n two posh villas
outside the small town of Ricany, near Prague, one of the most
dreaded mob families in the world savagely murders its terrified
victims. The mob's young enforcers, trained by veterans of the
Afghanistan war, are infamous for their extreme brutality. Their
quarry, usually businessmen who have balked at extortion demands,
are repeatedly stabbed and tortured, then mutilated before they are
butchered. The carnage is so hideous that it has scared the
daylights out of competing crime groups in the area.
The torture chambers are run by what international
police officials call the Red Mafia, a notorious Russian mob family
that in only six years has become a nefarious global crime cartel.
Based in Budapest, it has key centers in New York, Pennsylvania,
Southern California, and as far away as New Zealand.
The enigmatic leader of the Red Mafia is a
52-year-old Ukrainian-born Jew named Semion Mogilevich. He is a
shadowy figure known as the ''Brainy Don''--he holds an economics
degree from the University of Lvov--and until now, he has never been
exposed by the media. But the Voice has obtained hundreds of
pages of classified FBI and Israeli intelligence documents from
August 1996, and these documents--as well as recent interviews with
a key criminal associate and with dozens of law enforcement sources
here and abroad--describe him as someone who has become a grave
threat to the stability of Israel and Eastern Europe.
''He's the most powerful mobster in the world,''
crows Monya Elson, who is listed in classified documents as one of
Mogilevich's closest associates and partners in prostitution and
money laundering rings. The Brighton Beachbased Elson, who once
led a pack of thugs and killers known as Monya's Brigada, is
currently in the Metropolitan Correctional Center in lower Manhattan
awaiting trial for three murders and numerous extortions.
In July 1993, after Elson was grievously wounded by
rival mobsters in a bloody shoot-out outside his Brooklyn apartment
building, Mogilevich spirited him out of the country. Mogilevich
then set up his Russian Jewish refugee friend in an alleged massive
money-laundering scheme in Fano, Italy, where he was eventually
arrested and extradited back to America. Elson, an integral part of
the Red Mafia, had been one of the most feared mobsters in Brighton
Beach, ground zero for Russian organized crime in America, which has
exploded here following perestroika.
''If I tell on Mogilevich, Interpol will give me
$20 million,'' boasted Elson. ''I lived with him. I'm his partner,
don't forget. We are very, very close friends. I don't mean close, I
mean very, very close. He's my best friend.'' Nevertheless, after
extensive interviews over the course of the last six months, Elson
ultimately confirmed some of the details about Mogilevich contained
in the classified FBI and Israeli documents.
Allegations of Mogilevich's devilish array of
criminal activities are extensively detailed in the reports:The FBI
and Israeli intelligence assert that he traffics in nuclear
materials, drugs, prostitutes, precious gems, and stolen art. His
contract hit squads operate in the U.S. and Europe. He controls
everything that goes in and out of Moscow's Sheremetyevo
International Airport, a ''smugglers' paradise,'' says Elson.
Mogilevich bought a bankrupt airline in a former Central Asian
Soviet republic for millions of dollars in cash so he could haul
heroin out of the Golden Triangle. Most worrisome to U.S.
authorities is Mogilevich's apparently legal purchase of virtually
the entire Hungarian armaments industry, jeopardizing regional
security, NATO, and the war against terrorism.
In one typical criminal deal, Mogilevich and two
Moscow-based gangsters sold $20 million worth of pilfered Warsaw
Pact weapons from East Germany, including ground-to-air missiles and
12 armored troop carriers, according to the classified Israeli and
FBI documents. The buyer was Iran, says a top-level U.S. Customs
official who requested anonymity.
In another deal, an FBI informant told the bureau
that one of Mogilevich's chief lieutenants in Los Angeles met two
Russians from New York City with Genovese crime family ties to
broker a scheme to dump American toxic waste in Russia. Mogilevich's
man from L.A. said the Red Mafia would dispose of the toxic waste in
the Chernobyl region, ''probably through payoffs to the
decontamination authorities there,'' says a classified FBI report.
Mogilevich is particularly intrigued by art fraud.
In early 1993, he reached an agreement with the leaders of the
powerful Solntsevskaya crime family in Moscow to invest huge sums of
money in a joint venture: acquiring a jewelry business in Moscow and
Budapest. The business, according to classified FBI documents, was
to serve as a front for the acquisition of jewelry, antiques, and
art, which the Solntsevskaya mob had stolen from churches and
museums in Russia, including the Hermitage in St. Petersburg. The
gangsters also robbed the homes of art collectors and even broke
into synagogues in Germany and Eastern Europe to steal rare
religious books and Torahs.
Mogilevich's operation, again in collusion with the
Solntsevskaya mob, also purchased a large jewelry factory in
Budapest. Russian antiques, such as Faberge eggs, are sent to
Budapest for ''restoration.'' Mogilevich's men ship the genuine
Faberge eggs to an unwitting Sotheby's auction house in London for
sale, then send fake Faberge eggs as well as other ''restored''
objects back to Moscow.
Mogilevich's early years are murky. Soviet
authorities first learned of his criminal activities in the 1970s,
when he was a member of the Liubertskaya crime group that operated
in the Moscow suburb of the same name. He was involved in petty
thefts and counterfeiting.
But Mogilevich made his first millions fleecing
fellow Jews. In the mid 1980s, when tens of thousands of Jewish
refugees were hurriedly immigrating to Israel and America,
Mogilevich made deals to buy their assets--rubles, furniture, and
art--cheaply, promising to exchange the goods for fair market value
and send refugees the proceeds in ''hard'' currency. Instead, he
sold their valuables and pocketed the considerable profits.
In the 1980s, he established a petroleum
import-export company, Arbat International, and registered it in
Alderney, one of the Channel Islands, which is known to be a tax
haven. One of his partners--with a quarter share of the company--was
Vyacheslav Ivankov, the legendary Russian criminal who in March 1992
became Godfather of the Russian mob in America. Ivankov was
convicted in 1996 of extorting two Russian-born Wall Street
stockbrokers. He now resides in Raybrook, a Federal prison in
upstate New York.
In early 1990, Mogilevich fled Moscow, as did many
other dons, to avoid the gangland wars that were then roiling the
capital. Mogilevich and his top henchmen settled in Israel, where
they received Israeli citizenship. He ''succeeded in building a
bridgehead in Israel'' and ''developing significant and influential
[political] ties,'' says an Israeli intelligence report.
Mogilevich is married to a Hungarian national,
Katalin Papp. That marriage allowed him to legally emigrate to
Budapest, Hungary, in 1991, where he began to build the foundations
of his global criminal empire. He bought a string of nightclubs in
Prague, Riga, and Kiev--called the ''Black and White Clubs''--that
has become one of the world's foremost centers of prostitution.
Monya Elson is a partner in the clubs, according to his own
admission and classified FBI documents. The Black and White Club in
Budapest became the hub of Mogilevich's operations. He quickly built
a highly structured criminal organization, in the mode of a
traditional American mafia family. Indeed, many of the
organization's 250 members are his relatives.
To the consternation of international law
enforcement officials, Mogilevich began to legally purchase much of
Hungary's arms industry. The legitimate companies he bought include:
Magnex 2000: a giant magnet manufacturer.
Digep General Machine Works: an artillery shell, mortar, and
fire equipment manufacturer, which was financed by a $3.8 million
loan from the London branch of Banque Francaise De L'orean.
Army Co-op: a mortar and anti-aircraft gun factory. Army Co-op
was established in 1991 by two Hungarian nationals, both in the
local arms industry, who were looking for a partner. Mogilevich has
bought 95 per cent of Army Co-op through another Channel Island
holding company, Arigon, Ltd., and also deals extensively with the
Ukraine, selling oil products to the Ukrainian railway
administration.
These transactions enabled the Mogilevich
organization to become a direct owner of the Hungarian armaments
industry. In 1994, he purchased a license enabling him to buy and
sell weapons. Now a legitimate armaments manufacturer, one of his
companies participated in at least one arms exhibition in the U.S.,
where it displayed mortars modified by Israel.
Like mob bosses everywhere, Mogilevich couldn't
sustain his empire without the help of corrupt police and
politicians. There is one documented example of a criminal associate
of Mogilevich mingling with American politicians. In March 1994,
Vahtang Ubiriya, one of Mogilevich's top lieutenants, was
photographed by the FBI at a tony Republican Party fundraiser in
Dallas, says an FBI report. Ubiriya, a high-ranking official in the
Ukrainian railway administration, has a prior conviction for bribery
in the Ukraine.
In Europe and Russia, the ''corruption of police
and public officials has been part of the Semion Mogilevich
Organization's modus operandi,'' says a classified FBI document.
''The corruptive influence of the Mogilevich organization apparently
extends to the Russian security system. During 1995, two colonels
from Department of the Russian Presidential Security Service . . .
traveled to Hungary under commercial cover to meet with Mogilevich .
. . seeking information for use in the Russian political campaign.''
An Israeli associate of Mogilevich met with the two colonels and
provided intelligence. Mogilevich also paid off a Russian judge to
secure Vyacheslav Ivankov's early release from a Siberian prison,
where he was doing hard time for robbery and torture, according to
U.S. court records and classified FBI documents.
On April 28, the German national television network
ZDF reported that the BND (the German intelligence agency) had
entered into a secret contract with Mogilevich to provide
information on the Russian mob. The charges were made by several
sources, including Pierre Delilez, a highly regarded Belgium police
investigator who specializes in Russian Organized Crime. Because of
this deal with the BND, police in Belgium, Germany, and Austria have
complained that it is now impossible to investigate the ''Brainy
Don.'' If the television report is accurate, one possible motive for
BND's deal, says a U.S. law enforcement expert on the Russian mob,
is that the Germans recently ''pulled their people out of Moscow
because they didn't like the level of cooperation they were getting
from the Russian authorities on the Russian mob.'' Gangsters, said
this source, often talk to intelligence agencies about their rivals.
Mogilevich's main activity in the U.S. appears to
be money laundering, says a classified FBI report. He has set up
companies in Los Angeles--FNJ Trade Management--and Newton,
Pennsylvania--YBM Magnex International--as well as dozens of shell
companies, which have received more than $30 million from Arigon,
Ltd., the center of Mogilevich's financial operations.
Last Friday, U.S. Attorney Robert Courtney, head of
the organized-crime strike force, led a a joint FBI, IRS, INS, and
Customs raid of YBM's offices in Newton. Cartons of documents were
seized, with Canadian and U.S. police citing the company's alleged
ties to Russian organized crime. YBM is publicly traded on the
Toronto Stock Exchange, and two days before Friday's raid, trading
in its stock was suspended by Canadian authorities.
The president and CEO of YBM is Jacob Bogatin, a
professor of physical metallurgy. In May 1996, he contacted the FBI
in Philadelphia to find out why the INS had denied visas to YBM
employees arriving from Hungary and the Ukraine. When he was
rebuffed, he had intermediaries step forward and pester the FBI. The
State Department has banned Mogilevich himself from obtaining a U.S.
visa because he's on the department's watch list of international
organized-crime figures. Nevertheless, he has surreptitiously
entered America under aliases and on visitor visas issued in Tel
Aviv to visit Elson and Ivankov.
Bogatin admitted during a telephone interview that
Mogilevich owns his company. When asked if he knew that numerous law
enforcement agencies here and abroad considered Mogilevich to be a
leader of one of the most ruthless organized-crime families in
recent times, Bogatin replied, ''We have an investors relations guy.
You want to talk with him about this stuff.'' He added that he had
read allegations in the Eastern European press that his boss was a
Mafia don, but didn't believe them. YBM vehemently denies that it is
connected to Russian organized crime or has engaged in any criminal
activities.
Bogatin is no stranger to the mob, however. His
brother, David, a top Russian crime figure who once served in North
Vietnam for the Soviets in an anti-aircraft unit, is now serving an
eight-year term in a New York State prison for a multimillion-dollar
gasoline tax fraud scheme. Just prior to trial, he had jumped bail,
fleeing to Poland. There he set up the first commercial banks, which
moved vast sums of money controlled by Russian wiseguys. (This after
handing over his mortgages for five pricey Trump Tower apartments to
a Genovese associate. The mortgages were liquidated and the funds
were moved through a mafia-controlled bank in Chelsea.) Eventually
he was caught and returned to the U.S. In the meantime, he lived
like royalty in a five-star Viennese hotel, surrounded by a
praetorian guard of 125 Polish parachutists, some of them bedecked
in shiny gold uniforms.
Mogilevich has not refrained from associating with
known killers in America, prime among them Elson and Ivankov. A
confidential informant told the FBI that Vladimir Berkovich, an L.A.
resident, is a chief lieutenant in Mogilevich's organization and has
arranged contract killings here, supplying the weapons and spiriting
the killers out of the country. The visas, says the report, were
obtained through the Palm Terrace restaurant, a watering hole for
Russian gangsters, which Berkovich owns. Berkovich told the
Voice that he is aware of the government's charges, and that
they are ''total bullshit.'' Although he has no criminal record in
the U.S., Berkovich's son, Oleg, was convicted in Los Angeles of
solicitation to commit murder on October 11, 1989. He was sentenced
to four years. Oleg's business card identified his employer as
Magnex, Ltd., a company owned by Mogilevich in Budapest. Oleg was
recently arrested in Hungary on unspecified charges but was
released.
Oleg's uncle, the colorful Lazar Berkovich, whose
last known address was New York City, arrived in the Big Apple after
having survived a shootout with Italian gangsters, says his brother
Vladimir. The FBI report claims that Lazar was head of Russian
criminal activities in Italy prior to his coming to America to
recuperate from his wounds, though Vladimir Bercovich denies that
Lazar was ever connected to the Russian mob.
Israeli and U.S. law enforcement sources agree that
the Red Mafia, though in existence for a mere six years, has become
one of the most formidable Russian organized-crime families in the
world. Strongest in the Ukraine, Hungary, the Czech Republic, and
the U.S., Mogilevich has increased his strength by forging ties with
other powerful Russian mob groups as well as with the Italian
Camorra. His reported ties to the German BND and expolice
officers in Hungary keep him informed of police efforts to penetrate
his organization. ''He also ingratiates himself with the police by
providing information on other [Russian crime] groups' activities,
thus appearing to be a cooperative good citizen,'' says a classfied
FBI report. This, along with his strong leadership qualities, his
acute financial skills, his talented and highly educated associates,
and his use of cutting-edge technology, has so far made the ''Brainy
Don'' impervious to prosecution.
