Former FBI Director represented Russian firm at center of major money-laundering probe

Former FBI Director Louis Freeh was hired by the Russian-owned real-estate firm Prevezon earlier this year to help the company negotiate a settlement agreement with the US government over an alleged money-laundering operation that involved an elaborate Russian tax fraud scheme that implicated high-level Kremlin officials.

That detail was disclosed in a new court document released on Thursday by Acting US Attorney Joon Kim, who wrote a memorandum seeking to enforce the settlement agreement Prevezon struck with the government back in May for roughly $US5.9 million.

Prevezon is also represented by Russian lawyer Natalia Veselnitsksya, who met with top Trump campaign officials last June at Trump Tower to lobby for a repeal of the Magnitsky Act. The Prevezon case garnered high-profile attention given its ties to an alleged $US230 million Russian tax-fraud scheme and the Russian lawyer Sergei Magnitsky, whose suspicious death aroused international media attention and spurred the passage of the Magnitsky Act in 2012. 

Democratic members of the House Judiciary Committee sent a letter to Attorney General Jeff Sessions in July asking whether Veselnitskaya was “involved at any point in the settlement negotiations.” But Prevezon hired Freeh specifically to help with the firm’s settlement discussions in early 2017, according to the court document.

Freeh served as the director of the FBI between 1993 and 2001, and he has been known to take on controversial clients since entering the private sector in the early 2000s. In 2015, for instance, he represented an I
sraeli billionaire who was accused of bribing the government of Guinea for a stake in an iron mine. 

Prosecutors in the southern district of New York are now trying to get Prevezon to pay the $US5.9 million it was supposed to turn over by October 31.

Prevezon has argued that the funds it would use to pay the settlement are currently tied up in the Netherlands with a company called AFI Europe, which it says froze a transaction of more than $US3 million to Prevezon as part of the US litigation against the Russian-owned firm. But the government has balked at Prevezon’s excuse.

“If Prevezon’s payment is not due until Prevezon obtains the debt from the Netherlands, this case could stay open — and Prevezon’s U.S. assets could stay frozen — for years,” Kim wrote. 

He added that Prevezon has even prepared for the possibility that it may never be paid by AFI Europe. 

“During settlement negotiations in 2015 and again in 2017, Prevezon repeatedly requested various protections for Prevezon in the event that the Netherlands announced or manifested its intent to retain the AFI

Europe Debt following its release of the US-requested restraint,” the memo reads. 

A federal judge in New York who denied a request by Prevezon to grant temporary immigration parole to Veselnitskaya earlier this month argued that the firm should have been eager to pay the $US5.9 million because, absent settlement, “the trial would have showcased a tale of international intrigue — a massive tax fraud in Russia resulting in the transfer of $US230 million through a Byzantine web of shell companies.”

Read Kim’s full memorandum below:

United States of America v. Prevezon Holdings Ltd. by natasha on Scribd