*
Sergei Tarasov had come a long way since his student days in Moscow, where he, like other students, had joined Komsomol, the Communist Youth League. As Mikhail Gorbachev implemented glasnost and perestroika, Tarasov graduated from Moscow’s Institute of Economics and Finance, left for the US, and returned four years latter with an excellent command of English.
After entering Mosbank his suspicions were soon confirmed, that is say the bank was nothing more than a façade of business respectability for Dermirshian’s criminal organisation. Undaunted and realising he had nothing to lose if the experience proved unfruitful he persevered. In the nineties Russia resembled the Wild West, an almost lawless business society in which Tarasov, with or without the blessings of the bank’s Mafiyosa shareholders, set about implementing the changes that were to transform Mosbank into a mainstream banking institution.
Mosbank became InterBank as its transition to respectability was powered by the explosive growth of Russian real estate and the privatisation of state owned property. Boris Yeltsin’s post-Soviet government carried out radical market reforms, regrettably with almost no legal structure to regulate business and finance.
Unprincipled businessmen profited from the ambient chaos by gouging prodigious margins and commissions from the export of Russian commodities. These were bought at below cost price from desperate freshly privatised combinats struggling to avoid collapse, with the connivance of their unscrupulous managers, and resold below market value to compensate for substandard quality.
Vast sums of money were diverted from payments to offshore accounts and shell companies set up by Mosbank and invested in super-prime property in London and other European capitals.
Nascent oligarchs lacking international business experience were guided by Tarasov, whose business and banking skills not only made them rich, but enabled the banker to build his own private mountain of wealth hidden offshore behind a web of accounts and companies.
In the eyes of the then existing Russian legal system none of this was strictly illegal and so called commissions were common practice in commodity trading. The export of oil, gas, minerals, fertilisers and wood products to India, China and most of the developing world boomed, third world countries avidly bought Russian commodities below world market prices with no questions asked.
InterBank loaned money to the almost bankrupt Yeltsin government, accepting state owned properties in Moscow and St Petersburg as collateral. The government foreseeable defaulted on the loans, and according to the covenants the bank automatically became owner of the properties.
Shell companies financed by the bank then bought the properties, the loans were covered, and the circle closed. Tarasov then went about developing the seriously run-down Soviet period properties: building shopping malls, offices and apartments, enabling the bank to build a vast real estate empire.
Under Yeltsin, state structures were broken-up, even revered institutions like the Bolshoi, which represented the essence of Russia’s cultural heritage, had to adapt as state funds shrivelled and the economy disintegrated. Such conditions attracted organised crime syndicates run by gangsters like Dermirshian and nearly a decade passed before the emergence of ‘clean’ oligarchs like Tarasov.
During those desperate years, failing state businesses suffered the same fate as the Yeltsin government with banks foreclosing on them and seizing properties in every major city. The subsequent redevelopment of these properties generated huge profits.
Those who tried to expose the system, like the unfortunate Vladimir Petukhov, who naïvely appealed to the Kremlin for help, ended up dead, shot down on the street in what the police described as a contract killing.
Contract killings became as common as road deaths: bankers, businessmen, casino and night club owners, not forgetting over ambitious or would be politicians, were assassinated. The favoured method was overkill, using of a whole range of imaginative techniques: bazookas, grenades, poison, defenestration and of course a burst from a Kalashnikov. Dermirshian’s Bratva hitmen were experts in all these deadly techniques.
Tarasov’s steered the bank away from its Mafiyosa beginnings, creating an image of respectability, enforced by the Ministry of the Interior, an arrangement that left its founders as passive, though very rich, shareholders in the prosperous institution.
At the outset Putin promised to clamp down on the oligarchs, however, his entourage composed of former KGB friends wanted part of the action. Thus an arrangement was made which permitted those who played along with the system to continue, whilst those who refused were dispossessed of their wealth, thrown into prison, or if lucky allowed to flee overseas before the vice closed.
Tarasov had no desire to end up like Khodorkovsky, who had either overestimated his power, imagined he was immune, or left it too late for an honourable exit. Whatever the case, a secret-police commando unit stormed his private jet at the crack of dawn during a refuelling stop in Siberia and grabbed the hapless oligarch.
Accused of fraud and tax evasion, Khodorkovsky was judged, found guilty and sentenced to nine years imprisonment in a labour camp on the Siberian steppe, where winter temperatures fell to minus thirty degrees centigrade.
Tarasov by refusing the Kremlin’s demands, had either overplayed his hand, or deliberately provoked Putin as a ploy to escape the suffocating court of the autocrat. Whatever the reason he found himself in fear for his life and his families safety.
Unlike Khodorkovsky whose wealth was bound to oil and gas under the permafrost, a large part of Tarasov’s wealth was beyond the reach of the Kremlin. His assets were owned by companies in London, Paris, Zurich, New York, or in one or more of a string of tax havens that spanned the Caribbean.
Cornucopia Page 57
