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From the file

From Russia with Diamonds | When Communism collapsed, a young man was tasked with selling Russia’s diamonds to the highest bidder. Then he went on the run with perhaps $600 million unaccounted for. He stayed out of sight for more than 20 years, until Tortoise caught up with him…

From Russia with Diamonds, Part II
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From Russia with Diamonds, Part II

From Russia with Diamonds, Part II

More than 20 years after emptying the Russian state treasure of hundreds of millions of dollars’ worth of diamonds and gold, Andrei Kozlenok breaks his silence with an even more extraordinary tale. But why?


Listen to Part I

Transcript

Giles Whittell: Hi Mr Shagirian, it’s Giles Whittell, a journalist from London. I’ve sent you an email which may or may not have reached you. I’m in California now, and I’m hoping very much if it might be possible to meet up. Just to introduce myself initially. I’ve been talking to a lot of people who say hi and I’d love to swap notes on the Golden ADA story.

Giles, narrating: I’m leaving a voice message for Ashot Shagirian, one of three former directors of the diamond importing firm Golden ADA. I want to ask him about some missing money and diamonds. At least $100 million-worth, although some say it’s much more. 

The money disappeared from Moscow in the mid-nineteen nineties, mainly in the form of diamonds and gold from the Russian state treasury, as you might have heard in episode one.

Ashot Shagirian didn’t return my call.

It’s not surprising if he doesn’t want to talk to me. He knows this story can turn dangerous. But it still seemed worth ringing his doorbell.

[Clip: Car doors slamming]

Giles: I’ll leave the keys with you, okay.

Giles, narrating: We head out to his place in the San Fernando Valley, about ten miles north of Sunset Boulevard. Ashot’s wife Gohar answers the door.

Giles: Hello, I’m really sorry to bother you again. It’s Giles again. I just thought that because I’m flying back to London tonight, just in case you had maybe changed your mind, I would come back and ask one more time. For 20 years I’ve been looking for Andrei and I found him last year. He came to meet me in Antwerp, I talked to him for two days.

How is he? Well he says hello… 

Giles, narrating: “How’s Andrei?” she said. Andrei Kozlenok. He’s the man who’d turned their lives upside down 26 years ago.

[Clip: Giles talking to Gohar in the background]

Giles, narrating: How’s Andrei? He’s alive and well and telling lies about you. I could have shown her a picture of him smiling into my phone in Antwerp. That might have done the trick. Because I was pretty sure her husband Ashot was watching us from behind his net curtains. I’d seen them twitch. Instead I said, “He says hi”.

Well, Ashot refused to come to the door.

The Shagirians – Ashot and his brother David – each owned 20 per cent of Golden ADA. And Golden ADA was the diamond factory that Kozlenok set up in San Francisco in the early 90s to get the diamonds and the gold out of Moscow and sell them.

In episode one you heard how the firm was set up and how it shipped the treasure to California – with the help of a Gulfstream jet, bought for the purpose, and a giant helicopter. You heard how the treasure was sold and the proceeds spent. Some people say more than a billion dollars was spent or lost in all.

So what happened to the missing money?

There are rumours that it set a lot of people up for life. But who were they?

And who was Kozlenok, really?

***

I’m Giles Whittell and you’re listening to From Russia with Diamonds, episode two. 

Koizlenok’s story tells us a lot about Russia – to me it tells us about the way it’s gaudy and brazen and at the same time, unfathomable. About the way it was looted in the 1990s by opportunists who then spent the first two decades of this century covering their tracks. 

And I can’t help asking, is Putin one of those opportunists?

We’re getting ahead of ourselves here, but context is everything. The conventional wisdom about Putin’s money, Putin’s so-called billions – however many he has, and estimates on that range from about two to about 200 – the conventional wisdom is that he’s acquired most of them since becoming president.

He’s done that by exacting informal tribute from Russia’s oligarchs as the price of staying in business. But there’s growing evidence that Putin was busy getting rich much earlier, at a time that overlapped with Golden ADA.

And in any case, the Golden ADA always seemed to me the perfect case study in human nature – and unbridled corruption. It seemed like a controlled experiment unleashed on the world with maybe a year’s head start on the law and law enforcement.

And the question, how far could it go before they caught up?

***

Last November, before I even knew this was going to be a podcast as you might be able to hear, I went to meet Kozlenok in Antwerp. It was a chilly day, deep into Belgium’s second lockdown. Everyone was wearing masks – on the Eurostar, in Brussels station, on the connection to Antwerp. This was before vaccines; hundreds of people were still dying every day in Belgium from Covid. 

I’d been told to expect a story that went way beyond diamonds. It was so much bigger than just Golden ADA, they said. Good, I thought. Apart from anything, the Golden ADA story had never quite stacked up. And I had my long list of questions for Kozlenok about who was really behind it, who really benefited.

I was met at Antwerp-Berchem station, in the suburbs. Kozlenok was waiting in his lawyer’s office nearby, he was standing up in a neat blazer, he had an open-necked shirt on, black jeans. He was tall, good-looking, his hair was grey but plenty of it, swept back, like a TV presenter’s.


It was hard to tell then if he was down to his last few euros or if he was a secret oligarch himself – except he’d driven all the way from Ukraine in his friend’s VW Golf. So I guessed the former.

Giles: Tell me where you would like to start? I would like to start…

Giles, narrating: Where did he want to start, I asked. I thought the beginning would be a good place but Koslenok had his own ideas. He wanted to start by getting a few things straight. Everything that had been reported about Golden ADA was a decoy, he said. People only know the cover story.

The truth was he’d come to San Francisco to do research. Groundbreaking research into energy, and space, time and dimension.  

[Clip: Andrei Kozlenok speaking to Giles in the background]


Giles, narrating: I took notes as he spoke. Every word he uttered opened up a bigger gulf between what I was expecting to hear and what he was saying. He’d smile from time to time – but not to suggest that he was joking. Not at all. He smiled to acknowledge his generosity in letting me into his secret.

He needed to be in Silicon Valley specifically, he said because it was near something he called a gravitation platform.

Giles: What do you mean by a gravitation platform?

Giles, narrating: Armed with this theory, positioned on a gravition platform, supplied with industrial quantities of diamonds – oh yes, all this said with a straight face – he would be able to build a gravity computer and a gravity generator and then…

Andrei Kozlenok: Create it, you can make everything what you…

Giles, narrating: Well then, he could make anything at all.

Andrei Kozlenok: Air, liquid, I had no problem. You understand?

Giles: Mmhmm. 

Giles, narrating: Over the course of many hours of interviews, I reminded Kozlenok several times that he was accused of spending huge sums he’d promised to return to the Russian government. To the Russian people.  

All the spending was now a matter of public record. The scheme he’d cooked up had been widely reported in the 1990s, especially in Russia. He said the government shipped the diamonds, not him. He said the money was spent by the company, not him. And he said it was Russia that had stolen from him, not the other way round. 

The sheer chutzpah of it was astonishing. Maybe it was also to be expected. But it still felt bizarre to be lied to like this. And to be honest I felt a bit sick. I confided in the voice memo app on my phone when I got back to my hotel

Giles: Okay, here I am in the Hotel O Kathedral in Antwerp, after spending about five hours with Andrei Kozlenok, who I’ve been wanting to meet for literally 20 years. I thought it was best if I just blurt out my thoughts before scribbling them down. 

He’s a crook, he has invented a parallel universe for himself. I can’t tell if he believes what he’s saying or not but he’s saying that he was doing serious, possibly world-saving science in San Francisco rather than spending a lot of money made from the sale of Russian state treasure. Hundreds of millions of dollars worth of diamonds and gold and other treasure.

He also says that he thinks he understands why the pandemic is happening and that it has very little to do with a virus so to be very honest that made my heart sink.

Giles, narrating: Why would Koslenok bother? After 20 years of not saying anything at all, why agree to an interview request and then spew out all this nonsense? Mike di Pretorio has over 25 years of experience investigating organised crime and he was the FBI’s man in Moscow in the mid-90s. I asked him what he thought.

Mike di Pretorio: As far as Koslenok reaching out to you and you getting a chance to interview him, why he would do that, I don’t know it doesn’t to me make a lot of sense but then when he does it, as you say, he basically tells you a pack of lies, he doesn’t tell you anything close to where the truth is.

I would assume that he’s just trying to, maybe in a convoluted way, curry favour with somebody back in Russia. You know hey look, this guy has been after me, I went and talked to him, I didn’t tell him anything so now everything’s okay and maybe he’ll just leave me alone again.  


Giles, narrating: Now this, I admit, makes the hairs stand up on the back of my neck. Lying is standard practice for anyone who’s been hanging around with KGB types because that’s what they do for a living. But Mike di Pretorio’s suggestion was that in this case, he’d had a very specific purpose – to let people know that Koslenok was still keeping his mouth shut – and those people who’d been powerful back in Moscow in the mid-nineties and are still powerful now. Well to me that brings this story bang up to date.


Let’s rewind to 1995. 

Koslonok’s spending is out of control. It’s caught the attention of Russian investigators and the FBI, and they have set up a wire tap on Golden ADA’s offices and Koslonk’s home. And exactly what they heard remains under seal 26 years later. The tapes are literally locked in a box in a vault in downtown San Francisco. But who was talking to whom is more or less known, and it’s only a slight exaggeration to say this information blew Mike di Pretoro’s mind. 

For one thing the calls from Koslonok’s big house on Happy Valley Road – some of them at any rate – were going straight to Boris Yeltsin’s presidential dacha outside Moscow.

Mike di Pretorio: The calls were made within the administrative offices of the then president Boris Yeltsin. There is also this presidential security group, it’s a bit like the secret service, Korzhakov and also there was a first deputy prime minister Oleg Soskovitch. One or two of the calls may have ended up going to his office. Whether they were with him personally I don’t know but it went to his office.

Giles, narrating: Let’s just check that list. Oleg Soskovets – he was deputy prime minister of Russia, he was head of Yeltsin’s reelection campaign and a close ally of the other man, Alexander Korzhakov.

Korzhakov was Yeltsin’s bodyguard but he was famous in his own right. Not just as a Kremlin enforcer but as the president’s tennis partner, and the man who actually claimed to running Russia for three years in the mid-nineties when Yeltsin was mainly drunk. 

Mike di Pretorio: You know you really want to give him the benefit of the doubt, possibly this was involvement at very senior levels trying to find out what was happening to their diamonds, and trying to find a way to get it back. But on the other hand you could also look at it, is this part of a conspiracy? Are these people complicit in the theft of the diamonds?

And also I think around this time, maybe it had become a little more public that both the Russians and the FBI were involved in a fairly major investigation about the diamonds. 

Giles, narrating: By now stories of a rogue Russian diamond factory in San Francisco have started appearing in Moscow. And they are potentially very awkward for Russian President Boris Yeltsin, who badly needs to stay squeaky clean as he runs for reelection. 

A troubleshooter shows up at Golden ADA’s San Francisco offices from Moscow – he’s an older man, stocky looking. Some people say he’s a dead ringer for Khrushchev on his epic 1959 tour of California. He wears shades and a white suit, he carries business cards with Russia’s double-headed eagle crest and the job title: “Advisor to the Russian Federation”. His name is Andrei Chernukhin. His nickname: the Cleaner.

***


Andrei Kozlenok: Chernukhin was official, like a representative of Russian government in my company.

Giles, narrating: According to Koslenok, Chernukhin was a representative of the Russian government and someone to be obeyed. So when he tells Koslenok they need to go to Acapulco for a meeting, Koslenok gets on the plane. 

Andrei Kozlenok: We must fly to Mexico…

Giles, narrating: In Acapulco, by Kozlenok’s account, he and his wife Irina are locked in the presidential suite of a fancy hotel. Their 8 year-old son has stayed behind in San Francisco being “looked after” by Chernukhin’s daughter. But Chernukhin himself – the Cleaner – is along for the ride. And he tells Kozlenok and his wife they won’t see their son again, ever, unless Kozlenok gives up his stake in Golden ADA. 

Andrei Kozlenok: And he told, if you don’t sign we’ll destroy your son and he told you cannot escape from there. Why? Because four guys are outside with machine guns.

Giles, narrating: Four men with machine guns are standing outside the room whilst Koslenok considers Chernukhin’s proposal. There’s no chance of an escape.

Giles: And did you sign?

Giles, narrating:  Koslenok and Chernukin then proceed to the US consulate in Mexico city where Koslenok signs over his share of the business and Chernukin hands over his son. 

Giles: They flew him to Mexico City?

Andrei Kozlenok: Yes, yes.

Giles, narrating: We do have to take this with a big pinch of salt. We’re in the hands of an extremely unreliable narrator. But if what Kozlenok is saying here is true, then he was the victim of extortion by a Russian intelligence operative on the grounds of a US consulate. Which is to say the least, unusual.

As is what followed. 

Koslenok and his family fly to Costa Rica where he’s told to lie low. But he manages to escape.  First, he sends his wife and son on ahead to Antwerp. And then, he says, he hires a body double and a female hiking companion for said body double, and sends them off into the mountains. 


He says he was being tailed all the time by Chernukhin’s men, but they took the bait and they followed the hikers. Immediately, Kozlenok buys a ticket to Belgium and he’s in Antwerp before Chernukhin’s people realise he’s given them the slip.

Kozlenok has turned into a liability. By this time Chernukhin and the Russians are extremely anxious to have him back in Moscow. From Kozlenok’s point of view, Belgium is the perfect place to be however. This is not just because it has got Antwerp, the centre of the global diamond trade but also because it doesn’t have an extradition treaty with Russia. 

***

But even there, in Belgium, Kozlenok wasn’t safe, and he seemed to know it.

In 1996 he put his wife and son on a plane back to America. It was the last time he would see either of them. Several years later his wife Irina made a trip to Moscow to sell a family apartment. She arrived off a night flight at 10 in the morning – and was dead by the evening. She was suffering from cancer at the time but her condition was supposed to be stable. And Koslenok believes she was poisoned.

Giles: What do you believe happened to Irina? 

Andrei Kozlenok: Some people talk to me that it was poison.

Giles: And this that what you believe? 

Andrei Kozlenok: Yes I do because I know the system very well in Russia. 


Giles, narrating: We’ve got no way to verify this but we do know that a connection to the Golden ADA story could be dangerous. It could be lethal. In 1998 one of Kozlenok’s Moscow associates was jailed and found “suicided” in his cell. It wasn’t suicide. All the evidence pointed to strangulation by prison guards to prevent him testifying in his own trial.

Koslenok was starting a fight with a Kremlin power structure that included people with an interest in Golden ADA’s assets – in the cash, in the real estate, in the treasure yet to be sold.

Mike di Pretorio: I don’t think that it’s ever been able to be documented that Yeltsin himself received, personally received anything in particular. But the daughter Tatiana Dyachenko, Valentin Yumashev, the son-in-law, there is stuff, there is information out there that they definitely benefited by putting a lot of money in their pockets that didn’t really belong to them. 

Giles, narrating: So who are these people?

Yeltsin’s daughter, Tatiana Dyachenko, and her husband, the presidential son-in-law, Valentin Yumashev, is an ex-journalist who’s now big in Moscow real estate. These were both paid-up members of what’s known in the Kremlin very simply as the semya – the family. If they’d been beneficiaries of Golden ADA, they would not have wanted Kozlenok talking about it. 

Mike di Pretorio: If Moscow had been New York, we probably could have done a RICO type prosecution of not Yeltsin but right beneath him in his family.

Giles: And just to explain, what is a RICO type prosecution?

Mike di Pretorio: A RICO type prosecution is what we would use to take down an organised crime group. It’s recaterian influenced corrupt organisations and it would basically be a way to go after a criminal group and effectively dismantle that group.

Giles: And you’re saying that if what you understood to be going down in Moscow had been going down in New York, then you would have jurisdiction and you could have proceeded that way?

Mike di Pretorio: Yes. Yes we could have and it would have been because this is what we were not independently doing but is what we were being told, what was going on in Russia by our Russian counterparts.

Giles, narrating: But of course this wasn’t New York – this was Russia.

***

In 1998, Chernukhin tricked Kozlenok into flying to Athens, where he was arrested, jailed and eventually extradited back to Moscow. While he was being held in Athens he said he feared for his life if the Russians got hold of him. But something protected him. He stood trial and he was given a six year sentence, of which he only served four.

Mike di Pretorio: It’s my impression that he has basically been given a warning, like, you know, keep your mouth shut, you know, be a good boy, don’t talk about any of this stuff or else something bad can happen to you too.

Giles, narrating: In essence, Kozlenok was protected for protecting someone else. And who would that be? Well the obvious candidate is Yevgenyi Bychkov. He is the precious metals minister who’d been in on the scheme all along.

Mike di Pretorio: I believe that, as far as Koslenok’s role in this, I don’t think to do this, to have pulled off what they did with all the diamonds leaving, I don’t think Kozlenok would have been the mastermind. I think he was more of a front man or an intermediary. Somebody that, like a middleman, you can use him but it would take much higher authority Bychov others to be able to do it and they needed somebody who could help pull it off and he was he was the guy. 

Giles, narrating: So in this scenario, Kozlenok is the front man and Bychkov is the mastermind. The question: does it go any higher than that? 

Mike di Pretorio: But at the end of the day, as far as pulling the layers off the onion you can probably only take it back as far as Bychov unless Bychov would be willing to talk and it’s very interesting as well as far as Bychov, how they do kind of put the wrap on him and say hey you shouldn’t have done this and then law and behold before he can be charged or convicted he gets amnesty. You know if you’re over 60 years old and you’re, as a part of the world where we’re into celebration, anybody over 60, you’re immune from prosecution. Ohh golly, Bychov is sixty-one.  

Giles, narrating: The episode di Pretoro’s referring to here is a perfect little Russian cover-up. Bychkov had been publicly implicated in the Golden ADA scandal, and publicly admonished for it. But prosecuted? Heavens no. He turned 60 that year. And he was a military veteran. And it was decreed, conveniently, that military veterans should have immunity from prosecution when they turned 60.

Giles: How does that make you feel as a law enforcement professional? 

Mike di Pretorio: You just have to go with the flow, it’s Russia you can’t change it you know, it’s what it is. And it just, you know you do what you can do. You can go after the bad guys, you gather the evidence and then the chips fall where they may. 

Giles, narrating: So who was Bychkov protecting? And who ultimately drew a line under the whole thing? Another FBI agent on the case put it to me that the answer to the first question was Yeltsin and the second, Putin. His theory was that Putin “pulled a Hoover” – that is, a J Edgar Hoover. Putin found out where all the bodies were buried, so to speak, and named his price to make them all go away. And in this case Putin’s price was power.

Mike di Pretorio: There were a lot of shenanigans that happened on Yeltsin’s watch that Putin would be aware of and could easily use to help put them in a position where he ended up. There definitely was a quid quo pro. I would think, and I don’t want to denigrate the diamonds at all, I mean 500 million or billion, that’s a huge theft. But so much else was going on, had gone on under Yeltsin’s watch. These loans for shares, with Potanin who I guess was another deputy prime minster but it was all about getting Yeltsin reelected in ’96 and it’s basically the alluding of the nickel industry and a variety of industries in Russia and letting people take control of these huge, I think like the nickel… for $170 million he acquired through these loans for shares a thing that was valued at three or four billion.

And so to me, if I’m Putin, yes the diamond thing is definitely something that’s another arrow in my quiver if you want to kind of blackmail Yeltsin in, that would put me in office but there’s so much else that went on that I would think, I would have played a few other cards first. 

Giles, narrating: Well, perhaps. But there’s no doubt Golden ADA was there in the pack. So let’s quickly lay out the chronology of how the whole thing was wound up.

In 1997 Putin moves into his first job in Moscow – he’s made chief of the “Main Control Directorate of the Presidential Property Department” a position in which it would be hard not to be aware of Golden ADA. 

The following year, in 1998, the year of Kozlenok’s arrest, Putin becomes head of the FSB, successor to the KGB. And there it would have been impossible not to be aware of Golden ADA, or of any of its tentacles. 

In 1999 he becomes prime minister. And on January 1, 2000, he becomes acting president and in his very first act he signs a decree granting Yeltsin and his family, the semya, blanket immunity from prosecution. And I think it’s fair to say this was a weight off Yeltsin’s mind. I say this partly because ten months later I interviewed him in his dacha about a memoir he’d just written, or had written by a ghost writer.

It was part of a big, organised reputation-laundering operation. And for someone who’d nearly died from the stress of government – and all the vodka that went with it in his case – Yeltsin was incredibly relaxed. He was friendly, laughing, he was definitely on the wagon. His daughter Tatyana was there. She brought in tea and cookies. It was quite clear that her dad had nothing to fear. A new era had begun – and he had nothing but praise for the new man in charge.

And of course the new man in charge has been in charge ever since. 

Koslenok told me that Putin definitely knew about Golden ADA – in fact he told me that that he and Chernukhin were good friends. 

Talking to people who were involved in Golden ADA – whether as part of it, or investigating it – it’s pretty standard for them to shake their heads and say something to the effect of “this was just the tip of the iceberg – you do know that, don’t you?”

And in general terms we do. In 2019 an economics advisor to Putin said Russia had lost a trillion dollars in capital flight since the fall of the Soviet Union. But that doesn’t mean a billion is small potatoes. And of that billion about $600 million relating to Golden ADA is still unaccounted for. 

So who got the Golden ADA money? I’m afraid I still don’t know. Not for certain anyway. If there’s anyone listening out there who does, please get in touch. 

Last week I tried to get hold of Kozlenok on the phone. But he’s disappeared. People who used to be close to him aren’t sure if it’s a stunt, or if he’s been detained by Ukrainian authorities, or even if he’s still alive. One person who knows him well and thinks he knows what’s happened to him said cheerfully he’d try to arrange an invitation to the people he thinks have Kozlenok under lock and key. 

“They will not harm you,” he said. “They will not put you in jail. They will not kill you. If they like you they might even tell you what happened.”

Well, I’m waiting by the phone.  

***

Thanks for listening to this episode. If the phone rings there’ll be another one. This story was written and reported by me, Giles Whittell. It was produced by Emily Williams of Feast Collective, and Danny Carissimi. Original music by Tom Kinsella. The editor was Basia Cummings.