The Times
September 6, 1999

BANKER TELLS OF KIDNAP BY RUSSIAN MAFIA

By David Lister and James Bone

BY THE time he was 25 he was one of the most important figures in post-Communist Russia . He had made a fortune after setting up one of Russia 's first commercial banks and lived with his wife in a 50-acre residence that was once the home of Mikhail Gorbachev.

But in 1992, while on a business trip to Hungary , Alexandre Konanykhine, then chairman of the All- Russian Exchange Bank, was kidnapped by members of the "Solnetsevo" mafia group controlled by Semyon Mogilevich - the gangster allegedly linked to the laundering of billions of dollars through the Bank of New York. Mr Mogilevich was traced to Budapest last week, The Sunday Times reported.

Mr Konanykhine said: "My wife and I were in a restaurant in Budapest when we were approached by two people who introduced themselves as officers of the Hungarian Ministry of Security. They said the ministry was working on an investigation and I was needed as a witness." Speaking from California , he said: "They took me to a building on the outskirts of Budapest which was not the Ministry of Security. They led me into an apartment which had some criminal characters in it and a KGB officer who told me I had to turn over all my assets to them if I wanted to get out alive."

Mr Konanykhine persuaded his kidnappers to take him to his hotel so that he could telephone Russia and authorise money transfers. "They wanted me to transfer the money out of the bank but they didn't even have a computer or a telephone.

"It happened that my wife and I had a dinner appointment with a friend who was supposed to wait for us in front of the hotel. I managed to get close to the car and just jumped in and we raced to Czechoslovakia and took the first flight to the US ."

While he was being held in Budapest , the mafia stormed his bank in Moscow and declared themselves the owners. He lost "99.7 per cent" of his wealth.

Many of his business acquaintances were killed or forced to join forces with the mafia, who by 1995 had taken control of up to 80 per cent of Russian commercial enterprises, according to the FBI. "Some people were poisoned, some shot, others hit by cars. Hundreds of businessmen were killed as the KGB and the mafia took control of the country," he said. He has been told that a price was put on his head.

Mr Konanykhine, who has never met Mr Mogilevich and who now runs an Internet business, said there have been many examples of Russian money-laundering: "Put simply, Russia was looted. After 70 years of communism, there were no morals and almost no religion, and after the collapse of the Soviet Union organized crime took over the country."

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