• CEO, TransparentBusiness
    TransparentBusiness SaaS platform was designated by Citigroup as the Top People Management Solution
  • International Entrepreneur
    Created the largest bank in Russia by age of 25 before defecting to the United States in 1992 and starting from scratch.

IMMIGRATION PANEL BACKS OFF EFFORT TO DEPORT RUSSIAN BANKER APPEALS BOARD RAISES QUESTIONS ABOUT FAIRNESS OF RUSSIAN JUSTICE SYSTEM

Baltimore Sun

January 28, 2004

By Scott Shane. Sun Staff

An immigration appeals panel reversed yesterday its decision to send former Russian banker Alex Konanykhin back to Russia, ending a deportation effort that was sharply criticized by a federal judge this week.

U.S. District Judge T.S. Ellis III had expressed dismay with the Department of Homeland Security for its insistence that Konanykhin be sent back to Russia. One of the first post-Soviet Russian millionaires, he fled to the United States in 1992, saying his life was in danger from ex-KGB officers and Russian mobsters.

In yesterday's surprise ruling, the Justice Department's Board of Immigration Appeals said recent developments raise enough questions about the fairness of the Russian justice system to return the case to the immigration judge who granted Konanykhin political asylum in 1999.

The same board overturned the asylum grant in November, finding "no evidence to suggest that the Russian government employs corruption in its criminal justice system as a tool of political persecution."

That baffled experts on Russia, particularly because it followed the arrest of Russian billionaire Mikhail Khodorkovsky, who was charged with fraud and tax evasion. The arrest sparked an international outcry and was criticized by the U.S. government as a move by Russian President Vladimir V. Putin to punish the billionaire for financing the political opposition.

In its new decision, the immigration appeals board appeared to take into account the concerns raised by the Khodorkovsky case. It also agreed that Konanykhin's lawyers could argue that the businessman would face torture in Russian prisons.

The new decision does not rule out deportation for Konanykhin and his wife, Elena Gratcheva, but makes that prospect unlikely, said Konanykhin lawyer J.P Szymkowicz.

Konanykhin, 37, made a fortune building a bank and other businesses as Russia emerged from communist rule in the early 1990s. After fleeing ex-KGB agents who, he said, had muscled him out of the bank, he resettled in Washington and worked for a time for Khodorkovsky, trying to drum up international business for Khodorkovsky's Menatep Bank.

In 1994, a Russian prosecutor accused Konanykhin of stealing $8 million from his old bank, charges he said were trumped up by former colleagues.

In 1996, Konanykhin was arrested by U.S. immigration officers on grounds that he had committed immigration fraud. The charge was thrown out.

Documents indicate the fraud charge was devised by U.S. officials to satisfy their Russian counterparts, who had sent several alleged mobsters to face criminal charges in the United States and were demanding Konanykhin in return.

After a legal battle, Konanykhin won asylum in 1999 and built a Web advertising business based in New York City. But after the November decision ordering his deportation, Department of Homeland Security officials took unusual steps to try to send him to Russia.

Last month, U.S. immigration agents swooped down on Konanykhin and his wife as they tried to cross from Buffalo, N.Y., into Canada for an appointment to apply for political asylum.

The next day, Homeland Security officials ordered the couple put on a plane to Moscow as Ellis was hearing an emergency appeal from Konanykhin's lawyers. At the last minute, he halted the deportation.

In a later hearing, Ellis wondered aloud why Homeland Security officials wouldn't permit Konanykhin to go to Canada instead of Russia, where he says he would be killed.

"Why is there such an intense interest in the U.S. government to send this man to Russia?" Ellis asked department attorneys. He called the government's rush to deport Konanykhin "redolent," adding, "You know what redolent means? It stinks."

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More News...

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.
CNN:
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.
The Sun:
Alex Konanykhin fled Russia in 1992 and won asylum in the US after the collapse of the Soviet Union. The entrepreneur had set up 100 different companies in Russia and had an estimated net worth of $300million by the time he was 25. He is regarded as one of the first Russian millionaires after the fall of the Iron Curtain. One of the newly open country's leading lights, he even met with US President George HW Bush in 1991 on a joint visit with Russian leader Boris Yeltsin. However, he was then kidnapped in 1992 while visiting Budapest and all of his business assets were seized in Russia. … Being hunted by the Russian state, Konanykhin won asylum in the US in 1997 and set up a new life - but the shadow of the Kremlin continued to loom over him.He went on to rebuild a business empire and set up multimillion dollar firms such as TransparentBusiness in the US.
The Deal:
... a New York-based software startup called TransparentBusiness Inc. has drawn backing from Fortune 500 executives through a relatively new type of securities offering called 506(c) as part of an effort to raise $10 million this year ... Alex Konanykhin, CEO of TransparentBusiness, said he decided to reach out directly to accredited investors by purchasing ads in financial publications. One particularly bold ad includes the figure, 90,000%, with a question mark next to it. Konanykhin said the ad speaks to the large market opportunity for his company's software, which helps governments eliminate fraud by verifying billable hours charged by outside contractors. ... One of the investors, Ken Arredondo, told The Deal he invested in TransparentBusiness and agreed to serve on its board of directors because of the company's strong management team and the huge market opportunity to increase transparency of outsourced contracts worldwide. He believes in the company's product and said it's unique. "It's a Saas-based, easy-to-use tool," he said. "There are a lot of technology players out there that are a lot bigger, but none of them have what they have. There will be competition, but they have the product now. They have first-mover advantage."
The Baltimore Sun:
Business whiz kid.
WJLA TV / ABC:
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.
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.