• 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.

"Judge orders INS to release jailed Russian"

The Washington Post

July 24, 1997

By Pamela Constable

A Russian former banker, jailed by the Immigration and Naturalization Service since his arrest in Washington a year ago, was ordered released by a federal judge in Alexandria late Tuesday after a former INS prosecutor and a former Soviet KGB agent testified that they had serious doubts about the case against him.

Alexandre Konanykhine (Koh-nen-EE-kin), a onetime jet-setting financier whom Russian authorities have accused of embezzling $8 million from a Moscow bank, was allowed to return to his Northwest Washington apartment yesterday with an electronic monitor on his ankle until his immigration case is resolved.

In their testimony, former INS prosecutor Antoinette Rizzi and former KGB agent Yuri Shvets said they had previously raised questions about the legitimacy of Russian documents the INS used against Konanykhine. Their concerns, they said, were ignored by other officials in the INS Arlington office, including District Counsel Eloise Rosas.

Rizzi testified that Rosas had misled the court by denying that the INS intended to deport him to Russia. And Shvets testified that the INS had ignored his opinion that the Russian government's case against Konanykhine was actually a KGB scheme.

"Congress did not intend for foreign powers to pull the strings" of immigration procedures, U.S. District Judge T.S. Ellis III said tersely Tuesday night after listening to both witnesses. "I was repeatedly assured that there was no desire by the INS to deliver Mr. Konanykhine to Russia. . . . We're going to get to the bottom of this."

Immigration officials, in a statement released yesterday, said the INS has "complete confidence in its case against Mr. Konanykhine and strongly believes that all of its actions in this case have been proper and legitimate. The government has no reason to doubt the reliability of the documents presented in this case."

In an unusual joint operation between U.S. and Russian officials, Konanykhine was arrested in June 1996 at his Watergate apartment, charged with visa fraud and held without bond. At his deportation hearing the following month before an immigration judge in Arlington, INS prosecutors led by Rizzi used documents and witnesses from Russia to show that he had lied about his business visa and that he was a fugitive from Russian justice who should be deported.

At the time of the hearing, the INS testified that it was eager to cooperate with Russian authorities in a fledgling joint law enforcement effort, of which the request to return Konanykhine was an early example.

Konanykhine, now 30, testified during his hearing that he was the victim of a plot by former KGB agents and mobsters who had seized control of his financial enterprises. He said the Russian military prosecutor, in league with his enemies, sought to punish him for protesting to higher authorities.

The immigration judge ruled against Konanykhine, who had remained in custody ever since, filing numerous appeals against INS attempts to deport him. The federal court hearing this week was on his petition to be released.

Rizzi also testified yesterday that Rosas told her to alter affidavits used in the case against Konanykhine and had overruled her growing suspicions about the information supplied by Moscow. Rizzi, now practicing law in Falls Church, said she was forced to resign in October because of her opposition to the case.

"I am torn between both sides," Rizzi said, testifying under subpoena after INS officials said she was not authorized to discuss the case. "I have obligations . . . to be truthful with the court if I believe the court has been deceived."

In cross-examination, INS prosecutors suggested to Rizzi that she had been asked to resign because she had tax problems with the IRS, that she had a vendetta against her former boss and that she had improper contacts with Konanykhine's lawyers.

Shvets, a former Soviet agent who lives here under political asylum, also testified under subpoena. He said that the INS asked him to examine numerous Russian documents and that he saw many signs that they had been manipulated, as well as "strong indications" that the case against Konanykhine was a "classic KGB operation" to cover up larger financial crimes.

But when Shvets reported those findings to INS officials, he said, they showed no interest and told him not to file a written report. INS prosecutors, in cross-examination, suggested to Shvets that he had no real expertise in document analysis and that he had provided them with no specific examples of faulty Russian papers.

@CAPTION: Alexandre Konanykhine is accused of embezzling from a Moscow bank.

Konanykhine
Agent
Authorities
Court
Cross-examination
Immigration
Judge
Kgb
Banker In Moscow
Prosecutor
Prosecutors
Shvets
Suggested
Testified
Visa
Soviet Kgb
Arrest In Washington

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.