Last week we learned that Russian billionaire Sergei Adonyev’s Bulgarian citizenship had been revoked, after local authorities were informed of the oligarch’s criminal record (under Bulgarian laws it is impossible to become a naturalized citizen having a prior criminal conviction). The co-founder of Yota Telecom Sergey Adoniev, known to the Russian public as the recent financial sponsor of «Novaya Gazeta», and Ksenia Sobchak’s presidential campaign, had been arrested in Germany and deported to the United States in 1997, after having organized a fraudulent scheme with deliveries of non-existent Cuban sugar to Kazakhstan. However, the Insider has learned that Adonyev was the target of investigation over suspected involvement in a much graver criminal enterprise: traffic of cocaine from Latin America to Europe via the port of St. Petersburg. However, the investigation into this suspected activity was hushed and Adonyev, being convicted for fraud, money laundering and bribery, was deported to his homeland – at the Kremlin’s behest - without serving his full US sentence. Soon after his return, with support by Putin, Adonyev began building a telecom business into which he invested hundreds of millions of US dollars.
The Sugar Scam
Adonyev was born in Lviv in 1961, and the 1980s graduated from the Leningrad Polytechnic Institute where he later taught mechanical engineering. In 1994 he partnered with Oleg Boyko and Vladimir Kekhman to launch a fruit import business. The trio’s first major enterprise was called Olbi Jazz, but it collapsed during the mid-90s banking crisis. In 1996 the partners resurrected the business into their flagship JFC (for Joint Fruit Company), the largest importer of bananas and citrus fruits from Latin America. Apparently, at that same time Adonyev planned and perpetrated his cross-border scam, for which he later had to pay in US prison.
In 1993, Adonyev teamed up with Vitaly Rashkovan, Bakhytyan Orolbekov and Oleg Popov to set up two corporations in the USA — Megabucks Trading Corp and Metal Works Company, both registered to a Beverly Hills address. Through these companies, Adoniev and his partners «negotiated» with the Government of Kazakhstan to supply 25,000 tons of Cuban sugar to the Central Asian republic for $6.7 million. According to the FBI indictment documents, Adonyev role in the scam was to pay bribes as needed to Kazakh officials, while Rashkovan dealt with administrative issues and maintaining US bank accounts. At the same time, according to the FBI, there never was any sugar to be had, and it could not be there even in theory: first, because the offered quantity of actual Cuban sugar traded for about twice the offered price, and second, because American companies were embargoed from transacting in Cuban products.
According to FBI documents, Adonyev visited Kazakhstan several times in 1993, and negotiated a fraudulent deal with Vladimir Krupenev, at that time personal advisor to Kazakhstan’s president Nazarbayev, in return for a bribe of €700.000. The funds for the bribe were transferred from Adoniev’s company’s account in the US to the bank account of a Moscow casino run – according to the FBI – by Adoniev’s associate. Having withdrawn the funds from the casino’s cash register, Adonyev and Oralbekov handed them over to Krupenev in cash. Immediately thereafter Krupenev organized the first “downpayment” in the amount of $4 million to the account of Megabucks Corp in Los Angeles. Out of these funds, Adoniev and his partners immediately bought luxury cars, furniture and other personal-use items. In the summer of 1993, Adonyev and Popov bought a Bentley, Mercedes, Jeep and a Lamborghini – all paid in good faith by Kazakh taxpayers.
In order to make the scam last longer, and continue receiving payment installments, Adoniev had to show at least some deliverables. In September 1993 he bought 100 tons of sugar from an actual Kazakh manufacturer for $300k, using a London-based trader as an in-between stop to conceal the provenance. This batch of sugar was “delivered” all the way from Kazakhstan to Kazakhstan. However, after one of the many installments was received, the FBI received a tip-off and froze the company’s US accounts. Adoniev, who by that time had returned to St. Petersburg, was placed on the Interpol wanted list, and was ultimately detained in 1997 at Dusseldorf airport. The German authorities repatriated him to the United States.
In 1998, Adonyev and Rashkovan were indicted and found guilty of wire fraud, defrauding the government of Kazakhstan, bribery of foreign officials and money laundering. Adonyev pleaded guilty and promised to repay the stolen $4 million to the Kazakh authorities, and as result was mercifully sentenced to only 30 months of prison and a three-year probation period. But he did not sit out even the 30 months. Under diplomatic pressure, the United States handed him over to Russia to serve out his term in his homeland. But why was Moscow so concerned with a self-confessed crook serving a relatively toothless 30-month sentence? As it turns out, the FBI was interested not only in his financial scams. In 2000, the Los Angeles Times published an article quoting an investigation conducted by insurance giant Prudential, into the cause of death of Adonyev’s long-time partner Oleg Popov. According to the LA Times, Prudential had stumbled upon FBI documents showing a link between Adonyev and shipment of a ton of cocaine, that had been intercepted at the Russo-Finnish border in 1993.
The Insider contacted Prudential but did not receive a comment to this story. We then tracked down the one-time FBI case investigator who worked the Adonyev case, currently a partner in a law firm. We asked if he remembered if in addition to the fraud investigations, there was a related cocaine-related investigation. The former case officer confirmed that he remembered the related case very well, but could not reveal the details due to the secrecy of the closed file.
The one-ton cocaine shipment mentioned in the LA Times article received due coverage in the Russian press at the time. On February 21, 1993, St. Petersburg’s Department of the Ministry of Security of the Russian Federation (known as UMBR, the predecessor to FSB) announced that it intercepted «an attempted ton of cocaine into Russia» at the Vyborg border crossing. Four days later, the head of UMBR Viktor Cherkesov said that the cargo had arrived from Columbia on a ship, and had passed Finnish customs unnoticed disguised as “cans of Colombian stew”, but that Russian customs officers noticed that some cans did not have markings, and upon opening one found cocaine inside. «The seized cocaine became the property of the state and will be used for medical purposes,» said Cherkesov, quoted by the newspaper «Nevskoe Vremya» in the article «We shall now be treated with cocaine» published on February 25, 1993. Cherkesov said that as of 1993 in St. Petersburg there were not enough cocaine reserves for medicinal purposes and these needed to be replenished. At that time such explanations did not cause a public uproar.
In his interview Cherkesov chose not to name the company, which was the intended recpiient of the cocaine in St. Petersburg (as the shipment was planned to be repackaged for further re-export to Western Europe. «The company’s name is kept undisclosed as the investigation is ongoing.», he said. He also withheld the name of the single detained suspect, whom he described as «citizen of Israel, and former citizen of the USSR».
Later, the Belgian newspaper Le Soir published its own investigation, according to which the seemingly valiant operation of St. Petersburg's security services was in fact a breach of an ongoing Interpol-coordinated international operation under the code name «Acapulco», which had been in the works for three years, and began with a wiretap by Colombian police. The container, which was tracked by the multi-country investigation, "moved from Bogota to Göteborg, and then, from Gothenburg to Kotka (Finland), and was finally intercepted by the Russians, contrary to all logic and jointly coordinated plans – at the Vyborg border crossing. The cargo was expected by the St. Petersburg company Agricum,-alleged Le Soir. According to Alain Lahlmann the investigation’s author (who would later go on to write a book on this case), the organizer of this delivery was a certain Oscar Donat, who was subsequently arrested in Israel. In the early 90’s Donat was the owner and operator of the giant St. Petersburg customs-clearance terminal «Eurodonat Terminals», and it was a public secret that Donat holds certain ownership in the business for representatives of the Petersburg authorities. (As of 1991, Vladimir Putin had chaired the Committee of External Relations of the City Hall of St. Petersburg). In addition to Donat, a number of other defendants were arrested in Russia, Israel and Colombia. For some reason the “public court case” that had been promised by Cherkassov in February 1993, never materialized..
The infamous ton of cocaine played a very important role in the formation and redistribution of power in the criminal world of St. Petersburg. The former chieftain of the Tambovskaya crime syndicat Vladimir Barsukov (Kumarin) recalled from behind bars that Nikolai Aulov, the future police general and deputy head of the Russia’s equivalent of DEA, had been communicating with him about this shipment. General Aulov later turned out to have been the right hand to the local criminal authority Gennady Petrov:
I know Aulov well from the times when he was still just a captain… from the time when the first big shipment of a ton of cocaine was transported through Vygorg in cans of «stewed meat». There was a meeting with Aulov in 1992-1993, where he (as I understood) hinted to me that I shouljd take the drugs under control, arguing that whoever takes control of it will get a lot of money. And that if someone else gets the big money will become stronger and destroys us or replace us, which eventually turned out true.
Many years later the connection of the banana-importing company JFC with the supply of cocaine received a new confirmation. In 2015, the law enforcement agencies of Ecuador tried to detain Dmitry Martínez, the Cuban-Russian representative of JFC, on charges of laundering cocaine money. According to local law enforcement officers, a criminal group headed by Dmitry Martínez had laundered a total $300 million, which came to the country in the form of loans borrowed from Russian banks. Earlier, in 2014, in the port city of Guayaquil, police confiscated more than a ton of cocaine destined to be sent to Kuwait via Spain. The drugs were on a ship in a banana container belonging to the company Exbafrut, owned by Martinez. According to the Minister of Internal Affairs of Ecuador Diego Fuentes, in ten years of existence the alleged criminal group managed to launder more than $1 billion.
Sergei Adoniev, whom the FBI suspected of involvement in the case original cocaine smuggling case, not only returned to Russia, but never served the entire term. Very soon his career quickly went uphill, benefiting from Vladimir Putin’s visible support.
In 2006, Adonyev created the Telconet Capital Fund, which became the main shareholder of the telecom operator «Scartel» (using the Yota trade mark). Yota, against the odds, managed to get a GSM license, without having its own cell tower network. In the next 4 years (2007-2011) Adoniev invested more than $600 m into «Scartel». It is unclear where the former banana importer (assuming that was the basis of his equity) had sufficient funds for such an investment. However several sources we talked to confirmed that since 2006 his patron has been Sergey Chemezov, the head of the state corporation Rostech and former colleague of Putin from their Dresden residency days at the KGB. In 2008 Rostech became the owner of 25% of the shares of «Scartel».
The rise of Yota did not come as a delight for other telecom companies, but a divine intervention seemed to have helped competitors accept – and provide the crucial interconnect agreements – to late newcomer. On March 3 2008, the heads and main shareholders of all major Russian telecom companies gathered at the Yota office. In addition to Chemezov and Adonyev, they were surprised to find then Prime Minister Vladimir Putin in person. Under his watchful gaze they signed an agreement that allowed Adonyev’s company to find its niche in the already mature market. On the basis of the fresh startup «Scartel», an infrastructure company was set up, in whose network the parties to this agreement agreed to provide LTE mobile Internet services.
In 2013, Adonyev and his partner Avdolyan sold their share in «Scartel» to Alishar Usmanov for a deal value estimated at 1.3 billion. In 2017, Forbes estimated Adonyev’s fortune at $0.8 billion. In recent years, Adonyev appears in the news more often not as a businessman, but as a sponsor, at that a sponsor of projects that few want to be involved with as they have no chance to pay off. For instance, he financed the movie project «Dau» (the long-awaited premiere of this film was held last week in Paris); he financed the election campaign of Ksenia Sobchak, and is still the main financial sponsor of «Novaya Gazeta». (The editorial team at Novaya says he is a good investor, as he does not try to intervene in editorial matters).
The Insider failed to reach Sergey Adonyev to get comments for this story.
Anastasia Kirilenko participated in the preparation of the material