New York federal court orders trial for claims related to the theft and laundering of hundreds of millions of dollars by Mukhtar Ablyazov and Ilyas Khrapunov

On 29 March 2021, United States District Court Judge Nathan issued a decision substantially denying the defendant’s motion and allowing all four claims (conversion; unjust enrichment; constructive trust; and a claim under New York Civil Practice Law and Rules § 5239) to go to trial.  Judge Nathan carefully reviewed the extensive record and determined that “significant evidence” demonstrates that the funds Triadou invested in the United States were stolen by Mukhtar Ablyazov and laundered into the United States knowingly by Ilyas Khrapunov and others.

Judge Nathan held that all of BTA’s claims could move forward to trial. Also, Judge Nathan wholly rejected Triadou’s argument that the money stolen from BTA was a series of loans to Tradestock that were eventually repaid. In rejecting this argument, Judge Nathan recounted in detail how Ablyazov used sham loans to his own shell companies to defraud BTA, a practice described as roundtripping (or paying back “loans” from BTA with further funds stolen from BTA).

It is important to note Judge Nathan’s finding that the evidence supported the conclusion that “Mukhtar Ablyazov, the former chairman of the bank, wielded his influence to pilfer millions of dollars through sham loans to companies he controlled. It traces those funds through a labyrinthine web of shell companies to Triadou. Its evidence would allow a reasonable juror to conclude that Triadou knew the money was stolen and helped launder it.” Judge Nathan also determined that the evidence showed that “Viktor Khrapunov embezzled millions of dollars from Almaty as the city’s mayor” and she held that all of the money invested in the United States was undisputedly traceable to BTA.

Judge Nathan’s decision denying Triadou’s motion for summary judgment was a significant victory, ensuring that BTA will be able to bring its claims against Triadou to trial and present proof of Ablyazov and Ilyas Khrapunov’s crimes in a New York courtroom. Now that the pending motions have been resolved, the case will definitely go to trial. The precise date of the trial in light of COVID-19 is difficult to predict.

Matthew L. Schwartz, partner at Boies Schiller Flexner LLP and counsel to the plaintiffs, said:  “The City of Almaty and BTA Bank appreciate the Court’s careful attention to the evidence.  Mukhtar Ablyazov, Ilyas Khrapunov, and their associates have repeatedly refused to honestly participate in the court process and have violated numerous court orders.  Even so, the evidence of their crimes is extensive.  Almaty and BTA look forward to presenting that evidence before a jury of New Yorkers.”

The New York proceedings on behalf of the City of 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 plaintiffs have gathered additional substantial evidence of Ablyazov’s crimes, along with securing the testimony of numerous witnesses to those crimes.