Captain from America.
Investigation into how the family of hockey player Vyacheslav Fetisov acquired an apartment at the Trump Tower
The Proekt team, September 16, 2020
Vyacheslav Fetisov is a celebrated Russian ice hockey player who later became a public official. The circumstances in which his family acquired a luxury apartment at the Trump Hotel & Tower in New York are rather peculiar. While serving as Russia’s sports minister, Fetisov was involved in setting up a sports lottery that laid the foundations for a highly lucrative gambling empire run by his friend, Alexander Varshavsky. In return, Varshavsky used a convoluted scheme to transfer $7 million to the former minister, who then purchased the New York apartment.
The godfather of Soviet hockey
One of the first and most notable transfers in Russian hockey in the 1990s, following the fall of the iron curtain, was the move to New Jersey of CSKA defender and USSR hockey captain, Vyacheslav Fetisov. Before long, the National Hockey League was recruiting ever growing numbers of Russian players. According to media reports, young players who had relocated across the ocean would often be met with interest by the locally based Russian mafia. One such story was used in the plot of the acclaimed film, ‘Brother 2’, where the protagonist travels to Chicago to assist his Russian friend who plays in the NHL and gets entangled with the mafia.
Fetisov was no exception and was written about in a mafia context, the press even dubbing him ‘the Godfather’. Both the player and the NHL have always denied any criminal associations
In the 1990s, Varshavsky set up a car dealership on the US East Coast called the New York Motors Corporation. In 1997
By the end of the 1990s, 90% of Mercedes vehicles used by Russia’s Interior Ministry, the FSB, Federal Protection Service, Investigative Committee, Prosecutor’s Office and the Department of Presidential Affairs were supplied by companies associated with Varshavsky
Since 2006, Avilon has sold vehicles worth ₽28.5 billion to the state. There has been media speculation that such levels of success can partly be attributed to informal contact with high-ranking security officials. One of Varshavsky’s car dealership business partners, Kamo Avagumyan, was an Armenian assistant prosecutor general and official representative of the Armenian prosecutor’s office in Russia. Avagumyan made a joint investment in a Greek hotel business with the son of Russia’s prosecutor general, Yury Chaika
In 2019, the founder of Rolf (a rival Russian car dealership), Sergei Petrov, who fled Russia following the instigation of criminal proceedings against him, described how for six months prior to the proceedings and right up to the time of the first search raid, Varshavsky would periodically call him offering to buy out his business. Later, Petrov clarified that Varshavsky had convinced him he had nothing to with the criminal case.
NHL the Russian way
Upon leaving the NHL and returning to Russia in 2002, Fetisov quickly carved out a career in public office. It all started when Putin personally put him forward for the role of head coach of the national hockey team ahead of the Winter Olympics in Salt Lake City. “It is a well-known fact that the Russian president is extremely fond of Fetisov” — such were the comments of the Olympic Committee after the winter Games, when the hockey player was appointed head of the State Committee for Sports (the body that preceded the formation of the sports ministry). Fetisov remained in that post until 2008, then becoming a senator in the Federation Council, and subsequently a member of the State Duma where he works to this day. Throughout his career in public office, Fetisov maintained a strong relationship with Varshavsky
Those who knew Fetisov recognised that he had access to the very top of the political pyramid. “He was on good terms with Putin, and many more. Everyone understood that he was Putin’s personal hockey coach and that for him the president was always just a phone call away”, recalls Fetisov’s friend. Fetisov claims to be the one who came up with the idea of teaching the president to skate. “I never knew skating would be so joyful” — was the president’s reaction, according to Fetisov. He was also responsible for transforming hockey into a central sport for the elite, and was one of the founders of the Night Hockey League. The amateur tournament will be best remembered for blowout victories by a team in which a striker named Putin scores ten goals per game.
Fetisov’s passion for hockey did not pass on to Varshavsky
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A close family friend
As noted by mutual acquaintances, “Not a single [Avilon] event was complete without Fetisov”. The former hockey player continues to attend new showroom launch parties as well as anniversaries of Russia’s largest car dealership. At one point, that relationship acquired a financial component.
In late 2007, Fetisov’s wife — the former actress and model, Ladlena — took on the role of Deputy CEO of AvtoLogistika LLC and AvtoLogistika-Trans LLC (both of which are part of Varshavsky’s business empire) with monthly salaries of ₽425,000 and ₽200,000 respectively
They were so close that Varshavsky even assisted Fetisov’s family when it came to financial matters. In 2008, the Avilon owner personally picked up the phone to ProBusinessBank. “He called and asked the bank to arrange a meeting with Ladlena Fetisova to discuss placing her funds with ProBusinessBank. He remarked that he was close friends with the Fetisov family as well as the family of ProBusinessBank co-owner, Alexander Zheleznyak, and that the Fetisovs should receive top-notch service and be treated as well as Varshavsky himself.” — that is a quote from the affidavit of Natalia Abramova, a copy of which is in The Project’s possession. Abramova was head of the VIP client department at ProBusinessBank
“Varshavsky and Fetisov are old friends. They used to spend a lot of time together, and I often saw them at Avilon” — confirmed Zheleznyak in conversation with The Project. In 2015, ProBusinessBank’s licence was revoked and criminal proceedings for embezzlement were commenced against its owners and managers. The bank’s owners, including Zheleznyak, fled abroad where they are now litigating against the Russian authorities, trying to prove the bank’s downfall was caused by political motivations. Two years after the bank’s collapse, the Fetisov family approached Russian prosecutors accusing Abramova of fraud. Abramova denies all accusations and has set out her position in an affidavit, the contents of which she subsequently verbally confirmed to The Project. In support of her position, she has provided documents evidencing the bank’s relationship with the Fetisov family.
Following Varshvavsky’s request, the bank duly opened a savings account for Fetisova
Thus began the long saga of topping up Ladlena Fetisova’s accounts
Materials in the criminal case make clear just how closely the interests of the public official and the businessman became intertwined. Varshavsky’s generosity was not confined to salary payments out of Avilon: Fetisov’s wife received a total of $7 million from companies affiliated with him, which were ostensibly used for the purchase of a luxury apartment at the Trump International Hotel & Tower in New York.
Fetisov’s lucky number
“In March 2009, Varshavsky called me saying that a $7 million loan needed to be issued to Ladlena Fetisova, with whose family he was on very friendly terms. He said he was willing to lend his own money for this purpose, and subsequently one of his Cypriot companies, KSPT Holdings Ltd, transferred the required amount”, — Abramova recalls in her statement. The Project has followed the payment trail from the primary documents.
The loan was almost immediately transferred to the personal bank account of Ladlena and Vyacheslav Fetisov in the United States
The structure of the transaction was highly complex. Abramova describes it in her affidavit which is backed up by evidence in the form of copies of contemporaneous documents and correspondence. Simultaneously with the bank issuing $7 million to the Fetisovs, Varshavsky transferred the same amount from his Cyprus-based company KSPT Holding Ltd
Despite its convoluted nature, the purpose of the deal was simple. $7 million had been transferred into the Fetisovs’ US account. As is evident from court documents, just two weeks previously that money belonged to a Cyrpiot company associated with Varshavsky. In August of the same year, the Fetisov family purchased an apartment at the Trump International Hotel & Tower in Manhattan for $6.4 million. Three bedrooms and three bathrooms, totalling over 200 square metres overlooking Central Park. In 2012, the same apartment was available to rent for $27,000 per month
In 2016, the apartment disappeared from Fetisov’s asset declaration, as it had been transferred into the name of his 26-year old daughter, Anastasia-Alexandra, who remains its registered owner to this day
“I don’t know, I am not a financier and I do not comment on subjects of which I have little experience” — Fetisov responded when we asked him about the loan scheme and his purchase of the apartment. He noted that he does not recall anything to do with receiving bank funds.
Was Varshavsky’s input into the Fetisovs’ financial affairs simply a friendly gesture? Perhaps. But it is important to recognise that at that particular time Fetisov’s status as a public official enabled him significantly to benefit Varshavsky’s business interests.
Is there an obligation on a minister to disclose any close friendships with business figures? ↓
Picture the scene: it is summer, and aboard a suburban train two ordinary-looking fishermen are perusing a catalogue choosing an expensive yacht. Women sitting nearby are picking out golden earrings, and a group of soldiers are studying a private jet. “Get ready for things to look up” — such was the announcement on state television of the return of a national sports lottery. Gosloto was essentially a revival of the Soviet ‘Sportloto’, whose profits had helped finance the 1980 Moscow Olympics. Sportloto had been so effective that it managed to raise almost half the funding necessary to run the Games
Gosloto, the modern equivalent of the Soviet Sportloto, pursued similar aims. Between 2006 and 2015, Gosloto was intended to raise almost ₽27 billion for the state budget
“The lottery will succeed as long as it is transparent and easy to understand. <…> It will allow us to finance our sport”, Fetisov commented at the launch of Gosloto
These grand plans were destined to fail. Despite promises of transparency, the lottery did not make it through to the Olympics in its original form as it went through an opaque change of ownership as well as bankruptcy, and the cost of the Olympics themselves had ballooned to ₽1,5 trillion
You could say Gosloto was the brainchild of the former hockey player. It was conceived by Rossport back in 2005 when, headed by Fetisov, the public body obtained permission to conduct lottery draws.
In Russia, lotteries are organised by public agencies which use competitive bidding to select private companies to operate the lotteries. The operators sell tickets, hand out winnings, make a profit and return the remaining funds to the state budget. Gosloto’s first lottery draw was issued in 2008, with Orglot as its operator. Orglot had been incorporated in 2006 by Gazprombank, with the bank later withdrawing from the business (before the lottery launch) as it was deemed unprofitable
In 2007, a 49% stake in the lottery operator came under the control of a little-known company by the name of Converse-Sport. Its ultimate beneficiary long remained unknown, but market participants suspected that Varshavsky might be the mastermind behind it
That denial is not quite the truth, as discovered by The Project from documentary evidence. In 2010, 100% of Converse-Sport was transferred into the control of the Cyprus-based KSPT Holdings Ltd — the same offshore entity that had been used by Varshavsky to repay Fetisova’s loan.
As reported in the media, the remaining 51% stake in Orglot was sold by Gazprombank in 2008 to the Hungarian property developer Shandor Demyan, who already managed lotteries in a number of countries. Shortly afterwards, a dispute arose between Orglot’s shareholders and as a result in 2011 Gosloto passed over into the hands of Varshavsky’s friend and business partner, Armen Sarkisyan.
Aside from the lottery, Varshavsky and Fetisov had at least one other joint project combining business and sport
In 2008, Varshavsky’s Avilon Plaza bought the Olympian. According to a mutual friend, Fetisov and Varshavsky had discussed the possibility of setting it up as a base for accommodation and training by national sports teams who would be sent there by Rossport, which was headed by Fetisov at the time
Fetisov always stayed abreast of Varshavsky’s lottery business
The office of Gosloto was even based in the Avilon Plaza building in Moscow. Many Avilon employees moved across to work at Gosloto
In June 2014, a law was passed banning all private lotteries. As the market was cleared, out of 455 lotteries only state and international ones remain. They are operated by three private companies, and as has been widely reported in the media, all three are controlled by Sarkisyan. The operators are AO State Sports Lotteries, OOO Sportloto, and the retailer AO TK Centre. Their total revenue has grown year on year, reaching ₽54,5 billion in 2019. All three are based in the same Avilon Plaza building belonging to Varshavsky. What started out as a friendly project between minister Fetisov and businessman Varshavsky to create a single state lottery, has grown into a private empire with a multi-billion rouble turnover.
“I have no comment to make” — said Fetisov when we asked him about Gosloto and Varshavsky, upon which he hung up the phone.
Varshavsky requested a list of questions to be sent to the Avilon press office. At the time of this article going to press, we have not received a response.