges. He refused to accept quick extradition on May 4, meaning the U.S. government has 40 days to file a formal extradition request. If convicted, Adamov could face up to 60 years in prison and a $1.75 million fine.

U.S. prosecutors believe Adamov invested the money in various projects and diverted the rest to U.S.-based companies he controls, including Omeka, a consulting firm registered in Monroeville, Pennsylvania. They have been investigating his activities for at least three years.

Adamov, a nuclear physicist by training, was appointed nuclear power minister by President Boris Yeltsin in March 1998. He was dismissed in 2001 amid a storm of allegations that he had received kickbacks through his U.S. companies.

Igor Petrov, spokesman for the Russian Embassy in Bern, said Adamov had come to Switzerland after $207,000 in Swiss francs in the bank account of his daughter, Irina Adamova, had been frozen in connection with a money-laundering investigation, Agence France Presse reported.

Adamova's lawyer, Christoph Dumartheray, confirmed that his client was being investigated for money laundering, but said there was no link between her case and that of her father, AFP reported.

RIA-Novosti reported Wednesday that Adamova refused to talk to the Russian media on Dumartheray's advice, though she granted an interview to Swiss television. In the interview, she said investigators had lured her father to Bern to discuss her case, the report said.

[FaGal]

Evgeny Adamov’s Accomplice Banned from Leaving
www.kommersant.com - May 12, 2005

Preliminary hearings on the case of Mark Kaushansky, business partner of Atomic Energy ex-Minister Evgeny Adamov, took place late Tuesday night Moscow time at a court in Pittsburgh. Mr. Kaushansky remained free despite being charged with 20 offences, including misappropriation and money laundry.

According to the Prosecutor’s Office of the Western District of Pennsylvania Mr. Adamov and Mr. Kaushansky registered Engero Pool Co. in Pennsylvania in 1993 and Energo Pool in Delaware in 1998. These shell companies received funds earmarked for nuclear safety researches by the U.S. state and private companies, meant for the Russian company of the same name �EEnergo Pool. The money was transferred from American Energo Pool companies to Omeka Ltd, and then got scattered among European and American accounts of the accused. According to the American prosecutors, Omeka Ltd alone received some $4.5 million later invested into “various projects in the U.S.A., Russia, Ukraine and Kazakhstan�E The total of $9 million was misappropriated.

Mr. Kaushansky entered a small court room No.17 together with his lawyer Fred Tillman. After a 20 minute discussion, Judge Robert Mitchell ruled to let Kaushansky free but ordered that he return his American passport. Secondly, Judge Mitchell restricted Mark Kaushansky’s freedom of movement in the U.S. warning that should he miss the following sitting of the court, he would be fined $100,000. Representatives of the Federal Prosecutor’s Office agreed with the ruling of the judge, though they previously insisted that Mr. Kaushansky pay a bail and be kept in custody until the beginning of the trial.

Mark Kaushansky was in high spirits. He told Kommersant correspondent with a smile on his face that “the judge made the right decision on the issue of procedures�E but he refused to comment on the charges leveled at him and pointed to his attorney. A few minutes later Kaushansky was led by U.S. Federal marshals to a special room where his photos and finger prints were taken. Afterwards, Mr. Kaushansky accompanied by his attorney left the court house.

According to the U.S. law, the full hearings are due to start no earlier than 70 days after the defense receives case files that include an indictment and evidence collected by the prosecutors.

Lawyer Tillman told Kommersant that “the trial is unlikely to start earlier than in six months.�EMr. Tillman accounted it for the “complexity of the case�Eand the fact that he “is going to get prepared to lodge appeals against the actions of the prosecutors.�EFred Tillman added that he “began working for Kaushansky in 2003�Ebut declined to say why Kaushansky turned to him two years before charged with fraud. The Federal Prosecutor’s Office in Pittsburgh did specify either how Mark Kaushansky learnt back in 2003 about the charges being prepared to be brought against him. “I am sure that Mr. Kaushansky had sound reasons for this,�Ea source in the Prosecutor’s Office said. He also confirmed to Kommersant Mr. Tillman’s prediction that the hearings of Adamov-Kaushansky case would likely to be deferred for at least half a year. “The defense always tries to take out some evidence collected by the prosecution, that is why the hearing may be adjourned after possible appeals from Tillman.�E

There is one more reason why the case will not be considered soon. The Prosecutor’s Office of Pittsburgh reported that the hearings are unlikely to proceed without the riling of the court in Bern on Evgeny Adamov’s extradition to the U.S.

Neither Mr. Tillman, nor the prosecutors would comment to Kommersant why Mark Kaushansky’s wife, Lyba, is not charged with the offences of the case too. According to the information of the investigators, her husband, she and the Adamovs were the founders of Omeka Ltd. The company is believed to be involved in the laundry of the money transferred to the accounts of the two shell companies set up by Evgeny Adamov and Mark Kaushansky in the U.S. [see Kommersant as of May 11].

The source of Kommersant in the Pittsburgh’s Prosecutor’s Office evaded the question about the possible cooperation of Lyba Kaushansky with the prosecution in exchange for the refusal to prosecute her. He answered, though, that “the prosecution does not consider the possibility of concluding a bargain with Mark Kaushansky but may as well take it up depending on the way the trial would proceed.�E

Fred Tillman told Kommersant that in 2003 and now he views “fraud charges against Mr. Kaushansky as baseless�E The defense strongly believes that Mark Kaushansky created legal companies and ran legal business, he added.

And yet, Mr. Tillman does not rule out the possibility of an agreement between Mark Kaushansky and the prosecution. “This alternative is present in almost every criminal case,�Ehe said. “Now I am preparing for the trial where my client will provide the jury with all the facts required.�E

Mark Kaushansky will face Judge Mitchell again for the usual procedure in less than a week: he will simply have to answer if he pleads guilty.

Kommersant will follow the development of the events.

[FaGal]

2 Deputies Say Adamov Could Spark an Uprising
www.themoscowtimes.com - By Carl Schreck


Two LDPR deputies on Thursday pressed for former Nuclear Power Minister Yevgeny Adamov be sent back to Russia and darkly warned that if the United States succeeds in extraditing him from Switzerland on fraud and money-laundering charges, the Kremlin could face a popular uprising.

Sergei Abeltsev, a State Duma deputy in Vladimir Zhirinovsky's ultranationalist Liberal Democratic Party, told a plenary session of the Duma that Adamov posed a national security risk because he might hand over state nuclear secrets in exchange for leniency.

"The Orange Revolution in Kiev began after [former Ukrainian Prime Minister Pavlo] Lazarenko handed over all of Ukraine's state secrets to the Americans," Abeltsev said in remarks shown on NTV television. U.S. authorities charged Lazarenko with fraud and money-laundering in 1999, and he is now being tried by a San Francisco court.

"For this reason, I suggest appealing to the Russian Prosecutor General's Office and other competent agencies to take immediate and decisive actions to return Adamov to Russia," he said.

"If this is impossible," he added, "then assign special services to liquidate the nuclear scientist-businessman."

Foreign Minister Sergei Lavrov told the Duma that efforts were being made to secure Adamov's return, but he declined to elaborate.

Adamov, 65, was detained last week in Bern on a U.S. arrest warrant. He and and an associate, Mark Kaushansky, are accused of diverting some $9 million in U.S. funds meant to improve safety at Russian nuclear facilities. Adamov served as nuclear power minister from 1998 to 2001, when he was dismissed amid accusations that he had received kickbacks through his U.S. companies.

LDPR Deputy Alexei Mitrofanov told the Duma that an appeal to prosecutors was needed because Adamov was one of a few people familiar with top-secret information, including Russia's construction of a nuclear reactor in Iran.

After a long pause, Duma Speaker Boris Gryzlov said, "We'll discuss it."

Prosecutor Ksenia Chernikova declined to comment. "Until such an appeal has been approved [by the Duma], it's pointless to fantasize," she said.

Meanwhile, Adamov's lawyer, Timofei Grindev, said his client might change his mind and agree to a quick extradition to the United States but only after consulting with a U.S. lawyer set to arrive in Bern by the end of the week, Nezavisimaya Gazeta said Thursday.