New York (15 December – 50).
Mukhtar Ablyazov, a Kazakhstan citizen, was found guilty of embezzlement and money laundering in the U.S. Court for $218 million against BTA Bank. Following a three-week trial, a jury of four men and four women in the United States District Court for the Southern District of New York against Mukhtar Ablyazov.
Today issued a verdict in favor of BTA Bank on all claims against Triadou SPV S.A. The jury awarded BTA more than $100 million in damages with interest accrued since mid-2013, bringing the total judgment to more than $218 million. The Honorable John G. Koeltl, U.S. District Judge for the Southern District of New York, presided over the trial and accepted today’s verdict.
The trial, which began on November 29, 2022, was the first time the BTA has presented evidence of a large-scale fraud and money laundering scheme orchestrated by Mukhtar Ablyazov in an adversarial proceeding. Ablyazov’s multibillion-dollar embezzlement led to the nationalization of the bank, costing taxpayers billions of dollars.
The defendant, Triadou SPV, is a shell company created and controlled by Ablyazov’s son-in-law, Ilyas Khrapunov, which received more than $70 million stolen from BTA, which it invested in real estate in New York and other US cities. Triadou actively litigated for more than seven years while the case was pending and presented its defense to the jury at trial.
During the approximately three-week trial, the jury heard testimony from a variety of witnesses, including former employees of UKB-6, the BTA unit during Ablyazov’s tenure responsible for the fraud, as well as American investors who dealt with the stolen funds, individuals involved in the money laundering scheme, and various experts in forensic accounting, fraud and money laundering, and handwriting analysis.
The jury also heard testimonies from key co-conspirators, including Gennady Petelin, who appeared as the legitimate source of Triadou funds, Ilyas Khrapunov, who controlled Triadou’s investments, and Mukhtar Ablyazov himself.
Evidence incriminating Ablyazov (including the founding documents with his signatures) obtained by the General Prosecutor’s Office of the Republic of Kazakhstan from the Isle of Man and the UAE as part of international legal assistance was disclosed to the jury.
As a result, in reaching a verdict in favor of BTA today, the jury concluded that Triadou knowingly laundered the money Ablyazov stole from BTA.
Triadou appeared at trial through Philippe Glatz, a Swiss-Brazilian businessman who claims to have bought Triadou’s parent company in 2013 from the Khrapunov family.
Glatz testified for three days and was questioned at length by an American BTA attorney from the law firm Boies Schiller Flexner LLP.
During the questioning, Glatz was forced to admit that he bought the parent company of Triadou without ever speaking to its alleged owners; that his alleged due diligence on the parent company of Triadou did not include any written report on Triadou’s investments; that he worked closely with a Dubai-based service provider who was responsible for money laundering schemes for Ilyas Khrapunov; and that he allowed Ilyas Khrapunov to continue running Triadou long after the alleged sale.
Matthew L. Schwartz, managing partner of Boies Schiller Flexner LLP and a BTA attorney, noted the following: “For the first time in more than a decade of BTA debt collection worldwide, this case gave the jury the opportunity to hear testimony directly from the perpetrators behind the collusion.
Mukhtar Ablyazov was found guilty unanimously by jury of defrauding BTA and BTA was awarded substantial damages.
“We are honored that we were able to present this evidence to the U.S. jury, and we are very pleased with the verdict in favor of our client, which should result in more than $200 million in damages. We thank the jury for their careful consideration of the evidence.” The proceedings in New York, on behalf of BTA and the Ministry of Justice of Kazakhstan (on behalf of the Almaty City Akimat), stretched over seven years ago against Mukhtar Ablyazov and his criminal associates for laundering stolen money in the United States. During the trial, the BTA and the DOJ successfully demonstrated that Mukhtar Ablyazov, Ilyas Khrapunov and former Almaty Akim, Viktor Khrapunov disobeyed court orders, destroyed evidence and refused to provide required information.
As a result, numerous penalty orders were entered against Mr. Ablyazov and Mr. Khrapunov by various judges of the U.S. District Court for the Southern District of New York, ultimately holding Mr. Ablyazov liable.
Nevertheless, the BTA and DOJ gathered additional substantial evidence of Ablyazov’s crimes and secured testimony from numerous witnesses to those crimes, which was presented to the jury, leading to today’s verdict.