A little known extradition case in Costa Rica is shedding light on Russia’s practice of vigorously defending its citizens arrested overseas and threatened with extradition to the United States on organized crime charges.
The case involves Maxim Chukharev, a Russian arrested in May for money laundering through Liberty Reserve, a money exchange platform that U.S. prosecutors say was the “bank of choice for the criminal underworld” before it was seized.
Last week, after a Costa Rican court gave the go-ahead for Chukharev to be sent to the United States, two senior Russian diplomats gave a dressing down to Costa Rican Ambassador Mario Fernandez Silva in Moscow, warning him that Costa Rica should ignore the extradition request because the “extraterritorial application of America law” is a “vicious practice which should be stopped.”
In a statement Friday, the Russian Foreign Ministry reiterated a warning for Russian nationals not to travel to any country that has extradition treaties with the United States if they suspect they are wanted by U.S. law enforcement agencies.
Sign Up and Save
Get six months of free digital access to the Miami Herald
“Experience shows that the trials of those who were basically abducted and taken to the U.S. are biased, based on shaky evidence and conspicuously accusatory. As a rule, they result in illegitimate verdicts with long prison terms,” the statement said.
A spate of recent arrests of overseas Russians casts a light on what U.S. officials say is the significant role of Russia in transnational crime. But the issues involved generate starkly different opinions from those worried by global crime syndicates and others who voice unease over the long reach of U.S. justice.
U.S. organized crime experts say Russian criminals working overseas often have connections within the Russian government, and that the Russian government’s defense of them is designed to keep those links from emerging in public light.
“Most of these guys operate with a significant amount of state protection. When they go down, the Russian state goes into full panic mode,” said Douglas Farah, a national security consultant and co-author of a book on Viktor Bout, a Russian arms trafficker extradited from Thailand and convicted in a U.S. federal court in 2011. Bout, dubbed the “Merchant of Death” because he supplied weapons to a series of radical and outlaw groups, is now serving a 25-year prison term.
Russia is not the only nation concerned about the U.S. prosecutions, however. The long arm of the U.S. law in pursuing foreigners in third countries makes some legal experts in Europe and Latin America uncomfortable.
“It gives the impression that there might be a certain abuse of power from a powerful country,” said Juan Carlos Esquivel, a Costa Rican lawyer who is president of the anti-money laundering committee of the Inter-American Bar Association. Esquivel noted that the use of digital currencies is not regulated in his country.
“If Costa Rica doesn’t obey what the United States suggests, what happens? Tomorrow, the U.S. could come out with regulations prohibiting U.S. citizens from investing here,” he said.
An expert on money laundering at the University of Hamburg, Ingo Fiedler, said he is uneasy over how U.S. laws seem to trump international regulations.
“The USA has the tendency to export their law to other countries by threatening the respective countries,” Fiedler said. “Thus I can understand Russia’s decision that they do not want a citizen committing a crime in Costa Rica to have a trial in the USA.”
In the past six months, Russians have been a frequent target of arrest warrants executed at the request of U.S. prosecutors.
On Aug. 1, the Dominican Republic extradited 24-year-old Aleksandr Panin to stand trial in federal court in Atlanta on charges related to cyberscams using SpyEye malware, which enables the theft of online banking information. Panin is accused of stealing $5 million from U.S. banks.
In mid-August, Lithuania extradited an alleged arms dealer, Dmitry Ustinov, to stand trial in the United States for allegedly negotiating to sell restricted night-vision goggles. He faces a 20-year sentence.
Another Russian, Dmitry Belorossov, was arrested at the Barcelona airport Aug. 17 upon triggering an Interpol fraud alert. Belorossov’s extradition to stand trial in the United States is pending.
When U.S. prosecutors seized Liberty Reserve in late May, they said the company had laundered “more than $6 billion in criminal proceeds.” Liberty Reserve allowed clients anonymity and offered them a digital currency, known as an LR, to facilitate payments for criminal activity.
“It was set up specifically to be a thieves’ market,” said Jeffery Robinson, a financial crimes consultant and author based in New York City.
Among the seven people indicted when the U.S. government shut Liberty Reserve was Chukharev, who the indictment describes as one of two architects of the platform for the exchange of the digital currency.
Chukharev worked for Arthur Budovsky, a Ukrainian-born naturalized American who later gave up U.S. citizenship to adopt Costa Rican citizenship. Budovsky was arrested in Spain.
Russia has come to the defense of Chukharev but not Budovsky.
A Costa Rican Ministry of Foreign Relations spokesman, Miguel Diaz, said the country’s ambassador in Moscow told Russian diplomats that his nation’s executive branch had nothing to do with the judicial extradition process.
The envoy explained to them “how there is a division of power here, and that it is up to the courts to decide on the extradition request,” Diaz said.