Wednesday, October 17, 2012

Kyrgyzstan: Maxim Bakiyev Faces Prolonged Legal Battle in West ...

Legal pressure is building on Maxim Bakiyev, the son of Kyrgyzstan's former president.

Shortly after Bakiyev was detained in Great Britain on October 12, the American Embassy in the Kyrgyz capital Bishkek issued a statement saying the US government is seeking his extradition to "face trial in US federal court on serious charges of conspiracy to commit securities fraud and obstruction of justice."

An affidavit, filed in April in US District Court for the Eastern District of New York, and obtained by EurasiaNet.org, identifies "a high level government official" from a "Central Asian country" as "co-conspirator #1" in an insider trading case involving US securities. The affidavit does not name the particular Central Asian state in question, but it does assert that the government of said state was "overthrown in a coup in April 2010." As a result, co-conspirator #1 "fled to England."

Former Kyrgyz president Kurmanbek Bakiyev's administration collapsed in April 2010 amid mass protests. Almost 100 people were killed in Bishkek on April 7, 2010, when security forces loyal to the elder Bakiyev opened fire on protesters. The former president and his brother, Janysh, are being tried in absentia for the deaths. Maxim Bakiyev, meanwhile, has reportedly spent the past two years in the United Kingdom. He faces money laundering and corruption charges back home in Kyrgyzstan.

The claims contained in the affidavit are attributed to an individual identified only as a "confidential source," or CS, who "agreed to cooperate with the United States government" starting in December 2011. Approximately six months earlier, a US federal magistrate had issued an arrest warrant for the CS "based on complaint charging the CS with an extortion conspiracy conducted in the Central Asian country," the affidavit states.

The court document describes the CS as a former "chief executive officer of a financial advisory and consulting firm based in New York, New York, and in a country located in Central Asia." The CS' clients "included various government entities of the Central Asian country." The CS also "had a personal and professional relationship with a high-level government official," according to the court document.

The CS told FBI officials that "since approximately April 2010, the CS has managed CC-1's [co-conspirator #1] investments," including "online securities trading activity" that was based on "inside information" acquired from other individuals. The affidavit, taken from an FBI special agent, was submitted in order to establish probable cause for an arrest warrant for one of the individuals who allegedly provided insider information. It spotlights three allegedly illegal trades involving "American public companies, whose securities are traded on national stock exchanges (including the New York Stock Exchange [NYSE] and the NASDAQ Stock Market Inc. [NASDAQ]."

One stock purchase on or about September 8-9, 2011, and the subsequent sale of the same shares on September 12, 2011, attracted the attention of the Securities and Exchange Commission, which in mid-September filed a complaint that characterized "these transactions as 'highly profitable and suspicious.'" The profits from the transactions, approximately $1.7 million, were frozen, the affidavit states.

The CS, according to the affidavit, has "admitted his/her activities in connection with insider trading and other criminal activity." It also states the information provided by the CS "has been corroborated by, among other things, bank records, consensual recordings, information provided by other witnesses and public records." The CS also is confronting money-laundering charges in Italy "arising from a large and complex tax fraud scheme," the affidavit adds.

The younger Bakiyev was taken into custody by London municipal police following an extradition request issued by the United States. Bakiyev appeared in Westminster Magistrates Court on October 12 to face criminal charges, including conspiracy to obstruct justice in the United States, according to a report distributed by the British Broadcasting Corp. Bakiyev was released on bail pending a December 7 hearing.

Politicians in Bishkek hailed the news of Bakiyev's arrest. "It gives the feeling that justice prevails, and that government is in fact doing something, taking measures for criminals to be punished sooner or later. Everyone should realize that all people are equal before the law," said Kurmanbek Dyikanbaev, an MP with the opposition Respublika party.

"It will increase popular support for [Kyrgyz President Almazbek] Atambayev," Dyikanbaev added. "It will definitely increase the level of trust in the authorities among the people."

Washington, not Bishkek, appears to have been the driving force behind the younger Bakiyev?s October 12 detention. American officials confirm that criminal prosecutions are initiated by the Department of Justice and not the Department of State. ?This is about a specific violation within our jurisdiction,? said one American official. ?It?s a straight-forward law-enforcement issue.?

Kyrgyz officials would like to put Maxim Bakiyev on trial in Bishkek. But there is no extradition treaty between the United States and Kyrgyzstan, and, even if there were a pact in place, Western officials have privately long expressed reservations about whether Bakiyev could receive a fair trial in Kyrgyzstan.

Editor's note:?

David Trilling is EurasiaNet's Central Asia editor.

Source: http://www.eurasianet.org/node/66056

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