by Craig Unger
Even before the Russians arrived, however, the neighborhood had been in a steep decline. Heavy manufacturing had abandoned Brooklyn en masse. With the huge loss of jobs, more than three hundred thousand middle-class people had already fled the borough.2 Now, with the wave of émigrés, there were new meat markets, vegetable pushcarts, Russian bakeries, and specialty stores selling knishes, blintzes, herring, and borscht. Russian restaurants proliferated, their menus written only in Cyrillic.3 Storefronts under the elevated train on Brighton Beach Avenue offered marriage brokerages, immigration assistance, and other services to a largely Russian clientele.
There were late evenings that went on into the early morning hours at vast, gaudy supper club/cabarets like the Odessa and the National and, later, Café Tatiana and Rasputin, featuring loud, festive nine-course dinners with massive amounts of borscht, sturgeon, sable, beef Stroganoff, and iced bottles of Stolichnaya. There were dancing and garish, over-the-top Vegas-style floor shows, replete with gold lamé gowns and sequins, sequins, sequins. For music, there was a mix of techno, disco, and Russian songs, including those by the renowned Iosif Kobzon, aka the Russian Sinatra, who happened to be notorious because of his Mafia ties. If you were lucky, he’d be there live, in person, crooning “Strangers in the Night.”
In some quarters, Brighton Beach became known as Little Odessa, after the Ukrainian city on the Black Sea. And criminals were not the only dubious characters among the new émigrés. There were also spies. According to Oleg Kalugin, the former head of counterintelligence for the KGB, at least two hundred Jews from Leningrad (now St. Petersburg) alone went to the US, and many of them promised to report back to the KGB once they were settled. The KGB’s goal was to place them in sensitive positions in the American government or the military-industrial complex.4
Once these agents were installed, many of them, including Kalugin himself, began to recruit more spies for the Soviets. “Brighton Beach was one of the places I would look for potential sources of information,” Kalugin told me.5 “I had one guy who I used to meet late at night at Rasputin. That’s where I used to go. I would look around, pick up some people, and check their backgrounds with Moscow to see if they were good enough that I should promote a relationship with them.”
Even though Brighton Beach was Fred Trump’s territory, Donald began developing his own contacts among the new Russian émigrés, including a man named Semyon Kislin. When it came to equipping his newly renovated Grand Hyatt Hotel, née the Commodore, with TV sets in the late seventies, Trump reached out to Kislin to buy a few hundred on credit. “I gave him [Trump] 30 days, and in exactly 30 days he paid me back,” said Kislin.* 6
For Trump, it was the beginning of a long association, and the first of many relationships to people who were allegedly tied to Russian mafiosi.7 Kislin and his partner, Temur Sepiashvili, aka Tamir Sapir,8 both of whom allegedly had mob ties, started an electronics store that was well-known among Soviet citizens9 in the United States and, according to the New York Times, became a wholesale outlet from which Soviet diplomats, KGB agents, and Politburo members bought their electronic equipment.10
Another émigré of note was Michael Sheferovsky (aka Michael Sheferofsky and Mikhail Sater), who had been a major player in the black market with the mob in Moscow until he moved to Baltimore with his family in the early seventies. In 1977, he moved to Brighton Beach with his wife and kids, and worked with Ernest “Butch” Montevecchi, a soldier in the Genovese crime gang,11 which had begun to forge a partnership with the newly arrived Russians. Sheferovsky’s specialty was extortion: his targets included restaurants, food stores, and a medical clinic in Brighton Beach.12
Sheferovsky had a son, Felix (who changed his last name to Sater), who went into the family business but had grand dreams for the future that led to a working relationship more than two decades later with Fred’s son Donald that was full of intrigue.
In addition, petitioners in a court case regarding Felix referred to Sheferovsky as “a Mogilevich crime syndicate boss.”13 That last name—Mogilevich—may be unfamiliar to many readers, as it is to the vast majority of Americans. For crime buffs, however, the name is all too recognizable as a reference to Semion Mogilevich, “the boss of bosses” of the Russian Mafia, as the FBI has called him, a man who graced the FBI’s “Ten Most Wanted” list for many years—and a man who surreptitiously played an extraordinarily powerful role in the ascent of Donald Trump.
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To the ordinary working people of Brighton Beach, there were plenty of signs that the new arrivals were not always on the right side of the law. On the back streets of adjacent Manhattan Beach, it was not unusual to see two adjoining houses knocked down and replaced by a multimillion-dollar McMansion replete with elaborate landscaping, marble finishes, and extravagant furniture. Older people on food stamps and social security had to make way for rich young Russians driving Lexuses, BMWs, even Rolls-Royces, loaded with suitcases full of money.
More ominously, many of the new Russians sported foreboding gulag tattoos. Forged passports, social security cards, or driver’s licenses could be had easily—for a price. Taxi drivers and émigrés in other modestly paid fields suddenly emerged as billionaires, with no real explanation. Rasputin, the gaudy restaurant/nightclub on Coney Island Avenue, boasted an amenity that was certain to raise questions about security with even the most hardened Manhattan restaurant patron—toilet stalls with bulletproof doors.14 Before long, virtually every business in Brighton Beach was either connected to the mob or had to weigh carefully the danger of not paying them off.
One of the first journalists to penetrate this new outlaw subculture was Robert I. Friedman, who chronicled the lurid Brighton Beach underworld of tattooed gangsters engaged in money laundering, extortion, prostitution, drugs, and murder as it evolved into a multibillion-dollar international criminal enterprise. Today, for reasons he could not possibly have predicted, the world portrayed in his book Red Mafiya has more resonance than ever because it presents a richly textured picture of the Russian mobsters—money launderers, con men, extortionists, and murderers—who initiated ties to Donald J. Trump.
The Russian Mafia’s exotic and colorful history dates back more than three hundred years to the time of the tsars, when Russia’s toughest hard-core criminals first banded together15 through imperial Russia’s vast network of gulags* and gave birth to a special breed of elite criminal known as vory v zakone, which is variously translated as “thieves professing the code” or the more widely used “thieves-in-law.”*
Though sometimes compared to the “made men” or “godfathers” of the Italian Mafia, the vory are a uniquely Russian product of Soviet16 reality. They grew out of the Stalinist era, when the gulags were flooded with political prisoners and criminals, giving birth to a clandestine subculture, with its own code of ethics and hierarchy, that ruled the criminal underworld within the prison camps and governed the darkest sectors of Soviet life beyond the reach of the KGB.17
The vory were governed by a strict code that forbade working a legitimate job, paying taxes, fighting in the army, cooperating with authorities, or participating in officially sanctioned political activities.18 A criminal caste that swore allegiance to its own brand of criminal ideals, the vory subsisted on petty theft and black-market profiteering when not in jail. They developed their own secret language that officials were unable to figure out, their own slang, their own nicknames. They set up a communal fund, called “obschak,” to bribe authorities, finance criminal business enterprises, and help fellow criminals.
The story of their lives was written on their bodies in tattoos. This was a subculture that fetishized brutality and it was spelled out through images that signified the exploits, rank, occupation, and status of the bearer. A giant eagle with huge, menacing talons tattooed on someone’s chest proclaimed his status as vor. Stars tattooed on the knees meant the bearer kneeled before no one. On the shoulders, stars signified a man of standing—perhaps a captain in
the vory v zakone.* 19
In the thirties, their numbers increased by leaps and bounds thanks to Joseph Stalin’s Great Purge, which resulted in millions of people being sent to gulags. World War II, however, marked a new era for the Bratva. Thousands of thieves joined the Soviet Army, an apparent violation of the Thieves’ Code, so a new breed of criminal emerged with an “every man for himself” attitude that meant they could occasionally cooperate with the government if necessary.
Then, when Stalin died in 1952, as many as eight million prisoners were released from the gulags. As the Cold War continued, thievery in Russia became so deeply institutionalized that corruption effectively became the business of the state. Illegal small businesses proliferated everywhere in the Soviet Union. Then the Bratva began to migrate to the West.
The first great boss of the Russian Mafia in America was Evsei Agron, a vor v zakone from Leningrad via the gulags, who arrived in 1975. An extortionist, black marketer, and killer,20 Agron had served seven years for murder in the Soviet prisons, and had run gambling and prostitution rackets in Germany,21 before coming to New York.22 Though he declared himself to be a jeweler on his immigration papers, upon his arrival Agron began to put together a rudimentary criminal organization with about twenty people.23 He worked out of El Caribe Country Club, a banquet hall and restaurant in Brooklyn in the name of Dr. Morton Levine, who shared ownership of it with his relatives, including his young nephew Michael D. Cohen, who later became Donald Trump’s attorney both in business and as president. (Dr. Levine was never charged with any wrongdoing.)24
Agron, whose short, grandfatherly appearance belied his rapacious nature, ran a lucrative extortion ring that terrorized Russian émigré doctors, lawyers, and shopkeepers,25 netting him about $50,000 a week.26 Known for his brutality, he carried a cattle prod under his arm as a highly effective means of persuading debtors to pony up.27 Among his many infamous exploits, he extorted $15,000 from a man by threatening to murder his daughter at her wedding.28
Overseeing a motley crew of con men, thieves, extortionists, and swindlers, Agron was often accompanied by the ferocious Nayfeld brothers, Benjamin and Boris. According to Red Mafiya, the former, a steroid-enhanced ex–Olympic weight lifter who boasted a twenty-two-inch neck, once killed a Jewish teenager in a local parking lot “by picking him up like a ragdoll with one hand and plunging a knife into his heart with the other.”* 29
Agron also relied on Emile Puzyretsky as another enforcer. Known as the Technicolor Killer because of his colorful tattoos, “Puzyretsky had a great contempt for life. He killed his enemies with force, fury, and no mercy,” a Russian militia colonel told Friedman.30
Locals “were scared shitless of [Agron and his men],” said FBI agent William Moschella.31
And so, having put fear in the hearts of his Brighton Beach supplicants, Evsei Agron adopted the life of a Mafia don, holding court in local restaurants, making collection rounds in his chauffeured limousine, and pausing on street corners to dispense favors. Unfortunately, Agron performed his daily rituals with the kind of phony theatrics that convinced locals that for Agron, being godfather was merely an act. “He would go round in a car with two big guys, they would open the door for him,” said one Brighton Beach resident. “Everything was staged.”32
Worse, Agron had failed to establish a code of honor. He had done little to foster the sense that he was a legitimate authority to resolve disputes or solve problems. In the end, he was nothing more than a ruthless neighborhood extortionist who ran a gang of thugs that terrorized the émigré community.33 By the eighties, he had angered so many people that it was simply a matter of time before one of them struck back.
Finally, on the morning of May 4, 1985, after he had already survived two assassination attempts, Agron pushed the elevator button in his apartment building to go downstairs, only to be met by a man in the hallway, who shot him twice in the temple.34
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Soon afterward, Marat Balagula, Agron’s successor, moved into his former office in El Caribe Country Club. Balagula was widely suspected of having ordered the hit on Agron35 but was never charged.
Agron’s stewardship of the Brighton Beach Mafia had been all about thuggery and torture and physical violence, but Balagula was different. He had moved to the United States in 1977 and begun working as a textile cutter in upper Manhattan for $3.50 an hour.36 But just a year later, he had won control over fourteen gas stations, formed two fuel dealerships, and begun buying gasoline from the Nayfeld brothers—all of which enabled him to team up with David Bogatin on the Red Daisy fuel tax scam.37
Balagula bought the Odessa Restaurant, a Russian/Ukrainian cabaret that was said to be Brighton Beach’s answer to the Moulin Rouge. The Odessa served immense portions of Russian delicacies, accompanied by background music from the Motherland by Iosif Kobzon.
Late at night, when the entertainers had finished, the cabaret/disco upstairs transformed itself into a people’s court of sorts, in which Russian mobsters adjudicated local disputes, in the tradition of the Russian Mafia, with Balagula and his goons taking a piece of the action.38
When it came to recreational activities that were obligatory for mobsters, Balagula held all-night sex and drug orgies on lavish yachts circling Manhattan. He was chauffeured all over town in a white stretch limo with a stocked bar. He tried to buy an island off the coast of South Africa to set up a bank for money laundering.39
But in the end, Balagula, unlike Agron, was a modern don. Intellectuals and political power fascinated him. For the first time, the Russian Mafia had a vision of taking the organizatsiya into the world of white-collar crime. From the start, Balagula had cultivated ties with powerful figures in the legitimate world. Even before he came to the United States, on his thirtieth birthday, he had thrown himself an extravagant bash at his dacha in the Crimea. It was attended by none other than Mikhail Gorbachev, then a regional Communist Party boss.* 40
Balagula sought out doctors, lawyers, engineers, and professionals of all stripes. He was a businessman in the sense that he realized if the Russians were to be in the business of skimming taxes from gas sales, they might as well have a vertically integrated operation with oceangoing tankers, terminals, a fleet of gasoline trucks, and scores of gas stations, all of which could be run by émigrés from the Soviet Union. Balagula was even able to bring on as a client a midsize $160-million-a-year company on Long Island called Power Test to buy its bootleg gas. As a result, the Bratva was on its way to creating a multibillion-dollar-a-year criminal enterprise.41
The gas tax scam that the FBI called Operation Red Daisy was so successful that over time it spread beyond the New York–New Jersey market to Pennsylvania, Ohio, Texas, California, Georgia, and Florida.42 Still, there were major differences between the Italians and the Russians. “When the Russians arrived, they came from a world where they didn’t have toilets,” says author (Wiseguy) and screenwriter (Goodfellas, Casino, etc.) Nicholas Pileggi, who covered the Italian mob for New York magazine in the eighties. “But they knew calculus. They had no deodorants. But they had an education. All of this made them beautifully suited to do financial frauds like the gas tax scam, Medicaid fraud, and pump-and-dump stock scams.”43
Having come of age in a country that had no investor class and no Wall Street, Russians took their considerable financial acumen and devoted it to crime. Whether it was tax distribution, Medicaid fraud, pump-and-dump stock scams, auto insurance fraud, tax fraud, or money laundering, if there was a loophole or a systemic weakness in the American governmental or corporate infrastructure, the Russians would seek it out and find it. Balagula’s gang pursued forgery and counterfeiting as well.
Nevertheless, they had the advantage of being off the FBI’s radar screen, relatively speaking. “At the time there were as many as three hundred FBI agents in New York assigned to each of the Five Families of the Italian Mafia,” says Pileggi. “Fifteen hundred in all. The FBI had almost no one on the Russians. For one thing
, they didn’t speak the language.”
Plus, Pileggi says, there were political reasons not to take on the Russians. “They turned a blind eye to it because so many of the Russians were Jewish. They didn’t want to make problems for legitimate Jews in Brooklyn, and the overwhelming majority was legitimate. If they went off against the gangsters, they were afraid it would hurt Soviet Jewry, so there was no real effort.”
From the beginning, the Russians didn’t give a moment’s thought to the FBI. “They feel we are pussycats,” said one New York detective who was monitoring them, “and the United States is one big candy store.”44
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With the advent of Ronald Reagan’s presidency in the eighties, the center of gravity in America shifted dramatically away from its post-Watergate hangover. Thanks to Reagan’s sunny optimism, every day, as if by edict, was a new morning not just in America, but in New York City as well. New York’s fiscal crisis receded to the rearview mirror. Wall Street was booming. The Dow soared. Men in suits donned power ties and red suspenders and reemerged as Masters of the Universe. Junk bonds and leveraged buyouts became sexy. The Predators’ Ball, Barbarians at the Gate, Liar’s Poker, and The Bonfire of the Vanities dominated the bestseller list by chronicling a new world of stupendous wealth, glamour, and conspicuous consumption, and how it came to be. Manhattan, Inc., a now-defunct glossy monthly magazine, deified the big swinging dicks of Wall Street as the new rock stars of the era.
Suddenly, “greed—for lack of a better word—[was] good,” as Michael Douglas’s Gordon Gekko put it in Wall Street. Greed was right. Greed worked. Greed clarified.
