Brooklyn Prosecutors Have a Long Reach
Brooklyn U.S. Attorney’s Office Well Versed in International Investigations
ENLARGE U.S. Attorney Loretta E. Lynch, shown in May in Brooklyn, has been mentioned as a possible successor to Attorney General Eric Holder. KEVIN HAGEN FOR THE WALL STREET JOURNAL By CHRISTOPHER M. MATTHEWS Nov. 6, 2014 2:18 p.m. ET 0 COMMENTS
NEW YORK—The money-laundering investigation into one of Vladimir Putin ’s closest allies puts a spotlight on the Brooklyn U.S. attorney’s office, which is spearheading the effort.
The office’s prosecutors might not get as much attention as their counterparts across the East River in Manhattan, but they have a history of handling high-profile, international investigations, and their boss, Loretta E. Lynch, is on the shortlist of possible candidates to succeed departing U.S. Attorney General Eric Holder .
The U.S. attorney’s office for the Eastern District of New York and the Federal Bureau of Investigation, aided by the Justice Department, are investigating whether billionaire Gennady Timchenko, an associate of the Russian president, laundered funds from allegedly corrupt Russian deals through the U.S. financial system, according to people familiar with the matter.
LORETTA E. LYNCH’S RÉSUMÉ
- Age: 55 years old
- Education: J.D. from Harvard Law School, A.B. from Harvard College
- Current Position: Appointed by President Barack Obama in May 2010 as U.S. attorney for the Eastern District of New York in Brooklyn
- Previously: Appointed by President Bill Clinton to the same job, serving from 1999 to 2001
- Private-Sector Experience:Formerly a partner at law firm Hogan & Hartson LLP
- Big Case: Lead prosecutor in the late 1990s Abner Louima police-brutality case
The Wall Street Journal
The Wall Street Journal reported on Wednesday that Brooklyn prosecutors are investigating sales of Russian crude oil by the Geneva-based commodities firm Mr. Timchenko co-founded, Gunvor Group.
In a statement published on its website on Thursday, Gunvor said it hadn’t been notified of any investigation by the Justice Department. “Any allegations of wrongdoing with respect to our trading activities are baseless and entirely false,” it said.
Mr. Timchenko said he was unaware of the investigation in a statement released Thursday by his investment vehicle, Volga Group, which added that Mr. Timchenko hasn’t been affiliated with Gunvor since selling his stake in March this year.
Ms. Lynch declined to comment through a spokeswoman.
Many in the legal community think of mob cases when they think of the Eastern District. The office has been at the forefront of dismantling organized crime for decades, a reputation that continues to this day.
In January, Brooklyn prosecutors charged a member of the Bonanno crime family who was allegedly involved in the 1978 heist of a Lufthansa Airlines cargo hold at New York’s John F. Kennedy International Airport, the famous robbery featured in Martin Scorsese ’s “Goodfellas.” The defendant has pleaded not guilty and is scheduled to go to trial next year.
But Brooklyn prosecutors haven’t confined themselves to mob cases. While they haven’t had a role in the high-profile crackdown on insider trading led by their Manhattan counterparts—prosecutors in the Southern District of New York—they have driven other sensitive inquiries.
Those investigations included a probe that led to a nearly $2 billion money-laundering settlement with HSBC Holdings PLC in 2012, as well as a foreign bribery probe into J.P. Morgan Chase & Co.’s hiring practices in China. J.P. Morgan has said that it is cooperating with related investigations, but otherwise declined to comment on the continuing probe.
“There is a deep history of international cases coming out of Brooklyn,” said Jodi L. Avergun, a former prosecutor in the office and now a partner at law firm Cadwalader, Wickersham & Taft LLP. Ms. Avergun isn’t involved in the investigation.
The Brooklyn office often gets its hands on money-laundering cases thanks to New York’s deep links with the global financial system. The city’s central role enables its prosecutors, both in Brooklyn and Manhattan, to bring cases in connection with crimes that may have originated overseas.
In many cases, the routing through New York of money connected to a crime is all that prosecutors need to establish jurisdiction, according to Daniel C. Richman, a professor at Columbia Law School. “Districts like the Southern and the Eastern in New York, which find the world’s business transacted within their loosely defined borders, are often free to pursue criminal activity that seems centered abroad,” Mr. Richman said.
Prosecutors in Manhattan’s Southern District, sometimes jokingly referred to as the “sovereign district” for its pre-eminent role in bringing big cases, have charged everyone from Russian arms dealers to France’s largest bank, BNP Paribas , accompanied by prominent news coverage.
The Eastern District, though more understated, has been successfully pursuing international narcotics cases since the 1980s and foreign terrorism prosecutions since the 1990s, Mr. Richman said.
The office has also taken its hits in high-profile matters. The decision not to indict HSBC for money laundering was widely criticized, and two former Bear Stearns hedge-fund managers the office charged with securities fraud in connection with the subprime mortgage-market meltdown were acquitted in 2009.
Still, the office has developed the skills and resources needed to be successful in complicated extraterritorial cases, Mr. Richman said, including relationships with foreign law enforcement and knowledge of how to gather evidence abroad. The office has a cadre of foreign-language interpreters to handle defendants who don’t speak English, according to Ms. Avergun, who estimated that around half the cases in Brooklyn involve a foreign component.
Ms. Avergun said Brooklyn’s claim on cases involving foreign suspects sometimes stems from a surprising source: JFK Airport. That is because in certain types of cases under U.S. law, jurisdiction is established by the location where a defendant first arrives in the U.S.
She said the office competes with Manhattan for top cases being investigated by the FBI’s New York field office, perhaps the bureau’s top investigative branch in the country. The decision by an agent about which office to work with is often based on relationships, Ms. Avergun said.
Write to Christopher M. Matthews at [email protected]