Chapter 12: The Wealth of Rus

Daryna told me that she had now completed the asset statements for the billionaire’s companies, translated the most important Russian texts into English with the help of her daughter Lenya, and wanted to discuss the next steps with me. Her English was still heavily influenced by French, but after three months she was able to communicate quite well. Although tomorrow was Sunday, we agreed to meet at 10 a.m. in my office, where Mrs Vernushina had spent the whole week going through the huge pile of documents.

The next morning, the beginning of spring brought sunshine and warmth to our valley, and I was told that it was ‘girls’ day’ in the garden of the palazzo. Boys and men were not allowed. Janka and Ronya had suggested it and the young mothers had agreed. Sarah told me that she would join in, too. The condition, she told me with a laugh, was that she should at least be topless, but if possible without any clothes at all.

“Isn’t it too cold for that?”

Sarah laughed at me. “Have you looked at the thermometer? It’s already 22 degrees. We definitely need sun protection today.”

Since I was busy in the study, I shouldn’t care if the little ones wanted to have fun. Lenya also started to complain. “Some are like little children, even in our group. I’m glad to be here.”

But it would have been just impossible for her. She was due to give birth next week. She was so incredibly strong, but Esther had whispered to me at the end of August how difficult it was sometimes for her best friend. It was not for nothing that I had taken over the maths lessons for both groups, but Lenya often sat in to see my methods and to be able to start straight away after her postnatal period.

First, Daryna gave me a lecture on how so many Russians and Ukrainians had managed to become billionaires in such a short time. Lenya had to help explain a lot for her mother to understand. So, here is just a short version of the Ukrainian’s lengthy explanation. I had no idea how it had happened before; I knew nothing about state companies and their dissolution after the collapse of the Soviet Union.

From 1992, all Russian citizens received ‘their’ share of so-called public property in the form of vouchers, as the Czechs had done before. Each voucher had a nominal value of 10,000 roubles, or just over 30 US dollars at the exchange rate of the time. They could be used to buy shares in Russian companies, but the process was far too slow and the number of desirable companies was limited. Many Russians were destitute and sold their vouchers far too cheaply, usually for less than $7. There were groups of so-called ‘managers’ who bought millions of these vouchers and then used them to auction off valuable companies such as oil production and processing. These coveted companies developed rapidly over the next few years and the new owners became millionaires, some even billionaires. All they had to do was earn enough money to buy their way into Russia’s Wild West economy from the late 1980s onwards, usually by illegal means.

With his criminal zeal, Bogoruskij was just the man for the job. As early as 1989, he was setting up illegal Internet platforms with child pornography and naked photos of girls and boys, mostly recruited from Ukraine’s impoverished population. At the same time, he was arranging international arms deals, including the improved East German version of the Kalashnikov, the Wieger MPi. In 1990, he founded Russia’s first private bank in St Petersburg. It was there that he came into contact with future high-ranking politicians and business tycoons. The bank grew unexpectedly quickly, as many rich Russians moved their money abroad illegally and also laundered black money.

Rus had unique connections and built an empire of his own companies in Russia and Ukraine. He knew the tricks of others and used them to his own advantage. He was also almost untouchable because he had many influential people under his control with his knowledge.

A newspaper article Daryna found on the Internet revealed something particularly insidious. According to the article, the bank of Rus had been delaying transfers to two large companies in St Petersburg for several weeks. As a result, the workers had not been paid. Previously, Rus had bought up almost all-available food and stored it in a rented warehouse. As a result, prices rose by more than 300 per cent. Now Rus played the saviour, exchanging the food for the workers’ vouchers. This made the products cheaper than in the shop. If the article is correct, he received more than a million vouchers in this way, because other citizens of the city of millions also shopped in Rus’ warehouse, either for vouchers or for the inflated prices. More voucher purchases followed. Rus was now able to bid successfully at auctions for shares in the best companies. Within five years, he was one of Russia’s richest oligarchs.

And the game went on for him. When Ukraine began the same privatisation process in 1995, Rus was there with his huge cash reserves and his private bank. Within a few years he had become a multimillionaire in Ukraine, too. In fact, he had amassed so much wealth that from then on he only had to work legally, but he had one goal: to be richer than the richest. This worked well for a few years, but at some point the authorities started to notice him, mainly because of his illegal tax practices. When the first criminal case against Rus for tax evasion began in Russia in 2012, he moved his residence to Ukraine and ran his empire from Odessa. But the Ukrainians did not tolerate his tax evasion for long. Another trial was imminent.

Boguruskij moved to Colombia because at the time it did not extradite people to Russia. Meanwhile, he had illegally acquired South African citizenship under the name Ferdinand Grant and was doing business in Asia under that name. His aim was to go completely underground and gradually invest as much money as possible around the world under the name of Grant. At the same time, he bought a valley in Peru and built himself a palace. There was not enough time to build a pompous villa for him on the huge site, but he intended to do so the following year. By then, Interpol and other hunters were closing in on him. He was also in danger of being silenced by his former ‘friends’, as often happened in Russia. He knew too much about them. Out of fear, he had the bridge blown up and tried to barricade himself in here, but the helicopter crash put an end to his activities. Daryna was able to reconstruct this from the extensive files and documents.

We took a break. Daryna needed to catch her breath. I looked at some of the documents she had given me. Over coffee and a snack, Lenya translated some of her mother’s thoughts. “The fraudster had such an unimaginable amount of money. I’m sure I only found out part of it, but it was so much that he could have bought a small country in the world. And he just couldn’t get enough. He was so incredibly greedy, he just wanted more, more and more. He could have easily paid his taxes, but no, he was too stingy. A bad man, a crook through and through!”

Daryna began with her explanations and records of the identified property of the Rus.

“First, something very simple. Rus had opened an office in Odessa with an assistant, Larissa Alexandra. Loans for houses and flats were administered there. Here is an email saying that the tax authorities are confiscating every monthly instalment from all debtors in order to pay off Rus’ tax debts. That’s why the clerk in Odessa no longer receives a salary from this account by standing order, but she sent an email five months ago saying that she would be willing to work for the Ukrainian state expense allowance of exactly 12,000 hryvnia, about $400. I prepared the reply email: First of all, she should send to Rus, that is to say to us, a complete list of all outstanding loans and monthly instalments, as well as the amount of the tax claim and the status of the payments. Then she should give us her bank details. Maybe we can then pay her monthly salary and social security contributions from the Sberbank in Kiev”.

Daryna had already asked the bank in Kiev. The answer was there. Because of their long history of good cooperation and Rus continued absence, they would set up a standing order for 60,000 Ukrainian hryvnia, just over $2,000, against a simple payment order. For amounts over 100,000 hryvnia, the account holder would have to appear in person. Lenya showed me the prepared payment order; all that was missing was the woman’s bank details in Odessa.

I kissed Lenya on the lips and Daryna just took one for herself. Mother and daughter spoke briefly and there was an argument. Lenya was almost angry with her mother, but Daryna told me shortly afterwards that she would only stay in the valley for the long term if she still had the chance to have a child. It wasn’t a formal proposal, but she had thought of me.

Of course, I had to think for a moment to understand. I didn’t want to be too dismissive and just said, “Daryna, not now. This doesn’t fit in with our work today. Let’s talk about it later, this is too surprising for me”.

Daryna went on as if she hadn’t just argued with her daughter. I understood at least this part of her long explanation: The Ukrainian state had so far confiscated only about 126 million hryvnia, or about four million dollars. In the court documents I had read about tax demands of over a billion hryvnia. With fees and interest, this was last estimated at 40 million dollars, not a very large amount for Rus.

In addition, Rus had lost four properties, including a former holiday complex of a Moscow ministry in Crimea, which now belongs to Russia. So, it was unclear who controlled it. Forced auctions of the other three properties had fetched only about $800,000. Two of Rus’ holdings in Ukrainian companies were also seized by the state, worth almost ten million dollars. The remaining debts were to be paid from the real estate assets placed under receivership.

It was a mystery to me why Rus’ account at Sberbank had not been seized to pay the taxes. I suspected that Rus had accomplices in the administration, which he also controlled. But that was just theory.

Next, Daryna showed me the list of Rus’ nine remaining holdings in Ukraine. To be honest, we had only just begun to look through the many lists and accounts, but I was already almost at the limit of my comprehension. In any case, I quickly realised that the original capital invested was around four million, the current value could not even be estimated, but Sberbank in Kiev was receiving monthly payments of around 40,000 dollars from these companies. This was a kind of shareholding, like a silent partnership. According to the partnership agreement, the share of each company’s profits that Rus was entitled to according to his shares had to be immediately reinvested in the company. Daryna estimated the total value at ten to twelve million dollars.

Daryna suggested that we leave everything as it was until we had a legally valid certificate of inheritance. She had contacted her murdered husband’s law firm. They were prepared to secure the assets and transfer them to the heirs. The fee was 2.5% of the secured assets. A lawyer friend of the firm had advised Daryna not to inform the authorities about Rus’ death until the certificate of inheritance had been recognized. He had suggested this as a friend and not as a lawyer.

So, I drew on an A3 sheet of paper:

Assets in Ukraine:

1. Seized companies approx. 10 million dollars - lost

2. Other company holdings - value: estimated 12 million dollars –

Annual income: around 550,000 dollars

3. Property management seized - value: estimated 20 million dollars - lost

4. 4 properties seized - only around 800,000 US dollars from forced sale - lost

5. Private account in Odessa seized - value: around 4 million dollars

6. Sberbank Kiev account - value unclear - income unclear

The account at Sberbank Kiev remained a secret. So, I asked Daryna to have the account statements activated online or to request them from Larissa. Our financial advisor liked my brief overview. She wanted to make a similar statement for the assets in Russia this afternoon. But that would involve much larger sums. In her opinion, going through the positions individually would be too tedious for me. I happily agreed.

Now I needed a cigarette and a beer. When we wanted to sit down on the terrace, there was whistling and shouting, “Boy, boo!”. Finally, everyone chanted “Girls’ day – girls’ day!”, but I sat down, laughing. There were parasols and blankets everywhere. As far as I could see, almost everyone was naked, even Ramona and Sarah. A few were wearing panties; maybe they were on their periods. I also saw Lucia, Willka, and Olivia walking around naked. Jenny came running with the kindergarten children, all naked. Five-year-old Gonzo was the only boy allowed to take part in Girls’ Day. Jenny was bubbling out a few sentences in excitement, saying how nice it was and what they had already done. They weren’t allowed into the paddling pool yet, the water was too cold, but that will definitely come in the afternoon.

With a little pat on Jenny’s tiny bottom, I sent the six kindergarten children back to Willka. Lenya looked with interest to see which of her twelve friends were taking part. “Actually, everyone except Esther,” she said in astonishment, even the heavily pregnant Cara. Meanwhile, the sounds of guitars and saxophones could be heard. Many had sat or stood under the new, huge parasol and were singing with great passion.

Sarah came to us. “It’s unbelievable how everyone is here. Sometimes I think I’m dreaming.”

“You’re welcome to stay with us, Sarah, my lovely sister.”

“Unfortunately that’s not possible. My Mario will be waiting for us. But ... at some point I could imagine moving in with you, if I can convince Mario.”

For that she got a kiss on the cheek. “We would be very happy. If necessary, I will organize a charter flight just for you so that you can bring our mom and, if possible, a carer with you.”

Sarah looked at me thoughtfully. “That was my only concern. Can you and do you really want to afford that?”

“Sure, our family is worth it to me.”

Of course, we spoke in our own language. In the meantime, Lenya clarified a few other things with her mother, but the pregnant Russian was exhausted. Maybe it was because there were only a few days left until she would give birth to her Pyotor, her Peter. So, I sent her to her room for an early afternoon nap. At first Lenya didn’t want to, but then she smiled gratefully.

In an expedited procedure, details had to be clarified after the certificate of inheritance; we completed the compilation of the assets in Russia according to the model from this morning.

Assets in Russia:

1. Company investments – value: estimated at $1,475 million

Annual income: around $70 million

2. Real estate unclear, especially its value – at least $1.4 million worth of

apartments in Petersburg

3. Private bank account in Saint Petersburg – value: completely unclear

maybe payment obligations for real estate loans there

4. Sberbank Moscow account – value unclear – income unclear

Daryna was supposed to wait for the result with Sberbank Kiev before requesting account statements from the two banks in Russia. Then my ‘banker’ showed me a scan of a newspaper clipping that she had found this week. According to it, a certain Aleksej Vladimirovich Boguruskij, born on March 18, 1974 in Yaroslavl, had been sentenced in absentia to 20 years in prison, to be served in a penal camp in Mordovia, to a fine of one billion rubles and to pay back taxes of 5.6 billion rubles. The verdict was handed down in October 2018, long after his death. The total claim of the Russian state amounted to around 66 million dollars. In my view, the verdict against a dead man was not legally valid, but the back taxes would certainly go to the heirs. I commissioned Daryna to find out who had represented Boguruskij as a lawyer.

In addition, she wanted to create a data sheet on the PC for each of the Russian and Ukrainian companies, as well as for all other companies in which Rus had a stake, and scan all the documents, such as all existing documents and future correspondence, and store them in a database. At the same time, I asked her to request a balance sheet and a statement of the seizure from the Ukrainian Ministry of Finance for the three confiscated holdings in Ukraine.

It was getting on towards midday. I sat down by the entrance to the terrace. No one was allowed to enter the house without any clothes on. I had allowed them to have their girls’ party, their ‘girls’ day’, but how they ate today was up to me. Some of them sent friends upstairs to get at least a shirt and a pair of trousers. Some girls had apparently run naked into the garden in the morning. There were some suppressed protests, but I deliberately made no exceptions. Order was soon restored and Luisa was allowed to ring the dinner bell.

Sarah laughed at me at first, but I quickly made it clear to her that if we didn’t enforce basic order here every day, sometimes with tough tactics, we would have been in chaos long ago. Ramona joked. “Yes, Dad. We’re fine now,” but she said seriously to Sarah, “Your brother set up a regime from the very beginning without which we wouldn’t be anywhere near where we are today. Believe me, he knows what he’s doing.”

Sarah asked me later, “Did you really humiliate the doctor in front of everyone and beat her with a broomstick and banish her from the palace? Did you really dunk Kira, who was very small at the time, head first into the toilet bowl because she was so messy?”

“Yes. Bad. I was and am a horrible person.”

“Ramona just said that both would have been right. Otherwise she would never have wanted or been able to submit. And for the girls who didn’t understand your language, it would have been necessary. ‘Better totally strict than totally undisciplined and neglected,’ she said to me.

“So, so, my dear Ramona announces late insight, that makes me happy.”

All the mothers and their children had taken a ninety-minute afternoon nap. The other thirteen girls, even Abril and Ana, who now lived upstairs, had also gone to bed. I enjoyed the heavenly peace on the terrace. But soon Luisa, Ramona, Daryna, and Sarah joined me. For the first time, I told them about our trip yesterday. Of course, I also mentioned the police report I had just read.

“After a fire fight lasting several hours in the province of Cajamarca, the army and police succeeded in breaking up what is believed to be the last group of the disbanded terrorist organisation ‘Tupac Amaru’. Six terrorists were killed and 22 arrested. One soldier was seriously wounded. The terrorist group had ambushed the first tourists in the region and extorted ransom. It has shown once again how damaging these bandits are to the economic recovery of our country.”