[Marxism] How a Ukrainian Hairdresser Became a Front for Paul Manafort

Louis Proyect lnp3 at panix.com
Sat Sep 15 14:13:25 MDT 2018


NY Times, Sept. 15, 2018
How a Ukrainian Hairdresser Became a Front for Paul Manafort
By Andrew E. Kramer

KIEV, Ukraine — At first glance, what happened to Yevgeny G. Kaseyev 
hardly seems like misfortune.

Without his knowledge, he says, unknown individuals set up multiple 
companies in his name and deposited tens of millions of dollars into 
those companies’ bank accounts.

“Sometimes it seems fun,” Mr. Kaseyev, a 34-year-old hairdresser, said 
with a shrug during an interview. “I’m a secret millionaire.”

Until the authorities came calling, that is, seeking $30 million in back 
taxes.

One of the people who did business with a company opened under Mr. 
Kaseyev’s stolen identity didn’t mean anything to him. But the name 
certainly caught the eye of investigators in the United States: Paul J. 
Manafort.

Mr. Manafort, who worked for a decade as a political consultant in 
Ukraine before becoming chairman of the Trump campaign in 2016, made a 
deal worth hundreds of thousands of dollars with the shell company under 
the hairdresser’s name. It was called Neocom Systems Limited, according 
to a Ukrainian lawmaker.

This was just one example of the kind of complex financial arrangements 
that caught the attention of the special counsel, Robert S. Mueller III, 
and led to Mr. Manafort pleading guilty to criminal charges on Friday in 
Federal District Court in Washington.

Looking into tax evasion by Mr. Manafort, Mr. Mueller’s investigators 
found a web of offshore companies, some of which had directors who, like 
Mr. Kaseyev, did not even know their identities were being used.

Mr. Manafort was convicted in August on eight counts of financial fraud 
and evading taxes on millions of dollars he earned as a consultant for 
pro-Russia political forces in Ukraine. He avoided a second federal 
trial by pleading guilty on Friday to conspiracy to defraud the United 
States, largely through the use offshore companies, and conspiracy to 
obstruct of justice.

There is nothing new about Mr. Manafort’s use of shell companies to hide 
and launder money. Nor is it surprising that Mr. Manafort should seek to 
use the scheme of fake directors, say analysts of Ukrainian corruption. 
It is a common form of subterfuge in former Soviet states, though hardly 
unique to them.

But the role — and sometimes the plight — of the people whose identities 
were used has gone mostly unnoticed.

“It’s a frequent problem,” Daria Kalenyuk, head of the Anticorruption 
Action Center, said of the directors, who stand to take the fall if 
prosecutors investigate.

Sometimes the directors are lawyers or victims of identity theft, she 
said. But usually “it’s people who are either alcoholics or in poor 
health, and who simply sell their passports for about $20.”

One of the risks to this scheme is that the fake directors might try to 
claim the millions held in their names. But Ms. Kalenyuk could not 
recall one instance of that happening.

“You need to have some knowledge and education to know how to do that” 
in the tax havens like Cyprus or the British Virgin Islands, where such 
companies are typically established, she said.

“Usually, they don’t know how to do it,” she added. “And even if they 
did, it’s a risky business to take over a company from a powerful 
businessman engaged in corruption.”

The companies set up with Mr. Kaseyev’s identity had bland names like 
April Limited and Neocom Systems Limited. For example, in 2009, Mr. 
Manafort signed an invoice for $750,000 addressed to Mr. Kaseyev as 
director of Neocom Systems.

That was news to Mr. Kaseyev when the invoice was first revealed 
publicly in 2017 by the Ukrainian lawmaker Serhiy A. Leshchenko. At the 
time, Mr. Manafort’s spokesman, Jason Maloni, suggested that the 
document might be fraudulent.

Neocom Systems did not come up at Mr. Manafort’s first trial, nor was it 
mentioned in the plea agreement he signed on Friday. But Rick Gates, a 
former employee who became the star witness for the prosecution, 
testified that Ukrainian oligarchs had paid millions of dollars to Mr. 
Manafort through an array of offshore companies with obscure names like 
Novirex, Firemax and Telmar.

Mr. Kaseyev said he first became aware of his unwitting role in the 
creation of at least three Ukrainian front companies a decade ago, when 
the tax police contacted him in 2007 about his purported $30 million tax 
liability at Regional Insurance Union, a company he had never heard of. 
His passport had been stolen in a burglary a year earlier.

The scale of unpaid taxes, he said, suggested that there were larger 
sums moving through the company.

A slender, soft-spoken young man then just getting his start as a 
beautician, and hence unlikely to have amassed such wealth, Mr. Kaseyev 
said he was able to quickly convince the police of the identity theft. 
Yet the companies continued to be used in deals, and one, April Limited, 
still appears to be open for business, a corporate registry shows.

Some homeless men have achieved a measure of fame among activists who 
track corruption in the former Soviet states because they pop up so 
often at the head of multimillion dollar companies.

One man identified in the Ukrainian media as a homeless Latvian named 
Erik Vanagels has been listed as the owner of hundreds of companies in 
Britain, Cyprus, Ireland, New Zealand, Panama and elsewhere. Companies 
in the network also helped finance the private zoo and sprawling estate 
of the former Ukrainian president, Viktor F. Yanukovych, who was the 
main client of Mr. Manafort.

Mr. Manafort’s finances also intersected with companies of Mr. Vanagels 
and another Latvian whose name was used as a director, Stan Gorin. Among 
the murky transactions these companies engaged in was an $18 million 
deal to sell Ukrainian cable television assets to a partnership put 
together by Mr. Manafort, called Pericles, and financed by a Russian 
oligarch, Oleg V. Deripaska, according to a Cayman Islands lawsuit and 
Cypriot corporate records.

Milltown Corporate Services, a front company in Mr. Gorin’s name, for a 
time controlled the television assets.

In another notable case, the police in Ukraine last year questioned a 
barefoot man, Arkady Kashkin, who during interrogation accepted their 
offer of slices of pizza. He turned out to be named as a director of one 
of several related companies that had bought $1.5 billion in Ukrainian 
bonds, according to court records.

In that case, first reported by Al Jazeera, Ukrainian prosecutors said 
that an oligarch who has since fled to Russia, Serhiy V. Kurchenko, was 
the actual manager of the company registered in Mr. Kashkin’s name. A 
judge fined Mr. Kashkin for willingly allowing his identity to be used 
in fraud.

Neocom Systems Limited, Mr. Kaseyev’s company, which was opened a decade 
ago in the Central American nation of Belize, surfaced in relation to 
Mr. Manafort’s dealings in early 2017, several months after the longtime 
Republican Party strategist had been pushed out as Mr. Trump’s campaign 
manager over his Ukraine work.

The invoice had been left in the Kiev office of Mr. Manafort’s political 
consulting business, Davis Manafort International. In the invoice, Mr. 
Kaseyev’s name is transliterated into English as Evgeniy Kaseev.

Mr. Leshchenko, the Ukranian lawmaker, publicized the find after first 
providing the originals to the F.B.I. Mr. Leshchenko said that the 
company was a front and that Mr. Kaseyev had no control over its operations.

This was not the first time Neocom Systems had surfaced in a corruption 
investigation. In a 2012 money laundering and stock fraud case in 
Kyrgyzstan, the country’s central bank listed it as a shell company used 
for payments by Asia Universal Bank, which was seized by Kyrgyz 
officials amid money laundering allegations.

It is not clear how much money, in total, passed through that company or 
through others opened in Mr. Kaseyev’s name.

He now spends his days working at a beauty salon in Kiev for the 
equivalent of about $8 a haircut. He is also a certified colorist.

The best part of his day, he said, comes from seeing the new “sense of 
self-confidence” in his clients as they leave his chair, examining their 
fresh new look.

Iuliia Mendel contributed reporting



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