In the Courts

Restitution Bid Fails in Wire Fraud Involving Kyrgyzstan

In a wire fraud case against a one-time investment banker connected to a now-deposed regime in the central Asian nation of Kyrgyzstan, a New York judge in late September ruled that the prosecution's inability to identify exactly who the money was stolen from has made the task of restitution impossible.

Noting the “highly unusual circumstances,” Eastern District Judge Allyne Ross declined to enter a restitution order in a $6 million fraud case against Eugene Gourevitch, which involves transactions through various accounts, all originating from a corporate account whose ownership the government could not determine. U.S. v. Gourevitch, 12-cr-758.

Gourevitch, 37, is serving a sentence of at least five years in a federal prison.

Although the stolen funds are subject to a preliminary forfeiture order in the United States, Kyrgyzstan is arguing in a petition before Ross that it has the superior interest in the money, which it claims is a portion of hundreds of millions of dollars that were looted by the former regime.

After the so-called Tulip Revolution of 2005, Kurmanbek Bakiyev ascended to power as president of Kyrgyzstan. At the time, Gourevitch, an American citizen, was trying to bring Western-style banking to the country when he advised the president's son, Maxsim Bakiyev, in 2008. Ross' decision and court papers say Gourevitch stole the money from John Doe No. 1. Gourevitch's attorney, Marc Agnifilo, of counsel at Brafman & Associates, said Maxsim Bakiyev is John Doe No. 1.

Maxsim Bakiyev permitted Gourevitch to pursue his investment banking business on the condition that Bakiyev received a large portion of the profits. But the Bakiyev regime was ousted in a violent 2010 coup. According to a transcript of sentencing proceedings, as the coup unfolded, Gourevitch at one point was whispering into a phone telling Agnifilo he feared for his life. Gourevitch ended up in Belarus, where he was working to pay off the $2 million debt that Bakiyev said it had cost him to bring Gourevitch to Belarus. Maxsim Bakiyev has been convicted in absentia by the current Kyrgyzstan government for various crimes.

Gourevitch paid down the debt through the profits he garnered when managing Maxsim Bakiyev's money. As he managed the funds from Belarus, he was also cooperating with U.S. authorities, who were looking into Bakiyev's dealings, as well as Italian authorities who were examining a tax fraud matter unrelated to Bakiyev.

Gourevitch told Bakiyev that he had the opportunity to buy initial public offerings of Facebook shares at prices he thought at the time were below-market. Gourevitch paid a friend to set up a company called Konnektix Ventures, which, in turn, set up a trading account and banking account.

Gourevitch did not follow through on the Facebook shares and instead kept the money. His conduct resulted in the Bakiyev probe being dismissed, Agnifilo said at the sentencing. After cooperating in the Italian case and being imprisoned for approximately 10 months in that matter, Gourevitch was sent to the United States and pleaded guilty to wire fraud in February before Ross.

Prior to sentencing, the probation department recommended that, pursuant to the Mandatory Victim Restitution Act, restitution had to be made to Bakiyev.

But the government, in a filing under seal just before sentencing, raised factual questions about remitting the money to Bakiyev, noting the funds originated from a corporate account whose ownership could not be determined. Ross sentenced Gourevitch in June to a 63-month term, but deferred the matter of restitution for 90 days to discover his victim's identity. In September, the government said it was taking the position that the victim's identity could not be determined.

Ross agreed, writing there was “ample basis to conclude that the ownership of the corporate account from which John Doe No. 1 transferred $6 million to Gourevitch is undetermined.”

On Sept. 16, the Kyrgyz Republic filed a petition to adjudicate the validity of its interest in the funds “unlawfully acquired by defendant Eugene Gourevitch.” The bid is part of a larger effort to claw back money that was “plundered and stolen” by Gourevitch and Bakiyev. ' Andrew Keshner, New York Law Journal

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Restitution Bid Fails in Wire Fraud Involving Kyrgyzstan

In a wire fraud case against a one-time investment banker connected to a now-deposed regime in the central Asian nation of Kyrgyzstan, a New York judge in late September ruled that the prosecution's inability to identify exactly who the money was stolen from has made the task of restitution impossible.

Noting the “highly unusual circumstances,” Eastern District Judge Allyne Ross declined to enter a restitution order in a $6 million fraud case against Eugene Gourevitch, which involves transactions through various accounts, all originating from a corporate account whose ownership the government could not determine. U.S. v. Gourevitch, 12-cr-758.

Gourevitch, 37, is serving a sentence of at least five years in a federal prison.

Although the stolen funds are subject to a preliminary forfeiture order in the United States, Kyrgyzstan is arguing in a petition before Ross that it has the superior interest in the money, which it claims is a portion of hundreds of millions of dollars that were looted by the former regime.

After the so-called Tulip Revolution of 2005, Kurmanbek Bakiyev ascended to power as president of Kyrgyzstan. At the time, Gourevitch, an American citizen, was trying to bring Western-style banking to the country when he advised the president's son, Maxsim Bakiyev, in 2008. Ross' decision and court papers say Gourevitch stole the money from John Doe No. 1. Gourevitch's attorney, Marc Agnifilo, of counsel at Brafman & Associates, said Maxsim Bakiyev is John Doe No. 1.

Maxsim Bakiyev permitted Gourevitch to pursue his investment banking business on the condition that Bakiyev received a large portion of the profits. But the Bakiyev regime was ousted in a violent 2010 coup. According to a transcript of sentencing proceedings, as the coup unfolded, Gourevitch at one point was whispering into a phone telling Agnifilo he feared for his life. Gourevitch ended up in Belarus, where he was working to pay off the $2 million debt that Bakiyev said it had cost him to bring Gourevitch to Belarus. Maxsim Bakiyev has been convicted in absentia by the current Kyrgyzstan government for various crimes.

Gourevitch paid down the debt through the profits he garnered when managing Maxsim Bakiyev's money. As he managed the funds from Belarus, he was also cooperating with U.S. authorities, who were looking into Bakiyev's dealings, as well as Italian authorities who were examining a tax fraud matter unrelated to Bakiyev.

Gourevitch told Bakiyev that he had the opportunity to buy initial public offerings of Facebook shares at prices he thought at the time were below-market. Gourevitch paid a friend to set up a company called Konnektix Ventures, which, in turn, set up a trading account and banking account.

Gourevitch did not follow through on the Facebook shares and instead kept the money. His conduct resulted in the Bakiyev probe being dismissed, Agnifilo said at the sentencing. After cooperating in the Italian case and being imprisoned for approximately 10 months in that matter, Gourevitch was sent to the United States and pleaded guilty to wire fraud in February before Ross.

Prior to sentencing, the probation department recommended that, pursuant to the Mandatory Victim Restitution Act, restitution had to be made to Bakiyev.

But the government, in a filing under seal just before sentencing, raised factual questions about remitting the money to Bakiyev, noting the funds originated from a corporate account whose ownership could not be determined. Ross sentenced Gourevitch in June to a 63-month term, but deferred the matter of restitution for 90 days to discover his victim's identity. In September, the government said it was taking the position that the victim's identity could not be determined.

Ross agreed, writing there was “ample basis to conclude that the ownership of the corporate account from which John Doe No. 1 transferred $6 million to Gourevitch is undetermined.”

On Sept. 16, the Kyrgyz Republic filed a petition to adjudicate the validity of its interest in the funds “unlawfully acquired by defendant Eugene Gourevitch.” The bid is part of a larger effort to claw back money that was “plundered and stolen” by Gourevitch and Bakiyev. ' Andrew Keshner, New York Law Journal

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