42 Years Later, Did Frank Sheeran Kill Jimmy Hoffa?

Posted on July 30, 2017July 30, 2017 by Denise Simon

EXCLUSIVE – It all started, and ended, on this day 42 years ago.

FNC: It was a hot July afternoon, nearly 92 degrees, when Teamsters president and labor icon Jimmy Hoffa is said to have opened the rear door of a 1975 maroon Mercury in the parking lot of the Machus Red Fox restaurant, in Bloomfield Hills, Mich., and climbed in.

He was never seen again.

The FBI has expended countless resources in the ensuing decades in the hopes of finally solving this enduring American mystery with no success.

But I believe, based on my 2004 investigation, that Frank Sheeran did it.

“Suspects Outside of Michigan: Francis Joseph “Frank” Sheeran, age 43, president local 326, Wilmington, Delaware. Resides in Philadelphia and is known associate of Russel Bufalino, La Cosa Nostra Chief, Eastern Pennsylvania,” reads the 1976 HOFFEX memo, the compilation of everything investigators knew about Hoffa’s disappearance that was prepared for a high level, secret conference at FBI headquarters six months after he vanished.

Sheeran, known as “The Irishman,” told me that he drove with Hoffa to a nearby house where he shot him twice in the back of the head. Our investigation subsequently yielded the corroboration, the suspected blood evidence on the hardwood floor and down the hallway of that house, that supports Frank’s story.

No one who has ever boasted about knowing what really happened to Jimmy Hoffa has had their claims tested, scrutinized, and then corroborated by independently discovered evidence… except Frank.

He is also the only one of the FBI’s dozen suspects who has ever come forward and talked publicly about the killing, let alone admit involvement.

Every other claim that you have ever heard about, from Hoffa being buried in the end zone of Giants Stadium to being entombed under a strip of highway asphalt somewhere, came from people who were never on the bureau’s list of people suspected of actual involvement.

For that reason, Frank stands alone.

Six weeks after Hoffa disappeared, Frank, along with the other suspects, was summoned before the Detroit grand jury investigating the case. He took the Fifth.

When I met him in the spring of 2001, Frank freely talked.

My meeting with Frank was arranged so that I could take his measure, and he mine, for a possible in-depth investigation, interview and news story about his claims. He was accompanied by his former lawyer Charlie Brandt, the author of Frank’s then-proposed biography, which tells the Hoffa story. Charlie had been able to spring Frank from a Mafia-related federal racketeering prison sentence, and for that reason was taken into Frank’s confidence.

It would be three years before the book, “I Hear You Paint Houses: Frank ‘The Irishman’ Sheeran And Closing The Case On Jimmy Hoffa” would be published by Steerforth Press, and before the first of my many news stories about Frank, and our investigation, would air on television.

His story is this: He and others were ordered by the Mafia to kill Hoffa to prevent him from trying to run again for the presidency of the Teamsters union. Hoffa had resigned after serving prison time for jury tampering, attempted bribery and fraud convictions. Frank picked Hoffa up at the restaurant, accompanied by two others, to supposedly drive Hoffa to a mob meeting. When they walked into the empty house together, with Frank a step behind Hoffa, he raised his pistol at point-blank range and fired two fatal shots into his unsuspecting target, turned around and left. He said the body was then dragged down the hall by two awaiting accomplices, and that he was later told Hoffa was cremated at a mob-connected funeral home.

Frank had an imposing, old-school mobster way about him that even his advanced years — he was 80 — did not betray. His menacing aura was not diminished by a severe case of arthritis that crippled him so badly that he was hunched over when he slowly walked with two canes, struggling to put one foot in front of the other.

I found Frank tough, determined, steely.

As I listened to his matter-of-fact recounting of what he said went down at that house, and giving such detail, I remember thinking what he was saying could actually be true.

Here’s why:

There is no doubt that Frank was a close confidant of Hoffa, someone who Hoffa trusted. And Hoffa didn’t trust very many.

Frank was both a long-time top Teamsters Union official in Delaware as well as an admitted Bufalino crime family hit-man and top aide to the boss himself.

The FBI admits that Frank was “known to be in Detroit area at the time of JRH disappearance, and considered to be a close friend of JRH,” as the HOFFEX memo states.

Hoffa’s son, current Teamsters President James P. Hoffa, told me in September 2001 that his father would have gotten into the car with Frank. He said that his father would not have taken that ride with some of the other FBI suspects whom I mentioned.

Frank, in the book, says that he sat in the front passenger seat of the car as a subtle warning to Hoffa, who habitually sat there. He felt a deep friendship and loyalty to Hoffa, yet knew what his own fate would be if he failed to carry out the lethal order from his mob masters. So he sat in the front seat hoping Hoffa would realize something was wrong. He did not.

The FBI did find “a single three-inch brown hair . . . in the rear seat back rest” of that car that matches Hoffa, and three dogs picked up “a strong indication of JRH scents in the rear right seat.”

I asked Frank if he remembered how to get to the house. I thought finding where Hoffa was killed, and investigating everything about the house, could be key to the case. Frank rattled off the driving directions from the restaurant and described the house’s interior layout.

U.S. labor leader Jimmy Hoffa is photographed at the Greater Pittsburgh Airport, Pennsylvania, in this April 12, 1971. (Reuters)

Killers may not remember an exact address of a murder scene, but they never forget how they got there and what they did when they arrived.

“Sheeran gave us the directions,” Charlie wrote in the book. “This was the first time he had ever revealed the directions to me. His deepened voice and hard demeanor was chilling, when, for the first time ever, he stated publicly to someone other than me that he had shot Jimmy Hoffa.”

A year after our meeting, Charlie and Frank drove to Detroit to try to find the house, and when they did Frank pointed it out to Charlie. They did not go in.

Three years later, in 2004, I, along with producer Ed Barnes and Charlie, first stepped foot into the foyer where Frank said he shot Hoffa, looked around the first floor and as it turned out, Frank’s description fit the interior to a tee.

Ed and I arranged with the homeowners to actually take up the foyer and hallway floorboards and remove the press-on vinyl floor tiles that they had put down over the original hardwood floors when they bought the house in 1989.

We hired a forensic team of retired Michigan state police investigators to try to find any blood evidence. They sprayed the chemical luminol on the floors, which homicide detectives routinely use to discover the presence of blood.

We found it.

The testing revealed a specific pattern of blood evidence, laid out like a map of clues to the nation’s most infamous unsolved murder. Little yellow numbered tags were placed throughout the first floor foyer and hallway, to mark each spot where the investigators’ testing yielded positive hits.

The pattern certainly told the story of how Hoffa was killed.

The greatest amount of positive hits were found right next to the front door, where Hoffa’s bleeding head would have hit the floor.

Seven more tags lined the narrow hallway toward the rear kitchen, marking the drops that perfectly mimic Frank’s story of Hoffa’s lifeless body being dragged to the kitchen by the two waiting accomplices, who then stuffed it into a body bag and carried it out the back kitchen door.

We arranged for the Oakland County prosecutor’s office to remove the floorboards for DNA testing by the FBI, though Oakland County Prosecutor David Gorcyca cautioned that it would be “a miracle” if Hoffa’s DNA was recovered.

I knew those odds. A DNA hit was beyond a long shot.

Experts told me that such tiny samples of genetic material, degraded by the passage of 29 years and exposure to air and the elements under a homeowner’s heavily trafficked floor, would likely not provide enough material to result in a DNA match.

The FBI lab report says that chemical tests were conducted on 50 specimens; 28 tested positive for the possible presence of blood, and DNA was only recovered from two samples.

The FBI compared what was recovered to the DNA from a known strand of Hoffa’s hair. One sample was found to be “of male origin,” but it was not determined from whom. The other result was “largely inconclusive.”

Was I disappointed that a DNA match was not possible? Yes. Was I surprised? No. Did I think this disproved Frank’s claim? No.

Think about it.

What are the chances of any random house in America testing positive for blood traces from more than two dozen samples, in the exact pattern that corroborates a man’s murder confession?

What would luminol reveal under your home’s floor?

There are other reasons to believe why Frank’s scenario fits.

The house was most likely empty on that fateful summer day. It was built in the 1920’s and owned for five decades by a single woman, Martha Sellers, a teacher and department store employee. By the summer of 1975, Sellers was in her 80s, and not even living there full time. Her family told The Detroit News and Free Press that she had bought another home in Plymouth, Mich., where she would move permanently the next year.

Frank says that a man he called “a real estater” lived in the house. The Sellers family remembered that boarder, who they recalled resided in an upstairs bedroom. He was described as “a shadowy figure . . . who would disappear. He never said more than a few words and they know nothing about him, not even his name.”

It is quite possible that “the real estater,” was the link between the house and the Detroit mob, providing an empty house as needed, when Sellers was absent, for whatever purpose…including using it as a Mafia hit house to murder Jimmy Hoffa.

The FBI clearly believed Sheeran had credibility. Agents visited him in his final years, in an unsuccessful attempt to secure his cooperation.

While we were conducting our investigation in Detroit in 2004, the FBI, I was told, tried to find the house even before we aired our story.

And the views of those closest to Jimmy Hoffa, his son and daughter seem especially relevant when assessing Frank’s credibility.

Not only did James P. Hoffa confirm that his father would have driven off with Frank, but his sister, Hoffa’s daughter, Barbara Crancer, wrote Frank a poignant letter begging him to come clean about their father’s fate.

In the one-page heartfelt note, handwritten to Frank on March 5, 1995, she wrote:

“It is my personal belief that there are many people who called themselves loyal friends who know what happened to James R. Hoffa, who did it and why. The fact that not one of them has ever told his family — even under a vow of secrecy, is painful to me…”

She then underlined: “I believe you are one of those people.”

Crancer confirmed to me that she wrote that letter.

Sadly for the Hoffa family, Frank never directly honored her request. When I sat with him, he said that his No. 1 priority was not to go back to “college,” meaning prison. He decided that the best way to avoid that possibility, while also revealing his story, was to share his secrets for the book and my reporting.

Frank died on Dec. 14, 2003. He was 83.

While authorities no doubt will continue to respond to more tips, as they should, I believe that we already know what happened to Jimmy Hoffa.

James R. Hoffa (left) with his son, James P. Hoffa, at a testimonial dinner in 1965. (Library of Congress)

Frank described the most precise and credible scenario yet to be recounted, and the evidence that we found from the floor backs up his confession.

In the more than four decades since, Hoffa’s life and legacy as a pivotal part of the American labor movement has been somewhat overshadowed by his disappearance. But it seems clear that organized crime bosses did not want him to resume the mantle of the Teamster’s presidency, and went to the ultimate length, through Sheeran, to prevent his return.

Today Hoffa’s union, the International Brotherhood of Teamsters, represents 1.4 million workers and continues to be headed by his son. Two years ago a milestone was marked in the attempts to shed any specter of possible organized crime. In 2015, Federal Judge Loretta Preska approved the Department of Justice and union agreement that ended the U.S. government oversight of the Teamsters that had lasted for more than 25 years.

The U.S. Attorney for the Southern District of New York at the time, Preet Bharara, said that the union had made “significant progress” in “ridding…the influence of organized crime and corruption,” though he cautioned that “the threat…persists.”

Hoffa called it “an historic agreement…our union is committed to the democratic process, and we can proudly declare that corrupt elements have been driven from the Teamsters.”

Sadly, it was those corrupt elements that took the life of his father as he tried to take back his union.

“Jimmy Hoffa raised millions of workers and their families out of poverty and into the middle class,” noted the Teamsters Union in a statement to Fox News.

“He gave his life while fighting to remove corrupt elements from the union and return power to the members. This tragic anniversary is particularly difficult on his family who lost a father and grandfather much too soon. They want nothing more than to have the closure that they so deserve.”

Frank’s story will be told in a major motion picture, “The Irishman,” starring Robert De Niro as Frank and directed by Martin Scorsese. Tribeca Films and Sikelia Productions, in association with Netflix, will bring this story to the big screen and the streaming service in 2018. Al Pacino, Joe Pesci and Harvey Keitel are said to also have roles, uniting the legendary actors of the genre in one last mob movie. I am proud of pushing the film idea, which will no doubt become an iconic motion picture.

Blame Obama and Brennan for Venezuela, Maduro

Posted on July 29, 2017July 29, 2017 by Denise Simon

Some facts on Venezuela under Chavez and now Maduro. When it comes to blame on why the country is in a tailspin and on the way to be a failed state where people are suffering beyond measure, rogue foreign leaders flock together and Obama/Brennan knew this was coming.

VIR

Venezuela is part of SWIFT, the Society for Worldwide Interbank Financial Telecommunications. SWIFT knows precisely all the global transactions into and out of Venezuela including the country’s dealings with Syria, Iran, and Russia.

Venezuela has received at least $36 billion in loans from China that have helped finance two economic development funds focused largely on infrastructure projects. Five people in raids that we carried out in Caracas linked to the embezzlement of $84 million from the Chinese Fund and Bandes. Maduro pledged to stop the corruption. Right huh? What about $300 billion?

Oops, there is more: How about the loan for oil program?

Under Chavez, several global oil deals were signed that included India, China and Russia. Under Maduro, the production has failed to meet contractual agreements. Caracas needs the oil to pay debts to China and Russia, key political allies that have together lent Venezuela at least $50 billion in exchange for promised crude and fuel deliveries.

According to Reuters, former ministers Héctor Navarro and Jorge Giordani are accusing government workers of pocketing more than $300 billion in crude oil revenue over the past decade. They are demanding the government account for these funds and investigate into whose hands they went. Navarro has personally requested that “a state ethics council review the operations of the 13-year-old exchange control mechanism that opposition leaders have described as a ‘corruption machine.’”

Another former Chávez minister, Ana Elisa Osorio, petitioned the Republican National Council, a government watchdog group, to investigate the case. “In the last two years, we have found missing $20 billion from the Republic’s funds. This is why we resort here to calling for a meeting of regulators, the treasury, and the national attorney’s office,” Osorio said. More here.

Oh yeah, we cant leave out Goldman Sachs. In 2016, Goldman Sachs confirmed its asset management arm had bought $2.8 billion of another bond issued by Venezuela’s state oil company PDVSA at a steep discount.

SantiagoTimes

So on to some other facts that rogue leaders overlook, including the United States when it comes to heading off the tailspin and eventual failure of a state resulting in disgusting human rights violations.

2011: Iran began building intermediate-range missile launch pads on the Paraguaná Peninsula, and engineers from a construction firm – Khatam al-Anbia – owned by the Revolutionary Guards visited Paraguaná in February. Amir al-Hadschisadeh, the head of the Guard’s Air Force, approved the visit, according to the report. Die Welt cited information from “Western security insiders.”

In 2015: Drug smuggling is thought to be on the rise in Venezuela, with many public officials complicit. According to the BBC, the US has already sanctioned at least 50 whom it accuses of human rights abuses and drug trafficking.

Pressure on the drug trade in neighbouring Colombia appears to have forced many narco-traffickers over the border. While Venezuela does not grow the coca plant or manufacture cocaine, estimates in the US State Department’s annual International Narcotics Control Strategy Reports suggest that between 161 and 212 metric tons of cocaine are shipped from the country each year, although data is scarce.

In its most recent such report, published in March 2015, the US State Department reported that “public corruption is a major problem in Venezuela that makes it easier for drug-trafficking organizations to move and smuggle illegal drugs”. More here.

IBTimes

2017: Maduro named Tareck El Aissami as the Vice President.

That means that, in a country of complete and utter chaos — where people are starving, healthcare is nonexistent, electricity is scarce, and vigilante justice is becoming a norm — a suspected terrorist is one heartbeat away from the highest office in the land.

El Aissami is a known entity in the world of US intelligence. He is allegedly a part of Venezuela’s state drug-trafficking network and has ties to Iran, Syria, and Lebanese terrorist group Hezbollah.

Joseph Humire, coauthor of “Iran’s Strategic Penetration in Latin America” and founder of the Center for a Secure Free Society (SFS) think tank, testified to the same effect before the House Committee on Foreign Affairs last year.

“Over the years, El Aissami developed a sophisticated, multi-layered financial network that functions as a criminal-terrorist pipeline bringing militant Islamists into Venezuela and surrounding countries, and sending illicit funds and drugs from Latin America to the Middle East.

“His financial network consists of close to 40 front companies that own over 20 properties with cash, vehicles, real estate and other assets sitting in 36 bank accounts spread throughout Venezuela, Panama, Curacao, St. Lucia, Southern Florida and Lebanon. This network became integrated with the larger Ayman Joumaa moneylaundering network that used the Lebanese Canadian Bank to launder hundreds of million of dollars and move multi-ton shipments of cocaine on behalf of Colombian and Mexican drug cartels as well as Hezbollah.

“This immigration scheme is suspected to also be in place in Ecuador, Nicaragua and Bolivia, as well as some Caribbean countries.”

In 2016: A jury in New York found two relatives of Venezuelan President Nicolas Maduro guilty on Friday of attempting to import 800 kilograms of cocaine into the United States. Franqui Francisco Flores de Freitas and Efrain Antonio Campo Flores, both nephews of Maduro’s wife Cilia Flores, were arrested in November 2015 in Haiti in an investigation that saw Drug Enforcement Agency (DEA) informants pose as Mexican traffickers and meet with the nephews. More here.

Further on that case during trial it was revealed that Flores and Campo are the nephews of Cilia Flores, the wife of President Maduro and a politician in her own right. According to trial testimony, they were planning to move cocaine for the Revolutionary Armed Forces of Colombia (FARC) through Venezuela via the president’s private hangar at the Simon Bolivar International Airport in Caracas.

They expected the deal to bring them as much as $11 million, some of which was to be used to help fund Cilia Flores’ re-election campaign.

When LLC Means Lies, Laundering and Coverups in New York

Posted on July 28, 2017July 28, 2017 by Denise Simon

It festers in New York and New Jersey. LLC’s, Limited Liability Company is a corporate structure where members are not held personally liable, a legal characteristic that actually has major abuse components.

Yesterday, my buddy Bill Browder gave chilling testimony before the Senate Judiciary Committee. He included one remarkable response to a question on the abuse of FARA, Foreign Agent Registration Act whereby there is a huge hole in the law that you could drive a truck through. That whole is, if you are a corporation, you don’t have to register, giving rise to the massive trend of lies, money laundering and coverups.

Photo of Chaika and Medvedev: (Dmitry Medvedev in 2013 at Davos, declared he wanted Bill Browder dead)

Senator Durbin mentioned Yuri Chaika in the hearing. Chaika, a Russian prosecutor who employs Natalia Veselnitskaya, the woman who met with Donald Trump Jr. at Trump Tower in June of 2016. Yuri Chaika is connected to Avilon Automotive Group.

About 90 percent of Avilon Automotive Group is equally split between Alexander Varshavsky and Kamo Avagumyan.

Varshavsky is a naturalized American. He lives in Holmdel, New Jersey, an upscale enclave southwest of Manhattan, and owns a number of US companies which control assets in Russia with well over US$ 1 billion dollars in turnover, including Avilon. Huge detailed summary here.

The extended case includes corruption totaling more than $1 billion in the hole, citing bad loans made for fake assets, among other offenses. The lawsuit regarding Avilon Automotive Group and New York Motors and the Russian operation is described here.

When bribes are paid, some include Daimler, Mercedes Benz and Russia.

“Avilon” is an official dealer of «Mercedes-Benz RUS “. The company “New York Motors Moscow” is the dealer of Ford, but this does not stop it from entering into large contracts to supply Mercedes cars. Forbes magazine has included “New York Motors Moscow” into its list of top 200 private companies in Russia. According to the database SKRIN, the founder of one of the major suppliers of “Mercedes” for special services is the company New York Motors Corp, incorporated in the State of New Jersey. American business registers show that one of the owners of the company is Alexander Varshavsky.

Going further, below, are further examples supporting Browder’s declaration that include more Russians and other foreigners.

NYT

There is a large condo building in New York by the name of the Time Warner Center. Yup, Alexander Varshavsky lives there. Who are his neighbors? Many of the same corruptocrats. The full study performed by the NYT’s is here.

These residents buy these condos using cash and under secret names or shell operations like the condo in the official name of “25CC ST74B L.L.C”, which belongs to Vitaly Malkin tied to organized crime.

Andrey Vavilov bought a $37.5 million condo in Time Warner Center in 2009. The former Russian senator and businessman has been tied to a series of crooked deals, including government kickbacks, and accused of masterminding a “media blitz … involving a longtime adversary” and starting programs that accrued him (and his friends) a massive amount of wealth during the foundering first years of the Russian Federation, according to The Times.

(Vavilov is also close friends with Rinat Akhmetshin who was a director of the Washington think tank Eurasia Democracy Initiative. Akhmetshin was also in the Donald Trump Jr. meeting at Trump Tower in June of 2016. Akhmetshin is a former Soviet intelligence officer and remains employed by the SVR, the Russian external intelligence agency for civilian affairs. The SVR is responsible for espionage activity outside of the Russian Federation.)

Kabul Chawla is the likely owner a $19.4 million, 4,050-square-foot condo with five bedrooms in the Time Warner Center, according to The Times. A New Delhi developer, Chawla is accused of pre-selling homes to residents and failing to finish them. Of the homes his company does finish, many are allegedly shoddily done.

José Murat Casab owns two condos that he bought for $5.44 million in the Time Warner Center through the shell company Nivea Management, according to The Times. He is the former governor of Oaxaca and a well-connected, controversial Mexican politician who is rumored to have staged an assassination attempt on his own life to gain public favor.

Vitaly Malkin reportedly owns a $15.65 million condo in the Time Warner Center through an LLC. He is a Russian-Israeli businessman and politician who was denied entry into Canada by the Canadian government amid accusations of money laundering and international arms deals (accusations his lawyer vehemently denies).

Dimitrios Contominas owned a condo on the 74th floor of the Time Warner Center until he sold it for $21.4 million 2014. He is the owner of one of Greece’s biggest TV stations and is a well-known businessman who was arrested on fraud and corruption charges last year.

Wang Wenliang’s shell company Columbus Skyline LLC owns three condos in Time Warner Center. The Chinese businessman and contractor owns a construction company that was accused of “housing workers in New Jersey in hazardous, unsanitary conditions,” according to Times reporters.

Anil Agarwal owns not one but two condos in Time Warner Center through the shell company Amanita Corporation. He is an Indian business magnate who has been fined for dumping chemical waste, poisoning nearby communities as well as the environment in both India and Zambia.

Former ambassador to the US Prince Bandar bin Sultan and his wife (and daughter of a former Saudi king) Princess Haifa bint Faisal were also tied to a Time Warner Center unit. Princess Haifa was accused in certain press outlets of funding the 9/11 hijackers, though no evidence was found by the United States Commission that linked back to her.

James Nicholson owned an $8.5 million Time Warner condo until it was frozen by law enforcement. He was charged with stealing more than $100 million from investors in one of the worst Ponzi Schemes in American history. He is now in jail.

Pablo Ardila bought a $4 million condo in Time Warner Center back in 2004. According to The Times, the former Colombian official sold it after being arrested for “enriching himself illicitly.” He was released in Colombia without being convicted.

Stewart Ford bought a $6 million condo in the building before eventually transferring it to a shell company, according to the Times report. His firm was under investigation for fraud at the time and was “at the center of one of the biggest financial collapses in Britain with an estimated 30,000 victims,” the reporters wrote.

Largest Dark Web Hub for Illicit Drugs, Firearms, Malware Shutdown

Posted on July 26, 2017July 26, 2017 by Denise Simon

Largest Dark Web Marketplace for Illicit Drugs, Firearms, Malware and More Shut Down

The largest criminal marketplace on the dark web for the illicit trade of drugs, firearms, computer hacking tools and more was shut down Thursday, the US Department of Justice (DOJ) announced.

The online marketplace, called AlphaBay, operated for more than two years, allowing buyers and sellers to anonymously exchange illegal goods and services like drugs, toxic chemicals, stolen and fraudulent identification documents and malware.

Alert placed on the Silk Road dark web criminal marketplace’s homepage after its seizure in 2013 (Photo: FBI, Public Domain Mark 1.0)

AlphaBay was hosted on the dark web, a hidden part of the internet that users require special software to access. One of the most common ways to access the dark web is by using a browser called Tor, which prevents network surveillance and essentially renders a user anonymous online.

Financial transactions between users on AlphaBay were conducted using cryptocurrencies, namely Bitcoin, Monero and Ethereum, according to the DOJ. Authorities believe the site was used to launder hundreds of millions of dollars from such illegal transactions.

AlphaBay was also linked to multiple overdose deaths in the US as a “major source” of fentanyl and heroin, The Independent reported.

The investigations that led to Thursday’s seizure of AlphaBay and Hansa, another major criminal market on the dark web, were led by the Federal Bureau of Investigation (FBI), the US Drug Enforcement Agency and the Dutch National Police, according to Europol, which also supported the operations.

Law enforcement agencies in Thailand, Lithuania, Canada, the UK and France also cooperated in the seizure of AlphaBay and Hansa’s digital infrastructure.

“Transnational organized crime poses a serious threat to our national and economic security,” said FBI Acting Director Andrew McCabe.

“Whether they operate in broad daylight or on the dark net, we will never stop working to find and stop these criminal syndicates.”

Authorities were able to take AlphaBay down in early July when they took the site’s alleged founder Alexandre Cazes into custody, The New York Times reported.

Cazes, 25, was a Canadian citizen living in Bangkok, Thailand. A few days after being arrested, on July 12, Cazes apparently committed suicide.

He was found to have possessed millions of dollars in cryptocurrency and luxury assets around the world, including expensive vehicles, residences and a hotel in Thailand.

At the time of its takedown, AlphaBay hosted more than 250,000 listings for illegal drugs and chemicals and more than 100,000 listings for stolen or fake documents, counterfeit goods, firearms and other illicit goods and services.

By comparison, the marketplace’s scope dwarfed the former largest illegal dark web exchange called the Silk Road, which was taken down in 2013 and had about 14,000 listings.

Europol Executive Director Rob Wainwright called AlphaBay’s demise a “massive blow to the underground criminal economy.”

However, the authorities’ fight against dark web markets is likely to continue.

In the wake of AlphaBay and Hansa’s seizure, NBC News reported a spike in traffic to a former competitor of the two marketplaces called DreamMarket, which might now enjoy a corner on the illegal market.

***

The U.S. Attorney’s Office for the Eastern District of California filed a civil forfeiture complaint against Alexandre Cazes and his wife’s assets located throughout the world, including in Thailand, Cyprus, Lichtenstein, and Antigua & Barbuda. Cazes and his wife amassed numerous high value assets, including luxury vehicles, residences and a hotel in Thailand. Cazes also possessed millions of dollars in cryptocurrency, which has been seized by the FBI and the Drug Enforcement Administration (DEA).

According to publicly available information on AlphaBay prior to its takedown, one AlphaBay staff member claimed that it serviced over 200,000 users and 40,000 vendors. Around the time of takedown, there were over 250,000 listings for illegal drugs and toxic chemicals on AlphaBay, and over 100,000 listings for stolen and fraudulent identification documents and access devices, counterfeit goods, malware and other computer hacking tools, firearms and fraudulent services. Comparatively, the Silk Road dark web marketplace, which was seized by law enforcement in November 2013, had reportedly approximately 14,000 listings for illicit goods and services at the time of seizure and was the largest dark web marketplace at the time.

“This is likely one of the most important criminal investigations of the year – taking down the largest dark net marketplace in history,” said Attorney General Jeff Sessions. “Make no mistake, the forces of law and justice face a new challenge from the criminals and transnational criminal organizations who think they can commit their crimes with impunity using the dark net. The dark net is not a place to hide. The Department will continue to find, arrest, prosecute, convict, and incarcerate criminals, drug traffickers and their enablers wherever they are. We will use every tool we have to stop criminals from exploiting vulnerable people and sending so many Americans to an early grave. I believe that because of this operation, the American people are safer – safer from the threat of identity fraud and malware, and safer from deadly drugs.”

“Transnational organized crime poses a serious threat to our national and economic security,” said Acting Director Andrew McCabe of the FBI. “Whether they operate in broad daylight or on the dark net, we will never stop working to find and stop these criminal syndicates. We want to thank our international partners and those at the Department of Justice, the DEA and the IRS-CI for their hard work in demonstrating what we can do when we stand together.” More here.

Magnitsky Act, Facts and Putin’s Operatives in the U.S.

Posted on July 25, 2017July 25, 2017 by Denise Simon

Bill and I have become distant buddies. I asked him for his opening statement before the Senate Judiciary Committee scheduled for July 25, 2017. He granted the request.

As a primer, current domestic spies and retired operatives have all stated that the meetings and or interactions between key Russians and those in the Trump orbit are indeed traditional tradecraft and that also includes several members of Congress meeting with the same.

Hayden told me, “My god, this is just such traditional tradecraft.” He said that he has talked to people in the intelligence community about Mowatt-Larssen’s theory and that “every case officer I’ve pushed on this” agreed with it. “This is how they do it.”

Hayden explained that the Russians would have learned several things from the approach. “Would they take the meeting?” he said. “So, then you get the willingness. No. 2, would they report the meeting?” Hayden suggested that Russian intelligence was sophisticated enough to know whether the Trump campaign reported the meeting to the F.B.I., which it didn’t. So, while Kushner claimed that the meeting was irrelevant, from a Russian intelligence perspective it would have been seen as a clear signal. “At the end, they have established that these guys are willing,” Hayden said, pausing. “How do I put this? They did not reject a relationship.” Read the full summary here.

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Bill Browder’s Testimony to the Senate Judiciary Committee

“I hope that my story will help you understand the methods of Russian operatives in Washington and how they use U.S. enablers to achieve major foreign policy goals without disclosing those interests,” Browder writes.

The financier Bill Browder has emerged as an unlikely central player in the ongoing investigation of Russian interference in the 2016 elections. Sergei Magnitsky, an attorney Browder hired to investigate official corruption, died in Russian custody in 2009. Congress subsequently imposed sanctions on the officials it held responsible for his death, passing the Magnitsky Act in 2012. Russian President Vladimir Putin’s government retaliated, among other ways, by suspending American adoptions of Russian children.

Natalia Veselnitskaya, the Russian lawyer who secured a meeting with Donald Trump Jr., Jared Kushner, and Paul Manafort, was engaged in a campaign for the repeal of the Magnitsky Act, and raised the subject of adoptions in that meeting. That’s put the spotlight back on Browder’s long campaign for Kremlin accountability, and against corruption—a campaign whose success has irritated Putin and those around him.

Browder will testify before the Senate Judiciary Committee on Wednesday in a hearing about Foreign Agents Registration Act enforcement; what follows are the prepared remarks he submitted to the committee. The committee also called as witnesses former Trump campaign chairman Paul Manafort, Donald Trump Jr., and Glenn Simpson, the co-founder of the Fusion GPS research firm that commissioned the Trump dossier. As of Tuesday evening, only Browder is definitely scheduled to appear during that panel.

Chairman Grassley, Ranking Member Feinstein, and members of the committee, thank you for giving me the opportunity to testify today on the Russian government’s attempts to repeal the Magnitsky Act in Washington in 2016, and the enablers who conducted this campaign in violation of the Foreign Agents Registration Act, by not disclosing their roles as agents for foreign interests.

Before I get into the actions of the agents who conducted the anti-Magnitsky campaign in Washington for the benefit of the Russian state, let me share a bit of background about Sergei Magnitsky and myself.

I am the founder and CEO of Hermitage Capital Management. I grew up in Chicago, but for the last 28 years I’ve lived in Moscow and London, and am now a British citizen. From 1996 to 2005, my firm, Hermitage Capital, was one of the largest investment advisers in Russia with more than $4 billion invested in Russian stocks.

Russia has a well-known reputation for corruption; unfortunately, I discovered that it was far worse than many had thought. While working in Moscow I learned that Russian oligarchs stole from shareholders, which included the fund I advised. Consequently, I had an interest in fighting this endemic corruption, so my firm started doing detailed research on exactly how the oligarchs stole the vast amounts of money that they did. When we were finished with our research we would share it with the domestic and international media.

For a time, this naming and shaming campaign worked remarkably well and led to less corruption and increased share prices in the companies we invested in. Why? Because President Vladimir Putin and I shared the same set of enemies. When Putin was first elected in 2000, he found that the oligarchs had misappropriated much of the president’s power as well. They stole power from him while stealing money from my investors. In Russia, your enemy’s enemy is your friend, and even though I’ve never met Putin, he would often step into my battles with the oligarchs and crack down on them.

That all changed in July 2003, when Putin arrested Russia’s biggest oligarch and richest man, Mikhail Khodorkovsky. Putin grabbed Khodorkovsky off his private jet, took him back to Moscow, put him on trial, and allowed television cameras to film Khodorkovsky sitting in a cage right in the middle of the courtroom. That image was extremely powerful, because none of the other oligarchs wanted to be in the same position. After Khodorkovsky’s conviction, the other oligarchs went to Putin and asked him what they needed to do to avoid sitting in the same cage as Khodorkovsky. From what followed, it appeared that Putin’s answer was, “Fifty percent.” He wasn’t saying 50 percent for the Russian government or the presidential administration of Russia, but 50 percent for Vladimir Putin personally. From that moment on, Putin became the biggest oligarch in Russia and the richest man in the world, and my anti-corruption activities would no longer be tolerated.

The results of this change came very quickly. On November 13, 2005, as I was flying into Moscow from a weekend away, I was stopped at Sheremetyevo airport, detained for 15 hours, deported, and declared a threat to national security.

Eighteen months after my expulsion a pair of simultaneous raids took place in Moscow. Over 25 Interior Ministry officials barged into my Moscow office and the office of the American law firm that represented me. The officials seized all the corporate documents connected to the investment holding companies of the funds that I advised. I didn’t know the purpose of these raids so I hired the smartest Russian lawyer I knew, a 35-year-old named Sergei Magnitsky. I asked Sergei to investigate the purpose of the raids and try to stop whatever illegal plans these officials had.

Sergei went out and investigated. He came back with the most astounding conclusion of corporate identity theft: The documents seized by the Interior Ministry were used to fraudulently re-register our Russian investment holding companies to a man named Viktor Markelov, a known criminal convicted of manslaughter. After more digging, Sergei discovered that the stolen companies were used by the perpetrators to misappropriate $230 million of taxes that our companies had paid to the Russian government in the previous year.

I had always thought Putin was a nationalist. It seemed inconceivable that he would approve of his officials stealing $230 million from the Russian state. Sergei and I were sure that this was a rogue operation and if we just brought it to the attention of the Russian authorities, the “good guys” would get the “bad guys” and that would be the end of the story.

We filed criminal complaints with every law enforcement agency in Russia, and Sergei gave sworn testimony to the Russian State Investigative Committee (Russia’s FBI) about the involvement of officials in this crime.

However, instead of arresting the people who committed the crime, Sergei was arrested. Who took him? The same officials he had testified against. On November 24, 2008, they came to his home, handcuffed him in front of his family, and threw him into pre-trial detention.

Sergei’s captors immediately started putting pressure on him to withdraw his testimony. They put him in cells with 14 inmates and eight beds, leaving the lights on 24 hours a day to impose sleep deprivation. They put him in cells with no heat and no windowpanes, and he nearly froze to death. They put him in cells with no toilet, just a hole in the floor and sewage bubbling up. They moved him from cell to cell in the middle of the night without any warning. During his 358 days in detention he was forcibly moved multiple times.

They did all of this because they wanted him to withdraw his testimony against the corrupt Interior Ministry officials, and to sign a false statement that he was the one who stole the $230 million—and that he had done so on my instruction.

Sergei refused. In spite of the grave pain they inflicted upon him, he would not perjure himself or bear false witness.

After six months of this mistreatment, Sergei’s health seriously deteriorated. He developed severe abdominal pains, he lost 40 pounds, and he was diagnosed with pancreatitis and gallstones and prescribed an operation for August 2009. However, the operation never occurred. A week before he was due to have surgery, he was moved to a maximum security prison called Butyrka, which is considered to be one of the harshest prisons in Russia. Most significantly for Sergei, there were no medical facilities there to treat his medical conditions.

At Butyrka, his health completely broke down. He was in agonizing pain. He and his lawyers wrote 20 desperate requests for medical attention, filing them with every branch of the Russian criminal justice system. All of those requests were either ignored or explicitly denied in writing.

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After more than three months of untreated pancreatitis and gallstones, Sergei Magnitsky went into critical condition. The Butyrka authorities did not want to have responsibility for him, so they put him in an ambulance and sent him to another prison that had medical facilities. But when he arrived there, instead of putting him in the emergency room, they put him in an isolation cell, chained him to a bed, and eight riot guards came in and beat him with rubber batons.

That night he was found dead on the cell floor.

Sergei Magnitsky died on November 16, 2009, at the age of 37, leaving a wife and two children.

I received the news of his death early the next morning. It was by far the most shocking, heart-breaking, and life-changing news I’ve ever received.

Sergei Magnitsky was murdered as my proxy. If Sergei had not been my lawyer, he would still be alive today.

That morning I made a vow to Sergei’s memory, to his family, and to myself that I would seek justice and create consequences for the people who murdered him. For the last seven and a half years, I’ve devoted my life to this cause.

Even though this case was characterized by injustice all the way through, the circumstances of Sergei’s torture and death were so extreme that I was sure some people would be prosecuted. Unlike other deaths in Russian prisons, which are largely undocumented, Sergei had written everything down. In his 358 days in detention, Sergei wrote over 400 complaints detailing his abuse. In those complaints he described who did what to him, as well as where, how, when, and why. He was able to pass his hand-written complaints to his lawyers, who dutifully filed them with the Russian authorities. Although his complaints were either ignored or rejected, copies of them were retained. As a result, we have the most well-documented case of human rights abuse coming out of Russia in the last 35 years.

When I began the campaign for justice with this evidence, I thought that the Russian authorities would have no choice but to prosecute at least some of the officials involved in Sergei Magnitsky’s torture and murder. It turns out I could not have been more wrong. Instead of prosecuting, the Russian authorities circled the wagons and exonerated everybody involved. They even went so far as to offer promotions and state honors to those most complicit in Sergei’s persecution.

It became obvious that if I was going to get any justice for Sergei Magnitsky, I was going to have to find it outside of Russia.

But how does one get justice in the West for a murder that took place in Russia? Criminal justice is based on jurisdiction: One cannot prosecute someone in New York for a murder committed in Moscow. As I thought about it, the murder of Sergei Magnitsky was done to cover up the theft of $230 million from the Russian Treasury. I knew that the people who stole that money wouldn’t keep it in Russia. As easily as they stole the money, it could be stolen from them. These people keep their ill-gotten gains in the West, where property rights and rule of law exist. This led to the idea of freezing their assets and banning their visas here in the West. It would not be true justice but it would be much better than the total impunity they enjoyed.

In 2010, I traveled to Washington and told Sergei Magnitsky’s story to Senators Benjamin Cardin and John McCain. They were both shocked and appalled and proposed a new piece of legislation called The Sergei Magnitsky Rule of Law Accountability Act. This would freeze assets and ban visas for those who killed Sergei as well as other Russians involved in serious human rights abuse.

Despite the White House’s desire to reset relations with Russia at the time, this case shined a bright light on the criminality and impunity of the Putin regime and persuaded Congress that something needed to be done. In November 2012 the Magnitsky Act passed the House of Representatives by 364 to 43 votes and later the Senate 92 to 4 votes. On December 14, 2012, President Obama signed the Sergei Magnitsky Act into law.

Putin was furious. Looking for ways to retaliate against American interests, he settled on the most sadistic and evil option of all: banning the adoption of Russian orphans by American families.

This was particularly heinous because of the effect it had on the orphans. Russia did not allow the adoption of healthy children, just sick ones. In spite of this, American families came with big hearts and open arms, taking in children with HIV, Down syndrome, Spina Bifida and other serious ailments. They brought them to America, nursed them, cared for them and loved them. Since the Russian orphanage system did not have the resources to look after these children, many of those unlucky enough to remain in Russia would die before their 18th birthday. In practical terms, this meant that Vladimir Putin sentenced his own, most vulnerable and sick Russian orphans to death in order to protect corrupt officials in his regime.

Why did Vladimir Putin take such a drastic and malicious step?

For two reasons. First, since 2012 it’s emerged that Vladimir Putin was a beneficiary of the stolen $230 million that Sergei Magnitsky exposed. Recent revelations from the Panama Papers have shown that Putin’s closest childhood friend, Sergei Roldugin, a famous cellist, received $2 billion of funds from Russian oligarchs and the Russian state. It’s commonly understood that Mr. Roldugin received this money as an agent of Vladimir Putin. Information from the Panama Papers also links some money from the crime that Sergei Magnitsky discovered and exposed to Sergei Roldugin. Based on the language of the Magnitsky Act, this would make Putin personally subject to Magnitsky sanctions.

This is particularly worrying for Putin, because he is one of the richest men in the world. I estimate that he has accumulated $200 billion of ill-gotten gains from these types of operations over his 17 years in power. He keeps his money in the West and all of his money in the West is potentially exposed to asset freezes and confiscation. Therefore, he has a significant and very personal interest in finding a way to get rid of the Magnitsky sanctions.

The second reason why Putin reacted so badly to the passage of the Magnitsky Act is that it destroys the promise of impunity he’s given to all of his corrupt officials.

There are approximately ten thousand officials in Russia working for Putin who are given instructions to kill, torture, kidnap, extort money from people, and seize their property. Before the Magnitsky Act, Putin could guarantee them impunity and this system of illegal wealth accumulation worked smoothly. However, after the passage of the Magnitsky Act, Putin’s guarantee disappeared. The Magnitsky Act created real consequences outside of Russia and this created a real problem for Putin and his system of kleptocracy.

For these reasons, Putin has stated publicly that it was among his top foreign policy priorities to repeal the Magnitsky Act and to prevent it from spreading to other countries. Since its passage in 2012, the Putin regime has gone after everybody who has been advocating for the Magnitsky Act.

One of my main partners in this effort was Boris Nemtsov. Boris testified in front of the U.S. Congress, the European Parliament, the Canadian Parliament, and others to make the point that the Magnitsky Act was a “pro-Russian” piece of legislation because it narrowly targeted corrupt officials and not the Russian people. In 2015, Boris Nemtsov was murdered on the bridge in front of the Kremlin.

Boris Nemtsov’s protégé, Vladimir Kara-Murza, also traveled to law-making bodies around the world to make a similar case. After Alexander Bastrykin, the head of the Russian Investigative Committee, was added to the Magnitsky List in December of 2016, Vladimir was poisoned. He suffered multiple organ failure, went into a coma and barely survived.

The lawyer who represented Sergei Magnitsky’s mother, Nikolai Gorokhov, has spent the last six years fighting for justice. This spring, the night before he was due in court to testify about the state cover up of Sergei Magnitsky’s murder, he was thrown off the fourth floor of his apartment building. Thankfully he survived and has carried on in the fight for justice.

I’ve received many death threats from Russia. The most notable one came from Russian Prime Minister Dmitry Medvedev at the World Economic Forum in Davos, Switzerland, in 2013. When asked by a group of journalists about the death of Sergei Magnitsky, Medvedev replied, “It’s too bad that Sergei Magnitsky is dead and Bill Browder is still alive and free.” I’ve received numerous other death threats from Russian sources through text messages, emails, and voicemails. U.S. government sources have warned me about a planned Russian rendition against me. These threats were in addition to numerous unsuccessful attempts that the Russian government has made to arrest me using Interpol or other formal legal assistance channels.

The Russian government has also used its resources and assets to try to repeal the Magnitsky Act. One of the most shocking attempts took place in the spring and summer of last year when a group of Russians went on a lobbying campaign in Washington to try to repeal the Magnitsky Act by changing the narrative of what had happened to Sergei. According to them, Sergei wasn’t murdered and he wasn’t a whistle-blower, and the Magnitsky Act was based on a false set of facts. They used this story to try to have Sergei’s name taken off of the Global Magnitsky Act that passed in December 2016. They were unsuccessful.

Who was this group of Russians acting on behalf of the Russian state? Two men named Pyotr and Denis Katsyv, a woman named Natalia Veselnitskaya, and a large group of American lobbyists, all of whom are described below.

Pyotr Katsyv, father to Denis Katsyv, is a senior Russian government official and well-placed member of the Putin regime; Denis Katsyv was caught by U.S. law enforcement using proceeds from the crime that Sergei Magnitsky uncovered to purchase high-end Manhattan real estate (the case recently settled with the Katsyv’s paying $6 million to the U.S. government). Natalia Veselnitskaya was their lawyer.

In addition to working on the Katsyv’ s money laundering defense, Ms. Veselnitskaya also headed the aforementioned lobbying campaign to repeal the Magnitsky Act. She hired a number of lobbyists, public relations executives, lawyers, and investigators to assist her in this task.

Her first step was to set up a fake NGO that would ostensibly promote Russian adoptions, although it quickly became clear that the NGO’s sole purpose was to repeal the Magnitsky Act. This NGO was called the Human Rights Accountability Global Initiative Foundation (HRAGI). It was registered as a corporation in Delaware with two employees on February 18, 2016. HRAGI was used to pay Washington lobbyists and other agents for the anti-Magnitsky campaign. (HRAGI now seems to be defunct, with taxes due.)

Through HRAGI, Rinat Akhmetshin, a former Soviet intelligence officer naturalised as an American citizen, was hired to lead the Magnitsky repeal effort. Mr. Akhmetshin has been involved in a number of similar campaigns where he’s been accused of various unethical and potentially illegal actions like computer hacking.

Veselnitskaya also instructed U.S. law firm Baker Hostetler and their Washington, D.C.-based partner Marc Cymrot to lobby members of Congress to support an amendment taking Sergei Magnitsky’s name off the Global Magnitsky Act. Mr. Cymrot was in contact with Paul Behrends, a congressional staffer on the House Foreign Affairs Committee at the time, as part of the anti-Magnitsky lobbying campaign.

Veselnitskaya, through Baker Hostetler, hired Glenn Simpson of the firm Fusion GPS to conduct a smear campaign against me and Sergei Magnitsky in advance of congressional hearings on the Global Magnitsky Act. He contacted a number of major newspapers and other publications to spread false information that Sergei Magnitsky was not murdered, was not a whistle-blower, and was instead a criminal. They also spread false information that my presentations to lawmakers around the world were untrue.

As part of Veselnitskaya’s lobbying, a former Wall Street Journal reporter, Chris Cooper of the Potomac Group, was hired to organize the Washington, D.C.-based premiere of a fake documentary about Sergei Magnitsky and myself. This was one the best examples of Putin’s propaganda.

They hired Howard Schweitzer of Cozzen O’Connor Public Strategies and former Congressman Ronald Dellums to lobby members of Congress on Capitol Hill to repeal the Magnitsky Act and to remove Sergei’s name from the Global Magnitsky bill.

On June 13, 2016, they funded a major event at the Newseum to show their fake documentary, inviting representatives of Congress and the State Department to attend.

While they were conducting these operations in Washington, D.C., at no time did they indicate that they were acting on behalf of Russian government interests, nor did they file disclosures under the Foreign Agent Registration Act.

United States law is very explicit that those acting on behalf of foreign governments and their interests must register under FARA so that there is transparency about their interests and their motives.

Since none of these people registered, my firm wrote to the Department of Justice in July 2016 and presented the facts.

I hope that my story will help you understand the methods of Russian operatives in Washington and how they use U.S. enablers to achieve major foreign policy goals without disclosing those interests. I also hope that this story and others like it may lead to a change in the FARA enforcement regime in the future.

Thank you.