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"Banker tells of kidnap by russian mafia"

The Times

September 6, 1999

By David Lister and James Bone

BY THE time he was 25 he was one of the most important figures in post-Communist Russia . He had made a fortune after setting up one of Russia 's first commercial banks and lived with his wife in a 50-acre residence that was once the home of Mikhail Gorbachev.

But in 1992, while on a business trip to Hungary , Alexandre Konanykhine, then chairman of the All- Russian Exchange Bank, was kidnapped by members of the "Solnetsevo" mafia group controlled by Semyon Mogilevich - the gangster allegedly linked to the laundering of billions of dollars through the Bank of New York. Mr Mogilevich was traced to Budapest last week, The Sunday Times reported.

Mr Konanykhine said: "My wife and I were in a restaurant in Budapest when we were approached by two people who introduced themselves as officers of the Hungarian Ministry of Security. They said the ministry was working on an investigation and I was needed as a witness." Speaking from California , he said: "They took me to a building on the outskirts of Budapest which was not the Ministry of Security. They led me into an apartment which had some criminal characters in it and a KGB officer who told me I had to turn over all my assets to them if I wanted to get out alive."

Mr Konanykhine persuaded his kidnappers to take him to his hotel so that he could telephone Russia and authorise money transfers. "They wanted me to transfer the money out of the bank but they didn't even have a computer or a telephone.

"It happened that my wife and I had a dinner appointment with a friend who was supposed to wait for us in front of the hotel. I managed to get close to the car and just jumped in and we raced to Czechoslovakia and took the first flight to the US ."

While he was being held in Budapest , the mafia stormed his bank in Moscow and declared themselves the owners. He lost "99.7 per cent" of his wealth.

Many of his business acquaintances were killed or forced to join forces with the mafia, who by 1995 had taken control of up to 80 per cent of Russian commercial enterprises, according to the FBI. "Some people were poisoned, some shot, others hit by cars. Hundreds of businessmen were killed as the KGB and the mafia took control of the country," he said. He has been told that a price was put on his head.

Mr Konanykhine, who has never met Mr Mogilevich and who now runs an Internet business, said there have been many examples of Russian money-laundering: "Put simply, Russia was looted. After 70 years of communism, there were no morals and almost no religion, and after the collapse of the Soviet Union organized crime took over the country."

Russian Immigrant
Russian Banker
Mikhail Gorbachev

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Media About Alex

Washington Post:
Konanykhin, one of the first Russian millionaires after the fall of the commies, left in 1992 and was granted asylum here in 1999. He's built a very successful Web advertising business in New York City. He had been chosen "New York Businessman of the Year." "As such, you will be honored and presented with your award," NRCC chairman Thomas M. Reynolds (R-N.Y.) said, at a "special ceremony" April 1. " President Bush and Governor Arnold Schwarzenegger are our special invited guests.
Alex Konanykhin controlled Russia's largest commercial bank in the 1990s
Wall Street Journal:
Mr. Konanykhin was a whiz-kid physics student who became a pioneering Russian capitalist in early 1990s, building a banking and investment empire valued at an estimated $300 million all by his mid-20s. He was a member of President Boris Yeltsin's inner circle.
World Economic Forum:
How transparency can help the global economy to grow. By Alex Konanykhin. Countries around the world spend an estimated $9.4 trillion a year on procurement – 15% of global GDP. Indeed, UN figures estimate that public procurement can account for 15-30% of GDP for many countries. However, according to the UN’s Office on Drugs and Crime and the Organisation for Economic Co-operation and Development (OECD), 10-25% of the value of public contracts is lost to corruption.
The Baltimore Sun:
Business whiz kid.
Russian Bill Gates.
The Times:
By the time he was 25 he was one of the most important figures in post-Communist Russia. But in 1992, while on a business trip to Hungary, Alex Konanykhine was kidnapped.
The New York Times:
The Federal Bureau of Investigation notified Konanykhin that Russian organized crime figures had paid to have him killed.
CBS "60 Minutes":
Alex Konanykhin didn't only have KGB after him… He had the FBI, the Justice Department, even the CIA all on his case, as a favor to the Russians, part of a deal to allow the FBI to keep a bureau in Moscow.
Los Angeles Daily Journal:
Representing himself through much of the process, Konanykhin managed to convince an immigration judge of an alleged INS and KGB conspiracy and cover-up. Following the court's admonishment, the INS agreed to drop all charges and also pay $100,000..The judge also ordered an investigation of the Justice Department. In separate actions, Konanykhine subsequently won multimillion dollar libel judgments against two Russian newspapers. A $100 million lawsuit against the Justice Department is pending, alleging perjury, fraud, torture and witness tampering by U.S government officers on behalf of the Russian Mafia.
Profit Magazine:
Imagine you are a teenage physics genius who quickly amasses a $300 million empire of real estate and banking ventures, has dozens of cars, six hundred employees, several mansions and two hundred bodyguards—but you are nonetheless kidnapped by those you trusted, threatened with torture and death, and have your entire empire stolen from you one dark night in Budapest. You escape with your life by racing through Eastern-block countries and flying to New York on stashed-away passports—only to have the KGB and Russian Mafia hell-bent on your hide and the U.S. government jailing you and conspiring to serve you up into their clutches. All this before your 29th birthday. Sound like a Tom Clancy thriller? No. . . just a slice in the life of Alexander Konanykhine.