Welcome to Rabbit Hole, a breaking-news analysis that helps you get smart on the one story everyone’s obsessing over—for Beast Inside members only.
It’s a scene out of a heist movie: Gun-wielding men in ski masks and body armor rush through the bank doors, head straight for the money, and make off with fat stacks of cash before the cops show up.
When it happened to banks in Russia recently, the gunmen were the cops—special-operations troops acting under the direction of allegedly corrupt officials from Russia’s powerful domestic spy agency, the Federal Security Service (FSB). So who got shaken down and why?
ADVERTISEMENT
The muscle: Russian court officials announced last week that they’d arrested five officials from the FSB on charges that they had committed robbery as part of an organized group. Among those arrested were members of the FSB’s elite special operations Alpha and Vympel units. Alpha and Vympel units trace their lineage back to KGB commandos and are among the premier units tasked with counterterrorism operations against Chechen militants. Alpha troops fought in both of Russia’s Chechen wars and were in charge of high-profile—and controversial—emergencies like the Chechen siege of a children’s school in Beslan in 2004, and the hostage crisis at a Moscow theater in 2002.
Bank robbers by any other name: The special-operations troops were allegedly recruited by members of the FSB’s Directorate K to perform illegal searches on financial centers during which they would steal stacks of cash, stuff them into their body armor where their ballistic plates would normally be, and kick the money back up to their bosses to the tune of around $141 million. Needless to say, when armed commandos from the state bust in and leave with their tactical gear full of your money, there’s not much you can do about it. In one case, the commandos allegedly accosted a businessman en route to a bank to deposit around $2 million and made off with the money after an employee tipped them off about the pending delivery.
The brains: In Russian news accounts, the four special operators arrested appear to have been the alleged muscle for a scam Russian officials say was carried out by officers from the FSB’s Directorate K, which is part of the FSB’s Economic Security Service (SEB). Within the SEB, there is a handful of directorates, distinguished by letters, devoted to different sectors of the economy, including industry, transportation, and support for other sections. Those in the K section handle financial crimes, which puts corrupt officials in a unique position to shake down banks for money.
Foxes guarding the henhouse: This isn’t the first time that Directorate K has seen senior officials shake down a bank. It’s not even the first time this year that FSB officers from the unit have been arrested. As it turns out, putting members of a generally unaccountable domestic security agency in charge of banks in one of the most corrupt countries on earth has made for some lucrative graft opportunities.
In April, Russian police arrested Col. Kirill Cherkalin. Cherkalin had been a senior official in Directorate K but was fired in 2013 after Russian news outlets discovered his secret million-dollar Italian villa—a suspiciously grandiose luxury for a civil servant. Russian authorities accused him recently of taking an $850,000 bribe from the head of a bank—something he was allegedly quite good at. Footage of a raid on Cherkalin’s home showed officers digging through stacks and stacks of cash, tightly wound in plastic and stuffed inside metal suitcases, gym bags, designer shopping bags, and shoe boxes. Other images of his estate showed a snowmobile and all-terrain vehicles.
Nice bank you got there: The money made by corrupt Directorate K officials hasn’t been so much gifts in expectation of the state’s good graces as insurance against its wrath. Put simply: The FSB’s bank security unit has been running the occasional protection racket. In the case of Cherkalin, one former banker told a Russian news outlet that the former officer started hinting that his bank would have problems and one day during a meeting kindly suggested that a €500,000 payment would help alleviate their troubles.
In another case, media tycoon Alexander Lebedev, a former Russian politician, sued Directorate K after masked FSB special operations troops bearing guns burst into his bank to carry out what he called a trumped-up search of the premises. The 2011 search was Directorate K’s attempt to spook him into paying a bribe, according to the lawsuit.
The martyr: But it’s the death of Russian lawyer Sergei Magnitsky in 2009 that stands out as the most infamous example of the FSB bank cops’ graft. Magnitsky was the lawyer for Bill Browder’s Russian hedge fund, Hermitage Capital. In 2007, the head of Directorate K, Viktor Voronin, authorized a raid on the fund on bogus tax charges after Browder had been kicked out of Russia for annoying authorities with revelations about corruption. Russian tax officials seized the fund and handed it over to mafia crooks, who then applied for hundreds of millions of dollars in phony tax rebates, pocketing the cash.
Magnitsky, a lawyer who worked for Hermitage, exposed the scam, was arrested and sent to jail for his whistleblowing, and endured torture by police there until he died awaiting trial.
Voronin, who had signed off on the raid, eventually left Directorate K in 2016 because of a corruption scandal of his own. Officers from his section of the FSB were involved in a scheme to smuggle millions of dollars’ worth of iPhones past customs in St. Petersburg, got caught, and embarrassed both Voronin and the FSB. An investigation by Russian news outlet RBC showed Vadim Uvarov, an officer in Vorinin’s section, communicating with employees from a Russian-Turkish company about how to arrange smuggling shipments.
House cleaning: Why so many FSB arrests lately? After Cherkalin was caught with $185 million in cash back in May, Putin spokesman Dmitry Peskov told reporters that the anti-corruption push wasn’t part of a specific campaign but just routine law enforcement work. The impunity that the FSB has enjoyed for so long, coupled with the cluster of arrests in such a short time, make that a little hard to believe. In either case, though, it seems doubtful than a handful of arrests of corrupt cops is likely to turn around Russia’s dismal corruption rankings anytime soon.
