The Red Syndrome (9 page)

Boris was looking for a local contact in order to get himself and his
$9,950 out of the country. But how? You can't just ask someone how you
smuggle foreign currency out of the Soviet Union without ending up at
the police station or in a mental asylum, or both - without the money.

Boris told Uolodia that he wanted to meet people with business connections in the West. The solution came faster than Boris had anticipated. One night Uolodia, who spent his days drinking and nights
ambushing careless tourists, robbed a friendly drunk. Counting his take,
he found $20 in singles, 34 German marks, 123 Swiss francs, and 3,450
rubles. The victim was Russian; of this, Uolodia had no doubt. Therefore
the only explanation for the amount of foreign currency was the victim's
profession. He must be a moneychanger.

"Take me to him," ordered Boris. "I need to talk to him."

"Are you crazy?" asked Uolodia while gulping another shot straight from
the bottle. "I'm not going to look for him. He'll call the cops."

"Don't worry," said Boris, "he won't turn you in. What is he going to tell
the police? That he was carrying foreign currency in Moscow?"

Volodia took Boris to the street corner where he had first seen Vladimir
the moneychanger. Boris didn't see him in the street, so he returned the
next day and the next; still no Vladimir. Boris was ready to give up when
he saw a person fitting Vladimir's description standing on the street
corner. He signaled Volodia to beat it.

"Are you Vladimir?" Boris asked as he approached.

The man looked at him full of suspicion. "Who wants to know?"

Boris ignored the question. "I need to buy some Valuta," he said
abruptly.

"Why do you think I can help you?"

"I know. And that's enough." Boris grabbed him by the throat. "How
long would it take to transfer out someone with foreign money to
Western Europe?"

"How much?"

"Almost ten thousand dollars."

"Two weeks," gasped Vladimir. He wasn't about to be hit by another
stranger, definitely not one twice his size with thrice his temper.

Boris tightened his grip. "Remember me; I'll be back."

Boris got what he wanted. Two weeks later, he met Vladimir at the train
station. They sat on a wooden bench in the corner and Vladimir said,
"Take this note to Bogdashko Kabanov in East Berlin. He will smuggle
you to West Berlin, where you'll get nine thousand in cash. Now give me
the money."

Boris looked at him in disbelief. "You mean I'm going to give you
almost ten grand in cash in return for a piece of paper hoping that some
jerk a thousand miles away will give me money for it? Are you crazy, or
do you think I am?"

Vladimir was shaken. "Please don't shout," he said in a low voice,
quickly looking around to see if anyone else was listening. "This place is
full of informers. Please understand that this is how these money things
are done. Read the note."

Boris looked at the handwritten note.

My dear Bogdashko,

I take this opportunity that my childhood friend Boris Zhukov is
traveling to Berlin to visit his family to send you this short letter.
Everything here is normal, if you can call our mother's bad health
as such. The doctor said she needs to take 9,000 mg of vitamin C
over a period of one month in small doses. That is a large quantity
that we cannot find here. Do you think you can buy the vitamins in
Berlin and give them to Boris? He'll bring it over to us when he
returns home. Other than that, we all miss you.

Your brother, Vladimir

"What do I do with it?" asked Boris. `And who is Bogdashko Kabanov?"

"Everything will be taken care of," Vladimir reassured him. "Just go to this
address in the Nikolai Viertel district of East Berlin. Look for Bogdashko
Kabanov and give him this note. He will smuggle you through the Berlin
Wall past the East German guards into the American zone of West Berlin.
He will give you further instructions as to where to wait in West Berlin for
a contact who will give you nine thousand dollars in small bills."

"And the rest?" asked Boris.

"The rest is spent on expenses. You don't expect our comrades in Berlin
to work for free, as I do?"

Boris grabbed him by his collar, almost strangling the already trembling
Vladimir. "If anything goes wrong, you know what's going to happen to
you?"

"Yes," said Vladimir in a choked voice, trying to ease himself from
Boris's grip.

"No, you don't," said Boris. "You'll die slowly at my hands. I'll make you
suffer until you beg to die. Do you understand that?"

Vladimir managed to nod.

"How do I get to East Berlin?"

"By train, but get your travel permit first. Tell them you're going to visit
a sick relative. You must build a credible story, because they might do a
check on you."

"I'll give you the money after I receive the travel permit," Boris said as he
got up and left Vladimir behind, still slightly panting and grasping for air.

Boris went back to Minsk, received his permit to travel to East Berlin,
and within five days was in West Berlin with his money. In Moscow,
Vladimir received his share via messenger. The year was 1965.

Coming to the West was easy; reaching the United States was much
harder. His visa applications were denied twice, so Boris started planting
roots in West Berlin. First he organized a small group of followers, all
Russians who offered "protection" to expat Russian shopkeepers and businessmen. Those who refused to participate suffered not-so-mysterious
fires in their homes and businesses, not to mention broken teeth and
bones. Next, Boris developed a relocation service for people and their
money from the communist countries to the West. True, sometimes only
the people managed to cross the border and not their money, or at least
not the bulk of it. "Lost in transit" was the explanation Boris gave.
Another lucrative area was the smuggling of young Russian women to
West Berlin for promised jobs as models or nannies. But when they
arrived, a completely different career was waiting for them: serving Boris's
male clients in his newly opened brothels and nightclubs.

Boris's cash reserve was quickly growing, and he was looking for new
investments. Getting into banking was his next move. Of course, his definition of banking was different from a civilian's. Sure, he made loans, but
the interest rate was just a little higher: io percent a month, sometimes
more. When the borrower couldn't pay, Boris took his business and, on
some occasions, his life. By the early 19gos Boris was very large, both in
size and fortune.

In Iggi the Soviet Union collapsed and the United States relaxed its
immigration policy regarding Russian immigrants. Boris didn't risk
another rejection of his visa application based on his own merits. He married a young woman who had already received a refugee green card,
enabling him to become a permanent U.S. resident. Soon they both
moved to New York. The rest was history, or it would be soon.

y task force team met for the first time the day after Hodson's pep
talk. We sat around a rectangular table at a small, windowless
office-turned-conference-room. In addition to the table, chairs,
and two metal file cabinets, there was a small projector used for visual
presentations, and a coffeemaker. We each had a yellow legal pad and
sharpened pencils.

"Okay," said the IRS agent. "Let's get to know each other. I'm Peter
Vasquez. My area is investigating criminal tax evasion." He was a
medium-built Hispanic with thick black hair. He had a wedding band on
his finger, and a diver's watch. He struck me as a straightforward guy.

"I'm Dan Gordon, Department of Justice. I'm the international moneylaundering guy."

"I'm Special Agent Laura Higgins, of Homeland Security." She paused
and added, "I'm new; I volunteered for the task force as my first field
assignment. So I guess you'll have to bear with me."

Oh, I could bear with her, I thought. I gave her an appreciative glance;
she caught it and lowered her eyes. I was embarrassed.

"Where did you work before coming here?" asked Vasquez.

"U.S. Customs in Brooklyn," she said.

Jim Lion introduced himself, adding, "What do we do next?"

"Let's caucus," said Vasquez. "We have a case of suspected criminal
activity involving a small New York bank with money laundered through
a maze of six countries. Do we know more?"

"Yes." I said. "Well, not exactly. We have suspicions as to who is behind
it."

"Frankly, I'm missing something," said Jim Lion. "Since when does the
government convene a task force because of a sixty-million-dollar transfer?
Where is the red flag thatd trigger a money-laundering charge?"

"The bank failed to send in some reports?" suggested Vasquez with a
straight face, although it was clear he was being sardonic.

"And for that we need forty people?" asked Jim.

"Since I was helping to stir up that commotion," I said, "I must tell you
that I support the suspicion that something bigger is going on."

"Like what?" asked Laura and Jim at the same time.

"That's what they expect us to investigate, but this case has several
characteristics we usually don't see in simple money-laundering cases. We
know that a total of sixty million dollars in several installments went on
a whirlwind tour around the world, ending up in Eagle Bank as a deposit
purportedly from an Australian company. The bank never reported the
transaction as suspicious."

"Was it an oversight or deliberate?" asked Laura.

"I have no idea," I answered. "The regulatory scrutiny of the bank is
being done by another team of the task force. Our job is to discover the
source of the money, discover whether any U.S. laws were broken, and if
so, to identify suspects. The facts we already know indicate that we should
investigate outside the United States. That's where it all began. Suspicious
activity was the trigger."

"How could a banker know there's something wrong with the client or
the transaction? Does the government expect the bank to look into every
transaction?" Laura asked again.

"No, of course not," said Vasquez. "But sometimes you'd really need to
be blind not to see a problem. In legalese it's called `willful blindness."'

"Do we know for a fact that the failure of the bank to file the report
was conscious?" asked Jim. "The violation is so outrageous that no sane
banker would risk it. There must be some other reason."

"Such as?"

"Such as an internal conflict that stopped the report from being filed,
or someone on the inside with a different agenda."

"It's possible," said Vasquez. "But thus far, these are speculations. I'm
sure we'll find out more down the road."

"Were the Australian police contacted?" asked Laura.

"Yes," I responded, "thanks to Jim." I indicated him with my hand.

Jim nodded. "I was in touch with the Australian Central Crime Intelligence Bureau in Sydney and with AUSTRAC, their financial intelligence
agency. They have recently signed a cooperation agreement with
FinCEN and this case was a good opportunity to launch that agreement."