The Ministry of Justice of the Republic of Kazakhstan and JSC "BTA Bank" Achieve Complete Victory in U.S. Jury Trial Against Associates of M. Ablyazov and V. Khrapunov, DKnews.kz reports.
After a three-week trial, the jury of the U.S. District Court for the Southern District of New York delivered a verdict in favor of the Akimat of Almaty (represented by the Ministry of Justice of Kazakhstan) and JSC "BTA Bank" on all three claims against Felix Sater, Bayrock Group, Inc, Global Habitat Solutions, and MeM Energy Partners LLC. The jury recognized illegal appropriation of property, unjust enrichment, and receipt of monetary funds. The jury also awarded compensation exceeding the requested amount in the form of damages — more than $32 million.
Evidence of Fraud
During the trial, irrefutable evidence of Mukhtar Ablyazov's fraud against BTA Bank and, for the first time in a Western court, Viktor Khrapunov's fraud against the city of Almaty was presented. The evidence showed that Ablyazov abused his position at BTA by orchestrating the issuance of fictitious loans amounting to billions of dollars, leading to the collapse of the bank, which was the third-largest in Kazakhstan at the time the fraud was uncovered.
The Ministry of Justice of Kazakhstan demonstrated to the jury the fraud committed by former Almaty mayor Viktor Khrapunov, who privatized state lands and sold them at below-market prices to companies controlled by him or his wife, and in some cases, to companies controlled by Ablyazov. Khrapunov's fraudulent activities caused damage to the residents of Almaty amounting to more than $300 million and left many land plots undeveloped.
Role of Felix Sater and Other Associates
Felix Sater, who has been twice convicted of criminal offenses, helped Ilyas Khrapunov, the son of Viktor Khrapunov, invest more than $40 million stolen by Ablyazov and Khrapunov from Kazakhstan into the U.S., including real estate and private investment projects. Sater also fraudulently obtained an investment visa for Ilyas's sister, Elvira Kudryshova. Sater's companies, Bayrock Group, Inc. and Global Habitat Solutions, were used to hide the stolen money. MeM Energy Partners LLC, owned by Mendel Mochkin, also helped Sater invest the stolen funds into the U.S. financial system.
Court Testimonies and Cross-Examination
The jury heard testimonies from various witnesses, including former employees of BTA Bank during Ablyazov's tenure, responsible for the fraud, as well as U.S. investors who dealt with the stolen funds, and experts in forensic accounting, fraud, money laundering, real estate, and immigration. Sater and Mochkin provided detailed testimonies and underwent three days of cross-examination by BTA's U.S. counsel from Boies Schiller Flexner LLP. During the cross-examination, Sater and Mochkin admitted to investing funds despite knowing the fraud charges against Ablyazov and Khrapunov.
Trial Outcomes
The jury rejected the testimonies of Sater and Mochkin, concluding that they knowingly laundered money stolen by Ablyazov from BTA Bank and by Viktor Khrapunov from the city of Almaty. Two other defendants, Daniel Ridloff and LLP "RRMI-DR," settled the claims against them, agreeing to return all the stolen money they had received to the city of Almaty and BTA. Judge Cote issued a judgment against RRMI-DR at the request of the Ministry of Justice of Kazakhstan. The seventh defendant, LLP "Ferrari Holdings," is in default; in light of today's verdict, the Ministry of Justice of Kazakhstan and BTA will seek judgment against it as well.
Previous Victories
Today's verdict follows a 2022 verdict by the same court against Triadou SPV S.A., controlled by Ilyas Khrapunov. During these proceedings, the Ministry of Justice of Kazakhstan and BTA successfully demonstrated that Ablyazov and the Khrapunovs did not comply with court orders, destroyed evidence, and refused to provide required information. Judges of the U.S. District Court for the Southern District of New York issued numerous sanction orders against Ablyazov and the Khrapunovs and ultimately found them guilty of contempt of court.
The Ministry of Justice of the Republic of Kazakhstan and JSC "BTA Bank" have achieved a significant victory, reaffirming their determination to combat international fraud and protect the interests of Kazakhstan.
