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American jury awards BTA Bank more than £218 million in trial over Ablyazov's theft and money laundering

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Following a three-week trial, a jury of four men and four women sitting in the United States District Court for the Southern District of New York returned a verdict today in favour of BTA Bank JSC on all claims against Triadou SPV S.A.  The jury awarded BTA damages of more than USD $100 million with interest dating to mid-2013, resulting in a total award of more than USD $218 million.  The Honorable John G. Koeltl, United States District Judge for the Southern District of New York, presided over the trial and received today’s verdict.

The trial, which began on November 29, 2022, represented the first time that BTA Bank has presented evidence of the massive fraud and money laundering scheme orchestrated by Mukhtar Ablyazov in a contested trial.  At the time of the revelation of the fraud in early 2009, BTA was Kazakhstan’s third-largest bank.  The multi-billion dollar theft perpetrated by Ablyazov resulted in the Bank’s nationalization, costing taxpayers more than a billion dollars.

The defendant, Triadou SPV, is a shell company created and controlled by Ablyazov’s son-in-law Ilyas Khrapunov, which received more than USD $70 million in money stolen from BTA, which it invested in real estate in New York City and elsewhere in the United States. Triadou has litigated actively over the more than seven years that the case has been pending, and presented its defense to the jury at trial. 

Over the course of the approximately three-week trial, the jury heard testimony from a variety of witnesses, including former employees of UKB-6 – the division within the bank during Ablyazov’s tenure responsible for the fraud – as well as American investors who dealt in the stolen funds, individuals involved in the money laundering scheme, and a variety of experts in forensic accounting, fraud and money laundering, and handwriting analysis.  The jury was also presented the testimony of the key co-conspirators, including Gennady Petelin, who was held out as the legitimate source of Triadou’s wealth, Ilyas Khrapunov, who oversaw Triadou’s investments, and Mukhtar Ablyazov himself.  In returning a verdict in favor of BTA today, the jury necessarily rejected their testimony and concluded that Tridaou had knowingly laundered money stolen by Ablyazov from BTA.

Triadou appeared at the trial through Phillipe Glatz, a Switzerland and Brazil based businessman who claims to have purchased Triadou’s parent company in 2013 from the Khrapunov family.  Glatz testified over the course of three days, and was examined at length by BTA’s long-time U.S. counsel at Boies Schiller Flexner LLP.  During the course of that examination, Glatz was forced to admit that he knowing purchased Triadou’s parent without ever speaking to the ostensible owners at the time; that his purported due diligence of Triadou’s parent did not include any written report of Triadou’s investments; that he worked closely with the Dubai-based service provider who was in charge of the mechanics of the money laundering scheme for Ilyas Khrapunov; and that he allowed Ilyas Khrapunov to continue to run Triadou long after the purported sale.

Matthew L. Schwartz, managing partner of Boies Schiller Flexner LLP and counsel to BTA, said: “For the first time in more than a decade of BTA Bank’s worldwide recovery efforts, this case presented the opportunity for jurors to hear directly from the criminals at the heart of this conspiracy.  After doing so, the jury unanimously agreed that BTA Bank was defrauded by Mukhtar Ablyazov and awarded significant damages against Triadou for its role in the scheme.  We are privileged to have been able to present this evidence to a U.S. jury, and are thrilled with the verdict in favor of our client, which should result in a recovery of more than $200 million.  We thank the jury for its careful attention to the evidence.”

The New York proceedings on behalf of the City of Almaty and BTA Bank were initiated more than seven years ago accusing Mukhtar Ablyazov and his criminal associates of laundering stolen money into the United States.  During the course of the proceedings, BTA and Almaty successfully demonstrated that Ablyazov, Ilyas Khrapunov, and former Almaty mayor Viktor Khrapunov disobeyed court orders, destroyed evidence, and refused to make required disclosures.  As a result, various judges of the United States District Court for the Southern District of New York entered numerous orders sanctioning Ablyazov and the Khrapunovs, and ultimately held Ablyazov in contempt.  BTA nonetheless gathered additional substantial evidence of Ablyazov’s crimes and secured the testimony of numerous witnesses to those crimes, which was presented to the trial jury, resulting in today’s verdict.

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