On 18 October 2021, United States District Judge Alison J. Nathan of the United States District Court for the Southern District of New York rejected various objections filed by Mukhtar Ablyazov and Ilyas Khrapunov and sanctioned them for their misconduct during the litigation filed by BTA Bank JSC and the City of Almaty. Judge Nathan’s decision also affirmed various earlier orders by United States Magistrate Judge Katharine H. Parker (dated 3 July 2019, 15 July 2019, 7 February 2020, 19 May 2020, and 3 September 2020), which also sanctioned Ablyazov and Khrapunov.
Yesterday’s decision, along with the Court’s prior decisions, found that Ablyazov, Viktor Khrapunov, and Ilyas Khrapunov had obstructed BTA Bank and Almaty’s discovery of evidence “highly relevant” to their claims against Ablyazov, the Khrapunovs, and the shell company Triadou SPV S.A., for laundering tens of millions of dollars into the United States. The Court found that the defendants had hidden evidence, intentionally destroyed evidence, testified untruthfully, violated court orders, and treated the litigation as “a game of cat and mouse.”
Among the specific misconduct cited in yesterday’s decision, the Court found:
- Ablyazov “failed to comply with this Court’s orders” requiring him to produce evidence.
- Ablyazov claimed that he had no such evidence, but that claim was “contrary to his own statements” under oath.
- The Khrapunovs “failed to produce any financial records,” “all without any excuse whatsoever.”
- Ilyas Khrapunov – who the Court described as “the primary abuser of discovery” – deleted “all” of his emails shortly before BTA Bank and Almaty’s lawsuit was filed, began using “hundreds” of encrypted email accounts instead, and then “incredibly” claimed that he could not access any of them.
- Ilyas Khrapunov also refused to identify emails that he had himself sent to third parties, and “denied any memory of financial transactions that involved tens or hundreds of millions of dollars.”
- “Ablyazov was less than forthcoming” when he testified that his net worth was in excess of USD $20 billion, but claimed that he could not name any person who helped him manage his money.
On the basis of these and similar findings of misconduct, the Court awarded judgment in BTA Bank and Almaty’s favor against Ablyazov of USD $140,115.16. The Court will fix the amount of the sanction against Ilyas Khrapunov after receiving additional evidence from BTA Bank and Almaty about the costs incurred as a result of his behavior.
The Court also found that “any appeal from [its] order would not be taken in good faith.”
The New York proceedings on behalf of co-claimants the Almaty and BTA Bank were initiated more than five years ago accusing Mukhtar Ablyazov and his criminal associates of laundering stolen money into the United States. As courts throughout the world have already found, Ablyazov looted billions of dollars from BTA Bank through the issuance of sham loans – conduct for which he has already been convicted and sentenced in Kazakhstan, and found civilly liable in the United Kingdom courts. In the U.S. proceedings, the claimants have gathered additional substantial evidence of Ablyazov’s crimes, along with securing the testimony of numerous witnesses to those crimes. Trial is presently scheduled to begin before a U.S. jury in New York City in February 2022.
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