Haaretz exclusive / How a serial criminal got help from an Israeli government minister
Immigrant Absorption Minister Sofa Landver pursued business ties with serial criminal Gregory Lerner. Her former chief of staff had links to Alexei Zakharenko, a Russian tycoon who disappeared two years ago. New facts from police files, published here for the first time.
Before dawn on the eve of Independence Day in 1997, a convoy of black Mercedes made its way from Ashkelon to Ben-Gurion airport. In one of the gleaming cars was a thin man with black hair combed straight back, impeccably attired and with a square knight's ring on one finger.
Some of the vehicles carried bodyguards who were accompanying the boss, Gregory Lerner, on his way to catch a plane for New York.
At the airport, Lerner went through a quick passport check and then spent time in the VIP lounge before being taken by car to board the plane. Lerner had no way of knowing that the occupants of the car, dressed as staff of the VIP lounge who smiled at him politely, were actually undercover police. It was not until Lerner had made himself comfortable in his first-class seat that they approached and quickly took him into custody.
"From his suitcase, we seized a billion dollars' worth of notes payable to bearer," says retired police major general Moshe Mizrahi, who conducted the investigation against Lerner and would later find himself in the line of fire as a result.
Lerner's first arrest in Israel generated an ear-splitting uproar. It was exploited by politicians who portrayed the serial criminal as a victim of the brutality of the law-enforcement agencies and a symbol of the discriminatory and prejudicial attitude of the veteran Israeli society toward new immigrants from Russia. One of those whose voice rang out loud and clear amid this castigatory chorus was MK Sofa Landver, the current immigrant absorption minister in the government of Benjamin Netanyahu.
Lerner was remanded in custody several times in a Petah Tikva court, under unprecedented security. Police officers brandishing loaded assault rifles took up positions outside the courtroom. A few were stationed inside the courtroom, where they kept a close watch on the windows, in case someone opened fire from the outside. The major concern of the police was that an attempt might be made to snatch Lerner and smuggle him out of the country.
The remand requests submitted to the court by the state prosecution stated that Lerner was suspected of commissioning contract killings.
"A dyed-in-the-wool criminal," Mizrahi says. "He was in touch with the leading police targets of investigation. He was the economic consiglieri. The expert in sting operations."
Shades of 007
Gregory Lerner was born in Moscow in October 1951 to an educated Jewish family. He studied journalism, but in the 1980s became involved in the flourishing black market that bloomed in the waning days of the Communist empire. In 1982, he was arrested for theft and sentenced to five years in a labor camp. Not long before the end of his prison term the charges against him were dropped, as part of the reform measures introduced by Mikhail Gorbachev.
Lerner returned to Moscow, where fortunes were being made overnight under the perestroika regime. There he met Olga Zhelovinskaya - a meeting that would affect the course of his life. This stylish woman was married to Sergey Timofeev (Sylvester ), leader of a Russian crime gang and a prominent figure in the twilight zone of Moscow, a city bleeding from turf battles after the fall of the Iron Curtain.
In 1989, a new police investigation was conducted against Lerner, this time on suspicion of stealing money from a Moscow bank. His response was to flee to Vienna with his wife and daughter. Next stop: the Holy Land. His first home in Israel was a modest apartment in the southern seaside city of Ashkelon. In 1991, he was arrested on a visit to Switzerland. He planned to escape from the placid country in a helicopter, but before he could pull off this James Bond-like stunt, he was extradited to Russia, spent a few months in jail and returned to Israel.
Not long afterward, Lerner moved to a luxurious fortified and fenced-off villa in Ashkelon. One of the most advanced closed-circuit television systems that existed in Israel at the time was installed in the new home. A fleet of armored Mercedes was regularly parked next to the house, which was also protected by guards toting submachine guns. Lerner also bought villas for his aides and, for the next five years, he conducted his global business transactions from this neighborhood, as well as from Textile House on the Tel Aviv beachfront, where he maintained a whole floor of luxury offices complete with Chinese carpets and antique furniture.
The mobster's wife
On September 13, 1994, the crime boss Sergey Timofeev turned the ignition key of his Mercedes S-60 on Tverskaya Street in Moscow. The car instantly blew up, killing the rising mafioso. A few months later, his widow immigrated to Israel with her young son and naturally took up residence in Lerner's neighborhood of villas. She was now known as Ilana Rubinstein. Lerner and Timofeev had been not only good friends but also business associates, according to senior figures who were involved in the investigation.
During this period, Lerner approached various banks in Russia and suggested that they entrust him with tens of millions of dollars, which he would invest in various projects, including the establishment of new banks in Israel and elsewhere in joint ventures. He joined Likud and, with the ease that characterizes every tycoon who comes to Israel, started to make friends in high places. One of the most prominent was Sofa Landver. An outstanding speech therapist who became Shimon Peres' Russian teacher, head of the Association of Immigrants from the Soviet Union and a member of the Ashdod municipal council, Landver was propelled in 1996 by her diligent pupil - who is now the president of Israel - to the position of Knesset member on behalf of the Labor Party.
Betwixt and between, Landver became friendly with Lerner and tried to help him forge ties with high officials. For example, she arranged meetings between Lerner and two leading members of Labor, Benjamin Ben-Eliezer and Ehud Barak. Afterward, the two made inquiries in law-enforcement circles about Lerner and were advised to keep their distance from him - advice they took. A source who was involved in the investigation relates that Landver helped Lerner negotiate the corridors of power. A veteran political consultant who met with Lerner and Landver says that Lerner told him he would like to acquire the Bank of Israel.
Lerner promised Landver a hefty donation to underwrite an event of her new-immigrant organization, but was arrested before he could make good on the promise. Later, when the affair bearing his name burst into the headlines, a number of politicians were called in for questioning, among them Avigdor Lieberman, Natan Sharansky and Landver.
"I went to him to ask for money and was very impressed by him," Landver said at the time in a press interview. "He is very educated, very cultured and intelligent."
A few months later - a period Lerner spent in detention, having been remanded in custody until the conclusion of the proceedings against him - he was indicted on serious charges involving suspected fraud in the amount of tens of millions of dollars. Another few months went by, and Lerner and the state signed a plea bargain in which Lerner, among other points, admitted that he had tried to bribe senior Israeli politicians.
He also admitted to receiving $37 million fraudulently from Mostroy, a Russian bank, establishing a series of straw companies that he controlled, and committing numberless forgeries. He admitted to having defrauded Semion Mogilevich, who holds Russian and Israeli citizenship and is high on the FBI's most-wanted list. Throughout his detention Lerner was held in total isolation. The authorities explained that this was necessary because they had concrete, verified intelligence information that a Russian crime organization planned to assassinate Lerner.
"There was good reason for the security with which he surrounded himself before his arrest," Mizrahi says. "He used to drive around like a prime minister, and not because he wanted to impress people. He was afraid of being shot. Former senior Shin Bet men supervised his security." In 1998, Lerner pleaded guilty to the charges and was given a six-year jail sentence.
"The accused did not balk at presenting false financial statements and balances, habitually inflated the capital of the company in which he was going to invest the fraudulent funds ... and presented false reports about the company's nonexistent vast capital ... The fraud which netted the accused $50 million and the attempt to obtain a license to establish a bank or acquire an existing bank so the accused could realize his goals were 'spiced' with acts of fraud, falsification of documents and financial reports, offers of bribes to politicians and bribes to bank clerks, in order to advance the goals of defrauding the Russian banks and other acts of fraud," the verdict stated.
Lerner was also ordered to pay a fine of NIS 5 million. He did not pay it, and as a result spent two additional years in jail.
Massive political pressure
In 1998, 1,500 people, most of them new immigrants living in the center of Ashkelon, gathered for a turbulent demonstration of solidarity with Lerner. The demonstration was one of the peaks of a campaign mounted by several Russian-language newspapers on behalf of the isolated prisoner and fanned by representatives of the Russian immigrants in the Knesset. The indefatigable Sofa Landver was present at the Ashkelon demonstration, in which the crowd called for the dismissal of the justice and public security ministers, Tzachi Hanegbi and Avigdor Kahalani. Rather unoriginally, some Russian-language papers in that halcyon time compared Lerner to Dreyfus and published interviews with his supporters.
Landver, who was active in the campaign, drew a comparison between Lerner's case and that of Leonid Roitman, who was later convicted of defrauding new immigrants and sentenced to 10 years in prison.
"I cannot but compare Lerner's case to Roitman's case," she said. "That man [Roitman], who simply stole millions of dollars from new immigrants, is to this day walking about free, while Lerner, who did not hurt anyone and is suspected of all kinds of crimes that were never committed, is in prison." Landver assailed the authorities for their treatment of Lerner: "In the 50 years of Israel's existence no one suspected of economic offenses has been held in such harsh and unusual conditions," she said. If Lerner was really one of the heads of the mafia and a dangerous murderer, why did they make a deal with him?
Landver also took advantage of her parliamentary prerogatives to assist Lerner and his family. She submitted a parliamentary question to Kahalani in which she was critical of the attitude of Prison Service staff to the wife of the well-connected prisoner. She and two other MKs also demanded permission to visit Lerner in prison. Following her lobbying efforts, she and a handful of other MKs were allowed to make the visit.
In 2002, the Knesset's Interior Committee met to discuss a fateful question: the conditions of the ranking prisoner Gregory Lerner. "Lerner is being kept in isolation. He has no contact with people, he is locked in a cage - the same cage in which Ivan Demjanjuk was held," Landver lamented. She added, "We maintain that the treatment he is getting is related to the attitude of the State of Israel toward residents of the former Soviet Union. If it were someone else, he would be treated very differently." She noted that even though Lerner had served two-thirds of his sentence, he was not being released. She demanded to be an observer on the parole committee in Lerner's case, but her request was rejected. She and two other MKs waited outside the door during the committee's deliberations. Lerner's parole request was denied; he remained in prison.
In 2003, the parole committee decided to release Lerner. The attorney general, Elyakim Rubinstein, objected to the decision and appealed it in district court. "The committee should have taken into greater account the scale of the respondent's [Lerner's] offenses, which involved vast amounts of money and sophisticated and well-planned methods of fraud. In the final analysis, the concern about dangerousness, which is a central consideration in the parole committee's decisions, remains firm and should not have been ignored," the attorney general's representative argued in court. But in vain. Lerner was freed in 2003. Landver's life also changed that year: after seven years in the Knesset, she found herself outside the Israeli parliament.
In May 2003, the ex-con began to work in a company called Global Connections. The company was founded by a former director general of Yisrael Beiteinu, Ludmila Grossman, together with Edward Blau, a former adviser to the party's leader, Avigdor Lieberman. The company's business was trade in energy commodities. In September, Lerner resigned from the company and relocated to the round building of the Azrieli Towers complex in Tel Aviv. He was now connected with a company bearing the promising name of Pacific Petroleum. Ostensibly only an adviser to the company, Lerner actually controlled it. The firm promised to import gas and oil products from giant Russian energy corporations at bargain prices. In the most natural way, the trajectories of the former prisoner and the retired MK crossed again.
"After she left the Knesset, Sofa Landver came to me and said, 'It's possible to bring oil tankers to Israel in large numbers and at good prices. Gregory Lerner represents the biggest companies in Russia. Come with me to meet him.'" The speaker, a well-known businessman who was recruited by Landver to help with Lerner's new project, continues: "I had connections with Israeli energy companies. The meeting took place in the round building of Azrieli Towers. Very luxurious offices, sofas like Louis XIV. Lerner speaks broken English, so Landver translated. During the meeting I said to a person who had accompanied me, 'He looks like a big windbag to me.' We left as we came."
How did Landver, between periods of serving in the Knesset, find herself collaborating with the serial offender for whom she had lobbied so intensively as an MK? Finding herself out of the Knesset, Landver scouted around for opportunities. Not long after Lerner's release, she visited his father in Ashkelon. Thereafter, everything unfolded at dizzying speed, as she herself said in her testimony to the police, here being published for the first time:
"At the end of November-beginning of December I was invited to his office at Azrieli and I spoke with Gregory Lerner. Also present was Aryeh Smolnyanisky, who was introduced to me as one of the owners of Pacific Petroleum. At their recommendation, I became a director of the company," said Landver. She acted as Lerner's ambassador to the big fuel companies in Israel. Among others, she brought two former senior figures in the Labor Party to meetings with Lerner to try to interest them in the project.
A probe by Haaretz found that Landver's closest associates, those who accompanied her in politics and later were given positions in the Immigrant Absorption Ministry, were cast in various roles in Lerner's company. Pacific Petroleum, for its part, offered tempting energy deals with the giant Russian corporations.
A Landver confidant, Colonel (res. ) Hagai Mann, currently her senior adviser at the Immigrant Absorption Ministry, was cast in the role of president of Pacific Petroleum. The role of the firm's administrative director went to Elena Meller-Semik, Landver's faithful assistant and later her ministerial chief of staff. In his police testimony Lerner said he chose the company's officials at Landver's request and provided her and the president with handsome salaries, cars and elegant offices. Landver and Mann launched vigorous talks with two major fuel companies, Paz and Dorgas.
"The idea was for Dorgas to issue a letter of credit as soon as the shipment arrived in Israel," Landver said in her testimony.
A person who was involved in the negotiations on behalf of Dorgas says that Lerner never came to the meetings. "Landver and Mann conducted the negotiations," he says. "Landver told us she had connections and that they could buy gas cheap. The connection with Lerner was not clear at first and only emerged later." Landver, in her testimony: "We did not hide the fact that Lerner was an adviser in the company." Except that Lerner was not an adviser; he pulled the strings.
"We had agreements with some of the big companies," Hagai Mann told Haaretz. "To the best of my recollection, I worked there for about half a year."
Didn't you know that Lerner was a ranking crook before you started working for him? Didn't you read the court judgments in his cases?
Mann: "I don't read court judgments. I saw working papers concerning price offers from Yukos [the now bankrupt Russian oil giant]. And with those papers I offered the merchandise."
To the biggest Israeli companies?
The gas sting
The Israeli businessman Oscar Katznelson, a co-owner of the Olimpia construction firm, struck a deal with Lerner. "He said he had an agreement to sell gas to Dorgas and an agreement with a Russian company to buy gas," Katznelson said. He showed me signed agreements. He said he needed funding, because you have to pay in cash there in order to get a cheap price."
Lerner asked Katznelson to get him interim funding of $550,000 to complete the deal. Katznelson got him the money. He had every reason to believe, as he told the police in testimony which is here being published for the first time, that the deal was kosher and authentic. "In that period a few people I knew were working for him," Katznelson said in his testimony. "Hagai Mann, a senior army officer whom I have known for many years, and Mrs. Sofa Landver, both of whom told me the deal was 100 percent safe, because they had handled it personally. They told me that the agreement with Dorgas was real, that Hagai Mann was dealing with the ship and that the ship was about to set sail and the gas was ready there. They said there was zero risk and that the expected profit was 50 percent of the total profits ... I am not familiar with gas and oil deals. I didn't know what the profits in such deals were, and that part of the deal looked completely real.
"Pressure started from Sofa Landver's assistant, whose name is Elena [Meller]. She called every day to ask me to transfer the money. We sent the first payment of $250,000 via a bank transfer to an account in Geneva ... whose number we got from Elena ... Then Elena started to put on pressure again for the second payment, and another $300,000 was transferred ... I only mediated ... I wanted to do a favor. The intention was to use the profits to acquire additional projects which my company was initiating."
Katznelson later transferred another few hundred thousand shekels to Lerner - who then obtained another $400,000 from a different patsy.
After returning from a trip to Hungary, Katznelson called the company. "Sofa or Hagai told me that everything was fine and that the ship should be leaving from Riga on time. After that it changed to Odessa. After a time, Sofa called to say that the ship was on the way and they were celebrating. A day or two later, Sofa or her assistant called me and said there were problems, that I should come urgently. When I got there they told me Gregory had collapsed ... The ship could not be found."
Lerner did indeed collapse. Katznelson, concerned that his money had gone down the drain, hurried to Lerner's residence in Ashkelon together with Landver. They found Lerner sick and exhausted. This was the death of the fictitious deal, or more accurately, the gas sting.
Enter Shoni Gavrieli
On the morning of January 28, 2004, a black Mercedes - a recurrent motif in this saga - glided into the underground parking lot of Azrieli Towers. At about 11:20 A.M., on a routine check of the first level of the parking area, the building's security personnel found a suspicious package wrapped in paper to which a cellular phone with dangling wires was attached. The police were called in; the package turned out to be an improvised explosive device. The police suspected that the device had fallen off the black Mercedes driven by Shoni Gavrieli, father of former Likud MK Inbal Gavrieli.
A few Belarus men were subsequently arrested and accused of attempting to assassinate Gavrieli as part of the gang wars for control of the illegal gambling market. The men were finally exonerated by reason of doubt.
The police investigation also found that Gavrieli had come to the building that morning to meet with Landver and Lerner about a gas deal. Landver told the police that she and her assistant, Meller, had been the go-betweens in the deal. Gavrieli said in his testimony that the meeting was about a deal "to sell crude oil from Russia to the United States." Landver, for her part, maintained that the deal involved the sale of oil and fuel products from Russia to Israel. And Lerner, in one of his versions of the events, said they talked about supplying fuel products to the Palestinian Authority.
Landver testified that she personally signed a check from Lerner for deposit to the account of the energy company Gavrieli represented. "I was asked to sign a check for $1.1 million ... Hagai Mann, myself and Elena Meller signed on the back of the check as guarantors," Landver told the police interrogators.
The company for which Gavrieli acted as a middleman was called Max Fuel Products and was controlled at the time by Koko Ovadia and Giora Sarig, a former CEO of the giant Delek fuel company. Until 2006, Ovadia, together with Dorgas, held the exclusive franchise to sell gas to the Palestinian Authority. In the late 1990s, Ovadia, who is considered close to former PA security chief Jibril Rajoub, was accused of evading the payment of excise taxes on fuel he exported to the PA. In the end, Ovadia paid a fine of NIS 12 million and the charges were dropped. Ovadia's company and Lerner's firm signed an agreement guaranteeing the supply of hundreds of thousands of tons of fuel. According to confidants of Gavrieli, the deal was not consummated because Lerner's bluff was exposed. According to one of the participants in the negotiations, the presence of a former MK in the discussions was one factor in getting them to believe that the deal was serious.
Advise and donate
In 2004, Katznelson and Lerner held a tense meeting after Lerner promised several times to return Katznelson's money, but gave him forged checks. Katznelson told Lerner that another businessman he had swindled had complained to the police about him. Lerner left the cafe where the meeting took place, went to his Azrieli Towers office, dumped documents into bags - including the company's documents - and then drove around Tel Aviv, throwing the bags into garbage bins across the city in order to be rid of potentially incriminating material.
The investigation against Lerner was conducted by the police international crime investigations unit, headed at the time by Yohanan Danino, who is now the police commissioner. It soon turned out that Lerner had set up straw companies bearing names identical to the giant Russian firms. He had made false promises and forged contracts, minutes of meetings, bank papers, certified checks and payment instructions in order to defraud investors and get his hands on their money with the aim of laundering it. He also continued to be in touch with Russian underworld bosses. For example, he told the police that he had transferred $1 million from his account in Switzerland to accounts belonging to the head of the Russian crime organization Solntsevo, Sergey Mikhailov.
Landver testified that she left the company a few months after both Lerner and his company collapsed and that she earned tens of thousands of shekels during the months in which she worked for him. "I left the company when Lerner started to drink and go crazy," she said, adding that she had turned down his request to invest the money she received from selling her apartment, $310,000, in the company. She confirmed that Lerner was the moving spirit behind all the transactions. Everyone worked with the adviser Lerner; all the oil and fuel ties were under his responsibility." The police did not ask her even one question about the interesting relations she developed with Lerner over the years.
This is the place to relate the following episode. In late 2003, while working with Lerner, Landver became head of the national federation of Russian-speaking immigrant organizations. In that capacity, she initially received expenses of thousands of shekels a month, plus a car, and in June 2005 began to receive a monthly salary. One of the association's financial statements, which was obtained by Haaretz Magazine, acknowledges receipt of a donation of NIS 50,000 from one Gregory Lerner.
Agreement with the prosecution
In mid-2004, Lerner came to the headquarters of the international crime investigations unit, not to be interrogated, but to reveal explosive information about senior Israeli figures. The meeting was preceded by negotiations between Danino and Lerner's lawyers, Hanan Gold and Moshe Friedman, which culminated in an agreement for Lerner to spill the beans in return for which the charges relating to the gas sting would be dropped.
In the course of many meetings, Lerner told harrowing stories about corrupt politicians who hold foreign accounts into which tycoons with vested interests pour millions. He promised to substantiate his testimony with documents and external evidence, but in the end could not. The police did not bother to question any of the leading political figures Lerner mentioned in order to check whether some of his fantastic stories might, after all, be true. Finally, the police and the State Prosecutor's Office decided to cancel the agreement with Lerner. In February 2006, Lerner appeared in court and admitted to the gas fraud. He now awaited the verdict.
A month later, Lerner arrived at Ben-Gurion airport, presented a passport in the name of Valery Bronstein, boarded a private plane and flew to Cyprus. He then went on to Paraguay. Ten days later, he was arrested in a hotel in Asuncion, the capital of Paraguay. His Louis Vuitton bag was found to contain more than $1 million in cash. Extradited to Israel, he was sentenced to six years in prison for the gas swindle. It then turned out that this was only the aperitif, that while Lerner was being interrogated and signing a state's witness agreement, he had been far from idle on the scam front.
This business initiative, which was devised between October 2004 and his flight to Paraguay, involved a company named Rosneftegazinvest Ltd. Lerner presented himself as a well-connected trader with expertise in the international energy market. To raise money, he opened branches across Israel and published an alluring offer in the local Russian-language media: Investors in the company would get a risk-free return higher than anything else on the market. Again some Russian media outlets provided him with a tailwind. A series of articles portrayed him as a talented entrepreneur who was returning to the business world big-time. The articles played up the close ties between his company and the Russian fuel giant Gazprom. "Rosneftegazinvest has become an integral part of Gazprom, which makes the company extremely reliable," the Russian-language weekly Globus wrote.
Lerner's dark charms cast their spell again. At least 2,500 people, nearly all of them new immigrants from the former Soviet Union, mostly old people and pensioners from the periphery, handed over all their savings - a total of at least NIS 62 million - to Lerner. Again Lerner rented luxurious offices and ran a prestigious campaign in the Russian-speaking media. Lerner was presented as a local Dreyfus who was being persecuted only because he was Russian, a philanthropist who was ready to share his profits with the downtrodden Russian masses. The wizard of frauds was presented to the new immigrants as a magnate who had contracts for large-scale oil deals. Investors were promised monthly interest of 2 percent and 29 percent a year compounded.
During the period in which Lerner promised the new immigrants a bonanza, a retired senior police officer, Meir Gilboa, who investigated Lerner's exploits, used to swim every morning in a pool in Jerusalem.
"One day a new immigrant from Russia approached me and said, 'I want to invest in Lerner's company, which promises steady yields.' I replied, 'The guy will cheat you. He has already been convicted in the past.' The man said, 'That's all nonsense. You see the Russian immigrants as criminals and cheats. I see him as a victim.'"
As in every basic Ponzi scheme, Lerner gave some of the investors their money back with interest, thus increasing the number of patsies. Once again he created straw companies with names identical to the Russian firms, signed fictitious documents, built a tower of lies and sucked in the investors' funds through hidden transatlantic banking channels straight into his pocket, concealing his control of the companies and accounts.
It was only when he stopped supplying the goods that the pyramid started to totter. Defrauded pensioners stormed Lerner's offices. He fled to Paraguay. When he was brought back, he was tried for the gas fraud and interrogated about the new affair: the Russian-immigrant scam.
In that same year, 2006, Sofa Landver, the former Labor MK, returned to the Knesset, this time with Avigdor Lieberman's Yisrael Beiteinu party. Appointed to head the party's public complaints committee, she became the natural place to turn for the irate investors who had lost their savings to Lerner.
Landver was appointed immigrant absorption minister in 2009. A few months later, Lerner pleaded guilty to the sting operation against the Russian immigrants and was sentenced to another 12 years in prison. His lawyer, Menahem Rubinstein, claimed in his defense that he suffers from manic depression, which leads him to take enormous risks, while developing patterns of megalomania on the one hand and total introversion on the other.
The vanished oligarch
A little more than two years ago, on August 4, 2009, the black S-class Mercedes of the young tycoon Alexei Zakharenko, 45, was found abandoned in a St. Petersburg suburb. Zakharenko - a mysterious bachelor with a stutter, who has a Ph.D. in nuclear physics, collects weapons and is fond of alcohol - has not been seen since. The Russian police think he was murdered. About two years before his disappearance, Zakharenko started to visit Israel. Even though he is not Jewish, he put on a skullcap and dreamed of settling in the Holy Land. In late 2008 he met two Israelis who would become significant figures in his short life. One of them has already played a supporting role in our story: Elena Meller, the industrious and talented close associate and chief of staff of Sofa Landver until the summer of 2009. "The relations between them were like mother and daughter, they were that close," says a source in the Immigrant Absorption Ministry. "Then, one day she just disappeared."
Meller was Zakharenko's interpreter in conversations with his first partner in the Pushkin Restaurant in Tel Aviv, the chef Ronen Dovrat-Bloch. Dovrat-Bloch told police that he paid Meller thousands of shekels for every visit of the tycoon: "Meller would take Alexei Zakharenko to all kinds of political meetings, to hook him up with politicians ... We are in the Knesset, we have connections, we will take him to Sofa Landver, to make him feel like a VIP."
Meller is responsible for bringing together Zakharenko and the man the Russians suspect of being involved in the oligarch's disappearance: Nissim Dedzhaldeti. Dedzhaldeti was declared bankrupt in the late 1990s but went on maintaining a luxurious lifestyle and was active in the "gray market."
Complaints filed with the police against the charismatic businessman, on suspicion of being involved in sting operations and making threats, led nowhere. This year, though, the state prosecution announced that Dedzhaldeti would be charged with stealing hundreds of thousands of shekels from Isramco, a fuel company, and from a businessman. The police report submitted to the court stated that Dedzhaldeti was connected with leading criminals in the past
Zakharenko and Dedzhaldeti hit it off immediately; the former bankrupt became the tycoon's partner in Pushkin and other business ventures in Israel. Meller was the interpreter and Dedzhaldeti became Zakharenko's guide in the Israeli business jungle.
"Everyone wanted Alexei as their partner," Meller said in her police testimony. "Everyone thought he was the next [Arcadi] Gaydamak."
In mid-2009 Zakharenko and Dedzhaldeti established Zakharenko Investments. Oddly, Zakharenko gave Dedzhaldeti half of the company that he had held in trust in his name. A second agreement between them guaranteed that Dedzhaldeti would receive the remaining half of the company (by means of a share-transfer bill ) should Zakharenko be incapacitated. That peculiar condition was stated orally.
"Alexei told a lawyer who was in his home ... that if anything should happen to him he wanted the company ... to be transferred to my full ownership," Dedzhaldeti told the police. Zakharenko deposited more than NIS 30 million into the company's bank account.
What was Dedzhaldeti's part in the deal? Why did he get millions from the mysterious tycoon? The former bankrupt had a simple answer for the interrogators: "They gave it to me as a gift because he wanted my business services."
Dedzhaldeti says that Zakharenko signed the share-transfer bills in his luxurious St. Petersburg penthouse in the spring of 2009. On that visit, Zakharenko hosted Dedzhaldeti and Meller - who was still chief of staff of Immigrant Absorption Minister Landver - lavishly. "He put us up in the presidential compound on the North Sea ... You need a special permit to enter the compound," Dedzhaldeti said in his interrogation.
Even before this, Dedzhaldeti was in possession of a sweeping power of attorney, promising him management of all of Zakharenko's businesses across the globe. According to Dedzhaldeti, Zakharenko signed the document "in case anything should happen to him."
Why should a 45-year-old be concerned about his future? In this thriller, any explanation is possible. A few months later, Zakharenko disappeared. A week earlier, Dedzhaldeti visited him in St. Petersburg. On the night before he disappeared, Meller and Zakharenko spoke for an hour and a half by phone, until 1:30 A.M.
Very soon after Zakharenko's disappearance, Dedzhaldeti started to behave like his heir. He now had control of tens of millions of shekels which Zakharenko had transferred to Israel. Meller, who left her job in the Immigrant Absorption Ministry just a week before the oligarch's disappearance ("I had a professional conflict with Landver," she told the police ), also enjoyed Zakharenko's money with dizzying speed.
Less than a week after his disappearance, Dedzhaldeti started to transfer NIS 50,000 a month to Meller from Zakharenko Investments. Dedzhaldeti and Meller also started to look for an apartment for the well-connected lady, who is now renting a spacious, glittering home in north Tel Aviv and driving a fine automobile.
In October 2010, Elena Meller arrived at a police station in south Tel Aviv. She told the officers a horror story. That morning, she said, she had been in a hair salon in Rishon Letzion, when an armed man in sunglasses had called to her in Russian to come outside. "He told me aggressively, in Russian ... that Alexei [Zakharenko] owed $5 million to people in St. Petersburg ... He started to get angry and said he knew for a fact that I had the money, that they knew the streets I used ... that they would not ask again and that I had to come up with the whole amount on Sunday."
Two months later, Meller was summoned to the police international crime investigations unit, this time as a suspect. The Russian police had requested that she be questioned about Zakharenko's disappearance.
At the same time, the ICIU launched an independent investigation to find out whether Meller and Dedzhaldeti had conspired to seize control of Zakharenko's assets fraudulently. When the police arrived at Dedzhaldeti's home to arrest him, he was asked if he had a safe. He denied it, but a thorough search turned up a coded safe containing currency from a large number of countries.
The police investigation revealed that a month after Zakharenko's disappearance, Dedzhaldeti and his lawyer submitted an urgent request to the registrar of companies to transfer Zakharenko Investments to Dedzhaldeti. This was one stage of the former bankrupt's takeover of the vanished tycoon's assets.
The investigation lasted several months, and last April an indictment was filed against the two for allegedly exploiting absence and committing various offenses with the aim of transferring assets of Zakharenko's to Dedzhaldeti. They are also charged with conspiring to forge Zakharenko's signature on a power of attorney which allows Dedzhaldeti to represent him and act in his name anywhere in the world.
The prosecution claims that police lab tests prove the signature on the power of attorney is not that of Zakharenko. All the accused deny the charges. Dedzhaldeti's lawyer, Moshe Israel, notes that the prosecution has backed off its allegation that his client obtained control of Zakharenko Investments fraudulently (see box ).
He's right, and the reason is simple: Zakharenko, whose English is poor and who relied on the translations of Elena Meller, is not here to testify whether he understood the meaning of his signature on the share-transfer bills and whether he promised Dedzhaldeti orally that the other half of the company would revert to him if "something happened to [Zakharenko]." It is important to note that Dedzhaldeti and Meller were not accused of being responsible for the oligarch's disappearance, even though the former was found to be lying on a polygraph test about this.
Sofa Landver's name came up in this labyrinthine investigation, too. Dedzhaldeti told the police that he met her in 2008. "A friend from Ashdod tried to persuade me to come and meet Elena and Landver, because they were familiar with the Eastern Bloc and I wanted connections there in order to connect Turkish companies with the Eastern Bloc," he related. During the investigation it turned out that Dedzhaldeti, with his controversial record, became, at least in his account, the economic brain of the minister of immigrant absorption.
"For a certain period, Dedzhaldeti helped Sofa Landver and Dimitry Apartsev, the director general of the ministry," Meller said in her interrogation. "More than that, when we went with Sofa to a meeting with the finance minister, Nissim counseled her over the phone."
Dedzhaldeti confirmed this: "For 10 months I was an economic adviser in the ministry. I helped them prepare the budget. I worked with the minister, Sofa Landver. Even though I have only an informal education, I helped the ministry get an extra NIS 200 million for the annual budget," he boasted.
Landver, though, says that "Mr. Dedzhaldeti was never employed by the Ministry of Immigrant Absorption in any position whatsoever and did not take part in the ministry's budget deliberations."
Dedzhaldeti and Meller had ties of one kind or another with politicians. Meller introduced Dedzhaldeti to, among others, Tourism Minister Stas Misezhnikov (Yisrael Beiteinu ) and the two met occasionally at social events. Not long after Zakharenko disappeared, Dedzhaldeti told various bank officials that he would see to returning the missing oligarch.
"Nissim claimed that Zakharenko had been kidnapped ... that he was being held by his captors and that Nissim was negotiating the amount of the ransom," one bank official said in his testimony to the police. No trace of Zakharenko has ever been found. The Russian police continue to believe that he was murdered.
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