Real estate bubble isn’t an American phenomena, Back in 2000-s the real estate loans and other financial tools were at the apogee. Mukhtar Ablyazov was one of the many who abused the system.
Loans and land plots, what could possibly go wrong? In fact, everything. Mukhtar Ablyazov as the owner of BTA Bank authorised his subordinate and accomplices to give out cash secured by pricey land plots in Russia. Then the magic happened.
The scheme, in short, is that the Bank gives funding to land plot owners to develop the commercial or residential property. The land plots itself served as security for the deal. Mukhtar Ablyazov, whose bank was very active at local development market, initiated the termination of the credit line. The terms are unusual in any sense: the bank got nothing. Those who took the bank’s funds get away with their land plots, their development projects and BTA’s own money. Thus BTA bank ‘lost’ around $700 million. Such generosity finds an easy and legally proven explanation: those who borrowed from the bank were close associates to the bank owners. Such were the golden years of the ‘self-service’. The stolen funds then were distributed across the network of offshore entities controlled by Mukhtar Ablyazov. His accomplices for this exact activities are established: Roman Solodchenko, Artur Trofimov, Igor Kononko, Anatoly Ereshchenko, Tatyana Paraskevich and Alexander Udovenko.
Mukhtar Ablyazov’s story of prison terms
Most of them fled abroad and are following the chief’s behaviour: they try to present the case as ‘politically motivated’. The group is sentenced in absentia: Mukhtar Ablyazov got 15 years as the king pin of the gang, others have to serve 10 years each. It’s not the first sentence of Mukhtar Ablyazov.
In Kazakhstan he was sentenced for corruption-related charges after he was dismissed from ministry of energetics. He was personally pardoned by the president – a practice quite common in Kazakhstan for those who got caught for bribes and kickbacks. Then Mukhtar Ablyazov was sentenced for lifetime for killing BTA Bank co-owner and the biggest bank embezzlement in modern history.