This is an audio transcript of the Behind the Money podcast episode: ‘The Russian Banker, Part 1 — The Raid

Michela Tindera
Hey there, Behind the Money listeners. It’s your host, Michela Tindera. Over the next few weeks, you’re going to find something a little different in your feeds on Wednesdays. Behind the Money is running a special three-part mini-series called The Russian Banker. It’s co-hosted by my colleagues Courtney Weaver and Stefania Palma. And you’ll get to join them as they try to uncover the truth about a man named Sergei Leontiev. I’ll be back to hosting later in September. But until then, I hope you enjoy this fascinating series.

Sergei Leontiev
My name is Sergei Leontiev, and I’m married citizen of Russia. I’m submitting this declaration in support of my application for asylum.

Courtney Weaver
This is the asylum application that Sergei Leontiev submitted to the US in 2022. Sergei had been this big Russian banker, Russian businessman. He liked to see himself as a kind of Steve Jobs or Warren Buffett. But then it all fell apart.

Sergei Leontiev
I’m currently being politically persecuted by the Putin regime and the Russian government based on my association with Alexei Navalny, the leader of the pro-democracy opposition movement in Russia.

Stefania Palma
Sergei fled to the west and ultimately landed in New York, and that’s where he applied for asylum.

Sergei Leontiev
As a direct retribution for my political positions, the banking and financial business that I built with my colleagues over the course of the decades and which grew to manage assets and access all of $750mn was illegally seized and appropriated by the corrupt Russian officials.

Stefania Palma
The US bought his story and a judge in New York said that Sergei had, quote, “a well-founded fear of future persecution in Russia”. The ruling also said that his co-operation with Navalny was a key reason why the Russian authorities were so angry with Sergei.

Courtney Weaver
But I spent years reporting in Russia, and I couldn’t help but wonder if this is the whole story. In Russia, it’s sometimes hard to tell who are the good guys and who are the bad guys. And there is this real grey area in between. And that’s where Sergei’s story exists.

Stefania Palma
Is Sergei a victim of Putin’s authoritarian regime, or was he the mastermind behind an enormous fraud that ultimately led to the loss of millions for his customers? Could he actually be both?

[MUSIC PLAYING]

Courtney Weaver
From the Financial Times, this is The Russian Banker: Part One — The Raid. My name is Courtney Weaver.

Stefania Palma
And I’m Stefania Palma.

Courtney Weaver
We’re both reporters at the Financial Times.

Stefania Palma
I was part of the investigation into Wirecard, which led to the collapse of a multibillion dollar German company.

Courtney Weaver
And I was based in Moscow for six years. So I know the country’s business and politics inside out.

Stefania Palma
Let’s start with Sergei’s version of events. This is what he told the immigration courts. Sergei had been a banker for years at a time when there was a lot of pressure to fall in line with the Russian government.

Courtney Weaver
The moment everything came crashing down for Sergei came in August 2015. Sergei had started out the day at home. He likes to kind of keep vampire hours. He would come into the office after lunchtime and stay there till two in the morning. So he was still at home when he got the call that there were paramilitary troops inside the bank.

Sergei Leontiev
A lot of people started calling me and telling me that I don’t come because the office is occupied by militia and there are people with machine guns everywhere.

Courtney Weaver
He still gets in his car. He still goes down to the centre of the city where the office is. But instead of going inside the bank, he decides to camp out at a Starbucks nearby and he just starts taking meetings, trying to kind of create the impression that it’s business as usual so that there is not a run on the bank and people don’t start rushing to take their deposits out.

Sergei Leontiev
And my assistant asked me if I going to skip all the meeting. I said, “Why? Just let people come here to the Starbucks.” There were like at one moment, more like 40 people from the bank.

Stefania Palma
While he’s at the Starbucks, the paramilitary troops are raiding the bank’s office, looking through documentation. He has no control over the situation.

Sergei Leontiev
I didn’t know anything, actually. They informed nobody.

Stefania Palma
The troops that stormed the bank on Russian authorities’ orders. And this came after the central bank had started an investigation and said it had found evidence of frauds.

Courtney Weaver
And these paramilitary troops are rifling through papers, they’re looking through documents, and they’re basically paving the way for Russian authorities to seize the bank, this bank that Sergei has spent his whole adult life creating. And it finally dawns on him that this almost like is his child, his baby, that he’s put all his time and effort into is about to be taken away from him.

Sergei Leontiev
That’s it. So this stage of your life is over. You have to start all over again.

[MUSIC PLAYING]

Courtney Weaver
So Sergei’s working at Starbucks and he gets a call from his business partner saying that one of the biggest clients at the bank wants to meet with him, and he’s not happy. Sergei shows up at the client’s office, and he’s according to Sergei, very upset. He’s worried not just about his own money that’s with the bank but with his partner’s money as well. And then he gets on the phone in front of Sergei and just starts calling people, suggesting that these people are very powerful within the Russian political system and that Sergei is in big trouble. So Sergei says he’s going to work on it, but he doesn’t. Instead, he goes home, he packs his suitcase and flees Russia, never to return.

[MUSIC PLAYING]

Six and a half years later, the US grants Sergei Leontiev asylum and all the protections that affords. We needed to understand how Sergei went from a Soviet childhood to a banking entrepreneur to living in exile in New York. We wanted to figure out how he had built this huge bank and then lost it all overnight. So we have to go back to the beginning of a story.

Sergei Leontiev
It was an interesting life, actually.

Courtney Weaver
So Sergei had a pretty unusual childhood. His father worked for the Soviet foreign ministry, so he grew up abroad, kind of straddled between these two worlds, Soviet Russia and European countries like Austria and the UK. And because of that, he kind of never really conformed the way a lot of other kids who had only been raised in the Soviet Union conformed.

Stefania Palma
This is an important point to truly understand Sergei. In his asylum application, he describes how he had become enamoured with the west because it was a market where he would have been able to run the business as he liked instead of having to conform to business regulations.

Courtney Weaver
You know, at a time of great conformity, and Sergei did not conform by any stretch, teachers would assign homework for the class, but instead of doing the reading, Sergei would come in and get in an argument with the teacher about the subject of the reading, which he hadn’t actually read.

Sergei Leontiev
And some teachers didn’t like it in Russian schools at all.

Courtney Weaver
I think some teachers in American schools wouldn’t like it either.

Sergei Leontiev
Yeah.

Courtney Weaver
He gets into one of the best universities in Moscow and decides to study international relations, but he is really more interested in the business side. With the opening up of the Soviet Union, a lot of people are seeing opportunities and Sergei is one of those people. So he finds a kid in his class with a photographic memory.

Sergei Leontiev
I was always ending him because I have no memory.

Courtney Weaver
And he gets this kid to memorise all the new regulations and then puts up flyers all around the campus saying, “Come learn about the new business regulations.” People pay to come to this lecture and he gives the kid a small cut of the profit and the rest he keeps for himself.

Sergei Leontiev
He was lecturing them and I was taking money. (chuckles)

Courtney Weaver
And for him, this was kind of the start of his entrepreneurial streak. He had an import-export business, a travel agency, some other ventures, and he’s basically just figuring it out as he goes along, just coming up with all these new ideas.

Sergei Leontiev
I was disrupting everything. A kind of disruptive guy. So I find small tricks, like with this guy of whom I would for these lectures and he was happy because he started earning money for the first time in his life. I was finding the way how to trick people.

Courtney Weaver
He goes along pretending to be this kind of successful Russian businessman until he actually becomes the real thing.

Sergei Leontiev
And then in ‘93, we created the bank and we started kind of doing real business ourselves.

[MUSIC PLAYING]

Courtney Weaver
Sergei got this idea to start a bank from his childhood best friend who’s a lawyer at the time. And together they buy an existing bank and eventually grow it into a group that will ultimately become Probusinessbank. Probusinessbank grows big. Eventually, it’s one of the top 50 banks in Russia as part of a bigger banking group called Life. It has over 700 branches across the country. And as Sergei tells it, it could have been a leader in the industry.

Sergei Leontiev
I mean, if not for Putin.

Stefania Palm
Sergei blames Vladimir Putin for the raids and the seizure of the license of a company that he spent his entire life building up. As Sergei tells it, his entrepreneurial efforts attracted too much attention and put a target on his back. Which brings us back to the raid and Sergei fleeing Russia. The raid came at a time when the Russian central bank was seizing licenses from banks across the entire country as part of what was seen as a broader clean-up of corrupt institutions in the sector. But according to Sergei, the central bankers were the corrupt ones.

Courtney Weave
Sergei and others saw the Russian authorities doing what the Russian banking sector what they had done with other industries in Russia. The oil and gas industry, the media industry, basically the state taking it over and going after anyone who stood in their way. Sergei says Russian officials began to make an example of him. They tracked him down across multiple jurisdictions, going after his assets in different countries and requested that foreign law enforcement agencies arrest him on the spot. Increasingly, he started to feel like he was backed into a corner, that not just his assets were in danger, but his life. And he and his lawyers, they decided to use a different weapon to fight back. They decided to apply for US asylum.

Sergei Leontiev
The lawyers were telling me, look, you know, L1 visa and stuff like that, that’s not the right weapon against these guys. They’re having tanks and you just machine gun. And you need to change the weapon.

Stefania Palma
Acquiring asylum status in the US is like winning a golden ticket. For asylum applicants, it really does mark a complete turning point in their life because finally the US has decided to provide them with a safe harbour. There are thousands of applicants who are very often running away from extremely dangerous situations back in their home countries. About one in four applicants from countries like Honduras, Colombia and Haiti were granted asylum in the US in 2022. But Russians had much higher odds — 88 per cent, nearly all applicants, received asylum. Experts we spoke to cited a few reasons for the odds. Distance can complicate the journey to the US. So Russians who do succeed tend to have good documentation for their alleged persecution, and many of them tend to be better funded and connected, which makes it easier for them to hire lawyers. That appears to be part of what helped Sergei. His money and connections may have tilted the odds in his favour.

Courtney Weaver
One of his first stops was to Kyle Parker. Kyle had been working on Capitol Hill for years and had a lot of experience with cases like Sergei’s.

Stefania Palma
To Kyle, Sergei’s story sounded like the stories of many other Russians who had been targeted.

Kyle Parker
You’re successful in Russia at the time. And, you know, you capture the attention of the thieves and crooks, and then they use the vast powers of this administrative leviathan to destroy you.

Courtney Weaver
Sergei’s lobbying in Washington worked. Influential people in the US, like Eliot Engel, the then head of the House Foreign Affairs Committee, wrote statements in support of Sergei.

Stefania Palma
In his application. Sergei says there are several reasons why he became a target of Vladimir Putin.

Courtney Weaver
One example he gives is this 2002 summit between George W Bush and Putin, where Sergei says he spoke to Bush for too long. Sergei says the US embassy invited him to speak. But according to his asylum application, the Kremlin wanted someone else, one of Putin’s allies. Ultimately, Sergei got the speaking role and made a presentation to Bush and to Putin. The application says he knew Putin was upset with him because he intentionally mispronounced Probusinessbank’s name at the event. After Putin spoke, Bush then asked some questions, and Sergei spent a few minutes responding, which apparently upset the Russian delegation.

Sergei Leontiev
Everybody was just like, “Why did you start a conversation with the president of the United States of America?” And I just what, what’s about it?

Courtney Weaver
After the event, Sergei says he was admonished and told to, quote, “behave better”. But he says he kept going to US embassy events.

Stefania Palma
Perhaps the crux of the asylum application is Sergei’s explanation of how he became way too close to Alexei Navalny, the key opposition figure in Russian politics. As you’ll hear, whether his connection to Navalny was as he described, will become key.

Courtney Weaver
The more we reported the story, the more Sergei’s version of events kept changing. And it was just this kind of microcosm of this bigger story about Russia and how you find the truth. Who is the most reliable narrator? You would think that if your story was being questioned in all these different legal jurisdictions, you’d have kind of an airtight version of events about the details of where you were, what you were doing. But every time we questioned Sergei about these kind of key incidents in the raid and what had happened, the details kept changing. One time he’d say, “I was in the car.” Another time he would say, “I was at home, I was asleep,” or “I was awake.” At one point we asked him what he’d ordered at Starbucks while the raid was happening, and he had a surprising answer.

Sergei Leontiev
I’m such a person that for me it’s much easier to invent something than to remember all the small details that usually is not . . . not important, which is not important, but usually put the thought of my memories. So stuff like that. I can invent something for you specifically now, but honestly, I don’t remember.

[MUSIC PLAYING]

Courtney Weaver
We pursued the story because Sergei’s team had reached out to us. They emailed us. They wanted his story told. They thought it would help him build an investment fund in the US and get his assets unfrozen. But the more we dug, the more an alternative theory emerged. We found foreign investors who were concerned about the bank even before the stuff and Navalny took place. And we found a former executive who said the bank’s raid wasn’t because of Bush and it wasn’t because of Navalny. It was because of a fraud at the bank. And he was the one who blew the whistle.

Whistleblower
People were not stupid. They didn’t want to ask because they knew, but they understood that something was going wrong.

Courtney Weaver
That’s next time.

[MUSIC PLAYING]

I’m Courtney Weaver.

Stefania Palma
And I’m Stefania Palma.

Courtney Weaver
We reported the series and it was produced by the Financial Times and Rhyme Media. At Rhyme Media, the producers are Lydia McMullen-Laird and Jennifer Sigl. Dan Bobkoff is the executive producer.

Stefania Palma
At the Financial Times, the executive producers are Cheryl Brumley and Topher Forhecz. Sound mixing by Breen Turner. Special thanks to Peter Spiegel, Marc Filippino, Alister Mackie, Persis Love, Josh Gabert-Doyon and Tania Cherkas.

Copyright The Financial Times Limited 2024. All rights reserved.
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