Russian Held in Scheme to Launder U.N. Bribes
By Julia Preston
September 3, 2005
The New York Times
http://www.nytimes.com/2005/09/03/international/europe/03diplomat.html
A Russian diplomat who is the chairman of a United Nations budget watchdog committee has been indicted in New York on charges of conspiring to launder hundreds of thousands of dollars in bribes, federal authorities announced yesterday.
The diplomat, Vladimir Kuznetsov, was arrested Thursday evening by F.B.I. agents at a restaurant in the Riverdale section of the Bronx. He pleaded not guilty at his arraignment yesterday in Federal District Court in Manhattan. 
Mr. Kuznetsov has served since January 2004 as the chairman of the Advisory Committee on Administrative and Budgetary Questions, an autonomous agency of the General Assembly responsible for close oversight of spending by the United Nations. He received his salary and diplomatic immunity from the United Nations. At the request of the United States, Secretary General Kofi Annan waived immunity for Mr. Kuznetsov shortly before he was arrested, United States officials said.
Mr. Kuznetsov is accused of conspiring with a United Nations procurement officer, Aleksandr V. Yakovlev, to conceal and transfer money that Mr. Yakovlev received from foreign companies in exchange for inside information about United Nations contracts. Mr. Yakovlev, who also is Russian, pleaded guilty on Aug. 8 in the same court to money laundering and wire fraud, admitting his role in a bribery scheme related to the former United Nations oil-for-food aid program for Iraq. 
Mr. Kuznetsov's arrest is the first of a United Nations official since Mr. Yakovlev's guilty plea, and appears to have resulted from information Mr. Yakovlev provided to prosecutors. 
According to the indictment unsealed yesterday, Mr. Yakovlev informed Mr. Kuznetsov sometime in 2000 of his plan to receive payments from foreign companies bidding on United Nations contracts. Not long after, Mr. Yakovlev received a wire transfer from a company, not identified by name, that was bidding on an airlifting contract. 
After that transfer, the indictment charges, Mr. Kuznetsov received two payments - on April 3, 2000, and June 5, 2000 - for a total of $32,000 in his personal accounts in New York from an account controlled by Mr. Yakovlev in the Antigua Overseas Bank Ltd.
Also in 2000, Mr. Yakovlev set up a front company called Moxyco Ltd. to channel his secret payments, while Mr. Kuznetsov in the same year set up a separate company, Nikal Ltd., both in the Antigua bank. Prosecutors said that Mr. Yakovlev transferred hundreds of thousands of dollars over the next five years to the Nikal Ltd. account in the Antigua bank. 
Citing a second case, the indictment says Mr. Yakovlev transferred $19,800 on May 4 to Mr. Kuznetsov's Nikal account, shortly after he had received a payment from a company seeking to win another airlift contract. Mr. Yakovlev is an unindicted co-conspirator in the case. 
A magistrate judge, Michael H. Dolinger, set Mr. Kuznetsov's bail at a $1.5 million bond and $500,000 in cash or property. Mr. Kuznetsov, appearing in the green polo shirt and khaki shorts in which he was arrested, remained in custody, saying he did not have the money immediately available.