The Miscreant’ Global Bust-Out (Chapter 12): Russian Spies, Rogue States, and the Manipulation of the American Markets
Posted on 03 June 2011 by Mark Mitchell
In the summer of 2010, the FBI arrested ten Russian spies in the United States and deported them back to Moscow. The American press (which tends to do little more than quote the words of official spokesmen and “prominent” members of the establishment) reported that these spies had posed no threat whatsoever.
Most media outlets suggested that the spies were hapless operatives at best. Aside from the occasional cash drops in public parks, the spies spent most of their time hanging out in Starbucks with their laptop computers, which maybe contained some encrypted messages from Moscow, but messages that were mundane or altogether pointless.
When one of the spies, Anna Chapman, returned to Moscow, she posed in sexy attire for the Russian edition of Maxim, the men’s magazine. That got the U.S. media excited for a brief spell, but she was soon forgotten.
Certainly no media outlet bothered to investigate whether Russian spies had, say, infiltrated the American financial system, developing relationships with some of the world’s most dangerous market manipulators.
Which is unfortunate, because there are many reasons to believe that the Russian intelligence services (and some of the Russian spies who were arrested in 2010) figure into the network of financial operators that Deep Capture is seeking to expose.
This should not surprise anyone at this stage in the story. We have seen that Michael Milken’s closest associates and a network of U.S. brokerages tied to Milken helped the Russian government and the Russian Mafia (notably, the Mogilevich organization) manipulate the markets and launder upwards of $7 billion in the late 1990s.
In more recent years, Mafia-tied oligarchs such as Roman Abramovich (Russian prime minister Vladimir Putin’s right-hand man) have been linked (along with the Mogilevich organization) to Bernie Madoff’s market manipulation enterprise and to outfits like Tuco Trading, which transacted (on trading platforms controlled by Milken cronies) manipulative trading equal to 20 percent of the volume of the largest brokerage on the planet during the month before the 2008 collapse of Bear Stearns.
We have also seen that some of Milken’s close associates, such as Russian Mafia boss Felix Sater, are market manipulators with ties to the Russian intelligence services.
In addition, there is no doubt that the Mogilevich organization (of which Felix Sater is a member) has close ties to not only the Milken network, but also to the Russian government. Indeed, as Admiral Dennis Blair, then director of U.S. national intelligence, made clear in his 2010 report to Congress, Russian organized crime groups and the Russian intelligence services are closely intertwined.
This assessment is shared by U.S. diplomats based in Russia, as was evident from diplomatic cables that were made public by Wikileaks in late 2010. As one cable from the U.S. embassy in Moscow noted, the Russian government “operates more as a kleptocracy than a government. Criminal elements enjoy a ‘kryshna’ (a term from the criminal/mafia world literally meaning roof or protection) that runs through the police [and] the Federal Security Service [Russia's main spy agency].”
Sexy Russian spy Anna Chapman did more than hang out at Starbucks. She also spent a good deal of time working for a hedge fund, Navigator Asset Management, that is part of the Milken network.
Navigator is a big player in the death spiral finance game, and shows up, alongside Milken cronies, as an investor in multiple companies. As just one example, a Navigator subsidiary, the Isosceles Fund (which the Russian spy helped run) was invested in NCT Group with Gene Phillips (Milken’s closest associate and launderer of $4 billion of Russian Mafia and Russian government money) and Yasin al Qadi (Osama bin Laden’s favorite financier).
That investment and others that I will discuss had the dual advantage of putting a Russian spy in contact with both Al Qaeda and a notorious American market manipulator (Gene Phillips) who had deep ties not only to the Russian Mafia, but also to La Cosa Nostra. And it is entirely possible that the Russian government and its spy services have since sought to strengthen their relationships with market manipulators who have demonstrated a willingness to damage the U.S. economy.
Perhaps that’s how it came to be that Christopher Metsos (another of the ten Russian spies arrested in 2010) turned up as a client of Lines Overseas Management, a major offshore short selling and market manipulating hedge fund and brokerage operation with a securities rap sheet a mile long.
Recall that Lines Overseas Management’s other clients included Felix Sater (Russian Mobster with ties to Russian intelligence); Ivan Boesky (Milken’s most famous criminal co-conspirator, who, after his release from prison, moved to Moscow); and Milken crony Ali Nazerali (who was not only an associate of Ivan Boesky and Felix Sater, but also a hedge fund partner of Yasin al Qadi, Osama bin Laden’s favorite financier.).
As I mentioned in Chapter 10, Mark Salter, a principal at Gene Phillips’ Sinex Securities (the outfit that laundered around $4 billion for the Russian government and the Russian Mafia), previously worked for Westcap Securities, then controlled by the above-mentioned Ali Nazerali (who has, as I documented earlier, has run stock scams with the chief of Saudi intelligence, and was a former top employee of a man, Abbas Gokal, who works for Pakistani intelligence)
Prior to that, Salter worked for Greystone Securities, then controlled by Nicholas Camilleri, proprietor of Navigator Asset Management (the outfit that employed Russian spy Anna Chapman).
Also possibly significant is what federal investigators reported about Cynthia Murphy (another of the ten Russian spies arrested in 2010). Specifically, the DOJ said that Murphy, whose real name was Lydia Guryev, “had several work-related personal meetings” with a “prominent financier” who was left unnamed.
That financier, the press later reported, was Alan Patricof. In fact, it was Patricof who notified the press that it was he. Perhaps he figured the information would eventually become public and decided to let the media know that it was no big deal.
The U.S. media (which does little more than transcribe the words of prominent financiers) reported that Patricof’s meetings with the Russian spy were, in fact, no big deal.
In the 1980s, Patricof was a major investor in Ivan Boesky’s arbitrage fund. In more recent years, Patricof’s Apax Partners has been involved in a number of the Mafia-style “bust outs” that have made the Milken network so much fun to investigate.
One of the many Milken network scams that involved Patricof was Versicor, a company that was taken over by Jeremy Goldberg, who went on to run one of Milken’s investment funds, an outfit called Proquest.
Versicor’s Chairman, Timothy Barberich, was, meanwhile, funding a casino venture with a Mobster named Anthony Moscatiello, who was then (according to the U.S. government) the chief bookkeeper for the Gambino crime family. Shortly after the casino venture, Moscatiello was indicted for the murder of one of his casino partners, Gus Boulis.
Meanwhile, Patricof was involved with a host of companies financed by Milken crony Lindsay Rosenwald, former vice chairman of D.H. Blair, the Mafia “death spiral” outfit that was (we know) indicted along with AR Baron, Felix Sater’s White Rock and at least five members of La Cosa Nostra.
As we saw in Chapter 10, A.R. Baron (and almost certainly D.H. Blair, given that it was indicted along with A.R. Baron) were tied in multiple ways to the market manipulation and money-laundering operation that the Russian government and the Russian Mafia were utilizing in the late 1990s.
In a coded message that Moscow delivered in 2009, the Russian spy Guryev’s handlers stated that Patricof “is checked in C’s database – he is clean. Of course, he is a very interesting ‘target.’”
The message mentioned that Patricof was interesting because he was “prominent in politics” – and the media reported that the coded message meant that the Russians were interested in Patricof only because the financier had made a large donation to the Democratic Party.
However, the otherwise vague message also stated that the spy should “consider all options in regard to Patricof”.
There are a couple of important things about this that seem odd.
The first is that, according to the FBI, Patricof had at least “several work related personal meetings” with the Russian spy. Considering that the spy was then working as a low level employee at an accounting firm, Deep Capture applauds the willingness of Patricof (a big time billionaire) to be so accommodating.
The second is that court documents in the spy case make it clear that the Russian government had at some point become aware that its spies were under FBI surveillance, though it is not entirely clear when the Russians first realized they were being watched. Deep Capture does not know whether it is a habit of Russian intelligence to send its operatives exculpatory messages regarding US citizens when the Russians understand (as those court documents make clear) that they are under FBI surveillance.
Another thing that is certain: Patricof is tied up with some unusual characters. One, as I mentioned, is Lindsay Rosenwald, whose father-in-law, Morty Davis, founded D.H. Blair, the Mafia brokerage indicted with A.R. Baron (linked to a massive Russian government and Mafia money laundering scandal) and Felix Sater (Russian Mafia boss with ties to the Russian intelligence services).
Recall that Felix Sater escaped jail by telling the DOJ he had ties to Russian intelligence and could therefore help the CIA purchase a stockpile of Stinger missiles from Osama bin Laden. Recall also that Felix Sater sent my colleague Patrick Byrne a “Message from Russia” suggesting that Patrick would be killed if he continued to be involved with investigations like this one.
Patricof was not just holding meetings with a Russian spy while doing business with market manipulators with deep ties to the Russian Mafia. Patricof was also the closest associate in the United States of an Iranian named Hassan Nemazee, who is the son of an Iranian diplomat and the scion of Iran’s wealthiest family.
In 2010, Nemazee was arrested for running a scam that involved securing collateral from major banks with securities that did not exist. He did this through an outfit called First Capital Partners that he ran with Gerardo Angulo, a former employee of Ivan Boesky.
As we know, Boesky (Milken’s most famous criminal co-conspirator) ran his arbitrage fund (financed generously by Patricof) out of a building that was owned by the Alavi Foundation (a front for the Iranian regime, indicted for espionage in 2009). Boesky occupied the same suite of offices in that building as Milken crony Marc Rich, later indicted for trading with Iran during the Iran hostage crisis.
At the time, Boesky’s most important employee was a mysterious Iranian fellow named Hushang Wekili. I say that he was “mysterious” because, while Boesky gave Wekili yearly bonuses of more than $1 million, nobody could figure out what, exactly, Wekili was doing for Boesky.
Adding to the mystery was the fact that Boesky went to live in Iran for a period of time after the Islamic revolution. This was not his first lengthy visit to Iran. He’d also worked there when he was younger.
Boesky later testified in court that he had been working in Iran for the U.S. Information Agency, teaching English. But Pulitzer Prize winning author James Stewart investigated and found that the USIA had no record of any Ivan Boesky ever working for the agency.
When he wasn’t in court, Boesky liked to tell people that he’d been Iran working for the CIA. That was almost surely a lie.
So we have to wonder — what was Boesky doing in Iran?
Nowadays, according to people who know Boesky, the mysterious Houshang Wekili never leaves Boesky’s side. They regularly show up at meetings together, they share a house, and they were together when Boesky met with Ali Nazerali (who has his own ties to the Iranian regime) at the offices of Lines Overseas Management.
Nemazee’s non-existent securities scam (at one point he provided banks with false documentation claiming that he possessed $500 million in U.S. Treasuries) was conducted with help from an outfit called Westminster Securities, a brokerage that used to trade in league with White Rock Partners, the outfit controlled by Russian Mafia boss Felix Sater (he with ties to the Russian intelligence and, apparently, the ability to negotiate weapons deals with Al Qaeda).
It was through Patricof that Namazee was able to get meetings with President Bill Clinton and many other government luminaries. After Namazee was caught with the fake U.S. Treasuries, Clinton’s meetings with Namazee became a fairly big scandal, ranking up there with the Chinese spy scandal.
In the latter case, several Chinese spies, big fundraisers for the Democratic party, managed to worm their way into meetings with Clinton, leading many people to wonder whether political corruption had compromised national security. Many people similarly wondered how it came to be that Namazee, an Iranian criminal with close ties to the Iranian regime, was greeted warmly in the Oval Office.
The answer, of course, is that Alan Patricof set it all up. Such access to the White House may have been of interest to Patricof’s Russian spy friend. But the Russian spy would surely have also taken note of the damage that Patricof’s network of market manipulators (including Namazee) had done to the U.S. economy.
This is not to say that the Russian spy successfully recruited Patricof. Perhaps the Russians are merely in the habit of sending their operatives chatty, exculpatory notes about complete strangers. However, it does seem that whenever such scandals arise, the Milken network is right in the mix.
And I must stress what is really the central thesis of the story that Deep Capture has been publishing for the past several weeks. Previous chapters have made it clear that key figures in the Milken network have close working relationships organized crime outfits, jihadi terrorist financiers, and multiple governments of rogue states.
As we will see in greater detail, some of the key figures in the Milken network have (quite deliberately) done significant damage to the American economy.
This is not to suggest that there has been a conspiracy among rogue states, jihadi terrorists, and Milken’s cronies to do serious harm to the United States. On the other hand, the possibility does not escape us. At the very least, it seems possible that relationships among these various entities could be pernicious.
There can be no doubt that some of America’s adversaries see advantage in weakening U.S. economic power. And it cannot be ruled out that these adversaries would seek to collaborate (if only at arms length) with American financial operators who have demonstrated a willingness to wreak havoc in the financial markets for fun or profit.
Therefore, we should take notice of relationships that already exist between destructive financial operators and America’s adversaries. And we should take notice when Russian spies attach themselves to financial operators who are notorious for busting out American corporations and demolishing markets.
So, no, there is no grand conspiracy. But there are many other reasons to believe that the Milken network’s skills at market manipulation have at least come to the attention of America’s adversaries, including Russian intelligence.
* * * * * * * *
In the summer of 2010, a billionaire hedge fund manager named Solomon Obstfeld fell from a balcony and splattered on the pavement in front of his 19th floor apartment on Park Avenue in New York. The cops arrived, and within hours, they had ruled the death a suicide.
However, Obstfeld’s friends and family were not convinced. They pointed out that Obstfeld was not depressed, he did not leave a suicide note, and it would have been impossible (without someone’s help) for him to scale the 9 foot wall protecting his balcony.
In addition, Obstfeld’s friends understood that Obstfeld had been dealing with some scary characters who were left unnamed. The friends hired a private investigator to solve the possible murder.
Soon after, another private investigator claimed that he had looked into the case and determined that the death was an accident, not a suicide. This news was splattered all over the Internet, but the second private investigator would not say who had hired him, and it seemed unlikely that Obstfeld could have “accidentally” scaled that 9 foot wall.
Having spent a considerable amount of time on this myself, I can say that it is unlikely that we will ever know exactly what happened. But if any honest private investigator is trying to get to the truth, he might consider that Obstfeld was one of Michael Milken’s close associates, and he had done a lot of business with some of the world’s most dangerous Mafia financiers, not to mention people tied to the spy agencies of some singularly rogue states.
In the 1980s and early 1990s, Obstfeld had been one of the most important traders at Datek Securities, the outfit founded by Omar Amanat (who later founded an Islamic TV station with Hamas and the Lightspeed trading platform deployed by Tuco). Datek’s clearing firm, recall, was A.R. Baron, the outfit tied to the Russian government and Mafia money laundering scandal that broke in 1999.
Later, Datek was implicated in the trading of Phil Gurian, right hand man of the DeCalvacante Mafia capo Phillip Abramo (who was involved with Ali Nazerali’s BCCI brokerage and later came to be known as the “King of Wall Street”).
Datek’s former vice president, remember, later bought Madoff’s brokerage, likely to cover-up the brokerage’s past market manipulation–specifically the liabilities in the form of “securities sold, but not yet delivered” that Madoff had previously tried to cover up with Ponzi money delivered by Milken cronies and the Russian clients of Bank Medici in Austria.
Obstfeld was such an important (and shady) component of the Datek operation that Datek arranged for one of its traders to pose as Obstfeld and take the exam that Obstfeld needed to pass to get his trading license. This was a rather large scandal at the time, but the scandal went away.
At the time of his death, Obstfeld was most famous for running a major death spiral hedge fund called LH Financial, which was a unit of BAWAG, the Austrian bank that caters primarily to Russian oligarchs (including Roman Abramovich) with close ties to Vladimir Putin.
BAWAG, recall, helped the criminal U.S. brokerage Refco cover up naked short selling liabilities in the form of “securities sold, but not yet delivered.”
Obstfeld’s partner in LH Financial was Martin Schlaff, who also ran a major death spiral hedge fund called Balmore Investments. In addition, Schlaff was, for much of his life, an asset of the East German Stasi and the KGB.
The KGB, of course, was the Soviet intelligence agency. Former KGB’s operatives and chieftains, known in Russia as the siloviki, along with current intelligence operatives, oligarchs, and the Mafia, now essentially control the Russian government. It’s not just me saying this; it is the consensus of foreign policy experts (e.g., Marshall Goldman of the Council on Foreign Relations).
Schlaff earned his first millions financing companies that had been founded by former German Stasi agents who had worked with Vladimir Putin in Dresden, back when Putin was employed with the KGB in East Germany. Schlaff, who remains one of Putin’s closest cronies, has also been involved in a number of companies, such as Centrex Holding, which have ties to the Russian state oil giant Gazprom and to Mafia kingpin Semion Mogilevich.
Schlaff and one of his Russian associates are also alleged to have paid (through BAWAG) millions of dollars in bribes to successive Israeli prime ministers, including Ehud Olmert and Ariel Sharon. In addition, Schlaff is alleged to have paid bribes to Avigdor Lieberman, who now serves as Israel’s foreign minister and leads a right-wing party that is a partner in Israel’s ruling coalition.
Avigdor Lieberman is one of the leading advocates for an aggressive Israeli policy in the occupied territories, and he was a big reason why Israel invaded Lebanon in 2006, and attacked Gaza in 2009. It is thus of interest that Schlaff is also on close terms with Arab dictators, including Libya’s Muammar Qadaffi, who reportedly worked with Schlaff to broker a deal that saw Israel allowing Qadaffi to support Hamas in Gaza.
Meanwhile, it has been reported that some of Schlaff’s bribes to the Israeli government were paid to facilitate a 1998 deal that he had brokered between BAWAG and Palestine Liberation Organization leader Yasir Arafat .
The deal saw BAWAG and Yasir Arafat building a seedy casino in Jericho. At the time, Yasir Arafat was still considered to be an underworld figure (this was before the international community had come to fully accept Yasir Arafat as an overworld politician).
Indeed, before the ultimately doomed Oslo Peace Accords in 1993, Arafat (who passed away in 2004) was still considered one of the world’s leading terrorists because his men had killed hundreds of Israeli civilians, and because he had developed ties between the PLO and a host of other terrorist groups, including Hezbollah, the Revolutionary Armed Forces of Columbia, the Beider Meinhoff gang, Carlos the Jackal, and the Japanese Red Army. Much of this network had close relations with Russia and the regime in Iran.
Schlaff’s Balmore Investments and Obstfeld’s LH Financial have both done quite a lot of business with other Milken cronies. For example, they were both investors in NCT Group, the outfit whose other investors included Gene Phillips (launderer of $4 billion in Russian money), Yasin Al Qadi (Osama bin Laden’s favorite financier), and the Isosceles Fund (employer of Russian spy Anna Chapman).
Obstfeld, meanwhile, was also involved with Global Securities, the outfit whose principal clients were Anthony Elgindy’s pack of traders, all of them tied to the Mafia, some of them tied to jihadis. Global Securities also counted among its clients one of Obstfeld’s closest associates, Eugene Grin, also known as Eugene Grinshpon.
Among the many scams that Mr. Grin/Grinshpon and Mr. Obstfeld perpetrated together (according to the Commissioner of Insurance for the State of Delaware, who filed suit against both of them) was the 1994 bust out of National Heritage Life, a giant insurance company.
Mr. Grin/Grinshpon now runs a powerful short selling and death spiral PIPEs fund called Laurus, which is closely tied to another fund called Talbiya. Unsurprisingly, Talbiya was among the investors in the above-mentioned mentioned NCT Group.
Mr. Grin/Grinshpon also once invested in a company called Earth Biofuels, and according to an investigator who has supplied information to Deep Capture, Mr. Grin/Grinshpon once tried to extort information from the CEO of that company, Dennis McLaughlin. When McLaughlin threatened to expose the extortion attempt, Mr. Grin/Grinshpon allegedly had one of his thugs try to murder McLaughlin by pushing him down a flight of stairs.
One of Earth Biofuel’s board members was Herbert Meyer, former special assistant to the director of the Central Intelligence Agency. According to the source, Mr. Grin/Grinshpon might have been trying to gain access to U.S. government secrets.
The source was likely jumping to conclusions (Meyer had retired from the CIA years before), and the source did not present hard evidence that Grin was after U.S. secrets, but on other matters, the source has been reliable.
And there can be no doubt that Mr. Grin/Grinshpon is tied to the familiar network of subversives.
According to Forbes magazine, Mr. Grin/Grinshpon once lent $6 million to a fellow named Francis O’Donnell, who was later named by authorities as being an associate of the Genovese Mafia family. And Mr. Grin/Grinshpon got his start working for FN Wolf, one of the Mafia brokerages that received finance in the 1980s from Milken associate Zev Wolfson.
FN Wolf was controlled by Robert Brennan, one of the people directly implicated in the Russian government and Russian Mafia money laundering and stock manipulation scandal that broke in 1999. Later Congressional testimony named FN Wolf as being one among a network of brokerages tied to organized crime.
After leaving FN Wolf, Mr. Grin/Grinshpon founded Laurus in partnership with Robert Press, who was previously the president of PCM Securities, a Genovese Mafia brokerage that was raided by the FBI in 1999 as part of its crack down on a larger network of Mafia brokerages, most of them tied to Milken or his closest associates. These brokerages were part of the same network deployed by the Russian government and Russian Mafia in the late 1990s.
Mr. Grin/Grinshpon’s relative, Avinadav Grinshpon, runs Memorand Management, which is controlled by an Israeli billionaire named Lev Leviev. A prominent Israeli newspaper, Haaretz, has reported that Leviev, best known as a diamond trader, is tied to foreign intelligence agencies. This seems to be supported by information compiled by a Congressional commission that was set up to monitor national security threats emanating from overseas.
Lev Leviev’s partner in Memorand Management is Rotem Rosen, who is married to the daughter of Tamir Sapir (the Russian Mafia boss who was selling electronics equipment to KGB operatives in New York along with Semion Kislin, named by the government as a “member” of the gang run by “Little Japanese” [the one-time top boss of the Russian Mafia in the USA who was murdered in Moscow in 2009 after revealing that he had been employed by the FSB, Russia’s main intelligence agency]).
Recall that Semion Kislin’s nephew, Arik Kislin, was a close business associate of Babek Seroush, an Iranian arms dealer who was dealing with North Korea while employed by Russian military intelligence. Kislin is now involved with a brokerage called Carlin Equities. He was previously among the small pack of closely affiliated market manipulators who traded through Global Securities.
That’s the pack that included Anthony Elgindy (tied to the Russian Mafia and multiple leaders of jihadi terrorist groups); Ali Nazerali (former top employee of Abbas Gokal, a Pakistani ISI asset who works for the Iranian regime); Rakesh Saxena (Marxist Naxalite), Adnan Khashoggi (asset to multiple intelligence agencies), and similar characters.
Also involved with Global Securities was Felix Sater, the Russian Mafia boss who sent to my colleague Patrick Byrne a “message from Russia.” Currently, Felix Sater runs Bayrock, which has a partnership with Tamir Sapir (the guy who used to sell high-tech equipment to the KGB). According to Bayrock’s former CFO, the company is a massive money laundering operation.
Another key figure involved with Global Securities was a fellow named Yavgeniy Dvoskin. He also owned an outfit called Centex, which was among the few brokerages aside from Global that was used by Elgindy, Sater, Nazerali, Kislin, and others in their close-knit pack of traders.
These market manipulators (some of them Milken’s closest associates, all with ties to the Mafia, many with ties to jihadis) were Centex’s principal customers, just as they were Global’s principal customers.
That Centex was even allowed to operate is amazing considering that Yavgeniy Dvoskin had been caught in the late 1980s perpetrating a money laundering scheme, at which point he shared a jail cell with the above-mentioned “Little Japanese” (top boss of the Russian Mob and, apparently, a Russian intelligence asset).
Yavgeniy Dvoskin also uses the name Semyan Altman. Sometimes he is known as Eugene Slusker. In addition, he is known as Eugene Schuster and Shuskar and Slushke and Sousker and Dvoskin and Lozin and Kozin – which is a lot of names.
Sometimes intelligence agents have a lot of names.
Mr. Dvoskin-Lozin-Kozin-Etc. may well be a Russian intelligence agent.
Soon after the FBI busted the ten Russian spies in 2010, a prominent Russian businessman named Vadim Glazkov told his business partner in Moscow, a banker by the name of Michail Zavertyayev, that he had in his possession some sensational documents that showed that Mr. Dvoskin-Lozin-Kozin had been the ring-leader of the arrested spies.
Glazkov, who is himself a former KGB operative and now the head of the Petersberg Fuel Company, said the documents showed that Mr. Dvoskin-Lozin-Kozin had directed the spies to penetrate the financial system to facilitate money laundering and the manipulation of the American markets.
Russian journalist Ilya Barabanov broke this story, and similarly enterprising reporting earned him the 2010 Peter Mackler Award, a prestigious honor given to the journalist who has done the most ground-breaking investigative work in nations that limit freedom of the press (as opposed to journalists in the United States, which has an almost limitlessly free press that no longer does ground breaking investigative work).
At any rate, as Barabanov noted, Glazkov (the fellow with the documents) had reason to dislike Mr. Dvoskin-Lozin-Kozin-Etc. because Mr. Dvoskin-Lozin-Kozin-Etc. had attempted a hostile takeover of one of Mr. Glazkov’s companies, and during this attempt, a posse of thugs attacked Mr. Glazkov, smashing in his head, subsequent to which Mr. Glazkov spent several months in a Moscow hospital.
It also should be said that Mr. Glazkov never managed to show anyone those sensational documents. Apparently, he had made arrangements with Kirill Kabanov, the head of Russia’s Anti-corruption Committee, to hand over the documents to independent observers. But on the day that the observers arrived to collect the documents, Mr. Glazkov said that Aleksandr Bortnikov, the head the FSB, had just appeared in his (Mr. Glazkov’s) office and threatened to arrest him (Mr. Glazkov) if he made the documents public.
Whatever the truth regarding that set of documents, it is clear to Deep Capture that Mr. Dvoksin-Lozin-Kozin-Etc. is a member of the network that poses a serious threat to the stability of the financial system and our national security. He is closely tied to the Mogilevich organization, and was involved in a scam that saw Mogilevich, with the apparent connivance of the Russian government, siphoning off billions of dollars from the Russian state oil company Gazprom.
In addition, Mr. Dvoskin-Lozin-Kozin-Etc. is a notorious market manipulator who has orchestrated multiple death spiral scams, sometimes in league with prominent members of the Milken network, including Ali Nazerali (former Gokal employee; major BCCI figure; hedge fund partner of Yasin al Qadi, Osama bin Laden’s favorite financier).
In 2003, Canadian authorities charged Mr. Dvoskin-Lozin-Kozin-Etc., along with Francesco Rizzo (an associate of the Colombo organized crime family) and seven others, in a market manipulation scheme that they ran through two Canadian brokerages – Pacific International and Thompson Kernaghan.
Both of those brokerages were also used by Elgindy and the rest of the above-menioned pack of Mafia-jihadi market manipulators. For many years, this crowd conducted nearly all of their trading through four brokerages: Pacific International, Thomson Kernaghan, Global Securities, and Centex (Mr. Dvoskin-Lozin-Kozin’s brokerage).
By 2008, those brokerages had been replaced by even more worrying operations. More on those later.
The star broker and key principal at Pacific International during its heyday was Jonathan Curshen, later a close trading partner of Elgindy, and the white knight for Semion Mogilevich’s money laundering outfit YBM Magnex.
In 2006, we know, Curshen (who was then operating out of the same building that housed the Israeli embassy in San Jose) was hosting those meetings in Costa Rica where (according to the former spy who monitored them) Michael Milken and some of his close associates, including Gene Phillips and Ali Nazerali, discussed ways in which to destroy some big companies.
Thompson Kernaghan was managed by a guy named Mark Valentine, who got his job thanks to his connections to Ali Nazerali and Nazerali’s friend Soleiman Rashid, who is, like Nazerali, on especially close terms with jihadis.
Rashid is a prominent member of the Palestinian community in Toronto, and according to his associates, his brother coordinates cells for Hamas in the Israeli city of Haifa.
Valentine was low-rent financial riff-raff until he met Rashid. But he was also the son of the Canadian ambassador to Saudi Arabia, so Rashid asked a close friend to give Valentine a high-flying job at Thomson Kernaghan.
With remarkable speed, Valentine assumed the leadership of Thompson Kernaghan, and in allegiance with his mentor Rashid, he became an important financier to both the Mafia and jihadis. In fact, Thompson Kernaghan repeatedly showed up as a co-investor in companies targeted by Yasin al-Qadi (Osama bin Laden’s favorite financier).
Among the many Yasin al Qadi deals handled by the brokerage were Imagis (the anti-terrorism company that Yasin al-Qadi and Nazerali listed just before the 9-11 attacks) and NCT Group, the outfit whose key investors included Yasin al-Qadi, Gene Phillips, Solomon Obstfeld, Martin Schlaff, Mr. Grin/Grinshpon, and the Isosceles Fund (which employed the Russian spy Anna Chapman).
Meanwhile, the Isosceles Fund and its parent, Navigator Asset Management, invested in other companies with ties to jihadis. For example, Isosceles was a key investor in a company called Newcom, which has been identified as one of the entities in the SAAR Network of terrorist financiers.
Another key investor in Newcom was Infinity Capital, which seems to have been initially set up to invest in First New York Securities, a brokerage founded by Dan Cherniak, who was previously a co-founder, with Steve Cohen, of SAC Capital. Cherniak, like Cohen, had worked, along with Felix Sater and other Milken cronies at the Milken-financed and Mafia-infested Gruntal Securities in the 1980s.
Other investors in Newcom included Asif Mohammad Khan and Muhammad Ashraf. Khan formerly worked for the Assa Corporation, the outfit charged in 2009 with being a front for the Iranian regime’s espionage and business activities meant to fund Iran’s nuclear program. This is the same outfit that was allegedly tied to Global Securities.
Ashraf was a partner with Yasin al Qadi in BMI Inc., the outfit that was the principal investor in Bank Al Taqwa. As was detailed in Chapter 11, Bank Al Taqwa set up Al Qaeda’s main operating base in Europe while laundering money, along with the Mogilevich Organization (and probably with the assistance of Gene Phillips’s Sinex Securities) into the Bank of New York.
Meanwhile, Mark Valentine, in addition to his work for Thomson Kernaghan, was a partner in Navigator, the hedge fund that employed Russian spy Anna Chapman. The press (relying on Chapman’s LinkedIn profile) has reported that Chapman worked for Navigator in 2005 and 2006. But a source who has worked closely with Valentine says both Valentine and the spy were involved with the fund as early as 2002.
Rarely allowing himself to be photographed, and never entering a public establishment without a bodyguard in tow, Valentine was soon recognized as one of the biggest financial criminals Canada had ever known — a financial criminal who helped short sellers with ties to the Mafia and jihadis destroy countless companies.
Meanwhile, Valentine became acquainted with Colombian drug traffickers who were doing business with Hamas, Hezbollah and the Mogilevich organization. In 2002, Valentine was arrested in connection with the FBI’s Operation Bermuda Short, a two year undercover sting targeting 60 traders who had manipulated the markets and also, in some cases, laundered money for FBI agents posing as members of a Colombian drug cartel.
Given this background, the authorities naturally focused on Valentine’s small-time “pump and dumps”. They failed to recognize (or, at any rate, failed to acknowledge) his more destructive trading – the naked short selling that earned him (by several accounts) upwards of a billion dollars.
As a result, Valentine spent a brief time under house arrest and was then released. Valentine immediately went back to trading under an assumed name (according to some of his associates, who have spoken with Deep Capture).
Given that these associates say that Valentine was not just trading, but pummeling the markets with manipulative short selling at height of the financial crisis in 2008, maybe someone should arrest him again.
Maybe someone should arrest the other financial operators in his network, too. Because, as we will see in upcoming chapters, this network of financial operators (with ties to the Mafia, the Grand Jihad, and the agents of rogue states) was to a non-negligible degree responsible for the market cataclysm of 2008.
And the network continues to harbor the potential to do additional damage to the American economy.
To be continued…