2:34 PM 11/3/2017 – The Manafort – Mogilevich link is established for the first time in the indictment by Mueller

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The Manafort – Mogilevich link is established for the first time in the indictment by Mueller

Mueller Reveals New Manafort Link to Organized Crime

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Buried deep in Robert Mueller’s indictment of Paul Manafort is a new link between Donald Trump’s former campaign and Russian organized crime.

The indictment (PDF), unsealed on Monday, includes an extensive look into Paul Manafort’s byzantine financial dealings. In particular, it details how he used a company called Lucicle Consultants Limited to wire millions of dollars into the United States.

The Cyprus-based Lucicle Consultants Limited, in turn, reportedly received millions of dollars from a businessman and Ukrainian parliamentarian named Ivan Fursin, who is closely linked to one of Russia’s most notorious criminals: Semion Mogilevich.

Mogilevich is frequently described as “the most dangerous mobster in the world.” Currently believed to be safe in Moscow, he is, according to the FBI, responsible for weapons trafficking, contract killings, and international prostitution. In 2009, he made the bureau’s Ten Most Wanted Fugitives list.

“Ivan Fursin was a senior figure in the Mogilevich criminal organization,” Taras Kuzio, a non-resident fellow at Johns Hopkins-SAIS’ Center for Transatlantic Relations and a specialist on the region told The Daily Beast.

Martin Sheil, a retired criminal investigator for the IRS, said the indictment, with its connections to Fursin, helps illuminate the murky world Manafort operated in before taking the reins of Trump’s presidential bid.

“This indictment strongly indicates the existence of a previously unknown relationship between an alleged Russian organized crime leader and Mr. Manafort,” Sheil told The Daily Beast.

According to the indictment, Manafort and his former business partner, Rick Gates, used Lucicle to avoid paying taxes on money which they then spent on a variety of pricey items: clothes, antiques, and at least one Mercedes-Benz.

Paul Manafort’s attorney, Kevin Downing, told reporters on Monday that the idea that anyone would engage in such a scheme is laughable.

“The second thing about this indictment that I, myself, find most ridiculous is a claim that maintaining offshore accounts to bring all your funds into the United States, as a scheme to conceal from the United States government, is ridiculous,” he told a scrum of reporters on the steps of a D.C. courthouse.

But the indictment alleges otherwise. According to Mueller’s team, from April 2012 to March 2013, Lucicle transferred more than $1.3 million to a home improvement company in the Hamptons, where Manafort owns property.

Lucicle also sent more than $200,000 to a New York men’s clothing store from March 2012 to February 2013. In that same window of time, it also sent more than $100,000 to a New York antique dealer, more than $340,000 to a Florida contractor, $88,000 to a landscaper in the Hamptons, and a comparatively paltry payment of $7,500 to a clothing store in Beverly Hills.

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On Oct. 5, 2012, Lucicle wired in $62,750 to pay for a Mercedes-Benz. And on Valentine’s Day of 2013, it sent $14,000 to a Florida art gallery. In total, according to Mueller’s indictment, Lucicle wired more than $5 million into the U.S. for Gates and Manafort.

At least some of the money Manafort and Gates used to pay for all those goodies appears to have come from Fursin. The New York Times reported in July that Lucicle and Fursin are tied to an “offshore entity, Mistaro Ventures, which is registered in St. Kitts and Nevis and listed on a government financial disclosure form that Mr. Fursin filed in Ukraine.”

According to the Times, “Mistaro transferred millions to Lucicle in February 2012 shortly before Lucicle made the $9.9 million loan to Jesand L.L.C., a Delaware company that Mr. Manafort previously used to buy real estate in New York.” It was one month after that transfer that Lucicle started shelling out millions to pay for cars, clothes, and real estate, according to the indictment.

That isn’t Fursin’s only connection to Manafort. He is also a lawmaker for the Party of Regions, which paid at least $17 million to Manafort’s firm.

In addition, Fursin’s longtime business associate, Ukrainian billionaire Dmitry Firtash, has an off-again, on-again partnership with Manafort. Together, they tried to buy the Drake Hotel in Manhattan for a cool $850 million. Firtash also bankrolled Ukraine’s Party of Regions.

Firtash has his own legal complications. He is currently under indictment in U.S. federal court for allegedly orchestrating an international titanium mining racket. The acting U.S. attorney in Chicago recently dubbed him an “organized-crime member” and an “upper-echelon associat[e] of Russian organized crime.” His attorneys say those charges are mere “innuendo,” according to the Chicago Tribune.

A December 2005 report from the Austrian Federal Criminal Investigation Agency said the FBI described Fursin and Firtash as senior members of the Semion Mogilevich Organization.

Ken McCallion, a former federal prosecutor who represented Yulia Tymoshenko in a civil case against Manafort and Firtash, told The Daily Beast that Fursin and Firtash are close.

“It was very similar to the relationship between Manafort and Gates,” he said. “Gates was a significant player in the criminal activities that Manafort engaged in… He played a major role, he was a major lieutenant in Manafort’s organization. By the same token, Fursin was one of the chief lieutenants of Firtash.”

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The Early Edition: November 3, 2017 

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Before the start of business, Just Security provides a curated summary of up-to-the-minute developments at home and abroad. Here’s today’s news.

SYRIA

Pro-Syrian government forces have “completely liberated” the city of Deir al-Zour from terrorism, Syrian state television reported today, the city in the eastern part of the country was the last remaining stronghold of Islamic State militants and was the headquarters of the terrorist group’s self-styled “caliphate.” The BBC reports.

The city was taken after a two-month campaign with the support of Russian air power, according to the U.K.-based Syrian Observatory for Human Rights, the AFP reports.

“The armed forces, in cooperation with allied forces, liberated the city,” a military source said today, Al Jazeera reports.

A Nusra Front car bomb killed at least nine and wounded 23 in a Syrian government-held village close to the Israeli-held Golan Heights. Reuters reports.

The U.S. and Russia have drafted rival U.N. Security Council resolutions in relation to the work of the Joint Investigative Mechanism (J.I.M.) and its work to determine responsibility for chemical weapons attacks in Syria. Russia recently blocked a resolution extending J.I.M.’s mandate through its veto power, Edith M. Lederer reports at the AP.

Civilians in the rebel-held Damascus suburb of Eastern Ghouta have suffered as a consequence of a years-long government blockade and the humanitarian situation is desperate. Louisa Loveluck and Zakaria Zakaria report at the Washington Post.

IRAQ

Iraqi forces have entered one of the last remaining Islamic State strongholds in the country, Iraq’s Joint Operations command said today, the offensive is taking place at al-Qaim near the border with Syria. Raya Jalabi reports at Reuters.

Iraqi troops have reached the border with Syria, according to an Iraqi officer, making the advance as part of the effort to recapture al-Qaim. The AP reports.

At least 741 civilians were executed by Islamic State militants during the battle for the Iraqi city of Mosul, the U.N. said in a report yesterday, the U.N. High Commissioner for Human Rights Zeid Ra’ad al-Hussein said that the Mosul operations subjected thousands of civilians to human rights abuses and clear violations of international humanitarian law, adding that “those responsible must answer for their heinous crimes.” Rick Gladstone reports at the New York Times.

The Kurds’ influence across Iraq, Syria, Turkey and Iran has diminished in light of the impending defeat of the Islamic State group and the aims of the four countries to stop any kind of independence movement. Yaroslav Trofimov explains at the Wall Street Journal.

U.S.-led airstrikes continue. U.S. and coalition forces carried out five airstrikes against Islamic State targets in Syria on November 1. Separately, partner forces conducted six strikes against targets in Iraq. [Central Command]

TRUMP-RUSSIA

Unsealed court documents appear to reveal that Trump and Attorney General Jeff Sessions knew that Trump campaign associates had contacts with Russians during the 2016 election, a campaign foreign policy adviser, George Papadopoulos, spoke to Sessions and Trump in March 2016 about setting up a meeting with Russian President Vladimir Putin – an idea that Trump listened to with interest but Sessions was strongly opposed to. Michael S. Schmidt, Matt Apuzzo and Scott Shane report at the New York Times.

The revelations from the court documents have led to demands by Senate Democrats that Sessions explain why he did not disclose the March 2016 meeting when testifying before congressional hearings, some Senators calling for the Attorney General to appear before the Senate Judiciary Committee to clarify his testimony. Karoun Demirjian, Sari Horwitz and Adam Entous report at the Washington Post.

The Trump campaign’s former foreign policy adviser Carter Page testified before the House Intelligence Committee in a private session yesterday and claimed that he had informed Sessions about his planned trip to Russia in July 2016, raising further questions about Sessions testimony and the extent of his knowledge about connections between Trump campaign officials and Russia. Manu Raju and Jeremy Herb report at CNN.

Page invoked his Fifth Amendment rights when asked why he had withheld documents from the committee relating to Russian interference, according to lawmakers. Following the testimony, Page was asked by reporters whether he had a relationship with Papadopoulos, to which he replied that he “had nothing to do with any of that.” Kyle Cheney reports at POLITICO.

Sam Clovis, Trump’s pick for the Agriculture Department’s chief scientist, has withdrawn has nomination amid the investigation into connections between the Trump campaign and Russia and the revelation that he was the campaign supervisor to Papadopoulos, who has pleaded guilty of lying to the F.B.I.. Jordan Fabian, Timothy Cama and Brett Samuels report at the Hill.

The president’s son-in-law and senior adviser Jared Kushner has turned over documents to special counsel Robert Mueller in relation to any contacts with Russia, according to sources familiar with the matter, two separate sources have said that investigators have asked other witnesses about Kushner’s role in the firing of former F.B.I. Director James Comey. Evan Perez, Pamela Brown and Shimon Prokupecz report at CNN.

Trump’s former campaign chairman Paul Manafort has been ordered by a U.S. judge to remain under house arrest and wear an electronic monitoring device as he awaits trial date for money-laundering and other offences, Manafort’s associate and Trump campaign adviser Rick Gates also remains under house arrest and the charges against him include money-laundering and conspiracy against the U.S.. The charges were made as part of Mueller’s investigation into Russian interference in the 2016 U.S. election. Sarah N. Lynch and Warren Strobel report at Reuters.

The Mueller indictment of Manafort reveals a connection with a notorious Russian organized crime leader, Betsy Woodruff reports at The Daily Beast.

“It’s a disgrace,” Trump said in an interview yesterday, saying that the investigations into Russian interference were “bad for our country” and that Congress has found “no collusion” so far, the president also dismissed the use of social media by Russian operatives to spread disinformation.  John Bowden reports at the Hill.

“We’re not a social network,” was the repeated reply of Google’s general counsel during this week’s congressional hearings about Russian election interference and use of online platforms to spread propaganda, the response highlighting the attempts by tech giants to distance themselves from being labeled as ‘social’ because of the associated problems. Daisuke Wakabayashi and Mike Isaac explain at the New York Times.

The Trump-Russia investigations are unveiling “Trump’s strange obsession with Russia” and the latest news from Mueller’s investigation “suggests that what has long been opaque will soon be clear.” Joe Scarborough writes at the Washington Post.

The Mueller indictments have shone a spotlight on the poor caliber of advisers surrounding Trump during the election and the inability of the campaign to properly vet individuals who sought to support the campaign. Scott Jennings writes at CNN.

NEW YORK TERROR ATTACK

The Islamic State group yesterday claimed responsibility for Tuesday’s terror attack in New York, calling the suspected attacker, 29-year-old Sayfullo Saipov, a “soldier of the caliphate,” but provided no evidence that they had prior knowledge of the attack being planned. Nicole Chavez and Hamdi Alkashali report at CNN.

President Trump repeated calls for Saipov to face the death penalty in a tweet last night, his remarks potentially jeopardizing a fair trial. The BBC reports.

An analysis of the clues left by Saipov and his connections with the Islamic State group is provided by Rukmini Callimachi at the New York Times.

The U.S. should be prepared for a new type of Islamist extremism in the wake of the New York terror attack, and the U.S. “must focus on defeating radical Islamist ideology,” Husain Haqqani writes at the Wall Street Journal.

NORTH KOREA

The U.S., Japan and South Korea flew bombers and jet fighters near North Korea yesterday, according to the U.S. Pacific Command the drill was planned in advance, but North Korea state media said it was a stealth mission demonstrating that the U.S. was “aggravating the situation of the Korean Peninsula and seeking to ignite a nuclear war.” Jonathan Cheng reports at the Wall Street Journal.

The joint exercises simulated attacks on land targets but did not involve live weapons, according to an anonymous South Korean military official, Kim Tong-Hyung reports at the AP.

The drills took place before Trump’s trip to Asia beginning on Sunday, and the North Korean threat is set to feature prominently in discussions with Asian leaders. Soyoung Kim and Phil Stewart report at Reuters.

The U.S. Treasury severed ties with a small Chinese bank on the border with North Korea yesterday, accusing the bank of acting “as a conduit for illicit North Korean financial activity.” Don Weinland reports at the Financial Times.

TRUMP ASIA TRIP

The world is “running out of time” to deal with the threat posed by North Korea, Trump is set to tell leaders on his Asia trip, the national security adviser H.R. McMaster said yesterday, Ali Vitali reporting at NBC News.

Putin and Trump may meet at the A.P.E.C. summit in Vietnam next week, Russia’s Kremlin said today, Reuters reporting.

Trump plans to draw attention to Japanese citizens abducted by North Korea during his trip, an issue that has a deep emotional resonance in Japan. Motoko Rich explains at the New York Times.

Trump’s Asia trip will begin in Japan on Sunday and the tour will continue to South Korea, China, Vietnam and the Philippines. Ishaan Tharoor sets out what to look for during the visit at the Washington Post.

Trump’s “erratic statecraft” and the specter of the Russia investigations have the potential to undermine the president’s agenda during his Asia trip, in addition, the intense schedule and the problem of promoting new initiatives in the region add further complications. Mark Landler explains at the New York Times.

Trump’s ‘America First’ policy undermines the U.S.’s ability to make an impact on human rights in Asia as the Trump administration has deployed differing human rights narratives based on a nation’s relationship with the U.S., in contrast to the Obama administration which responded quickly to abuses and political strife. Matt Spetalnick and Prak Chan Thul write at Reuters.

GUANTÁNAMO BAY

A federal judge in Washington may intervene in the case of defense chief Brig. Gen. John Baker who has been confined to his quarters in Guantánamo Bay for contempt of court for defying his orders and refusing to testify in the U.S.S. Cole case. Josh Gerstein reports at POLITICO.

The three civilian defense lawyers who left the U.S.S. Cole case are set to defy the military judge’s orders again and refuse to appear in court at Guantánamo due to a secret ethical dilemma. Carol Rosenberg reports at the Miami Herald.

CYBERSECURITY, PRIVACY AND TECHNOLOGY

Russian hackers targeted Putin’s detractors and those of interest to the Kremlin, a digital hit list reveals. Raphael Satter, Jeff Donn and Justin Myers report at the AP.

Attorney General Jeff Session yesterday castigated technology companies for stopping investigators from accessing encrypted information for ongoing terror investigations, Morgan Chalfant reports at the Hill.

TRUMP ADMINISTRATION FOREIGN POLICY

“We’ll see,” Trump replied when asked by an interviewer yesterday whether Secretary of State Rex Tillerson would remain in the administration for the duration of the president’s term, once again throwing doubt on the future of Tillerson’s position. Cristiano Lima reports at POLITICO.

The Trump administration asked the French President Emmanuel Macron to set up a meeting between Trump and Iranian President Hassan Rouhani at the U.N. General Assembly in September, Iran replied unequivocally that they would not meet with President Trump. Karen DeYoung reports at the Washington Post.

Tillerson is scheduled to visit Myanmar this month to discuss the “humanitarian crisis in Rakhine State,” the State Department announced yesterday, referring to the human rights abuses against the Rohingya Muslim minority. Laura Koran reports at CNN.

Russia has been taking advantage of the lack of U.S. policy in the Middle East to increase its influence, Zeina Karam writes at the AP.

Key positions in the Pentagon will finally be filled, the vacancies, which have lasted 10 months, have had an impact on U.S. operations, including in Afghanistan. Paul McLeary explains at Foreign Policy.

The U.S. pledge for $60m for a U.N.-backed counterterrorism force in Africa’s Sahel region comes following increased extremist activity. Azad Essa explains the details of the new force at Al Jazeera.

OTHER DEVELOPMENTS

The U.S. has been “deliberately lying” about the mysterious sonic attacks the U.S. has alleged Cuba has been carrying out against its diplomats in Havana, the Cuban Foreign Minister Bruno Rodriguez said yesterday, Luis Alonso Lugo reporting at the AP.

“We hope that as an external party, the United States can plant more flowers and fewer thorns,” China’s Vice Foreign Minister Zheng Zeguang said today in relation to the dispute over the South China Sea, making the comments ahead of Trump’s visit to Beijing next week. Michael Martina reports at Reuters.

Serbia rejected calls from the U.S. to choose between the West or Russia, the Foreign Minister Ivica Dacic saying that “what is important is to see what is in our own best interests.” Aleksandar Vasovic reports at Reuters.

Read on Just Security »

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Today’s Headlines and Commentary 

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President Donald Trump leaves for Asia on Friday; he will visit Japan, China, South Korea, Vietnam and the Philippines, the New York Times reported. Trump will address the North Korean missile crisis in meetings with Chinese, Japanese and South Korean leaders. In a speech in Vietnam, Trump will build on the Japanese idea of a “free and open Indo-Pacific” to articulate a containment strategy against China. In advance of Trump’s departure, two U.S. bombers flew close by North Korean airspace and conducted a bombing drill in South Korea, according to the Wall Street Journal. North Korean state media said the exercise was meant to simulate a nuclear strike. The U.S. Pacific Command said the exercise was not planned in response to any current event.

The Islamic State said Sayfullo Saipov, the man who killed eight people in New York using a truck on Oct. 31, was one of its soldiers but did not provide evidence he had coordinated with other Islamic State fighters, CNN reported. In its weekly newspaper, the militant organization did not say it had any prior knowledge of the attack. Federal investigators found that Saipov had about 90 videos and 3,800 images related to the Islamic State on his phone.

Sgt. Bowe Bergdahl will be dishonorably discharged for deserting his base in Afghanistan but will not serve any prison time, the Times reported. Bergdahl walked off his base in 2009 and shortly after, the Taliban captured and held him for five years.

Attorney General Jeff Sessions is under scrutiny for his statements to Congress regarding the extent of his knowledge of Trump campaign contacts with Russia, CNN reported. Sessions failed to disclose to lawmakers at his confirmation hearing that he had rejected a proposal from Trump foreign policy adviser George Papadopoulos for the candidate to meet with Russian President Vladimir Putin. Carter Page, another former Trump foreign policy adviser, testified before the House intelligence committee that he had told Sessions about a trip Page planned to take to Russia during the campaign, also according to CNN. Democrats on the Senate judiciary and intelligence committees want Sessions to clarify his prior testimony on the matter.

The White House was unaware that Sam Clovis—the former Trump campaign co-chair, and later—nominee for USDA chief scientist, testified before a grand jury in the special counsel investigation, ABC News reported. Administration staffers learned that Clovis had come under scrutiny in the Russia investigation from media reports. Clovis was the “campaign supervisor” cited in the charges against George Papadopoulos who appeared to encourage Papadopoulos to cultivate ties with Russia. Separately, in recent weeks, Jared Kushner has turned over documents to the special counsel probe related to his role in the campaign, the transition and any contacts with Russians, CNN reported. On Thursday, Trump said he wished he could redirect the Justice Department to focus its efforts on Hillary Clinton, also according to CNN. He said, “A lot of people are unhappy with the Justice Department, including me.”

Syrian government forces and Iranian-backed militias have completely retaken the city of Deir al-Zour, the Islamic State’s last major stronghold in Syria, the Times reported. Russia air strikes aided the capture of the last remaining neighborhoods where militants held out against the Syrian advance. In Iraq, the town of Al-Qaim fell to the Iraqi Army and its allied militias, clearing the Islamic State from one of its last remaining territories in the country, Reuters reported. Separately, a U.N. report said the Islamic State executed hundreds of civilians during the siege of Mosul and used civilians as human shields in the course of the nine-month battle, the Times reported. The U.N.’s top human rights official recommended that Iraq amend its criminal code to allow its courts to try the Islamic State’s offenses, which he described as war crimes, or that Iraq bring the crimes to the International Criminal Court’s jurisdiction.

Three civilian defense attorneys again defied an order from a Guantanamo Bay military judge to continue representing Rahim al-Nashiri, accused of plotting the USS Cole bombing, the Miami Herald reported. The attorneys said they would not appear at a Virginia teleconferencing facility to participate in a hearing on Friday morning. A federal district court judge in Washington D.C. refused to halt the hearing because of its lack of counsel. The D.C. judge may also rule on Friday afternoon about the detention of the Marine Corps brigadier general who assented to the attorney’s resignation.

The U.S. and Russia put forward conflicting U.N. resolutions about extending the mandate of the body investigating uses of chemical weapons in Syria, the AP reported. Last week, Russia vetoed an extension of the Joint Investigative Mechanism’s (JIM) mandate for another year. The Russian resolution only renews the JIM’s mandate for six months while the U.S. resolution would extend the body’s authority for two years. Last week, the latest JIM report blamed the Syrian government for the April sarin gas attack in Khan Sheikhoun.

The International Criminal Court’s prosecutor will seek to open an investigation into war crimes in Afghanistan, Reuters reported. Fatou Bensouda said she had a reasonable basis to believe war crimes and crimes against humanity occurred in the course of the sixteen-year long war in Afghanistan.

Defense News’ Matt Bodner and Aaron Mehta explained how a minor Pentagon research project led Vladimir Putin to warn the U.S. was planning biological warfare.

Politico’s Josh Meyer wrote about how Carter Page and George Papadopoulos’ interactions with Russians linked to the Kremlin exemplifies Moscow’s use of cut-outs.

 

ICYMI: Yesterday on Lawfare

Harry Larson explained what immigration detainers are and the legal challenges they face.

Robert Chesney, Sabrina McCubbin and Benjamin Wittes analyzed President Trump’s suggestion that the New York attacker be held as an enemy combatant in the context of the chaotic developments in the military detention system.

Mieke Eoyang, Ben Freeman and Benjamin Wittes shared the October 2017 data from the Confidence in Government on National Security Matters project. They also discussed data that supported a troubling conclusion: Republican attacks on the special counsel are affecting public confidence in Mueller’s inquiry.

Sarah Grant summarized Wednesday’s contempt hearing for in the al-Nashiri case at the military commissions..

Vanessa Sauter posted the habeas petition of Brig. Gen. John Baker, the chief defense counsel at the military commissions.

Stewart Baker shared the Cyberlaw Podcast, featuring an interview with Rep. Tom Graves, co-sponsor of the Active Cyber Defense Certainty Act.

Benjamin Wittes posted the “Million Dollars in Rugs” edition of Rational Security.

 

Email the Roundup Team noteworthy law and security-related articles to include, and follow us on Twitter and Facebook for additional commentary on these issues. Sign up to receive Lawfare in your inbox. Visit our Events Calendar to learn about upcoming national security events, and check out relevant job openings on our Job Board.

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Manafort Indictment Reveals Trump Russia Collusion.


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