Did the U.S. Government Give Russian Mobsters a Sweetheart Deal?
A multi-year case against Russian mobsters for laundering many hundreds of millions of dollars just settled on the eve of trial for a fraction of the damages at issue. This “surprise settlement” allowed the Russian-owned Prevezon Holdings to pay less than $6 million to settle the charges, even after losing their summary judgment motion and other potentially damaging evidentiary motions.
The Office for the U.S. Attorney for the Southern District of New York brought the case while under the direction of Preet Bharara, who was fired by President Trump in March.. Much of the case was based on evidence from Sergei Magnitsky, a whistleblower who died in Russian custody after being jailed by the same officials he reported on. Mr. Magnitsky’s family lawyer, Nikolai Gorokhov, then reportedly “fell” out of a window earlier this year before being able to testify. The sudden and unexpected settling of the Prevezon case after Mr. Bharara’s firing and the public outcry over the mysterious injuries to key witnesses has raised questions about the fairness of the settlement.
Publicly, both sides are claiming triumph. The Russian administration called the settlement a “victory.” An attorney for Prevezon told Bloomberg: “This settlement is nothing short of a victory for Prevezon . . . . It’s almost an apology by the government.” On the other side, Mr. Bharara congratulated the government lawyers for the settlement.