Kremlin Insider Arraigned in U.S. Hacking, Insider-Trading Case

(Bloomberg) -- A Russian technology executive with ties to the Kremlin pleaded not guilty to U.S. charges that he led an insider-trading ring that made millions of dollars by hacking into systems used by public companies to file quarterly earnings reports.

Vladislav Klyushin, 41, entered the plea before U.S. Magistrate Judge Marianne Bowler in Boston federal court and said he was “absolutely not guilty” to the first count in the indictment charging him with conspiracy, and not guilty to the three other counts as well. He was ordered detained pending trial, despite offering a London apartment as collateral for bail.

The judge said Klyushin's access to assets -- including a $4 million yacht -- the lack of an extradition treaty with Russia and weak ties to the U.S. made him a flight risk, despite a letter from the Russian Embassy in Washington promising it would “not assist in concealing” Klyushin or removing him from the U.S. if he was released pending trial. Bowler said she had never “seen a document of this sort” in more than three decades as a judge.

Klyushin was extradited to the U.S. from Switzerland on Dec. 18, after his arrest on a family ski trip. Authorities suspect Klyushin may have extensive knowledge of Russia's efforts to meddle in the 2016 U.S. presidential election, the hack of Democratic Party email servers and the assassination attempt of former spy Sergei Skripal.

Another defendant in the Klyushin case, Ivan Ermakov, has been separately charged by federal prosecutors in the 2016 election interference.

Klyushin may be the highest-level Kremlin insider apprehended by U.S. authorities in recent memory. Not long ago, he was awarded a medal of honor by Russian President Vladimir Putin. Prior to his arrest, he was approached by U.S. and U.K. intelligence agencies, and may have access to secret records stashed abroad of high-level Russian intelligence operations.

Prosecutors said they expect 20 to 25 witnesses to testify at trial. The charges carry maximum sentences of five to 20 years, though prison time is ultimately determined by the judge overseeing the case.