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Case against Russian UN Official Takes Unexpected Turn

In January 2003, Vladimir Kuznetsov was elected chairman of the United Nations Administrative and Budgetary Committee. On September 1, 2005, FBI agents arrested him in New York on the charge of conspiracy to launder money. Kofi Annan, secretary general of the UN at the time, waived his diplomatic immunity at the request of U.S. authorities. The Russian did not admit any guilt and was released on $1.5-million bail paid by the Russian government. Kuznetsov is now under house arrest in his apartment in The Bronx. He is under round-the-clock monitoring with an electronic bracelet on his ankle.

Kuznetsov was taken into custody three weeks after the arrested another Russia citizen, Alexander Yakovlev, former employee of the UN Procurement Office. Yakovlev made a deal with investigators and fingered Kuznetsov as an accomplice in laundering money received by them in return for giving assistance to private companies competing in multimillion-dollar UN tenders. According to prosecution accusations, Kuznetsov laundered hundreds of thousands of dollars received by Yakovlev between 2000 and June 2005. The prosecution holds that Kuznetsov knew of the criminal origin of Yakovlev's money but did not inform law enforcement bodies of it, but rather deposited it in an account of an offshore company set up especially for that purpose, Moxyco Ltd., at Antigua Overseas Bank Ltd. in Antigua, and receiving about $300,000 of the money from the offshore company. The money was originally placed in the account of another offshore company, Nikal Ltd., and then in Kuznetsov's personal account.

Yakovlev agreed to cooperate with investigators after they proposed that, if he did not cooperate, he would receive the maximum sentence – up to 60 years. He then named his associate as accomplice. Soon after that, Yakovlev's lawyer, Arkady Bukh, stated confidently that Yakovlev would receive a light sentence or probation. American diplomats in New York began to hint immediately after the arrest of Yakovlev that he was a small fish and the investigation would lead to more important people.

Kuznetsov does not deny that he received $300,000 from Yakovlev, as payment for a debt on the construction of a home outside Moscow. He claims that he did not know about the criminal origins of the money and assumed that his associate had made the money on the stock market. That is the only charge against Kuznetsov.