(Bloomberg) -- A Russian-backed company involved in a decade-long drama that touched the highest levels of the U.S. and Russian governments must hand over $5.9 million that it had agreed to pay to avoid a trial in New York.
A U.S. judge, who said events of the case "read like a John Le Carre novel,” ordered Prevezon Holdings Ltd. on Friday to pay the settlement, rejecting the company's claim that it didn't have to pay the entire amount until assets seized in the Netherlands were released.
Prevezon had struck a deal with U.S. prosecutors to resolve the case in May on the eve of a trial that threatened to shed light on a $230 million Russian tax fraud and an associated money-laundering scheme.
The Cyprus-based investment company was represented in part by Natalia Veselnitskaya, a Russian lawyer who sat down with President Donald Trump's son during the 2016 election campaign, in a meeting that was sold as an opportunity for them to get dirt on Hillary Clinton. The meeting came on the same day a New York court was hearing arguments in the Prevezon case and about a year before the lawsuit was settled. Veselnitskaya represents Russian businessman Denis Katsyv, the owner of Prevezon.
Laundering Suit Ends as Russian Firm, U.S. Claim Victory
Prevezon had argued that it didn't have to pay the entire amount of the settlement because about $3 million euros ($3.7 million) of debt was seized by Dutch authorities as part of a separate investigation. A condition of the settlement was that the assets would be released, Prevezon claimed.
U.S. District Judge William Pauley on Friday ordered Prevezon to pay up, saying the U.S. “lacks the authority to question the Netherlands' law enforcement priorities or decisions, or dictate what the Netherlands chooses to do with an asset located inside its borders.”
Prevezon had argued that prosecutors acted in bad faith by not telling the firm they had cooperated with Dutch investigators and knew they were planning on seizing the debt.
Pauley said Prevezon knew or should've known that its assets were subject to seizure elsewhere and that the fact the U.S. prosecutors met and provided information to Dutch authorities "about a case that has been well-publicized for several years."
Prevezon was accused of using $2 million from the Russian tax fraud to buy real estate in New York. After filing the case in 2013, prosecutors seized Prevezon assets in the U.S. valued in the tens of million of dollars.
The case is US v. Prevezon Holdings Ltd, CA No. 13-cv-06326, U.S. District Court for the Southern District of New York (Manhattan).
To contact the reporter on this story: Chris Dolmetsch in New York State Supreme Court in Manhattan at cdolmetsch@bloomberg.net.
To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Joe Schneider
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