(SRI) - Russia’s Interior Ministry has completed a preliminary investigation of several Russian businessmen accused of being involved in a $730-million fraud scheme surrounding land deals of Kazakhstan’s [1] BTA Bank in Moscow, RIA Novosti reported Wednesday.


The accused businessmen held high-level positions within Eurasia Logistics, a real estate development company associated with BTA’s fugitive ex-chairman [2] Mukhtar Ablyazov. Alexander Volkov, head of the company, Artem Bondarenko, the finance director, and Denis Vorotyntsev, head of the legal and economic department, have been accused of fraud, and falsifying and using falsified documents, RIA Novosti reported.

“The investigation found that in 2006 former head of BTA Bank and BTA Bank (Moscow) Mukhtar Ablyazov created an organized criminal group to steal the property of BTA Bank,” RIA Novosti cited the Interior Ministry’s press office as saying. “The group included [the three executives at] Eurasia Logistics and the general director of East Bridge Capital, Alexander Udovenko.”

According to the authorities, the defendants agreed to acquire a large land plot in the Domodedovo district of the Moscow region. Then, on behalf of six offshore companies registered in the Seychelles and controlled by Udovenko, they prepared false loan applications, ostensibly to purchase the land for residential development for more than $730 million, a greatly inflated price, according to RIA Novosti.

When the $730-million loan was approved by BTA and the funds were transferred on the accounts of the six offshore companies, the defendants acquired the land plot for a fraction of the purported price while the bank booked the property as a collateral.

In early 2009, the defendants “defaulted” on the $730-million loan, and BTA took ownership of the land plot. The authorities now accuse the three Eurasia Logistics executives of using fraud to terminate the loan agreement.

“[The defendants] forged the signature of a BTA Bank representative and forged a document to terminate the loan agreement,” RIA Novosti cited the Interior Ministry’s press office as saying.

The land plot was later sold by BTA Bank for a fraction of its purported value, and the bank wrote off almost the entire loan amount, the Interior Ministry said, according to RIA Novosti.

The case has reportedly been referred to Russia’s Prosecutor General’s Office which is expected to prosecute the defendants.

BTA, once Kazakhstan’s largest lender, defaulted on its debt in April 2009, shortly after the Kazakh government had taken over the bank, amid allegations of fraud, embezzlement and political revenge. In September 2010, the bank completed the largest ever emerging markets debt restructuring, reducing its $16.7-billion debt to $4.2 billion.