Why God Nisanov and Zarakh Iliev No Longer Need The Help of Law Enforcement And Bankers?

Why God Nisanov and Zarakh Iliev No Longer Need The Help of Law Enforcement And Bankers?

Photo: https://rusplt.ru/


Seemingly, the elimination of bad banks and arrests of corrupted law enforcers are playing into the hands of operators in Moscow’s food market. The largest of them is Food City, the investment project of "real estate kings" God Nisanov and Zarah Iliev.

In Chancery

In 2020, construction of Food City-2, a new wholesale food center, will start in Khimki, a suburban town adjoining Moscow City in the northwest. Judging by the new venture’s name, it may become very similar to Food City, a hypermarket that was opened on Kaluga Highway, on the opposite side of Moscow, in 2014.

The area of Food City-2 will be 33 ha. This is three times smaller than the area of the "regular" Food City. Altogether, they might build up a huge natural food products monopoly in Moscow. Consumption of fresh foodstuffs shows outstripping rates in the capital. Both compounds are controlled by the same investors, God Nisanov and Zarakh Iliev, the two largest commercial real estate owners (according to Forbes). These people also command at other key sectors of the consumer goods’ market. Namely, the glamorous shopping malls (for example, a shopping mall Evropeysky) and shopping mall Moskva (Lyublino District of Moscow) and retail complex Sadovod, the heritage of the Luzhniki and Cherkizovsky merchandise markets of the 1990’s and 2000’s. As all of them allow effective control over the huge segments of the wholesale and retail market, they have equal importance for the partners.

Cash Kingdom

The peculiarity of "market places" of the 1990s and 2000s was that almost all of them worked for cash. This was the main condition for survival of the whole model of Russian capitalism created on the ruins of the shadow economy of the USSR in its final years. Cash was quickly and freely transferred to different business sectors and across the whole world, as Western governments looked past even the graphic signs of money laundering. Money had no smell then.

Another condition for the efficient operation of the system was the support of various law enforcement agencies. Even though the power of the shady scheme was strong, it is very difficult to ensure the safe flow of billions of cash rubles and dollars without the support of law enforcement agencies. Besides, a necessary element of the system's functioning was the free movement of money both on the streets and inside the lending institutions. First of all, for transferring it abroad. The main problem with this movement is the trails that money leaves through bank accounts. It means that any law enforcement agency, entrusted with making a search at a bank, could get a legal reason for criminal prosecution. In other words, if it was not you who controlled the law enforcers, someone else would certainly do it, and the consequences for you would be negative. There was no third option.

The way how this affinity of interests worked in practical terms became known relatively recently -- after the disclosure of the “support teams” shoring up the banking system. They consisted of the chiefs of key main departments of the Interior Ministry and the Federal Security Service (FSB).

In addition, lately, the notorious German Gorbuntsov, one of key operators of the financial backstage of 2000’s, has revealed all the details about the scheme.

After a warning by Dmitry Zakharchenko, a colonel and a famous underground billionaire, German Gorbuntsov left the country in 2010. He calls this warning a provocation, as, in fact, he was not threatened in Russia at that time. But in 2012, he was shot at in London. Under apprehensions for his life, Gorbuntsov decided “to confess” to his lawyer and kept back the records. As they say, just in case. And that case occurred in December of 2019, when the transcript of the records turned up at the disposal of First Anti-Corruption Media (PASMI), an information resource close to some factions of the Russian law enforcement milieus.

From these testimonies, recorded in Cyprus in 2017, it follows that bribes to Dmitry Zakharchenko and his inner circles were paid by means of unreported profit from different trade and service enterprises, handled the ethnic Chinese and Vietnamese, among others.

According to the information provided by Gorbuntsov, the main payers were the Moskva trade fair mall, the Sadovod and Cherkizovsky markets and Pokrovskaya fruit-and-vegetables wholesale depot.

Of course, it does not mean that the colonels of the Ministry of Internal Affairs received suitcases with cash from smugglers while walking along the trading rows. The scheme was relatively technologically advanced.

According to German Gorbuntsov, it was supervised by a certain Krasnov, a deputy chair of the board at Inkredbank and a well-trained expert on collecting shadow money at the markets. To carry out encashment at the markets, a transport company was established with a fleet of special minibuses equipped to transport money. According to Gorbuntsov, Inkredbank itself got the bulk of cash from the Moskva trade fair complex.

However, even multi-level protection could not guarantee security. In December 2009, when "grey" cash was collected, there was an armed attack on collectors, during which 60 mln rubles were stolen and several collectors were killed. The cash brought to the bank was not placed to accounts but registered in Gorbuntsov's laptop. From that moment on, he turned into a vicious offender, and without the support of the above-mentioned Zakharchenko all this activity would have ended very soon. The same thing would have happened to the "cash markets" (in a chain).

Cash Refusal

A part of the received cash was transferred to the West by German Gorbuntsov's banking system with the aid of Baltic or Moldovan channels. But after the financial crisis of 2009, it became more and more difficult, and Western regulators were much less inclined to do so. Therefore, it caused the rift in relations between the network operators themselves -- both bankers and law enforcement officers were in disagreement.

What was the reaction of the main operators of this system, the markets and shopping centers themselves? They began to fall out of business. The Food City Center itself can be considered an brilliant example of this process. God Nisanov and his partners bought it at the end of 2013 -- just before the so-called "Big Cleaning". What came to replace the compromised banking system became known much later. Only in 2018 did the financial regulators start calling it by its true name. Yuri Polupanov, director of the financial intelligence and foreign exchange control department of the Central Bank of Russia, can be called a trailblazer in this sense. He explained the change in cash flows by the direct entry of shopping centers into the crypt currency market. "We see the purchases of crypto currency for a big part of the revenue, which is not reported anywhere at the moment. We see the immediate transferring of the crypto currency by e-mail directly to the home countries of these traders and manufacturers and its conversion into local currencies," said Yuri Polupanov. Apparently, he referred to the main operators of the new system which primarily included all the aforesaid Sadovod, Food City and other "marketplaces" of our age. According to Polupanov's estimates, the new scheme provided the shadow sector of Moscow retail with 600 mln rubles a month and did not need any more “Gorbuntsov-style bankers” and “Col Zakharchenkos.” Groups of Chinese system administrators, who didn’t speak a word of Russian and lived without any permissions right in the markets, and powerful generators of crypto currency were quite enough to assure access to the world market. Or perhaps, the sequence was reverse? As for the marginalized bankers and their security force patrons, they were just sent to the trash heap of history because they did not fit into new markets (literally). New algorithms and operators came to replace them.

After the confession, Yuri Polupanov did not keep his position at the Central Bank for too long. In June 2019, he left the bank “due to disagreements with the top officials.”

And then reports on the forthcoming construction of Food City-2 surfaced. Just a total coincidence.