The New York court’s decision in the case of "Flatotel" dated 09/03/2020

On September 3, 2020, the US District Court for the Southern District of New York issued another ruling against Ilyas and Viktor Khrapunov on the appointment of a fine for violation of the order of legal proceedings.

Judge Katharine Parker concluded that “the Khrapunovs, and particularly Ilyas, have violated numerous [legal] obligations,” “admitted to deleting” evidence, and falsely claimed not to be able to access other evidence.

The Court likewise found that “the Khrapunovs have violated various court orders in this case,” beginning with Ilyas Khrapunov’s unauthorized leaking of confidential testimony. 

September 3rd’s order follows on the Court’s May 2020 sanctions order against the Khrapunovs, as well as the Court’s July 2019 order imposing similar sanctions on Mukhtar Ablyazov for his own misconduct, and represents at least the fifth time that the Court has found that the defendants engaged in improper litigation conduct.

The final amount of the fine will be determined after the Claimants have submitted the amount of court costs incurred.

The New York proceedings were initiated by the Ministry of Justice (on behalf of the City of Almaty) jointly with BTA Bank (hereinafter - Plaintiffs) more than four years ago accusing Mukhtar Ablyazov and his criminal associates of laundering stolen money into the United States. 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. 

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.”

______________________________________________________