The Russian gangs of New York: Part 1

Part 1 - The Brotherhood

Unless you’ve been living in a cave for the past two years, you will have heard the words ‘Trump’ and ‘Russia’ in the same sentence at least once. As furious debate around Russia’s alleged election interference burgeons with each new Mueller indictment, fresh issues, like shadowy Russian donors to Trump’s suspiciously large inauguration fund, continually rear their heads. But, some would argue, Trump’s flirtation with Russia began long before his election campaign; long before Putin came to power; long, even, before the Soviet Union collapsed.

Russian criminals effectively bought (Trump), and in return used Trump Tower, in New York, as a “money-laundering cathedral”.

In his new documentary, Active Measures, Jack Bryan argues Trump was compromised decades ago through his financial ties to the Russian Mafia; a criminal organisation which, in the words of House of Trump, House of Putin author, Craig Unger, is “an adjunct of the Russian Government”. The argument goes that following a series of bankruptcies when Trump was around $4bn in debt, Russian criminals effectively bought him, and in return used Trump Tower, in New York, as a “money-laundering cathedral”. Since the 1980s, at least 13 people with proven or suspected Russian mafia links have owned or lived in Trump Tower apartments, or other Trump properties. Some have even conducted criminal operations out of them.

On the other side of the world, were Trump’s five failed attempts to build a hotel in Moscow. During the final attempt, from 2015 to early 2016, the financing of the deal was handled by Trump’s New York business associate, Felix Sater. A childhood friend of Michael Cohen, the President’s former lawyer and “fixer”, Sater’s many suspected Russian Mob contacts include Semion Mogilevech; the “boss of bosses”, the “most powerful mobster in the world” and a driving force behind the group’s North American criminal operations. Discussing the Moscow hotel project, on the eve of Trump’s nomination, Sater wrote in an email to Cohen, “I will get Putin on this program and we will get Donald elected”.

But what is the Russian Mafia? And why are so many of them in New York?

Since the 1980s, at least 13 people with proven or suspected Russian mafia links have owned or lived in Trump Tower

From Tsars to Oligarchs

Sometimes referred to as the Bratva (“the brotherhood”), the Russian Mafia is a blanket term for all organised crime across the former Soviet Union. In a time of Tsars and pomp, when most Russian citizens were peasants, these thieves and bandits were literal Robin Hoods – stealing from the rich and dividing their spoils amongst the poor. After the Bolshevik Revolution, Lenin tried to wipe out this Vorovskoy Mir (thieves’ world) but they lived on. It was in the Soviet era that vory-v-zakone (“thieves-in-law”) were born, as their leaders fought their way to the top of the pecking order in Soviet labour camps. An honour code became more defined; their status confirmed by complex tattoos still used today. 

With the end of World War Two, the death of Stalin and the fall of the Soviet Union, more and more gangs emerged, capitalising on the flourishing black market and political instability which followed. Over time, the old honour code was replaced with a kind of ‘every man for himself’ approach. Mikhail Gorbachev loosened the restrictions on private enterprise, opening up new opportunities for these criminal gangs. At one point, the Russian Mafia was said to control up to two-thirds of Russia’s economy, with many ex-KGB members joining up and becoming criminal bosses. On the eve of the USSR’s dissolution, there were formalised meetings to carve up control of post-Communist Russia. As the USSR fell, the sudden shift to a market economy allowed gangsters and corrupt government officials to “loot” state-held assets such as oil and banking, Unger says, leaving them with huge amounts of ‘dirty money’ to invest. From here came the oligarchs; individuals who had grown rich from privatisation, or simply corrupt ex-government officials who spent years lining their pockets on the job. Where there were oligarchs, there was private “security” and these “security” forces, journalist Misha Glenny has argued, were “quite simply the Mafia”.

Between the 1970s and mid-1990s, around 200,000 immigrants from the former Soviet Union settled in New York...

Coming to America

Back in the 1970s, the Soviet Union allowed the first of its citizens to emigrate to the United States, including many Soviet Jews fleeing religious persecution. Brooklyn’s Brighton Beach and Sheepshead Bay became home to a small number of Russian criminal gangs. Between the 1970s and mid-1990s, around 200,000 immigrants from the former Soviet Union settled in New York, Long Island, Westchester County and New Jersey; around a quarter of them in Brooklyn’s Brighton Beach area. Known as ‘Little Odessa’, it became home to the New York Russian crime family’s biggest names and was a hotspot for heists and gangland executions.

Russian-born Evsei Agron emigrated to New York in 1975, and swiftly took leadership of Russian organized crime at Brighton Beach. He rented and ran criminal operations out of an office at notorious event space, El Caribe Country Club, owned by Michael Cohen’s uncle, Morton Levine, who would later pass ownership to Cohen and his siblings. (Cohen reportedly sold his share after Trump won the election.)

In 1984, former Soviet Army pilot David Bogatin, who had arrived from Russia seven years earlier, bought five luxury condos in Trump Towers for $6 million. At the time, Unger says, Russian mobsters were beginning to invest in high end New York real estate as a means of money laundering, and Trump Towers was only the city’s second high-rise building to accept anonymous buyers. Bogatin was later found to be a leading member the New York Russian mob. His brother had run a $150m stock scam with Mogilevich himself, who was expanding his multi-billion-dollar crime syndicate into America at the time (though Mogilevich himself never settled in the States.) This, it is believed, was the first time Donald Trump did business with the Bratva.

Following Agron’s 1985 assassination, Marat Balagula succeeded him. After Balagula was convicted of bank fraud and fled the country, Boris (“Biba”) Nayfeld, Balagula’s former bodyguard, become the new leader in 1986. Like Agron and Balagula before him, Nayfeld continued to use El Caribe for his many nefarious enterprises. 

In 1987, Bogatin pleaded guilty to his role in a huge gasoline-bootlegging scheme which had been run by Russian Mobsters (led by Balagula and his associate Igor Roizman) with the help of the New York Mafia. After Bogatin fled the country, his five Trump Tower condos were seized by the Government, who concluded he bought them to launder money and hide assets.

1987 was also the year Trump made his first trip to Russia to discuss the possibility of building a luxury hotel in Moscow, in partnership with the Soviet Government. Arranged by the highest echelons of the Russian civil service, there are theories the KGB had also had a hand in the visit. After five failed attempts, the hotel was never built, but Trump met many wealthy and influential Russians in the process.

TO BE CONTINUED...