Suit Contends Lost Millions Weren't 'Lost'
New York Times
Becky Gaylord
8 November, 2001
Ten days after the World Trade Center collapsed, as firefighters and rescue workers dug through the rubble looking for victims, three executives of a currency firm with offices in the twin towers plotted in Brooklyn to cover up $105 million that was missing from the firm, according to a lawsuit filed yesterday.
Their plan, according to the court papers, was to raise another $160 million from investors around the world to cover the shortfall, which had been reported missing a few days after the Sept. 11 terrorist attack, along with the company's owner, a Russian businessman named Andrei Koudachev. Mr. Koudachev, the lawsuit contends, took the initial $105 million for his own use.
The three executives intended to eventually steal the new money, the lawsuit states. The $105 million is missing from two related firms, First Equity Enterprises and Evergreen International Spot Trading, both owned by Mr. Koudachev.
Only a small portion - about $1.7 million - of the missing money has been located. Mr. Koudachev had been reported missing, as well, but yesterday his lawyer said Mr. Koudachev was in Moscow and was not a thief, but a victim.
His lawyer, Nathanie! Z. Marrnur of Stillman & Friedman, said that Mr. Koudaches "is himself a creditor of Evergreen. "He is disappointed and concerned, " Mr Marmur added, "with the apparent loss of investor lunds and is hopeful that every effort will be made to recover any missing assets."
Evergreen, with unree offices in Manhattan, was the sales operation, employing several dozen people who scoured business directories and then telephoned wealthy individuals around the world to recommend currency trading as a lucrative investment.
First Equity Enterprises acted as the clearing house for Evergreen, taking in funds, issuing statements to clients and disbursing money to those who wanted to cash out.
Soon after the Sept. 11 attacks some clients, anxious about their money, asked to cash out, but could not get their money. One of these investors, Dirk Karreman, a wealthy Australian land developer, filed the lawsuit yesterday in United States District Court in Manhattan, secking to recover nearly $2 million.
Mr. Karreman and others complained to Evergreen's star salesman, Justin Fauci of Brooklyn, who in turn inquired about the money, according to the lawsuit.
On Sept. 22, 11 days after the attacks on the trade center, three executives of Evergreen and First Equity asked to meet with Mr. Fauci at a Brooklyn golf driving range, where they outlined the plot described in the lawsuit. The three also sought to enlist Mamed Mekhtiev, who hadled the currency trades, in two more meetings that day.
Instead, Mr. Fauci and Mr. Mekhtiev hired a lawyer, James J. Mc-Guire of White & Case, who in turn took them to federal prosecutors and Postal Service inspectors. Mr. McGuire, a former federal prosecutor, praised Mr. Fauci and Mr. Mekhtiev yesterday for blowing the whistle on both the disappearance of the $105 million and the plot to steal more.
Accusations of a crime within a crime within a crime.
"Nobody would know about any of this if these guys had played ball," Mr. McGuire said. The three executives who hatched the plot outlined in the court papers are Polina Sirotina of Cliffside Park, N.J, the chief financial officer of Evergreen; Gary Farberov, also known as Gary Farber, of Brooklyn, a principal in both companies; and Gary Gelman of Staten Island, a principal in Evergreen.
Ms.Sirotina's lawyer, Michael Armstrong, said last night that his client "did nothing wrong and that will be her position. Efforts to locate Mr. Farberov and Mr. Gelman were unsuccessful. Evergreen's 1,400 clients were from the United States, Australia, Britain, Canada, New Zealand, Norway and other countries.
The firm initially used a Chicago bank to execute currency trades, but in 1998 Mr. Koudachev ordered that all trades be made through Forex, a company in Budapest.
Once Forex was engaged, the lawsuit states, "it appears that the currency trades executed by Mekhtiev, which to his knowledge were totally lawful, legitimate and sound, were not consummated.
Instead, the lawsuit contends, Mr.Koudachev and unnamed confederates took the $105 million for their own use. The lawsuit contends that Mr. Koudachev diverted client money to buy, fix up and furnish his apartment in Cliffside Park, that he charged $150,000 of lavish expenses including works of art to a company American Express card and that Ms. Sirotina charged $500,000 of jewelry, furs and clothing to her company American Express card.
