From Russia with Blood

xviii

St. George’s Hill, Surrey—November 2012

The slumped body was caught in the headlights of a car nearing the brow of the hill through the dusk and drizzle. The driver leaped out, and a passing chef in full whites rushed to help. The man on the ground was large, dark, and deathly pale. He threw up repeatedly as the chef tried to administer mouth-to-mouth, and by the time the ambulance arrived he was completely unresponsive. Soon his heart stopped beating.

The dead man was Alexander Perepilichnyy, a mysterious multimillionaire who had moved into a rented mansion in the exclusive Surrey enclave of St. George’s Hill two years earlier and was rarely seen by neighbors except on his occasional jogs around the gated estate. The forty-four-year-old had returned home that morning, November 10, 2012, from a secret assignation in France. No one knew whom he’d been meeting, but he told his wife and eight-year-old daughter that Paris had been “really gray” and “gloomy” as he tucked into a bowl of Russian sorrel soup they’d cooked for his lunch. Then he went out for a jog and never came home.

To officers who attended the scene where Perepilichnyy collapsed at the roadside that damp afternoon, his death looked like a simple heart attack. They didn’t think to check his name in the database used by Britain’s spies to share intelligence with the police. If they had, they would have seen that the man on the ground had a target on his back.

Back in Moscow, Perepilichnyy had been a master money launderer for Russian government officials who conspired in a massive fraud with an organized crime network run by a mobster named Dmitri Klyuev. The criminals would seize control of companies in Russia. Then they would forge documents to make it look like they had sustained massive losses and apply for huge tax rebates that were approved by corrupt officials, who took a cut. Perepilichnyy was one of the financiers who helped funnel the proceeds out of the companies and into a sprawling network of offshore slush funds controlled by Klyuev and his government conspirators. The scam had run smoothly for several years, allowing the gang to embezzle the equivalent of $800 million from the state.

But trouble arose when a British-American hedge-funder named Bill Browder noticed that a group of companies he owned in Russia suddenly appeared to have racked up huge losses. Browder hired a tax attorney in Moscow named Sergei Magnitsky to investigate. The lawyer discovered that the companies had been fraudulently seized by the Klyuev gang and used to apply for the biggest tax rebate in Russian history—$230 million—which had been hurriedly approved on Christmas Eve and siphoned off as soon as it hit their accounts. He dug deeper and identified the corrupt tax officials who had sanctioned the rebate as well as a lieutenant colonel from the country’s interior ministry who had also conspired with the Klyuevs, and he reported the whole scam to the authorities.

It was a brave move and a naive one. The authorities did nothing to investigate the officials and mobsters Magnitsky had identified. Instead, they arrested the lawyer and accused him of perpetrating the fraud himself. The thirty-seven-year-old spent almost a year behind bars, where he refused to change his testimony despite being severely beaten. He was isolated in windowless, sewage-flooded cells; deprived of food, water, sleep, and toilet access; and denied medical care. In November of 2009, after 358 days of extreme mistreatment, he died in prison.

Brandishing Magnitsky’s death, Browder sparked an international outcry, mounting a campaign for sanctions against the Kremlin officials responsible for both the fraud and his lawyer’s murder. That was when Perepilichnyy finally turned against his paymasters. In 2010, shortly after Magnitsky’s death, he fled to Britain and approached Browder with an explosive cache of evidence documenting the fraud in lurid detail.

The financier’s files revealed how the money stolen from the Russian purse had been split up and funneled into a complex offshore network through thousands of transactions in more than a dozen Western countries—including the United States and the UK. It had fueled an orgy of spending on yachts, private jets, London mansions, couture clothes, and exclusive private-school fees. Perepilichnyy himself had bought a luxury beachfront mansion on Dubai’s Palm Jumeirah island for the husband of one of the government officials involved in the fraud and funneled millions more into his accounts. And buried within the documents was a clue to an even darker reality.

Perepilichnyy had signed agreements on behalf of his government clients to transfer millions to a shadowy company at the center of a secret network of slush funds often used by criminals to funnel money in and out of Russia. Its owner, obscured behind opaque corporate filings, was a man named Issa al-Zeydi. He would go on to be outed by the US government as a front man for the Syrian chemical weapons program. It would take time for the authorities to piece all that together. But the financier had not just blown the whistle on a Russian crime: he had also exposed a network of slush funds with all the hallmarks of a Kremlin black-money conduit. And it was funding the development of internationally outlawed weapons that the Syrian despot Bashar al-Assad would soon unleash on his own people.

Browder passed Perepilichnyy’s information to the authorities in every country through which the embezzled money had been routed, sparking criminal investigations in more than a dozen jurisdictions. The Swiss froze the Klyuev gang’s accounts, and the fraud prompted the United States to issue sanctions against forty-nine people, including a network of senior Kremlin officials. But the UK refused to open an investigation, despite evidence that £30 million of the stolen money had ended up in London. Years later, a high-ranking detective at the country’s National Crime Agency would come forward to claim that he had attempted to open a case but had been ordered to shut it down by a senior official with links to the Foreign Office.

The British government had no appetite for a fight with the Kremlin over the fraud, nor was there any interest in stemming the flow of Russian money into the country’s recession-hit economy. When Putin returned to the Kremlin in the spring of 2012, having retaken control from Dmitry Medvedev in an election tainted by allegations of vote rigging, the British prime minister launched a charm offensive. David Cameron welcomed the resurrected Russian president to London to watch the judo competition during the 2012 Olympics, and later that year BP merged with Rosneft, the state-owned Russian giant, to create the world’s largest oil company. Then plans got under way for a visit to Sochi the following spring.

A new flash point had emerged between the Kremlin and the West over Russia’s support for the Syrian regime as it cracked down brutally on civilians, and Cameron fancied himself the global statesman who could bridge the divide. He and Putin went on to discuss the bloodshed in Damascus over a ten-course lunch in Sochi, including burnt caramel pudding in the shape of Big Ben. Cameron agreed during the meeting that British intelligence would resume cooperation with the FSB for the first time since the death of Alexander Litvinenko.

Despite the unwillingness of central government to act on Perepilichnyy’s evidence, the spies in the River House had taken a keen interest. The financier had set up home in Surrey and become a prized source for several Western intelligence agencies investigating the flow of dark money out of Russia. He knew he was taking his life in his hands. Three other conspirators in the fraud he had exposed had already met untimely ends—one died suddenly of liver disease, another succumbed to heart failure, and a third plunged to his death from a balcony. And the first harbingers of his own demise had followed soon after he made it to Britain.

Contacts in Russia had told Perepilichnyy his name was on a hit list, and he’d started receiving a stream of threatening messages over Skype. Then a company founded by Dmitri Kovtun attacked him with a series of lawsuits over money he allegedly owed Litvinenko’s assassin. The financier had taken out a multimillion-pound life insurance policy with Legal & General for “family protection purposes” in the event of his “premature” death. Medical checks required by the policy had given him a clean bill of health—but when he dropped dead at the roadside months later, Surrey police were happy to assume he died of a heart attack.

When Browder learned of the whistle-blower’s demise and wrote to ask the force to launch a murder inquiry, police chiefs intervened to tell investigators to play down suspicions about Perepilichnyy. At a meeting a month after the financier’s death, Assistant Chief Constable Olivia Pinkney ordered the officer leading the investigation to “make it a nonissue,” remarking gnomically that though there was “ambient interest” in the case at a senior level, a Home Office official was “helping to keep a sense of perspective within central government.” The officer in charge of the case, Detective Superintendent Ian Pollard, promised to keep his statements to the media “bland and simple,” and police went on to announce that there was “no evidence to suggest that there was any third-party involvement” in Perepilichnyy’s death. A “full and detailed range of toxicology tests” had, they said, found nothing suspicious in the whistle-blower’s system. The case was closed.

But then came another astonishing revelation. Perepilichnyy’s life insurance company had ordered its own tests on the dead man’s stomach contents, and its lawyers told the coroner overseeing a routine inquest hearing that a plant expert at Kew Gardens had identified what appeared to be traces of a deadly poison in his stomach. The toxin, the expert said, bore striking structural similarities to a rare Chinese flowering plant of the genus Gelsemium—nicknamed “heartbreak grass” because its leaves trigger cardiac arrest if ingested. The same expert later told the inquest she couldn’t definitively identify the substance because the sample sent to the lab was too small. Further tests were impossible, because most of the contents of Perepilichnyy’s stomach had been thrown away by the police toxicologist.

The revelation was enough to persuade the French police to open an inquiry of their own in light of Perepilichnyy’s mysterious trip to Paris immediately before his collapse. Detectives opened an official file, noting that the financier was “clearly threatened with death in Russia” and that he told Swiss prosecutors he was “on a list of future victims of the Russian mafia.” They designated the case a suspected “organized assassination.”

The Paris visit was shrouded in mystery. None of Perepilichnyy’s family, friends, or business associates knew what he had been doing in the French capital. The only clues were that the financier had taken a Eurostar train on November 6, booked himself into two hotels simultaneously, and returned on the tenth with a €1,200 receipt from the Prada store on the Champs-Élysées and nothing to show for the purchase.

The French investigation quickly turned up a red-hot lead. Detectives seized records showing that Perepilichnyy had been joined at the five-star Le Bristol hotel by a Ukrainian woman for two nights, during which time they had ordered the “romance pack” before checking out on November 10—the day he returned to the UK and died.

French detectives reached out to their British counterparts following the find, but the authorities stonewalled their inquiries, maintaining that the death was unsuspicious and that no further investigation was necessary. The Paris police were urged to await the British coroner’s findings on Perepilichnyy’s cause of death before taking the matter further. So the French sat on the discovery, making no further inquiries for years, while over in London, the financier’s inquest remained snarled up in government red tape. And all the while, the woman with whom Perepilichnyy shared his clandestine assignation was living in an opulent penthouse apartment on the glitzy Avenue Victor Hugo, holding all the secrets of his last night alive.

Paris—November 2012

Elmira Medynska sashayed up the Champs-Élysées turning heads at every step. Even on the most glamorous avenue in Paris, she was a striking vision: towering over her male companion at well over six feet, with her white-blonde hair, sharp-angled features, and penetratingly dark eyes. The twenty-two-year-old had arrived from Ukraine that morning for her third tryst with Alexander Perepilichnyy.

Their first encounter had been earlier that year at an exclusive nightspot in Kiev, after which she’d traveled to join him for a short holiday in Nice, on the French Riviera. Perepilichnyy never told her anything about his life, his family, or his work. He was handsome in a homey way, with tousled hair and gentle eyes, and he liked to take her shopping and send her roses. But the danger signs were already showing.

At a bistro lunch during their summer stay in the south of France, he’d taken a phone call, walked out into the street, and started screaming into the receiver. And as soon as she arrived in Paris it had been clear that his nerves were frayed. He’d taken her for lunch at the Four Seasons but kept going outside to take mysterious phone calls that seemed to spook him, and his hands were trembling so much that he spilled his wine all down his front. Medynska was incensed. She was not used to anything less than the undivided attention of the men she entertained, and she told Perepilichnyy as much. He proposed to take her shopping to make it up to her.

That was how they ended up on the Champs-Élysées, where he bought her a handbag from Prada and a pair of black Louboutins. But while she was trying on her shoes, he kept pacing up and down and checking his email, and he was so distracted that he bought them in the wrong size. After that, even with the aid of the romance pack back at Le Bristol, the mood was frosty.

The next evening Perepilichnyy tried to salvage the occasion by taking Medynska for dinner at Buddha-Bar in Paris, having made reservations at a series of other restaurants as a decoy, but he remained tense as they tucked into their sushi and tempura. He refused to sit with his back to the rest of the customers, demanding the seat on the banquette facing outward, and he sent his food back twice before taking a bite. His mood seemed to turn even more sour when he started eating, and she couldn’t help but notice that his eyes kept wandering to the stairs. As soon as they finished, he said he needed to get outside for some fresh air.

Out on the street, he felt better. They held hands as they made the short walk back to the hotel. But when they got to their room, he went straight to the toilet, where he stayed for an hour. He started running the water, but it didn’t obscure the sound of vomiting. When he finally emerged, his eyes and face were red and his skin was clammy, but he declined to call for a doctor.

In the morning, it seemed as if nothing was amiss as they enjoyed a breakfast of eggs and hot chocolate, and Perepilichnyy asked Medynska to see him again before they parted, but she was disenchanted. She felt a pang of guilt when she got home and sent him a message apologizing for being cold—but she never received a reply.

Shortly after Perepilichnyy’s death, Medynska set up a fashion business in Paris and rebranded herself Elmira Medins, moving into a palatial apartment on the Avenue Victor Hugo. Her Instagram feed features glamorous selfies snapped at five-star hotels and exclusive restaurants in Paris, Dubai, and Milan. She has held couture shows at Le Bristol, where she stayed with Perepilichnyy, and posted photographs taken at the Four Seasons, where they dined.

Several months after the financier’s body was found in Surrey, she received an email from a British investigator who said her messages had been found on the dead man’s phone and asked if she had met him in Paris. She replied that she had, and she received a second email asking if she knew four other women with whom Perepilichnyy had been connected. She didn’t, but replied giving her mobile number and offering to travel to England to help with any investigation if he could get her a visa. She never heard from him again.

Years went by before Medynska heard any more from law enforcement. When she did, it was after she had been tracked down by journalists at BuzzFeed News and revealed her story in an interview. Only then was she called to testify at the inquest into the financier’s death, which had been delayed for more than five years. Medynska told the coroner that she was “very scared” when she read about her paramour’s demise on the internet, “because the last person to see him in Paris was me.”

By that point, a staggering series of police failures had ensured that the full truth about the financier’s death could never be known. Not only had Surrey police thrown away the contents of Perepilichnyy’s stomach, they had also lost a vital cache of digital evidence shedding light on his last months alive. Files from the financier’s computer had revealed a stream of threatening Skype messages, as well as details of a mysterious $500 million payment he had received shortly before he died. But both the primary police evidence disk containing those files and the backup somehow got accidentally wiped, and then officers discovered that the files had also disappeared from the server of the region’s counterterrorism unit, meaning they could never be recovered.

Meanwhile, as had become its habit, the British government was fighting tooth and nail to keep the full truth about the dead man from his inquest. The home secretary initially used a public-interest immunity certificate to prevent the disclosure of a cache of government documents relating to Perepilichnyy on national security grounds. And when further questions arose about the financier’s work for MI6, the government obtained a second secrecy order banning the disclosure of any contact between Perepilichnyy and British intelligence.

In the years after the financier’s death, the human casualties of the fraud he exposed continued to rise. A lawyer representing the family of Sergei Magnitsky in Russia nearly died in a fall from a fourth-floor balcony. A campaigner who pushed for sanctions against the Kremlin conspirators narrowly survived two poisoning attempts. And the director of a play about Magnitsky’s killing died of a sudden heart attack. Six weeks later, so did his wife—who happened to be the playwright. But through it all, the British government remained unflinching in its insistence that there was nothing to suggest that the death of Alexander Perepilichnyy was anything other than natural.

The spies at Langley were infuriated. They had warned their colleagues in England that the Kremlin was aggressively stepping up its assassination program on UK soil. Now, they agreed among themselves that the “incompetent” British authorities needed to be held accountable for failing to put a stop to the disturbing trend. America’s top intelligence official prepared a highly classified report for Congress “on the use of political assassinations as a form of statecraft by the Russian Federation,” which listed multiple deaths in Britain. The report asserted with “high confidence” that Perepilichnyy had been assassinated on direct orders from Putin or people close to him, and the intelligence it outlined was passed to MI6. But the British government ignored that and other evidence connecting the Kremlin to another brazen hit on British soil. So Russia grew yet more emboldened.

Royal Courts of Justice, London—August 2012

Roman Abramovich was not in the packed courtroom to hear the verdict, but his opponent would have died rather than miss his big moment. At the end of a months-long trial that crackled with drama at every turn, Lady Justice Gloster was finally ready to deliver judgment, and Boris Berezovsky arrived at the Royal Courts of Justice bright and early to soak up the atmosphere.

The oligarch was by now down to his bottom dollar, but if his £3 billion claim against his former protégé went his way, it would restore him to riches at a single stroke. Sure, defeat would ruin him completely, but he wasn’t one to waste time pondering the abyss. Asked by the swarming press pack outside the turreted court building whether he expected to win, he replied: “I’m confident,” adding with a note of grandeur, “I believe in the system.”

Berezovsky’s claim was that he and Patarkatsishvili had been strong-armed into selling Sibneft to Abramovich at a “gross undervalue” as part of a Kremlin “black-op” to strip them of their business interests in Russia, and he was demanding billions in compensation. But Abramovich denied it all, claiming that Boris and Badri never owned any stake in the oil giant and that he had paid them $1.3 billion not to buy them out but in recompense for the krysha they provided while he was building up his businesses in the ’90s.

Neither man had any paperwork to back up his claim because all their deals had been done on a handshake—“It’s just how business was organized,” Berezovsky explained, describing the Russia of the ’90s as the “Wild East.” More troubling, as the judge noted, was that “a number of witnesses, who would, or might, have been able to have given key evidence, were dead.” So the verdict would have to swing on whose version of events Lady Justice Gloster happened to believe.

Berezovsky had been typically florid in the witness box, using his testimony to fire volleys at the Kremlin and burnish his own role in the invention of post-Communist Russia.

“I don’t want to present me as a hero, but unfortunately you push me again,” he said at one point, as he explained under cross-examination how he had single-handedly run off the Communists to secure Boris Yeltsin’s reelection in 1996. Abramovich, on the other hand, had been quiet, measured, and respectful. He had given evidence in Russian and kept his answers short.

The trial riveted audiences in Britain and Russia, shining a searing spotlight on the smash-and-grab chaos of post-Soviet Russia, and the public gallery was so packed on the final day that the clerks had to open up a second courtroom to contain the overspill. At 10:30 a.m. Lady Justice Gloster entered in her wig and gown and settled on the bench as the court fell silent. Berezovsky, sitting near the back, looked fit to burst as she shuffled her papers. Then, with icy poise, she looked straight out into the gallery and demolished his case.

“On my analysis of the entirety of the evidence, I found Mr. Berezovsky an unimpressive, and inherently unreliable, witness, who regarded truth as a transitory, flexible concept, which could be molded to suit his current purposes,” the judge declared. The oligarch’s hands flew to his face. “At times the evidence which he gave was deliberately dishonest; sometimes he was clearly making his evidence up as he went along,” she continued.

“At other times, I gained the impression that he was not necessarily being deliberately dishonest, but had deluded himself into believing his own version of events.”

Abramovich, by contrast, had been a “truthful and on the whole reliable witness,” the judge said, and she accepted his evidence.

Berezovsky walked out of the courtroom in a daze. Instead of emerging with his fortune restored, he was now saddled with his own crippling legal bill and would have to pay tens of millions more to cover Abramovich’s costs. That was money he simply didn’t have. The court had just heard that he’d already sold the mansion at Wentworth Estate and was shedding assets as fast as he could to pay his spiraling debts. But what hurt more than anything were the harsh words of the judge still hammering inside his head. Berezovsky had fought the fiercest information war imaginable against all the organs of the Russian propaganda state. Now, in a few short sentences, Lady Justice Gloster had ruined his reputation forever.

“I’m absolutely amazed what happened today,” he told journalists in the street, shaking his head in a haze of bewilderment. “Sometimes I had the impression Putin himself wrote this judgment.” He shrank into the back of a black Mercedes and sped away from the crowd.

The oligarch decamped to a more modest mansion owned by his ex-wife in Ascot and struggled to come to terms with his fate. British justice had been his last love, and now, in his eyes, the system had betrayed him. He shed more valuable possessions, including a prized Andy Warhol painting of Lenin, and laid off all but one of his bodyguards.

The Scotland Yard protection officer was worried. There had been several more suspected plots to kill Berezovsky since Atlangeriev’s assassination attempt, and the threats showed no sign of abating. The most alarming intelligence had come from Mossad, the Israeli spy agency, whose agents had picked up on an FSB plot to blow Berezovsky up the next time he visited Belarus—by planting fifteen land mines on the road to his dacha outside the city. The protection officer had been dispatched to Down Street to warn the oligarch that he would be “vaporized” if he went back to Belarus—but no sooner had that threat been neutralized than others emerged. The Russia watchers had detected a spike in the number of plots against Berezovsky since Putin’s reelection earlier that year, and Scotland Yard had always relied on the oligarch to foot the bill for his own security. Police resources were seriously depleted by the government’s austerity program, and there was no way Scotland Yard could afford to pick up the tab for the vast teams of bodyguards, surveillance units, and armored vehicles required to keep him safe around the clock. But without that level of protection, Berezovsky was a sitting duck.

The protection officer went to see his charge at Down Street and grew still more alarmed. Berezovsky had always exuded wealth and power, but now he looked disheveled and exhausted, as if he’d slept in his suit. The officer tried to venture some thoughts about boosting his personal security detail, but Berezovsky shut him down. There had been a time, he said, when he was so rich he barely knew the value of a million bucks. Now his pockets were empty.

“I am broken,” he said before they parted ways.

Berezovsky could no longer sustain his fight with Patarkatsishvili’s family and the other shareholders in the New World Value Fund, and he was forced to settle out of court for an undisclosed sum. The deal was partially brokered by Scot Young, who visited Down Street appearing unkempt and hollow-eyed in a baseball cap and jeans. He looks like a bum, the oligarch’s secretary thought as the fixer walked by. It was the last deal Young would ever do for Berezovsky. The proceeds sank straight into the swell of debt and legal bills.

The oligarch descended so deep into his misery that he began taking antidepressants and opened a Facebook account to post rambling messages bemoaning his hubris. “I repent and ask for forgiveness for greed. I longed for riches, not thinking that this was to the detriment of others,” he wrote. “I repent and ask for forgiveness for what led to the power of Vladimir Putin.” His plight was heavily publicized in Russia—to the fiendish delight of an old adversary.

Andrey Lugovoy took to the floor of the Russian parliament in December of 2012 to crow over the oligarch’s demise. “He takes antidepressants,” the assassin jeered, and “flies to Israel from London economy rather than in his private jet.” But he said he had learned that the “infamous tycoon and villain” was plotting to spend the payout he received from the New World Value Fund to finance new anti-Kremlin activities and accused those involved in the carve-up of “sheer cynicism, villainy, shamelessness of the highest degree.” Lugovoy said he had passed a file of evidence to Russian prosecutors and the FSB and called for a crackdown on all those found to be providing financial assistance to Berezovsky.

Soon after Lugovoy’s speech, Michelle Young received a call from another private investigator who had approached her claiming a connection to the FSB. “Boris Berezovsky is being dealt with,” the man said. He thought she ought to know that her ex-husband’s boss was about to end up “in a body bag.”