Red Notice

by Bill Browder

  As he and I argued, my call waiting beeped. I looked at the caller ID only because I was worried that it might be Elena, who was due to give birth to our second child later in the month. It wasn’t Elena, though—it was Emma, the Hermitage Fund secretary in Moscow. Emma was a pleasant twenty-one-year-old Russian girl from the provinces who looked several years younger. She was honest and hardworking and managed the office vigilantly. She rarely called me directly, so I told the trader to hold on and clicked over. “Emma, can this wait?”

  “No, it can’t, Bill,” she said in perfect English. “There are twenty-five plainclothes police officers raiding our office!”

  “What?”

  She repeated what she’d just said.

  “Shit. Hold on.” I clicked back to the trader, told him I had to call back, and returned to Emma. “What are they after?”

  “I don’t know but there’s a guy—Artem Kuznetsov—who’s in charge and—”

  “Did you say Kuznetsov?”

  “Yes.”

  This had to be the same Artem Kuznetsov who’d tried to shake us down us a few months earlier! “Does he have a search warrant?”

  “Yes. He showed it to me, but he won’t let me keep it.”

  “Can you write down what it says?”

  “I’ll try.”

  I hung up and called Ivan to tell him what was going on. He was equally alarmed and called Emma back. Then I called my lawyer in Moscow, Jamison Firestone. Jamison—a fit, good-looking, forty-one-year-old American with bright eyes, brown hair, and an incredibly boyish face—was a Russophile who’d been in Russia since 1991. He was the managing partner of Firestone Duncan, the law firm he founded with another American, Terry Duncan. In 1993, during the attempted Russian coup, Terry had gone to the Ostankino TV Tower to help protesters. As the authorities opened fire on them, he tried to evacuate the wounded, but he was shot and later died. Afterward Jamison carried on by himself.

  I liked Jamison from the moment I met him, not just because he was a straight-talking American, but also because unlike most lawyers he never overcharged me. We’d done a lot of business together over the years, and our stars had risen together.

  As soon as he picked up the phone, I skipped all pleasantries. “Jamie, I just got a call from our secretary in Moscow. There’s—”

  “Bill! You were my next call—”

  “Jamie, there are twenty-five cops raiding our office!”

  “You too?”

  “What’re you talking about, Jamie?”

  “There’re two dozen plainclothes officers here tearing my office apart as well. They’ve got a search warrant for Kameya.”

  This was like being punched in the face. “Jesus Christ!”

  Kameya was a Russian company owned by one of our clients whom we advised on investing in Russian stocks. Since the police were conducting simultaneous raids at our office and at Jamison’s, I could only conclude that the police were targeting Hermitage.

  “Shit, Jamie. What do we do?”

  “I don’t know, Bill. They’re holding us captive in our conference room. They won’t even let people use the bathrooms. The warrant doesn’t appear to be valid. The cops aren’t allowed to search until our defense lawyers get here, but they’re ripping the place apart anyway.”

  “Can you call me as soon as you learn anything more?”

  “I will.”

  We hung up. Now I was late for the board meeting. I grabbed my file with the agenda and presentations and quickly made my way downstairs. Adrenaline pumped through my veins—all I could think about were these raids.

  I entered the room and our four board members—men in their fifties and sixties who’d come in from different points in Europe—were looking relaxed and happy as they sipped coffee, ate croissants, and gossiped about the markets. I broke the mood by telling them what was going on in Moscow. As I spoke, Ivan burst into the room looking like a ghost. One of the board members asked what else we knew. Since we didn’t know anything else, I decided to call Emma and put our phone on speaker.

  She answered and put her phone on speaker too. We listened from seventeen hundred miles away to a live blow-by-blow of boxes being emptied, men shouting, feet stomping, and even our safe being drilled into.

  Ten minutes passed. Twenty. Thirty. We were shocked and impressed as Emma tried to take charge, shouting at the officers: “You can’t drink our coffee! . . . Put that computer down! . . . Leave him alone! That guy has nothing to do with Hermitage!” She was talking about a Deutsche Bank employee who was unfortunate enough to have shown up that morning to deliver some documents. The police had forced him to stay, and he was holed in up in the conference room, shitting himself with fear.

  This raid was both disturbing and riveting. I assured the board members in Paris that there was nothing for the police to take from our office—no relevant information, no confidential files, and most importantly no assets. Everything that mattered had been safely removed from the country the previous summer.

  While we continued to listen to the raid at the Hermitage office, my phone rang. It was Jamison. I stepped out of the room to take the call.

  “B-Bill. Something terrible has hap-happened!”

  “Jamison, slow down.” He was upset and emotional. He was a corporate lawyer with fifteen years’ experience, and I’d never heard him like this. “What’s going on?”

  “Maxim, one of my junior lawyers, pointed out that their warrant wasn’t valid and that they couldn’t take things unrelated to Kameya.”

  “And what happened?”

  “They beat the shit out of him! He’s going to the hospital right now.”

  “Fuck. Is he okay?”

  “I don’t know.”

  A lump formed in my throat. “Jamie, you’ve got to document everything these guys are doing. We’re not going to let these bastards get away with this.”

  “Bill—it’s not just Maxim. They’re taking almost everything.”

  “What do you mean ‘everything’?”

  “They’re grabbing client files that have nothing to do with Kameya. They have two vans out front. They’ve taken almost all of our computers, our servers, all the corporate stamps and seals we hold for our clients’ companies. None of this makes any sense. It’ll be hard for some of our clients to operate without their documents and seals. I don’t even know how we’re going to be able to work after this. We can’t even get emails!”

  I was at a loss for words. “I . . . I’m so sorry, Jamie. We’re going to get through this together. I promise. More importantly, let me know how Maxim’s doing as soon as you know anything.”

  “Okay. I will.”

  I walked back into the conference room completely stunned. Everybody looked at me. “Hang up the phone.” Ivan said good-bye to Emma and clicked off. I then told them what was happening at Firestone Duncan. None of us could speak.

  We were in deep shit, and if I knew anything about Russia, this was just the beginning.

  23

  Department K

  Ivan and I took the 3:00 p.m. Eurostar back to London. We needed to talk out of earshot, and the only place available was between cars, where we sat uncomfortably on fold-down jump seats. Northern France churned by just outside the door, a blur of green and gray. We tried to call Moscow and London, but the connection kept dropping out as the train zipped in and out of tunnels, so we gave up and went back to our seats, where we sat in silence for the rest of the journey. Although I’d known Russia was a violent place, since the day that I’d set foot on Russian soil in 1992 it had never touched me, or anyone close to me. Now, all of a sudden, it was all too real.

  My first concern was Maxim. As soon as I got home, I called Jamie and asked for an update. After Maxim had been beaten, the police had arrested and fined him, even before he was taken to the hospital. Thankfully, his injuries were not life-threatening. I implored Jamie to file a complaint, but he resisted. “Maxim’s scared, Bill. The officers who beat him said that they’d accuse
him of pulling a knife on them, rearrest him, and put him in jail if he says anything.”

  How could I argue with that? At least he was going to be all right.

  I arrived at the office early the next morning. Ivan was already there, inspecting a handwritten copy of the search warrant that Emma had faxed over. Her handwriting was obsessively clear and still had the bubbly letters of a schoolgirl’s, but the content of the warrant was anything but innocent. It said that the tax crimes department of the Moscow Interior Ministry had opened a criminal case against Ivan, accusing him of underpaying $44 million in dividend withholding taxes for Kameya. They came up with an arbitrary tax claim for the company, and because Ivan administered the entity for our client, the police blamed Ivan.

  No matter how illegitimate the Russian criminal justice system may seem from the outside, Russia is still a sovereign state that most Western governments cooperate with on extradition requests, Interpol Red Notices, and international asset freezes. Even though we were in London, ignoring a criminal case like this could lead to all sorts of terrible things for Ivan.

  The warrant was baseless—Kameya had paid the same rate of tax as everyone else—and accusing Ivan of any crime was plainly unjust. If there was ever a person who lived by the rules, it was Ivan Cherkasov. He was a good husband, father, friend, and colleague. His suits were always pressed, his hair was always trimmed, and he was always on time. Watching him pace the office because of this trumped-up charge was infuriating, and I promised I would do whatever I could to help him sort out this mess.

  The first thing I did was to retain the best tax lawyer I knew in Moscow, a thirty-five-year-old attorney named Sergei Magnitsky. Sergei was the head of the tax practice at Firestone Duncan, and his knowledge of Russian tax law was encyclopedic. Since he’d begun working there, he was rumored never to have lost a case.

  Once Sergei was on board, we asked him to analyze whether we’d done anything wrong. Ivan had always been vigilant, and I assumed that our taxes were correctly paid, but since the Interior Ministry was making such grave allegations, we needed to be absolutely sure.

  Sergei requested all of Kameya’s tax filings and supporting documents. He stayed up late into the night and called the next morning with his analysis: “Guys, I’ve looked at every aspect of Kameya’s tax situation. Ivan’s done nothing wrong.”

  While Sergei could help us understand tax law, Ivan also needed a criminal lawyer to deal with the police. We then hired Eduard Khayretdinov, a former police investigator and judge who’d been a defense attorney since 1992. He was forty-eight years old, six feet two, with gray hair, a thick mustache, and big hands. He reminded me of a Russian version of the Marlboro Man. He was the type of man you wanted to have on your side in Russia if things ever went horribly wrong. He’d defended and won some of Russia’s most high profile and seemingly hopeless criminal cases—in a country whose conviction rate is over 99 percent, that was a true miracle.

  Eduard volunteered to go to the police station to find out what the cops were up to. When he arrived, he was directed to the lead investigator on the case, a thirty-year-old major named Pavel Karpov. Eduard asked Karpov for a copy of some of the case files, which under Russian law the defense attorney is entitled to see. Karpov refused. This was very unusual. In Eduard’s fifteen years as a defense lawyer, it had never before happened.

  Eduard was frustrated by Karpov’s stonewalling, but I actually saw it as a positive sign. I thought that if Karpov was afraid to show us the case files, it must mean that he simply had no case.

  Unfortunately, my optimistic theory started to unravel almost immediately. On June 14 I got a call from Catherine Belton, the reporter from the 2006 G8 summit who’d asked Putin why I was kicked out of the country. She was now working for the Financial Times and wanted to know if I had any comment on the raids by the Interior Ministry. I gave her my response and hoped the article would accurately reflect our side of the story.

  The next morning I went to the front door to pick up the papers and was greeted by a headline on the front page of the FT that read, “Russia probes Browder firm over taxes.” I sat on the bench in my hallway and read the article three times. It was full of Interior Ministry fabrications and innuendo, but the one thing that jumped out at me was a single sentence in the middle of the story: “Investigators are targeting Mr. Browder as being behind the scheme.”

  These guys weren’t backing off at all. They had much bigger plans. Clearly, whatever was happening with Ivan and Kameya was just a prelude to a much bigger plan to go after me.

  This was disturbing, and we were at a complete disadvantage. We arguably had the best lawyers in Russia, but that didn’t matter because our opponents were law enforcement officials working outside the law. What we needed more than anything was intelligence, the kind of intelligence that the FSB would have. What we needed was Vadim’s source Aslan, the man who’d warned Vadim to leave Russia back in 2006, after things got hot following my expulsion from the country.

  We had no idea whether the internal governmental conflict that had motivated Aslan to come to Vadim in the first place was still going on or if he would be willing to help us again, but it was worth a try.

  Vadim sent him a simple message asking to talk.

  Thirty minutes later we had a response: “What do you want to know?”

  “I’m hoping you could tell me who’s behind last week’s raids, and if you might know what they’re planning next?” Vadim wrote.

  A few minutes later another message arrived: “Yes, I know. Department K of the FSB is behind everything. They want to take Browder down and seize all of his assets. This case is only the beginning. Many other criminal cases will follow.”

  When Vadim translated this message for me, my leg started to twitch uncontrollably. Aslan’s message was unequivocal and chilling, and I desperately hoped he was wrong.

  I had a million questions, starting with, What was Department K?

  I asked Vadim, but he didn’t know. We walked to his desk on the off chance we could find some reference on the Internet. Remarkably, after clicking several links, we were staring at an official organizational chart on the FSB website. Department K was the FSB’s economic counterespionage unit.

  I stumbled back to my desk and fell into my chair. I told my secretary to hold all calls. I needed to process this. The thought of being pursued by Department K was almost too much to take in.

  As I sat there, I thought, I am being pursued by the Russian secret police, and there is nothing I can do about it. I can’t file a complaint with them and I can’t request my case files. They are the secret police. Worse, they have access to every tool imaginable, both legitimate and illegitimate. The FSB doesn’t just issue arrest warrants and extradition requests—it dispatches assassins.

  24

  “But Russian Stories Never Have Happy Endings”

  As I sat at my desk trying to take everything in, my secretary quietly placed a message at my elbow: “Elena called. Not urgent.” Normally I would have called Elena back right away, but I had so much on my mind that I didn’t.

  About an hour later, Elena called again. I answered. Before I could say anything she yelled, “Why haven’t you called?”

  “What do you mean? You said it wasn’t urgent.”

  “No—I said it was urgent. Bill, I’m in labor. I’m at the hospital!”

  “My God! I’m coming right away!” I jumped up and ran for the door. I didn’t wait for the elevator and rushed down the stairs, nearly slipping in my smooth-soled loafers as I turned a corner. I ran outside into the midafternoon sun, suddenly forgetting about Department K, the FSB, and Russia.

  Covent Garden is a maze of tiny roads that leads to a central pedestrian square. Hailing a taxi there was pointless because it would take twenty minutes just to get out of the neighborhood, so I sprinted toward Charing Cross Road, but when I arrived, there wasn’t an unoccupied taxi in sight. I kept running in the direction of the hospital, looking over my should
er for cabs along the way. I dodged through pedestrians and the mixture of London traffic with its trucks, double-decker buses, and motor scooters. It seemed as if every London cab was already taken. It was too far for me to go on foot, so I kept on running and finally found a free taxi on Shaftesbury Avenue.

  Fifteen minutes later I burst through the hospital doors. I was a complete mess as I made my way up to the delivery suite on the fourth floor. Elena was in the final stages of labor. She was screaming and red-faced from the contractions. She didn’t have time to be mad at me—she didn’t have time to think about me at all. I took her hand and she gripped mine so hard I thought her nails might draw blood. Twenty minutes later, our second daughter, Veronica, was born.

  Unlike with Jessica’s birth, when the joy of a new baby overcame my thoughts of problems in Russia, this time my troubles were so monumental that I couldn’t get away from them. As soon as it was clear that Elena and Veronica were healthy, my Russian problems reinvaded my mind like a horde.

  I wasn’t going to share the bad news about Department K with Elena, not then, anyway. I decided to let her rest and bond with our newest daughter. We went home the following day, and I put on a brave face as friends came to meet the baby and congratulate us. But I could never shake what was going on in the background. Up until then, the main reason I’d been able to hold up psychologically had been Elena. In our relationship, we had this strange rhythm of emotions. Whenever I panicked, she was calm, and vice versa. It had worked perfectly up until now, but this news was so disturbing that I couldn’t imagine the pattern would hold.

  Two days after we got home, I couldn’t wait any longer to tell her. That night, after rocking Veronica to sleep, I went to our bed and sat at Elena’s side. “I have something I need to talk to you about.”

  She took my hand and looked into my eyes. “What is it?”

  I told her about the latest message from Aslan about Department K.

  Veronica, sleeping in the bassinet, interrupted me now and then with a coo or one of those staccato exhales that newborns make—ah-ah-ah-ahhh. When I was finished, I asked Elena, “What do you think we should we do?”