UPDATE, 4:41 pm: The U.S. Attorney for the Southern District of New York issued a statement alleging that one enterprise in this global gambling scheme laundered tens of millions of dollars through Cyprus shell companies and bank accounts -- and into the U.S. Once in America, the funds were further laundered into investments such as real estate and hedge funds.
A 32-year-old JPMorgan Chase branch manager in New York is alleged to have helped a major defendant structure transactions in order to avoid bank reporting requirements. [It's worth noting to readers that Cyprus' financial system has long been a haven for Russian organized crime, and that the country has declined to rein it in, despite a pending $13 billion bailout of its economy by the EU and IMF.] The statement added that a second enterprise was allegedly financed by Helly Nahmad's art gallery. Arrests have occurred today in Detroit, Philadelphia and Los Angeles, in addition to the New York raid. Nahmad is expected to surrender later today in LA.
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EARLIER: Art dealer and collector Hillel ("Helly") Nahmad, the 34-year-old scion of the billionaire Nahmad art dealer family, received the jolt of his career this morning, and there was nothing abstract about it.
As part of a massive $100+ million money-laundering case against illegal gambling rings operated by Russian organized crime, FBI agents made busts at numerous locations in New York and elsewhere in the U.S. this morning. A 32-year-old banker at JPMorgan Chase was among those arrested. And the famed Helly Nahmad Gallery on Madison Avenue, a longtime tenant of the luxury Carlyle Hotel, was among the locations raided.
Helly's family is one of the richest and most powerful art-dealing dynasties in the world. Forbes estimated his father, David's, fortune at $1.75 billion as of last month (while it's believed the entire family is worth more than $3 billion). Reached in London, David Nahmad says "I know almost nothing" about the raid this morning on his son's gallery. As for allegations that the raid is connected with Russian organized crime, he said, "I think it's totally stupid."
The feds allege that Helly made two separate wire transfers -- totaling $1.35 million -- from his father's bank account in Switzerland to a bank account in the U.S. to help finance the gambling scam.
Helly himself has not returned phone calls. "He's not here right now," says a man who answered the phone at the gallery while the raid was taking place. "Call back later." Told that Forbes would be going to press momentarily, he adds, "We have no comment." (Helly's lawyer, Richard Golub, echoes that sentiment.)
A paper sign on the front door reads "WE ARE CLOSED FOR RENOVATIONS. PLEASE RING THE BELL OR CALL." But it's unlikely the Nahmad family expected that the feds would be helping with the remodeling.
[See page 2 for more Forbes photos of the raid.]
Thirty-four people have been indicted in the case today, including Nahmad, but he's not been arrested yet. The U.S. Attorney's office in New York is expected to issue a statement later today. Law enforcement sources tell Forbes that the gambling dens were very popular with prominent Wall Street bankers, Hollywood stars, and sports figures.
Listed at the top of the indictment, which was unsealed several hours after the raid, is 64-year-old Alimzhan Tokhtakhounov (a/k/a "Taiwanchik"), who Forbes included on its World's 10 Most Wanted Fugitives list in 2011. The feds maintain that he was the leader of the gambling operation, overseeing the laundering of its proceeds for Russian oligarchs overseas. In 2002, Tokhtakhounov was indicted by the U.S. Attorney in Manhattan on allegations he helped rig the results of the Winter Olympics in Salt Lake City in ice dancing and pairs figure skating. (He was arrested in Italy in July 2002, but the Italian government refused to extradite him to the U.S. to stand trial.)
As for Helly Nahmad's New York art gallery, "they've been very good tenants [for decades]" says Victor Romero, the Carlyle hotel's director of security, on the sidewalk while the raid was occurring. "It goes to show what you don't know."
In a profile of the family in 2007 titled "The Art of the Deal," Forbes senior editor Susan Adams detailed how the Nahmads are among the world's most influential megadealers of modern and impressionist art. They boast an arsenal of well-known names, from Monet and Matisse to Renoir and Rothko. While they conduct most of their buying and selling through the Sotheby's and Christie's auction houses, a good deal of art is also sold though Helly's New York gallery, as well as the gallery of a cousin (also named Helly Nahmad) in London.
The Nahmads descend from a prosperous banker from Aleppo, Syria. Today, their art inventory takes up 15,000 square feet of a duty-free building next to Geneva's international airport. Three sources in a position to know told Forbes' Adams that the warehouse in 2007 contained between 4,500 and 5,000 works of art, worth between $3-4 billion at the time. (The holdings included 300 Picassos, worth some $900 million.)
Arrests and search warrants in the massive sweep are still unfolding throughout the country today. Sources tell Forbes that an investigation by the FBI's Eurasian Organized Crime Squad uncovered high-stakes poker and sports-betting dens that were frequented by prominent New Yorkers in the financial, sports and entertainment fields. "Today's charges demonstrate the scope and reach of Russian organized crime," noted George Venizelos, the FBI's Assistant Director-in-Charge of the bureau's New York office. "Crime pays only until you are arrested and prosecuted."
One defendant, 32-year-old Ronald Uy, a Vice President and Branch Manager for JPMorgan Chase, allegedly provided advice on how to structure transactions in order to avoid bank reporting requirements. In his bio on LinkedIn (see right), Uy boasts that he's a "highly accomplished banking professional with solid and progressive experience" who has been "repeatedly promoted into leadership roles."
According to the feds, most of the defendants were born in the former Soviet Union and regularly traveled to Russia and Ukraine. The alleged second-in-command of the enterprise (Vadim Trincher, age 52) is based in New York, where he oversees a high-stakes illegal sports-betting operation that caters to oligarchs living in Russia and Ukraine. He is said to be a dual-citizen of the U.S. and Israel, and is a well-known poker champ.
Prosecutors say that Trincher was caught on months of wiretap recordings threatening violence against gamblers who didn't pay their debts. On those recordings, he allegedly referenced an enforcer named "Maxim" who collected the money owed.
Others among the nearly three-dozen defendants include Joseph ("Joe the Hammer") Mancuso; Stan ("Slava") Greenberg; Noah ("The Oracle") Siegel; Dmitry ("Blondie") Druzhinsky; Alexander ("Murushka") Katchaloff; Anatoly ("Tony") Golubchik; David ("D.A.") Aaron; and Edwin ("Eddie") Ting.
One of the flashiest defendants is 34-year-old Molly ("Poker Princess") Bloom, the sister of Olympic skier Jeremy Bloom. For years she has organized high-stakes poker salons in lavish homes and hotels on both coasts of the U.S. (The secret games were sometimes secured by armed guards, according to one attendee.) Molly's alleged staple of players has included celebs Leo DiCaprio, Ben Affleck and Tobey Maguire, and athletes Alex Rodriguez and Pete Sampras. Whether any of these stars indulged in games sponsored by today's busted-up global enterprise remains to be seen. Perhaps those answers will have to wait until 2014, when a Harper-Collins memoir by Bloom is scheduled to be released.
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Richard Behar is the Contributing Editor, Investigations, for Forbes magazine. He can be reached at rbehar@forbes.com
See next page for additional photos taken by Forbes at this morning's raid of the Helly Nahmad Gallery.
