Originally published August 23, 2013
Tony Soprano he isn’t. Alleged Red Mafia boss Semion Mogilevich is a new kind of mobster.
He doesn’t bloody his hands with street crimes or swagger around like some two-bit thug. He’s a world-class executive. He plans. He organizes. He delegates. He manages an a
rmy of Slavic criminals, many of them veterans of the Soviet War in Afghanistan, but his real strength is in a network of companies big and small, and his own financial brilliance. “The Brainy Don” uses not mere force, but business skills and economic insight to orchestrate his crimes, and with that he influences the fate of nations and the global economy.
It’s a calculated, distant brand of crime, almost too cerebral to be scary. But Slate says this big business man is “twice the villain Whitey Bulger ever was.” The Village Voice called him “the most dangerous mobster in the world.” CNN deemed him “more powerful than Gotti.” His ruthless business acumen has put the 67-year-old Ukrainian on the FBI’s 10 Most Wanted list—but Mogilevich is unlikely to ever face trial in the United States.
‘The Brainy Don”
Semion Mogilevich earned an economics degree at the Ivan Franko National University of Lviv in the Ukraine before embarking on an unorthodox entrepreneurial career path. He learned the basics of the underworld by working for the Moscow-area Liubertskaya crime organization. Then he took advantage of the 1980s Jewish exodus from the Soviet Union to Israel and the U.S., and was able to make it big on his own. He allegedly bilked dozens of emigrating Jewish families, agreeing to sell their assets on their behalf and to forward the bulk of the proceeds to them in their new homes—but detractors say he kept all the profits for himself.
That little trick seems to have helped finance Arbat International, the petroleum import-export company that Mogilevich founded with Vyacheslav Ivankov (“The Japanese”), the ex-wrestler and Russian mob boss whose biggest extortion attempt landed him in U.S. federal prison and who was assassinated by rival mobsters in Moscow in 2009. Mogilevich is also a cohort of another Brighton Beach Red Mafia leader, the alleged heroin kingpin Monya Elson. Mogilevich reportedly ferried Elson out of Brooklyn and helped set him up his business again in Italy after Elson was wounded in a Brooklyn gun battle.
As his own operation internationalized, Mogilevich moved to Israel. Then he got Hungarian citizenship through his wife. With Budapest as his new base, he ran the Black and White chain of nightclubs—and, allegedly, their prostitution operations and related criminal endeavors—there and in Prague, Czechoslovakia; Kiev, Ukraine; and Riga, Latvia.
His nightlife profits helped him take a big and relatively legitimate step: He entered Hungary’s weapons industry. Mogilevich bought the heavy-duty magnet manufacturer Magnex and armaments manufacturers Army Co-op and Digep General Machine Works. Insiders claim that Mogilevich’s control of the majority of Hungary’s arms industry, coupled with his petroleum and natural gas connections, gives him the power to influence governments and finance in Eastern Europe and beyond, threatening not only the region’s security, but the global war on terror. He’s rumored to have sold as much as $20 million worth of former East German weapons to Iran.
Furthermore, anonymous figures claiming to be familiar with classified U.S. and Israeli intelligence reports suggest that Mogilevich largely controls Russia’s smuggling trade through Sheremetyevo International Airport in Moscow, that he uses a once-bankrupted Central Asian airline that he bought to transport heroin internationally, and that he may even be trafficking in nuclear materials. Whispers of contract killings circulate too.
Mogilevich is a busy man, but the powerful financier still finds time for the beautiful things in life. He has been accused (along with the Solntsevskaya crime family) of using a Moscow/Budapest jewelry business as a front for antiques and art stolen from private collectors and even from synagogues, as well as from sources as illustrious as Catherine the Great’s State Hermitage Museum in St. Petersburg, Russia. He may even have trafficked his stolen and forged goods through the venerable Sotheby’s International in London.
But it’s the shady dealings of an offshoot of his magnetics company that officially have Mogilevich in trouble with the U.S. government.
An Impossible Target?
It’s a big but bloodless crime that landed Semion Mogilevich on the FBI’s Most Wanted List, reminiscent of the way taxes brought down the mighty John Dillinger. Investigators say that one of Mogilevich’s companies, YBM Magnex International, Inc., committed massive securities fraud. The company, incorporated in Canada and headquartered near Philadelphia, allegedly ran a scheme that cheated investors out of $150 million. Magnex’s stock price soared in the 1990s, but when its auditor, Deloitte & Touche, refused to approve Magnex’s 1997 accounting records, the Federal Bureau of Investigation quickly shut Magnex down, subsequently asserting that the company and its officers had falsified records, bribed accountants and lied to the Securities and Exchange Commission. The company’s real business wasn’t magnets, according to the FBI, but serving as a front for Russian money laundering.
The fraud accusations at Magnex led Mogilevich’s other U.S. companies under the umbrella of his Arigon, Ltd., including FNJ Trade Management in Los Angeles, to fall under government scrutiny as well. But being on the FBI’s Most Wanted List likely isn’t going to cause much trouble for this master of industry.
International efforts against Semion Mogilevich are a mixed bag. Israel and Canada have worked with the United States. Police in Belgium, Germany and Austria also have initiated action against him—but, some claim, because Mogilevich is serving as an informant to the German intelligence agency BND, police investigations have been crippled.
Russia doesn’t extradite to the U.S. Though Mogilevich was arrested in Moscow right off the street on tax charges in 2008, he’s not currently accused of any crimes in Russia. In fact, he’s rumored to be on “good terms” with President Vladimir Putin. Also it’s unlikely that this evil genius will make the mistake of visiting territory that he would find hostile.
So Mogilevich, the corpulent Brainy Don, remains in Moscow, safely directing one of the most powerful international crime organizations ever.