Suspect in Bucks fraud arrested in Moscow
Semion Mogilevich, a reputed Russian crime figure, was sought for years for a stock scheme at a Newtown firm.
Federal authorities in Philadelphia who have been tracking the reputed Russian organized-crime figure Semion Mogilevich for nearly five years now know where he is - in custody in Moscow.
But authorities cautioned yesterday that Mogilevich's arrest Thursday in a Russian tax-evasion case does not mean he will be returned soon to face racketeering and conspiracy charges that have been pending in U.S. District Court since 2003.
"There is no extradition treaty between the United States and Russia," said Assistant U.S. Attorney Suzanne B. Ercole, the lead prosecutor in the case against Mogilevich and two others who have been listed as fugitives since their indictment five years ago.
Mogilevich, described in some law-enforcement reports as a godfather of international organized crime, was charged with masterminding a multimillion-dollar stock-fraud scheme centered on YBM Magnex, a now-defunct company based in Newtown, Bucks County, in the late 1990s.
Authorities allege that Mogilevich made off with $18.4 million as part of a sophisticated scam in which investors on the Ontario Stock Exchange lost an estimated $150 million.
YBM Magnex touted itself as a developer and distributor of industrial magnets. In fact, U.S. Attorney Patrick Meehan said at the time the indictments were announced, the company was part of a "corportate house of cards" used to manipulate and defraud investors.
Mogilevich, 61, and two of his alleged accomplices, Ogre Fisherman and Anatoly Tsoura, have been listed as international fugitives since the charges were filed against them.
Ercole said there had been periodic attempts to negotiate their return to the United States through their legal representatives here.
She said the U.S. Justice Department had also issued international arrest warrants - so-called "red notices" - for all three men. Had any of the defendants traveled to another country, they could have been arrested and, where possible, extradited to the United States.
Ercole said her office believes Mogilevich, Fisherman and Tsoura have been in Russia for most of the last five years.
She acknowledged it had been difficult to keep track of Mogilevich because he uses several aliases.
"He can be a chameleon," she said. "He morphs into one individual or another."
Various reports placed the reputed organized crime leader in Hungary, in his native Ukraine, and in the Moscow area during the years.
Once described in a Village Voice article as "the most dangerous mobster in the world," Mogilevich was said to be involved in drug trafficking, prostitution, money laundering, and the sale and smuggling of weapons and radioactive materials, according to FBI and Scotland Yard reports.
In an interview in 1999 with the BBC, Mogilevich denied those charges, calling himself an "international businessman."
According to a report in the Moscow Times, he was arrested Thursday along with the owner of a cosmetics firm. The two were picked up near the city's World Trade Center.
About 50 armed police commandos took part in the arrest. Both Mogilevich and the cosmetics company executive were charged in connection with an alleged $2 million tax-evasion scheme.
Mogilevich is also said to be the target of a separate investigation in Ukraine focusing on his involvement with a company that brokers gas exports from Russia to Ukraine.
Why Mogilevich was arrested last week after living and doing business in the Moscow area for years could not be determined.
One law enforcement source in the United States said the arrest suggested that Mogilevich had fallen out of favor with Russian President Vladimir V. Putin. Until last week, the source said, Putin's government tacitly allowed Mogilevich to operate in business and corporate circles despite his reputation and the international warrant for his arrest.
Mogilevich was using the name Sergei Shnaider at the time of his arrest. Over the years, he is believed to have used 17 different names and to have traveled on passports from several countries, according to the Moscow Times report.