• 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.

U.S. JUDGE QUESTIONS RUSSIAN'S DETENTION

THE MOSCOW TIMES

JANUARY 16, 2004

By Catherine Belton. Staff Writer

ALEXANDRIA, Virginia -- Court hearings on the arrest and attempted deportation to Moscow of banker-turned-software magnate Alexander Konanykhin, who says he fears death if returned, went into a second day Thursday.

Even though the presiding judge on Wednesday accused the U.S. government of entering into a special pact with Russian authorities to speed up Konanykhin's deportation to Russia, the outcome was still unclear by press time.

But as the court reconvened Thursday morning, a lawyer for Konanykhin said: "It appears to be going our way."

The day before, U.S. District Judge T.S. Ellis lambasted the U.S. government, questioning why it had rushed Konanykhin's deportation before he could appeal a November ruling that overturned his political asylum.

"I have the firm impression that it is the strong desire of people in the executive branch to return this man to Russia for what reason I cannot tell," Ellis said. "It stinks."

Konanykhin ran the U.S. operations of jailed oil tycoon Mikhail Khodorkovsky's Bank Menatep for several years after arriving in America in 1992.

He eventually won political asylum in the United States in 1999 after a protracted courtroom battle over his legal status that arose from an earlier attempt by Russian authorities to have him deported on embezzlement charges.

But in a shock ruling Nov. 20, the U.S. Immigration Board of Appeals suddenly overturned his refugee status after four years of making no moves to decide on a Department of Justice appeal lodged in 1999.

The board concluded Konanykhin would not face political persecution if he returned to Russia.

Although Konanykhin filed to appeal that ruling in a Richmond, Virginia, court, where it is still pending, he and his wife, Yelena Grachyova, attempted to flee to Canada and seek political asylum there on Dec. 18.

They were seized in a dramatic arrest by agents from the Immigration and Naturalization Service just as they were attempting to cross the border.

Dressed in a black sweater and jeans, Konanykhin took the stand for the first time Wednesday, stumbling over his English.

He claimed he and his wife had fled because he feared their imminent deportation.

Konanykhin testified that he had made an appointment with a Canadian immigration officer who was waiting on the other side of the border to discuss his eligibility for political asylum in Canada.

Konanykhin called the immigration board's ruling "a death sentence hanging over our heads." By going to Canada, "we were basically trying to save our lives."

Ellis raised questions Wednesday as to why the U.S. authorities appeared to be rushing to send them back to Moscow.

"Why before his appeal is allowed to be heard, suddenly... [the U.S. government] wants to send him back to Russia. Doesn't it trouble someone [that if that happened] his claim would never be heard?" he asked.

Konanykhin testified that following the December arrest, he and his wife were whisked to Washington's Reagan airport, where INS officers made them run to catch a flight to New York.

A last minute intervention by Ellis halted the deportation only minutes before they were to be put on a connecting flight to Moscow.

"I would hope that some executive branch policy involving some promise, some quid pro quo to the Russian police or executive who wants Mr. Konanykhin ... wouldn't deter our government from honoring ... the heart of an agreement to let him have his asylum claim adjudicated," Ellis said.

In an interview on Wednesday, Grachyova, who has a different immigration status than her husband, said she and her husband only wanted to "live a normal life."

"We felt like we were being crushed between two superpowers all the time."

The INS argues that the Nov. 20 ruling gave it a final and enforceable order to deport Konanykhin back to Russia because the former banker had not filed to stay deportation.

The INS claims Konanykhin's attempt to cross the Canadian border was a violation of a 1997 deal with immigration authorities that allowed him to stay in America until a final ruling on his asylum request. It maintains that this breach of the agreement gave authorities the right to detain him.

Konanykhin, however, claims subsequent modifications to his 1997 agreement with immigration allowed him to travel freely across the United States without seeking the government's permission. He says the agreement also contained no provision preventing him from leaving the country.

On Wednesday, Konanykhin testified that one of the INS officers who detained him at the Canadian border had said it was unusual to make an arrest while an asylum appeal was still pending.

Ellis is due to rule on whether Konanykhin's attempt to flee was in breach of the 1997 agreement or not. Though his decision could free Konanykhin from detention in an Arlington, Virginia, jail, it will not decide Konanykhin's final status.

Two other cases are pending: one to stay his deportation and the other to appeal the asylum ruling and reconsider his case in the light of the legal campaign in Russia against Khodorkovsky and his associates.

On Wednesday the Alexandria court heard Konanykhin and his Canadian immigration lawyer, John Somjen, who testified by telephone conference call.

Thursday's hearing began with an INS attorney cross-examining Konanykhin, followed by testimony from Grachyova and the INS officer who escorted the couple to the plane that should have taken them back to Russia.

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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.