Or: “Prime Minister Mishustin’s family is linked to the Magnitsky case.”
Or: “The son-in-law of the head of the Tax Service is involved in illegal VAT refunds.”
Which headline do you like better? Either one works.
Honestly, just two days ago I couldn’t have imagined writing a headline like that for an investigation. And yet here I am writing it, and it’s the plain truth.
Here’s why:
This is an excerpt from an interview that “businessman” Alexander Udodov gave to Izvestia. Right in the very first paragraph, there’s a bombshell. Even though no one asked him about it (go back and read the question), and no one had ever written about it before, Udodov suddenly states that he is married to Prime Minister Mishustin’s own sister.
You know, ever since Mishustin was appointed, his PR machine has planted a lot of ridiculous and laughable paid puff pieces aimed at laundering the official’s not-so-clean biography and explaining where his billions came from. The mortgage-dependent journalists did their best. Kommersant called him a “conservative investor” who made all his money from bank deposits. Then RBC published a completely contradictory article about how the brilliant Mishustin made $33 million in just 18 months in business. There was also a hilarious paid piece in MK (do read it, it really is very funny) praising how “businessman” Udodov is single-handedly reviving the Russian economy. And at the same time showering the Mishustin family with real estate. Forbes published some very odd article about the “brilliant” sysadmin Mishustin and his dealings in the 1990s (apparently as a preemptive move).
I should note that Mishustin’s lies about the legality of his wealth have also been thoroughly examined and debunked in the media. Here in The Bell Here in Vedomosti Here my friend Tatyana Lysova from Meduza writes about it. Here is Sergei Aleksashenko. And Vladimir Milov broke it down in extremely thorough and convincing detail.
There is, without question, a consensus among unbiased observers: Prime Minister Mishustin is lying about the origin of his wealth.
But this interview that Mishustin’s newly revealed brother-in-law by marriage, Udodov, gave to *Izvestia* is on an entirely new level. We were genuinely stunned and for several days had no idea what to do with it. I’ll explain why. With this one sentence, Udodov created a formal, legal link between himself, all of his “business,” and the family of Russia’s second most important official.
We don’t know why he said it, or more importantly, how Mishustin is going to wriggle out of this now. But if he said he’s the husband, then he’s the husband. No one forced him to say it.
If you’ve forgotten who Udodov is, reread or rewatch our recent investigation into Mishustin. Back then, a month ago, when I was talking about Udodov, I said he was such a shady character with a gangster past that he and an official like Mishustin shouldn’t even be in the same city. Well, now we all know: Udodov is Mishustin’s brother-in-law by marriage.
And now every story about Udodov takes on a whole new meaning. Take, for example, this excellent investigation by Open Media: they managed to obtain case materials on a fraudulent illegal VAT refund scheme. They studied the investigative documents and found transcripts of phone calls in which Udodov is literally organizing the entire scheme, introducing all the participants to one another, arranging forged documents for the tax authorities, and so on.
In that case, the main beneficiary of the scheme, former senator Alexander Sabadash, was sent to a penal colony for six years. Yet while the investigation was underway, Udodov spoke with him by phone 200 times.
So the brother-in-law by marriage of the sitting head of the Federal Tax Service was deeply involved in forging tax documents and illegally extracting money from that very same tax service. I can just picture Udodov and Mishustin sitting together at the family New Year’s table, eating caviar sandwiches, watching The Irony of Fate (the classic Soviet New Year’s film), while one of them is stealing from the tax service and the other is running it.
But those are all old stories that now look very different.
Now let us present a new and extremely interesting episode from the biography of Mishustin’s brother-in-law by marriage, previously unknown to anyone. As we discovered, shortly after marrying Mishustin’s sister, Udodov bought six apartments in the beautiful new residential complex at 20 Pine Street in New York. Just 300 meters from the famous Wall Street.
No conspiracy theories here. No one “leaked” this to us or “told” us about it. All of the information is available in New York’s property records. You can check it yourself.
Five of the apartments were purchased on December 23, 2009. They were not bought directly by Udodov as a private individual, but through five companies. In other words, they were initially registered to companies with similar names (PINE 2315, PINE 2401, PINE 2407, etc.), and Udodov then acquired those companies together with the apartments.
Looking closely at the documents in the New York registry, we can see his surname on a fire alarm document:
And here is the mortgage document, which clearly states that Udodov is the sole owner of the companies that own the apartments:
The stated price of the five apartments was $5.1 million. Udodov transferred a $1.9 million mortgage into his own name and sent the bank payments from the rental income on the apartments.
This is what one of those apartments looked like—the one that belonged to Udodov and was rented out:
In the summer of 2010, Mishustin’s brother-in-law by marriage, Udodov, bought a sixth apartment in the same building. Using the same scheme, through a legal entity. Price: $1.3 million.
Now that we know Udodov and Mishustin’s sister are married, this property can safely be considered marital property. In other words, these are not “Udodov’s apartments,” but “the apartments of the tax service chief’s sister and her husband.” Incidentally, all of the apartments had been sold by 2018. We very much hope the official’s family did not forget to report that income in their tax declarations.
But our story is not about the $6.4 million spent on American real estate. It is about something else entirely.
If you google the address of Udodov’s New York apartments—20 Pine Street—you’ll find that this residential complex has already been written about extensively in the media. And, believe it or not, in connection with Russia.
I hope you all remember the Magnitsky case well. Lawyer Sergei Magnitsky uncovered a scheme by which crooks illegally obtained $230 million in tax refunds, moved the money out of Russia, and then Magnitsky himself was tortured and killed in prison.
The stolen money was moved abroad and distributed among a whole range of people. The tax official who pulled it all off bought herself an apartment in Dubai. Investigators and police officers got money and bought up real estate in Moscow. And some of that money was transferred to the accounts of companies belonging to Denis Katsyv, a Russian crook and the son of a former vice president of Russian Railways.
Using that very money stolen through the “VAT scheme,” Katsyv bought real estate in New York. In 2013, U.S. authorities seized that property in connection with a money-laundering case tied to the Magnitsky affair. A case was opened, and in the end Katsyv reached a settlement and paid a $6 million penalty to the U.S. government.
What makes the situation especially striking is that the property seized from Katsyv consisted of five apartments at the now-familiar address: 20 Pine Street. The very same building where Udodov owned six apartments.
And what raises the temperature of this story even further is that Katsyv and Udodov bought their apartments just three weeks apart: Katsyv on November 30, and Udodov on December 23, 2009.
This situation could hardly look worse. I have no idea where Mishustin could place his next paid puff piece, or how this could possibly be explained away.
But as of now, this is what the situation looks like:
We are listening very closely, Mikhail Vladimirovich Mishustin.
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If you know anything about these apartments (or anything else connected to Mishustin or Udodov), write to our secure dropbox.