The “Shulaya Enterprise” organised crime bust in New York

FBIA big case opened yesterday in New York, with 33 people being charged with membership of a Eurasian organised crime group (the “Shulaya Enterprise”) and a wide range of charges, from murder-for-hire and gambling fraud to, intriguingly enough, stealing 10,000 pounds of chocolates (gangsters after my own heart). I duplicate the press release below and look forward to following the case, but a few points leapt out at once:

Razhden Shulaya, also known as “Roma” and “Brother,” the vor v zakone (not “zakonei”) considered to be the boss of the outfit, was arrested in Lithuania as part of a major crack-down on Georgian gangsters in 2013. I note now that he has been living in Edgewater, NJ. I’ll be curious to hear how a guy not only arrested in Europe but well known previously in St Petersburg as a protégé of major crime figure Zakhary Kalashov and his smotryashchyi or “watcher” in that city, got from a Lithuanian holding cell to the States…

The not-so-Russian-“Russians”: This is called a “Russian Crime Syndicate” but the boss is Georgian, and a quick glance through the names of the accused shows a mix of Georgian, Russian, Armenian and even Central Asian names, with Georgians very much predominating. This is characteristic of modern Eurasian organised crime groups in the States, in particular, but it is worth stepping beyond the ROC cliché. I appreciate this is just a press release, but still there’s no harm in a press release being accurate. (And don’t get me started on the mythical “Brothers’ Circle”…)

Imagination is one of these gangs’ hallmarks; as I told Ben Weiser of the NYT, I was not taken aback by the more outré gambits such as “a scheme to defraud casinos with a hacking device that predicted the behaviour of particular models of electronic slot machines.” Rather, “what surprises me actually is they were still involved in the traditional types of crime.” Instead of trying to compete in crowded and fiercely-defended markets such as drug-dealing on the streets, these gangs often seek to identify new criminal opportunities, especially involving fraud and technology.


Department of Justice

U.S. Attorney’s Office

Southern District of New York

FOR IMMEDIATE RELEASE

Wednesday, June 7, 2017

Members And Associates Of Russian Crime Syndicate Arrested For Racketeering, Extortion, Robbery, Murder-For-Hire Conspiracy, Fraud, Narcotics, And Firearms Offenses

Charged Defendants Include Alleged “Vor” or “Thief-In-Law” of a Russian and Georgian Criminal Enterprise

Joon H. Kim, the Acting United States Attorney for the Southern District of New York,  William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), Leon Hayward, Acting Director of the New York Field Office of U.S. Customs and Border Protection, and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of three Indictments and one Complaint charging 33 defendants with a variety of racketeering, fraud, narcotics, firearms, and stolen property offenses.

Of the charged defendants, 27 are associated with a nationwide racketeering enterprise led by RAZHDEN SHULAYA and ZURAB DZHANASHVILI and are charged in United States v. Razhden Shulaya, et al. (the “Shulaya Indictment”) and an accompanying superseding indictment, which has been assigned to U.S. District Judge Katherine B. Forrest. Of those defendants, 23 were taken into federal custody. 18 will be presented before U.S. Magistrate Judge Gabriel W. Gorenstein today. One defendant will be presented in the District of Nevada.  Three defendants will be presented in the Southern District of Florida.  DENIS SAVGIR, EREKLE KERESELIDZE, GIORGI LOMISHVILI, MAMUKA CHAGANAVA, and SEMYON SARAIDAROV remain at large. One defendant, TIMUR SUYUNOV, is currently detained in federal custody and will be brought to Manhattan federal court on a writ.

Two additional defendants are charged in United States v. Nikoloz Jikia, et al. (the “Marat-Uulu Complaint”), with conspiracy to commit murder-for-hire and with additional firearms offenses.  Of those defendants, one of whom is also charged in the Shulaya Indictment, both were taken into federal custody last evening and will be presented before Judge Gorenstein today.

Three additional defendants are charged in United States v. Alex Fishman, et al. (the “Fishman Indictment”), which has been assigned to U.S. District Judge Richard J. Sullivan.  Each of those three defendants was taken into federal custody today and will be presented before Judge Gorenstein this afternoon.

Finally, one additional defendant was charged in United States v. Sergey Gindinov (the “Gindinov Indictment”), which has been assigned to U.S. District Judge Alison J. Nathan.  GINDINOV was taken into federal custody today and will be presented this afternoon before Judge Gorenstein.

Acting Manhattan U.S. Attorney Joon H. Kim said:  “Today, we have charged 33 members and associates of a Russian organized crime syndicate allegedly engaging a panoply of crimes around the country. The indictments include charges against the alleged head of this national criminal enterprise, one of the first federal racketeering charges ever brought against a Russian ‘vor.’ The dizzying array of criminal schemes committed by this organized crime syndicate allegedly include a murder-for-hire conspiracy, a plot to rob victims by seducing and drugging them with chloroform, the theft of cargo shipments containing over 10,000 pounds of chocolate, and a fraud on casino slot machines using electronic hacking devices. Thanks to the remarkable interagency partnership of FBI, CBP, and NYPD, we have charged and arrested 33 defendants allegedly involved in this criminal enterprise.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said:  “The suspects in this case cast a wide net of criminal activity, aiming to make as much money as possible, all allegedly organized and run by a man who promised to protect them. But that protection didn’t include escaping justice and being arrested by the agents and detectives on the FBI New York Eurasian Organized Crime Task Force. Our partnerships with other FBI field offices, the NYPD and CBP allows us to do everything we can to go after criminals who don’t believe the law applies to them.”

Acting CBP New York Director Leon Hayward said:  “U.S. Customs and Border Protection is extremely proud to have assisted our federal partners in this operation.  It is through our interagency partnerships, and collaborative approaches like the one leading to today’s arrests, that law enforcement successfully combats modern criminal organizations.”

NYPD Commissioner James P. O’Neill said:  “The Thief-in-Law allegedly established an extensive cross country criminal enterprise from Brighton Beach to Las Vegas that engaged in bribes, gambling, and murder for hire.  Thanks to all whose work resulted in the arrest and indictment of 33 today.”

According to the allegations in the Indictments and Complaint unsealed today in Manhattan federal court:[1]

The Shulaya Enterprise was an organized criminal group operating under the direction and protection of RAZHDEN SHULAYA a/k/a “Brother,” a/k/a “Roma,” a “vor v zakonei” or “vor,” which are Russian phrases translated roughly as “thief-in-law” or “thief,” and which refer to an order of elite criminals from the former Soviet Union who receive tribute from other criminals, offer protection, and use their recognized status as vor to adjudicate disputes among lower-level criminals.  As a vor, SHULAYA had substantial influence in the criminal underworld and offered assistance to and protection of the members and associates of the Shulaya Enterprise.  Those members and associates, and SHULAYA himself, engaged in widespread criminal activities, including acts of violence, extortion, the operation of illegal gambling businesses, fraud on various casinos, identity theft, credit card frauds, and trafficking of large quantities of stolen goods.

The Shulaya Enterprise comprised groups of individuals, often with overlapping members or associates, dedicated to particular criminal tasks.  While many of these crews were based in New York City, the Shulaya Enterprise had operations in various locations throughout the United States (including in New Jersey, Pennsylvania, Florida, and Nevada) and abroad.  Most members and associates of the Shulaya Enterprise were born in the former Soviet Union and many maintained substantial ties to Georgia, the Ukraine, and the Russian Federation, including regular travel to those countries, communication with associates in those countries, and the transfer of criminal proceeds to individuals in those countries.

The Shulaya Enterprise was led principally by SHULAYA and ZURAB DZHANASHVILI, a/k/a “Zura,” his lieutenant.  Along with SHULAYA and DZHANASHVILI, AKAKI UBILAVA, a/k/a “Ako,” HAMLET UGLAVA, MAMUKA CHAGANAVA, MIKHEIL TORADZE, NAZO GAPRINDASHVILI, a/k/a “Anna,” ARTUR VINOKUROV, a/k/a “Rizhy,” EVGHENI MELMAN, TIMUR SUYUNOV, ZURAB BUZIASHVILI, GIORGI LOMISHVILI, AZER ARSLANOUK, IVAN AFANASYEV, a/k/a “Vanya,” DENIS SAVGIR, DIEGO GABISONIA, LEVAN MAKASHVILI, SEMYON SARAIDAROV, a/k/a “Sammy,” and VACHE HOVHANNISYAN are charged in Count One of the Shulaya Indictment with racketeering conspiracy.

The Enterprise’s criminal activities included:

  • The operation of illicit poker businesses in Brighton Beach;
  • The extortion of gamblers who became indebted to the Shulaya Enterprise;
  • Attempts to extort local business owners;
  • Efforts to defraud casinos in Atlantic City and Philadelphia by using electronic devices and computer servers to predict and exploit the behavior of electronic slot machines;
  • The theft of cargo shipments, including a shipment containing approximately 10,000 pounds of chocolate confections;
  • The use of a female member of the Shulaya Enterprise to seduce men, incapacitate them with gas, and then rob them;
  • Attempts to create an after-hours nightclub that would host, among other things, the sale of narcotics;
  • The transportation and sale of numerous cases of untaxed cigarettes;
  • Plans to pay bribes to local law enforcement; and
  • Creation and use of forged identification documents, checks, and invoices.

SHULAYA, DZHANASHVILI, UGLAVA, CHAGANAVA, TORADZE, VINOKUROV, SUYUNOV, BUZIASHVILI, LOMISHVILI, AFANASYEV, KANADASHVILI are charged in Count Two of the Shulaya Indictment with conspiring to sell and transport stolen goods in a scheme involving contraband cigarettes, falsified bills of lading, and assorted stolen merchandise.

SHULAYA, DZHANASHVILI, UGLAVA, CHAGANAVA, TORADZE, KANADASHVILI, and VINOKUROV are charged in Count Three of the Shulaya Indictment in connection with a multi-year conspiracy to transport and sell purportedly stolen contraband cigarettes.

SHULAYA, DZHANASHVILI, SUYUNOV, AFANASYEV, SAVGIR, HOVHANNISYAN, DAVYDOV, KERESELIDZE, and MITSELMAKHER are charged in Count Four of the Shulaya Indictment in connection with a conspiracy to create and use false identification documents.

SHULAYA, UBILAVA, UGLAVA, MELMAN, GABISONIA, and MAKASHVILI are also charged in Count Five with wire fraud in connection with their plot to defraud casinos through the use of electronic devices and software designed to predict the behavior of particular models of electronic “slot” machines, thereby removing the element of chance from play of those machines.

LOMISHVILI, MARAT-UULU, and PETRUSHYN are charged in Count Six of the Shulaya Indictment with narcotics conspiracy in connection with their efforts to sell cocaine and heroin.

LERNER is charged in Count Seven of the Shulaya Indictment with obstruction of justice for lying to the FBI about information LERNER provided the Shulaya Enterprise about the FBI’s investigation.

MARAT-UULU and JIKIA are charged in the Jikia Complaint with conspiring to commit a murder-for-hire, and with firearms offenses.

GINDINOV is charged in the Gindinov Indictment with conspiring to sell narcotics in Manhattan and Brooklyn.

ALEX FISHMAN, STEVEN FISHMAN, and MELNYK are charged in the Fishman Indictment with conspiring to transport and sell contraband cigarettes in Manhattan and Brooklyn.

 

 

 

Crimintern: How the Kremlin uses Russia’s criminal networks in Europe

C9s92ljW0AAhnPtMy latest report for the ECFR is out. While I am waiting for the bidding war for the film rights, I’ll settle for pointing people in its direction – you can download it free here – and offer up the summary:

  • Over the past 20 years, the role of Russian organised crime in Europe has shifted considerably. Today, Russian criminals operate less on the street and more in the shadows: as allies, facilitators and suppliers for local European gangs and continent-wide criminal networks.
  • The Russian state is highly criminalised, and the interpenetration of the criminal ‘underworld’ and the political ‘upperworld’ has led the regime to use criminals from time to time as instruments of its rule.
  • Russian-based organised crime groups in Europe have been used for a variety of purposes, including as sources of ‘black cash’, to launch cyber attacks, to wield political influence, to traffic people and goods, and even to carry out targeted assassinations on behalf of the Kremlin.
  • European states and institutions need to consider RBOC a security as much as a criminal problem, and adopt measures to combat it, including concentrating on targeting their assets, sharing information between security and law-enforcement agencies, and accepting the need to devote political and economic capital to the challenge.

I confess I am pleased with the ‘Russian-based organised crime‘ notion, that I think fills an ontological niche, in that it is clear that there is a difference between those gangs which still have strong connections to Russia — who could as easily be Georgians, or Dagestanis, or whoever — and those who have essentially moved out of the country. It is the former who are especially susceptible to use by the Russian security apparatus, and who genuinely worry me. (And yes, I’m also pleased with the title…)

Russian banks warned of risk of cyberattack: a crime or security concern?

russianhackerRussian banks are being warned by the FSB to prepare for possible cyberattacks. That may seem to be a given in these days of virtual criminality, and follows a recent theft of 2 billion rubles ($31.3 million) from correspondent bank accounts at Russia’s Central Bank, but actually Russian financial institutions have until now had it pretty easy. That’s not least because part of the unwritten deal between the state and the hacking community (along with the need to pitch in when ‘patriots’ are expected to attack some foreign target) is that they are fine so long as they don’t commit their crimes against domestic institutions.
 
However, I wonder if there is also a security dimension here. Just as the Central Bank was involved in recent mobilisation exercises, predicated (rightly) on the fact that any major conflict with the West would also be fought with economic instruments, I wonder how far Moscow is coming to terms with the fact that the one-way ‘political war‘ currently being waged against the West might become a two-way one, at least to a limited extent. Those who live by the hack risk dying by it, too.

New Book: ‘Hybrid War or Gibridnaya Voina? Getting Russia’s non-linear military challenge right’

19823811_cover-frontminiI’m today releasing Hybrid War or Gibridnaya Voina? Getting Russia’s non-linear military challenge right. As the title suggests, this study explores the whole issue of Russia’s non-linear challenge to the West and make recommendations about possible responses. It is not the last word, of course, and is as much as anything else written to try and further the debate. A key point I do make is that I feel what we tend to call Russian ‘hybrid warfare’ (it’s not the best term, but we seem to be stuck with it at the moment) is not only that not special in Russian eyes, but in many ways ought perhaps to be considered as two similar but distinct ways of wielding similar instruments: as a preparatory stage before proper kinetic warfare operations (‘hybrid war’) and as a purely non-kinetic variety of aggravated and confrontational diplomacy (‘political war’). Ukraine faced the former, the West the latter. Either way, these are wars…

I reproduce the Executive Summary below, but the book is available in both PDF and hardcopy here or from Amazon.


Executive Summary

The West is at war. It is not a war of the old sort, fought with the thunder of guns, but a new sort, fought with the rustle of money, the shrill mantras of propagandists, and the stealthy whispers of spies. (more…)

Gangster, upstart, folk hero: Rovshan Janiev (Lenkoransky) finally put to rest

Screen Shot 2016-08-21 at 20.56.46Azeri-born gangster Rovshan Janiev, also know as Rovshan Lenkoransky, was killed in an ambush on 17 August in Istanbul, while returning from a trip to Dubai (which, incidentally, seems to have become the Russian/Eurasian gangsters’ haven of choice). His Range Rover was caught in the crossfire of at least two gunmen firing automatic weapons; he was killed, riddled by some twenty bullets, his driver seriously wounded.

Whodunnit?

Who killed him? Heaven knows: there were enough serious people after his blood. Three Azeris and a Turk have apparently been arrested, but who they are and why they carried out the hit remains to be seen.

What made Janiev interesting is that around him cohered a loose coalition of hungry young and youngish gangsters, who felt the relative stability of the post-90s status quo – and the end of the rapid social mobility caused by periodic turf wars and gangland killings – was locking them out of the big time. Janiev ended up challenging Moscow-based godfather Aslan Usoyan, ‘Ded Khazan,’ and may indeed have been behind his attempted assassination in 2010 and/or his successful one in 2013. Certainly Usoyan’s heirs have continued to be on the hunt for him.

However, Janiev’s ambitions and his open desire to overturn the current underworld order also may have led to his becoming a target of Georgian Tariel Oniani (‘Taro’), one of the most powerful and vicious of Moscow’s gangsters, and even the major Slavic gangs. It did not help that he was persistently accused of sometimes cooperating with the Russian security apparatus (presumably the FSB), when they wanted to bring a little indirect pressure to bear.

And as if that were not enough, it is also worth mentioning that three years ago, near enough to the day, one of Janiev’s bitter enemies, Azeri kingpin Alibala Hamidov (‘Goji Baku’) was murdered in Istanbul. This may prove to have been a delayed revenge.

Local hero

With so many people (literally) gunning for him, and a reported $5 million bounty on his head, perhaps the greatest surprise was that Janiev survived as long as he did, especially since according to some accounts of late he had relaxed some of his security precautions. In February 2013, he had been reported as killed, just one of many tall tales around him, but this proved to be a hoax; it seems unlikely history will repeat itself.

However, also striking was the way his funeral back in his home town of Lenkoran saw up to 25,000 attending to pay their respects. In part, this reflects the Robin Hood-like legend of the local boy who was able to protect the Azeri market traders in Moscow from the Russians and the Georgians (which he did, up to a point, and for a price), in part the Azeri who was able to take on those Russians and Georgians (and Armenians) at their own game.

There was more than just romantic appeal involved, though. Azeri businessman Mubariz Mansimov, President of the Palmali Group of Companies, lent his private jet to deliver the body home, and it is clear that Janiev also had connections with elements of Azerbaijan’s business and thus by definition political elite.

Impact back in Russia?

Janiev had stayed out of Russia for years, but had maintained his operations there, especially connected with the produce markets of the city. With him gone, there is every chance that the sporadically-violent struggles to control them will flare up again. Recent arrests hitting Shakhro Molodoi’s organisation have, after all, already created instability in this underworld sector.

Indeed, it is not impossible that Janiev’s death will actually turn out not to have been because of any of his old feuds, but because of the new pressures on the Russian underworld. As times get tight, the competition over those businesses still making money is only getting commensurately tighter, and Janiev may have posthumously discovered.

Breaking up the Khinkalnaya sitdown: Georgians being warned off trying for a slice of the Crimean pie?

Rys' SOBR of the kind deployed to break up the skhodka

Rys’ SOBR of the kind deployed to break up the skhodka

On 24 May, Moscow police including Rys’ SOBR commandos broke up a skhodka–sit down–of mainly Georgian gangsters reportedly at the Khinkalnaya restaurant on Savvinskaya embankment, briefly detaining 38 of them. (The perennially well-connected Life News has the list of detainees here.) In part they were there apparently in another bid to resolve the long-running and periodically-violent feud between the Tbilisi clan of “Dead Ded” Khasan (Aslan Usoyan) and Tariel Oniani’s Kutaisi clan. However, they were also going to talk about expanding their activities in Crimea and how to apportion the profits. These may well be significant, not only in diverting some of the massive investment being channelled there to make it a showcase “why it’s great to be in Russia” region, but also if Sevastopol comes to rival Odessa as a smuggling hub. I suspect that this latter agenda item is why the meeting had to be raided. After all, the ethnic Russian networks are also moving into Crimea, looking to strike deals with local gangs, and they are a much more known and trusted factor for the government. It’s futile to try and keep the Georgians out of Crimea, but I imagine that a pernicious alliance of ethnic Russian mobsters and the government will try to minimise their role there.

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