United States v. Leonid Abelis, A/K/A "Shatera" A/K/A "Lyonya" Yakov Volovnik, Leonard Lev and Yelena Lev, Valery Novak Vladimir Topko Sergey Ilgner Vyacheslav Kirillovich Ivankov, A/K/A "Yaponchik,"

Citations: 146 F.3d 73; 1998 U.S. App. LEXIS 11500Docket: 97-1080

Court: Court of Appeals for the Second Circuit; May 29, 1998; Federal Appellate Court

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Valery Novak, Vladimir Topko, Sergey Ilgner, and Vyacheslav Kirillovich Ivankov appealed their convictions from the United States District Court for the Eastern District of New York, following a jury trial that lasted six weeks. They were found guilty of conspiracy to commit extortion, violating 18 U.S.C. § 1951, and Novak, Ilgner, and Ivankov were also convicted of attempted extortion under the same statute. The appellants raised multiple arguments alleging errors during the trial, but the court found no basis for these claims and affirmed the convictions.

The facts, viewed favorably for the Government, indicate that the victims of the extortion attempt were Alexander Volkov and Vladimir Voloshin, who operated Summit International, an investment firm in New York City. Both men had significant criminal backgrounds and connections to Russian criminal organizations. Summit, which started in September 1993, claimed to have expertise in investments and raised over $8 million from Russian investors. However, Volkov and Voloshin mismanaged the funds, leaving them with only a small amount by 1995.

The attempted extortion targeted a $2.6 million loan from Chara Bank, which Volkov and Voloshin secured through their acquaintance, Rustam Sadykov. Following the suspicious death of Chara's president, Vladimir Rachouk, during financial troubles, Sadykov, along with Topko and Korostishevsky, met with Volkov and Voloshin to discuss the loan. Sadykov was not authorized by Chara to be in the U.S., nor were his companions employees of the bank.

On December 1, Korostishevsky informed Volkov and Voloshin of Rachouk's death and his widow's attempts to recover Chara's investment with the aid of Russian criminal organizations. Korostishevsky and Sadykov suggested sharing the Chara money with Volkov and Voloshin in exchange for protection against these groups, but no agreement was reached. The group then went to the Russian Samovar restaurant, where Korostishevsky reiterated the threat posed by Rachouk's wife. 

The following day, a meeting at Summit's office resulted in Volkov and Voloshin agreeing to repay the money but requesting more time to determine how to split it. However, no payments occurred as Voloshin traveled to Moscow until December 23. Later in December, Volkov met with Sadykov and Novak, who expressed urgency regarding the repayment, citing that delays were jeopardizing Sadykov's ability to return to Russia.

Subsequent to these discussions, Sadykov and Topko returned to Moscow while Korostishevsky and Sadykov made repeated attempts to contact Volkov and Voloshin, who avoided communication. A meeting was arranged for February 21, 1995, where Ivankov, a powerful figure in the Russian criminal underworld, was introduced to the matter. Upon learning of Ivankov's involvement, Volkov and Voloshin fled to Miami to seek help from a business partner, Leonid Venjik, with Voloshin later falsely informing his contacts in another criminal group that the Chara money had been repaid, in hopes of deterring Ivankov.

Voloshin was in California while Volkov met with the FBI in Miami seeking protection. Voloshin later contacted the FBI, falsely claiming that Summit had repaid the Chara loan, which led to an investigation into Ivankov's activities and the authorization for phone taps on Ivankov. After returning to New York in mid-March 1995, Volkov and Voloshin continued to evade Ivankov and Sadykov, who were strategizing to recover the Chara money from Summit.

On April 10, 1995, Ivankov met Leonid Abelis at a restaurant, where Ivankov indicated that a Chara representative sought his help to recover a significant sum owed by an American company, offering a share of the recovered money. Ivankov instructed Abelis to contact Sergey Ilgner for assistance. During a call on April 12, Ivankov assured Abelis that he would oversee the operation and that a meeting would take place the next day to assert their claim.

At the April 13 meeting, Ivankov reiterated the importance of handling the matter in his name. Sadykov attended and offered payment for assistance, while Ivankov stated everyone would share the proceeds. Sadykov provided Abelis and Ilgner with identifying information about Volkov and Voloshin, suggesting Volovnik as a potential contact. Ivankov later expressed a desire for them to keep the $2.6 million rather than returning it to Sadykov.

Abelis attempted to facilitate a meeting with Volovnik to discuss the matter but faced delays. On April 25, Abelis met with Volovnik to address the lack of progress and emphasized Ivankov's control over the case. Throughout this period, Abelis kept Ivankov informed of developments while avoiding using names in phone conversations to prevent detection. Eventually, Abelis arranged a meeting with Sadykov at a restaurant, where discussions about recovering the money took place, but Sadykov declined to cover legal expenses or bail for Abelis and his group, leading to a suggestion to pursue the matter discreetly.

On May 25, 1995, after multiple failed attempts to meet, Volovnik informed Abelis that Volkov and Voloshin were at a dinner with Venjik at a Hilton Hotel in New York City. Upon encountering Abelis, Voloshin felt fearful due to Abelis's association with Ivankov, a powerful figure in the Russian criminal underworld. During the meeting, Volkov stated that a debt had been repaid, but Abelis warned that failure to settle with Ivankov could lead to serious consequences, which Voloshin interpreted as a threat to his safety and his family's safety.

Following their discussion at the Hilton, Volkov and Voloshin traveled with Abelis to the Troika Restaurant in New Jersey, where tensions arose between Sadykov and Volkov. Initially, Sadykov demanded $5 million, but after discussions and the acknowledgment of a prior $100,000 payment to Sadykov, the amount was negotiated down to $3.5 million. Voloshin and Volkov agreed to the payment, believing it was the only way to ensure their safety. Abelis repeatedly asserted that he was acting on behalf of Ivankov, pressuring them to sign an agreement.

The agreement was drafted to wire the $3.5 million to an offshore account controlled by Novak rather than Chara Bank, but it lacked a payment schedule due to Voloshin's concerns about Summit's payment capabilities. Volkov and Voloshin signed the agreement in the presence of several individuals, and afterward, Ilgner drove them back to Manhattan. 

A few days later, Ivankov contacted Abelis to inquire about the meeting's outcome. Upon learning of the prior $100,000 payment to Sadykov, Ivankov ordered that no further payments be made to Sadykov and that the funds should instead be transferred to an account under his control, indicating that Sadykov would only receive a fee for his assistance.

On May 30, 1995, Abelis spoke with Voloshin, suspecting he was trying to withdraw from their agreement. Abelis asserted they had resolved the matter without violence and mentioned that he had informed Ivankov about the deal, emphasizing Ivankov's significance. Voloshin subsequently shared the payment schedule with Ilgner and confirmed that payments were to be directed to an account provided by Ivankov, not Novak. 

On May 31, Abelis, Ilgner, Gladun, and Volovnik visited Summit's office for a meeting with Volkov and Voloshin, but found the office equipped with FBI surveillance devices used to record Ilgner's prior meeting with Voloshin. When confronted, Voloshin claimed the equipment had not been activated during that meeting. During this encounter, Ivankov called Abelis, spoke with Voloshin about the transaction, and indicated he would need repayment due to his involvement, agreeing to meet later. Abelis then provided Voloshin with a new payment account number for transfers to National Westminster Bank in London.

On June 5, Ivankov met with Abelis, Ilgner, and Gladun to discuss the payment status. Voloshin informed them that the first payment had not been made due to banking issues. Abelis relayed a conversation with Topko, who criticized Abelis for being lenient with Volkov and Voloshin, to which Abelis responded that Topko should not interfere. When Ivankov arrived, Voloshin reassured him about the payment account changes and affirmed adherence to the payment schedule.

The following day, June 6, Voloshin informed Abelis that the first payment had been made, sending a falsified wire transfer record via fax, claiming it would clear by June 7. When the payment did not reach Ivankov's bank, Abelis inquired with Voloshin, who cited difficulties with his banker. Ultimately, on June 8, FBI agents arrested Ivankov, Abelis, Ilgner, Topko, and Novak.

Appellants Novak and Topko contest the adequacy of evidence supporting their convictions, with the legal standard placing a significant burden on defendants in such challenges. Courts evaluate evidence in its entirety, favoring the government, and consider all inferences and credibility issues in its light. Evidence should be collectively assessed rather than in isolation. The critical determination hinges on whether any rational fact-finder could establish the essential criminal elements beyond a reasonable doubt. The prosecution is not required to eliminate every potential exculpatory hypothesis, and juries may rely on circumstantial evidence for their verdicts. While minimal evidence can link a defendant to a conspiracy once established, mere presence at a crime scene or association with conspirators is insufficient to prove active involvement. Nevertheless, a defendant's presence can indicate membership in a conspiracy if combined with other circumstances suggesting an intent to further the conspiracy’s objectives, necessitating evidence of purposeful conduct.

Novak contests his conviction for conspiracy to commit extortion and attempted extortion, claiming he was not part of the conspiracy, despite acknowledging its existence. The government presented evidence indicating Novak's involvement, including his close friendship with co-conspirators Sadykov and Topko, as well as his active participation in meetings concerning the extortion. Notably, during a December meeting at Michael's Restaurant, Novak pressured Volkov to fulfill his payment obligations to Sadykov, demonstrating his awareness of the extortion scheme. 

Additionally, at a May 25, 1995 meeting at the Troika Restaurant, Novak drove late at night with Sadykov and Topko to confront Volkov and Voloshin, who ultimately agreed to pay $3.5 million to Sadykov, which included Chara’s investment plus interest. Although Novak did not negotiate directly, he typed the written agreement and provided his offshore bank account as the destination for the funds. His presence during the signing of the agreement and his actions throughout the night strongly suggested he was not a passive observer but an active participant in the extortion scheme. The jury was justified in concluding that Novak was involved in the conspiracy, interpreting his actions as efforts to unlawfully recover funds through intimidation rather than legitimate recovery efforts for Chara Bank.

The jury could reasonably conclude that other conspirators trusted Novak to manage a $3.5 million payment to an offshore account, highlighting his role in the conspiracy. The court referenced previous cases where financial trust and transactions indicated a defendant's involvement in conspiracies. It noted that dissension among co-conspirators does not affect the existence of the conspiracy or an individual's membership. Consequently, there was sufficient evidence to uphold Novak's convictions for both conspiracy and attempted extortion. 

Topko's challenge to his conviction was found to be even weaker, as trial evidence indicated his participation in key meetings where the conspiracy was discussed, and he was identified as a representative of other conspirators. The jury could infer from his presence and actions that he was acting to further the conspiracy.

All defendants contested the jury instruction regarding the "fear" element of extortion. The court's charge clarified that attempted extortion involves knowingly trying to exploit fear, regardless of whether the defendant instilled that fear. The defendant must have been aware of the victim's fear and taken actions to exploit it for a conviction to be valid.

The appellants argue that the jury instruction allowed for Ivankov's conviction based solely on his reputation in the Russian criminal underworld, suggesting that any of his actions could be seen as an "attempt to exploit" fear. They contend that the district court should have included their proposed language, which required proof that Ivankov acted with awareness of the victims' fear and attempted to exploit it through threats. The review of jury instructions is conducted de novo, with the appellant bearing the burden to demonstrate that their requested instruction accurately represented the law and that the given instructions caused prejudice. The court found that the appellants' proposed instruction did not accurately represent the law because the Hobbs Act defines extortion broadly, allowing for fear to arise from sources other than direct threats. Additionally, case law supports that the wrongful use of fear does not necessitate a direct threat. The court concluded that the district court's refusal to provide the requested instruction was appropriate as the overall jury charge clarified that a conviction required proof of knowingly instilling or exploiting fear to induce property transfer, not merely relying on Ivankov's reputation.

The district court emphasized the necessity for the Government to demonstrate the "wrongful use of actual or threatened force, violence, or fear" in establishing extortion under the Hobbs Act. The jury was instructed that extortion requires a knowing and intentional act with a bad purpose, specifically that the defendants must have wrongfully exploited fear to obtain money. The court defined intentionality as willfully acting against the law to obtain consent through wrongful means. The Government was tasked with proving that the defendants acted with this wrongful intent, not merely that Ivankov had a bad reputation. 

While the court noted that caution is needed to prevent innocent activities from being categorized as extortion, it clarified that the charge adequately informed the jury about the wrongful exploitation of fear. The charge’s wording could have been improved for clarity, but it sufficiently conveyed the legal standards required for a conviction.

Additionally, the appellants contested the district court's refusal to give a "missing witness" instruction regarding Alexander Volkov, who did not testify. The decision on such an instruction is at the trial court's discretion, and it allows the jury to infer negatively against a party that fails to call a material witness under its control. Determining a witness's availability involves assessing the relationship and accessibility of the witness to the parties, rather than just physical presence. The requirement for the witness to be "peculiarly within the control" of a party ensures that the inference is not available against a party with limited access compared to the adversary.

Volkov, although he did not participate in interviews with the defendants' attorneys, was present at the trial and expressed willingness to testify if summoned. The government informed the district court that it had supplied the appellants with all relevant F.B.I. records and business documents related to Volkov. Consequently, the court determined that Volkov was not exclusively under the government's control, which negated the need for the defendants' requested jury instruction regarding missing witnesses. The district court did not issue any comments on uncalled witnesses but permitted defense counsel to address the matter in their arguments to the jury. Hence, the decision not to provide a "missing witness" instruction was upheld. After reviewing all other arguments presented by the appellants, the court found them lacking merit, leading to the affirmation of the District Court's judgment by Judge John G. Koeltl of the Southern District of New York.