In the matter of Alexandre Konanykhine (Applicant)
and Elena Gratcheva (Respondent)


I. Procedural History

Applicant and Respondent are husband and wife, natives and citizens of Russia. They first entered the United States as visitors (Applicant on a B-1 business visa and Respondent on a B-2 tourist visa) on September 3, 1992. After receiving a visa extension, Applicant was the beneficiary of a Petition for Nonimmigrant Worker (form I-129), filed in February 1993 by A/O Greatis, a Moscow-based advertising company. See Gov’t Ex. P. The petition was approved on March 4, 1993. See Id. Applicant’s status was thus changed to that of a nonimmigrant worker and he received an L-1 visa. His wife received a derivative L-2 visa.

Applicant became president of Greatis USA, Inc. (Greatis USA), a subsidiary of A/O Greatis. On March 30, 1994, Greatis USA filed an Immigrant Petition for Alien Worker (form I-140) on Applicant’s behalf. The petition was approved on May 2, 1994 and Applicant received an immigrant visa pursuant to INA 203(b)(1)(C), as a multinational executive. See Gov’t Ex. O. On March 4, 1996, Applicant and Respondent filed an application for adjustment of status pursuant to INA 245. See Gov’t Ex. N. At the same time, Applicant was granted advanced parole to leave the United States for business. See Gov’t Ex. C. In June 1996, Applicant left the United States and returned three days later, on June 13, 1996. Id. He was paroled into the United States. See Gov’t Ex. D.

By letter dated June 27, 1996, the Immigration and Naturalization Service (INS or Service) informed Greatis USA of its intention to revoke Applicant’s immigration petition because of its contention that the petition was false and procured by fraud. See Gov’t Ex. O. By letter dated June 27, 1996, the Service also informed Applicant that his application for adjustment of status was denied. See Gov’t Ex. B. The letter stated that Applicant had "obtained L-1 nonimmigrant status, extensions of stay as an L-1 nonimmigrant, [and] immigrant visa classification as an employment based immigrant by fraud and willful misrepresentation of material facts." Specifically, the letter stated that Applicant falsely claimed to have been employed by Greatis USA and falsely claimed that Greatis USA was a subsidiary of a Russian-owned company. The letter concluded that because his visas were obtained by fraud, Applicant was excludable pursuant to INA 212(a)(6)(C)(1).

Applicant was arrested and detained on June 27, 1996. The next day, Applicant was served with a "Notice to Applicant for Admission Detained for Hearing Before Immigration Judge" (NAAD). The NAAD stated that Applicant was excludable under INA 212(a)(6)(C)(I) and 212 (a)(7)(A)(i)(I). On June 28, 1996, Respondent was served with an Order to Show Cause (OSC). The OSC charged that Respondent was deportable under INA 241(a)(1)(B). In July 1996, both Applicant and Respondent filed applications for asylum based on their belief that they would be "persecuted by the Government and/or assassinated by the Russian Mafia if [they] return to Russia." See App. Ex. 69 & 70.

On September 20, 1996, this Court found by clear, convincing, and unequivocal evidence that Applicant was excludable and Respondent deportable. See Matter of Konanykhine, File No. A74-827-707 & A74-361-122 and Matter of Gratcheva, File No. A74-360-665 (Sept. 20, 1996) (hereinafter collectively referred to as "Konanykhine I"). The Court further found that because of Applicant’s fraud, he was ineligible for adjustment of status and that Respondent, as a derivative beneficiary of her husband’s application, was also ineligible to adjust status. The Court also found that although Applicant feared prosecution if returned to Russia, he did not fear persecution based on his race, religion, nationality, membership in a particular social group, or political opinion. Accordingly, his and Respondent’s application for asylum and withholding of deportation were denied. Applicant was ordered excluded and deported. Respondent was granted voluntary departure. Applicant and Respondent filed an appeal with the Board of Immigration Appeals (BIA or Board) on September 24, 1996.

The Service and Applicant and Respondent filed a "Joint Motion to Remove Case from Oral Argument Calendar" (Joint Motion) on July 31, 1997. In the Joint Motion, the Service agreed not to oppose Applicant and Respondent’s Motion to Remand, which had been filed on May 7, 1997. The Motion to Remand was predicated on new evidence that "critical evidence supplied by Russian military Prosecutor A.G. Volevodz and submitted by the [INS] to establish deportability and alleged inability for asylum and other relief from deportation was known by the Service to be manipulated and unreliable." By order dated August 29, 1997 and pursuant to the Motion to Remand and the Joint Motion, the Board remanded the case to this Court for a new decision. Besides providing the parties an opportunity to present additional evidence, the Board noted two matters that this Court should address: First, the Court should make specific findings with regard to the Respondent’s claims, to the extent that her claims are not entirely derivative to Applicant’s claims. Second, the Court should address whether termination and excludability findings can be made notwithstanding the evidence alleged to be tainted.

On April 1, 1998, both Applicant and Respondent filed with the Court supplemental applications for asylum (hereinafter referred to collectively as "1998 Asylum Application"). These applications contained more detail than the asylum applications filed in 1996. In these applications, they claimed eligibility for asylum based on political opinion—opposition to corruption and pro-democracy—and membership in a particular social group—uncorrupted successful Russian financiers, bankers, and business people.


During the week of December 7, 1998, seven witnesses testified: Applicant and Respondent, as well as five experts: Nikolai Petrov, Alec Sarkisian, Jim Moody, and Professors Peter H. Solomon and Louise I. Shelley. The Court also considered the submitted transcribed testimony of Yuri Shvets. In its post-trial brief, the Service objected to the admission of the following exhibits by Applicant and Respondent: 124, 128, 133, 134, 135, 138, and 139. The Court notes these objections and finds that the exhibits are admissible. The Court will give these exhibits appropriate weight.

Testimony of Applicant and Respondent

Applicant and Respondent both testified during the hearing. The Court finds their testimony credible.

Applicant’s career began when he founded a construction company while at university. In 1986, the university expelled him for "conduct unworthy of the calling of a Soviet Student." See App. Ex. 126. Applicant was also expelled from Lenin’s Communist Union of Young People of the Soviet Union. After his expulsion, Applicant’s companies thrived, partly because there was so little competition. According the his best estimate, Applicant had $10 million, mostly in cash, by 1989. With the marker reforms in Russia, Applicant was able to use his cash to buy greatly undervalued properties, and by 1992, his estimated worth was between $300 and $350 million. Applicant controlled scores of companies, including the Russian Exchange Bank, which he founded and in which he retained a 51% interest. See App. Ex. 70 & 132. Besides his business pursuits, Applicant was also politically active. He supported Russian President Boris Yeltsin well before Yeltsin became president. Applicant estimated that he supplied five to ten million dollars of in-kind goods and services to Yeltsin’s presidential campaign. This amounted to approximately 50% of Yeltsin’s total financial support. After Yeltsin became president, he gave Applicant a personal security detail consisting of 52 former KGB employees and allowed him the use of governmental dachas. Applicant also worked to oppose corruption. He formed two agencies, the Russian National Economic Security Service, which helped fight organized crime, and the Russian Detective Agency, which provided private businesses with security. See App. Ex. 132.

Many of Applicant’s high-level employees were former or current members of the Committee for States Security, the KGB. Some were also associated with Russian organized crime. Applicant employed these characters to protect him from the Russian Mafia. See 1998 Asylum Application. In mid-1992, a group which included several former KGB members tried to gain control of the Russian Exchange Bank by manipulating the shareholders. When this failed, they attempted to steal the bank’s assets. This too failed. In order to thwart the groups efforts, Applicant transferred $3 million of his own funds to the bank and, later, transferred $3.1 million of the bank’s assets to his personal account in Switzerland. After their first attempts were frustrated, the group thereafter demanded that Applicant give them a share of his holdings. They threatened to "cook" a criminal case against Applicant and to arrange for the murder of Applicant and members of his family. See App. Ex. 73. Applicant felt that he could no longer control the situation at the bank and that he could not rely upon the bank’s internal security for protection. Because they felt in danger, Applicant and Respondent left for Budapest. There, they had a house and maintained a Hungarian Residence, and Applicant had business operations.

On September 2, 1992, shortly after they arrived in Hungary, Applicant was "kidnapped" by men associated with the group that threatened him in Russia. While in a Budapest restaurant, Applicant and Respondent were approached by two men who claimed to be Hungarian security officers. They asked the couple to come with them, but Applicant insisted that his wife remain at the restaurant. The men agreed. Instead of taking him to the Hungarian Ministry of Security, the men took Applicant to an apartment where he met one of his employees, Vadim Avdeev, who had organized the kidnapping and who Applicant knew from Moscow. In the apartment besides Avdeev was a former member of the Russian Exchange Bank and two KGB men. Avdeev demanded that Applicant transfer funds belonging to the Russian Exchange Bank to him, that he resign from the Russian Exchange Bank, that he appoint Avdeev as acting president of the bank, and that Applicant transfer a significant portion of his personal assets to Avdeev. Under threat of death against him and members of his family, Applicant agreed to Avdeev’s proposal. Several people were then designated to escort Applicant back to his hotel, where they met Respondent and took the couple’s travel documents, as well as their cash.

Unbeknownst to the kidnappers, Applicant and Respondent had other travel documents (multiple passports were permitted under Russian law) and money in the hotel safe deposit box. Applicant retrieved the contents of the box, and the couple managed to leave the hotel unmolested. They then met friends, who drove them the Czechoslovakia from whence they flew to the United States, arriving in this country on September 3, 1992. They chose to come to the United States because, after comparing their travel documents, they found that this was the only country for which they both had visas. The Federal Bureau of Investigation (FBI) has gathered significant evidence to support this account of events. See Service Response to Updated Application for Asylum, Attachment D.

Once in the United States, Applicant immediately began writing letters to high-level Russian officials and to the media in an effort to convince them to begin an investigation. See App. Ex. 59, 61, 65, 119 & 126. This campaign was fruitless. Applicant also retained the law firm of Skadden, Arps, Slate, Meagher & Flom to represent his interests before the Hungarian and Russian authorities. Applicant received no result from these efforts until summer 1993, when he received an unofficial letter from the Russian Minister of Interior. The letter simply stated that the Russian government would not consider Applicant’s claims. Applicant attempted to make further inquiries, but these were unsuccessful. Around this same time, Applicant began publicizing his plight in the Russian press. In October 1992, for example, Applicant denounced the KGB and Mafia takeover of his bank in the Russian financial press. See 1998 Asylum Application. In 1993, Applicant publicized an article in Nezavisimaya Gazette entitled "I’m tired of living surrounded by men with automatic weapons." See App. Ex. 62. This article condemned the take over of Applicant’s companies by Vadim Avdeev, and lamented the criminalization of Russia. Later, in 1996, Applicant and Respondent wrote an article entitled "Mafiocracy," which they posted on the internet. See App. Ex. 142. In 1997, Applicant publicly renounced his Russian citizenship. Id.

Applicant tried to regain his assets with the help of an active-duty KGB agent, Colonel Ivanov, who was Applicant’s Chief of Personal Security. Ivanov was ultimately arrested and charged with stealing Applicant’s car. As a result of these events, he was dismissed from the KGB. Applicant testified that the car was never actually stolen--Ivanov had permission to use it. It seems likely that the car theft incident was fabricated as a pretext for dismissing Ivanov. See App. Ex. 139.

In July 1993, Applicant received a letter from A.G. Volevodz of the Office of Military Procurator in Moscow. The letter contained a long series of question related to Applicant’s allegations of criminal activity. See App. Ex. 8. Applicant filed an immediate response. See Id. Based on Applicant’s responses to that letter and subsequent letters, Volevodz began an investigation of the affair. In the spring of 1994, Applicant learned that Volevodz’s investigation shifted gears--Applicant himself was now the target of the investigation. See App. Ex. 29 & Gov’t Ex. L. & X. Volevodz charged that Applicant had stolen $8.1 million from the Russian Exchange Bank. See Gov’t Ex. V, W & X. In November 1994, Russian authorities delivered a letter rogatory to the United States embassy in Moscow. See Gov’t Ex. FF. The letter detailed the charges brought by Volevodz. Applicant testified that he feared that Volevodz was attempting to bring him to Russia in order to have him killed. Volevodz also charged that Respondent was a fugitive and requested that she be returned to Russia. See Gov’t Ex. V; App. Ex. 70; 1998 Asylum Application.

Volevodz accused Applicant of forging the signature of Karol Miller in connection with the alleged embezzlement scheme. In making this accusation, Volevodz relied upon a report by the Russian Federation Ministry of Defense Central Forensic Medicine Laboratory. An examination by a document expert in the United States revealed that there was more "dissimilarity than similarity" in a comparison between the allegedly forged signature and the signature of Applicant. See App. Ex. 127. In addition, the document expert noted that the Russian laboratory concluded that Applicant "probably" forged the signature even though the laboratory’s report found insufficient detail to draw any conclusion at all. Id. The Service asserts that the document expert was working with a flawed translation. See Service Post-trial Brief, p.33. Even if the more recent translation is assumed correct, the Russian laboratory’s "probable conclusion" that Applicant faked Karol Miller’s signature is insufficient for this Court to find that Applicant did, in fact, forge the signature. Moreover, Applicant himself testified that there was no need for him to forge the signature--he could have accomplished the same ends by signing his own name.

In August 1993, Applicant’s deputy at the Russian Exchange Bank, Aleksandr Lazarenko, complained to Russian authorities about some of the same men who organized the kidnapping of Applicant. See App. Ex. 138. He stated that Vadim Avdeev, among others, demanded property and assets from companies where Lazarenko worked. He also claimed that Avdeev had Lazarenko and his brother kidnapped and beaten. See id.; see also 1998 Asylum Application. The Russian authorities failed to take any effective action in response to Lazarenko’s complaint. See App. Ex. 138.

Early in 1995, the FBI informed Applicant that the Russian Mafia had placed a contract on his life with the New York Mafia. See Gov’t Ex. OO. Furthermore, Applicant submitted evidence that, if he were returned to Russia, he would be tried before a military court where he "has virtually no chance or prevailing because the practice is such that the prosecution cannot lose, regardless of the merits of the case." App. Ex. 129. Further, in an August 1993 article in Kommersant, a Russian periodical, Applicant’s nemesis,
Vadim Avdeev, is quoted as saying: "[I]n all my affairs, I follow the principles of economic expediency. And it tells me that it is not to our advantage to kill Konanykhine until the time when the bank gets the 3 million dollars back. But as for me, I would not give a single dollar for the life of this man." App. Ex. 57. A 1994 article in the San Antonio Express states that "More than a dozen Russian bankers have been slain in the past year, most of them for refusing to pay protection fees to criminal gangs." See App. Ex. 82. In November 1998, Galena Starovoitova, a member of the Russian Parliament known for her forceful opposition to political extremism and financial corruption, was gunned down in her apartment building. See App. Ex. 146. Her murder was "typical of Russian contract killings."

Concurrent with his letter writing campaign to Russian authorities, Applicant began to work on creating a subsidiary of A/O Greatis in the United States. To that end, Applicant hired the law firm of Jones, Day, Reavis & Pogue to incorporate Greatis USA and to assist him with extending his nonimmigrant status in the United States. Although Applicant had worked with A/O Greatis since before December 1991, it was not until that date that he formalized his relationship with that company. After Applicant explained that he worked at A/O Greatis for more than one year (a requirement for an L class visas), the Jones, Day lawyers recommended that he apply for an L-1 visa. In February 1993 A/O Greatis filed an L-1 visa petition on Applicant’s behalf. See Gov’t Ex. P. The petition was prepared by Jones, Day, and was approved by the INS shortly after it was filed. In order to get visa, Applicant and Respondent went to the United States embassy in Budapest. In order to protect themselves while in Hungary, they brought along an American lawyer since they believed it would be less likely that anyone would harm them if an American lawyer was present. Applicant thus received an L-1 visa. As a derivative of her husband’s application, Respondent received and L-2 visa. Later, Applicant and Respondent both received extensions on their L class visas. See Gov’t Ex. Q.

Greatis USA was incorporated in December 1992. The purpose of Greatis USA is to promoted the business of its parent company, A/O Greatis, a full service advertising firm. See Id. Greatis USA was created to facilitate and implement advertising by Russian companies in the United States and by American companies in Russia. In 1993, Greatis USA signed a $1.2 million contract with one of the largest banks in Russia--Manetep. At the time, Applicant was working for Manetep, In late 1994, in conjunction with the European Union Bank, Greatis USA created the first Internet-based, on-line banking system in the world.

In mid-1994, Volevodz visited the director of Manetep bank to inform him of the investigation against Applicant. Volevodz also contacted the United States Federal Reserve. Although it ultimately discontinued its investigation, the Federal Reserve initially questioned Applicant about Manetep’s banking activities in the United States. As a result of these events, Manetep stopped doing business with Applicant and Greatis USA.

In the mid-1990’s, Applicant helped form the European Union Bank in Antigua. Much of the bank’s internet work was done by Greatis USA. In fact, by 1995, the bank was Greatis USA’s largest client. Respondent testified that Russian officials let it be known that the bank was formed by an embezzler and a money launderer associated with the Russian Mafia. This weakened the bank and, in July 1997, Coopers & Lybrand, a major American accounting firm, released a report stating that there were reasonable grounds to believe that the bank was plagued by deceit and dishonesty. However, by this time Applicant had resigned from the bank. Later in 1997, the bank collapsed and investors lost money. Despite the difficulties encountered by the European Union Bank, there is no evidence suggesting that Applicant engaged in criminal activity.

In 1998, Applicant filed a lawsuit in the Arlington county, Virginia Circuit Court against ITAR-TASS, a Moscow-based international news agency. See App. Ex. 137. The suit alleged that ITAR-TASS defamed Applicant by falsely referring to him as a "swindler" and stated that he stole more that $8 million belonging to the Russian Exchange Bank’s depositors. According to his testimony, Applicant also sued Isvestia and other newspapers. See Supplement to Applicant’s and Respondent’s Pre-Hearing Statement, Attachment 4. He said that Isvestia made him a symbol for anti-capitalist forces. Applicant also testified that he has been made a scapegoat for the bad economy in Russia.

Testimony of Yuri Shvets

Volevodz’s efforts against Applicant have been disputed as illegitimate. In a civil case filed by Applicant against the INS, a Russian lawyer, and former KGB agent, Yuri Shvets, testified about the documents submitted to the United States by Volevodz. See App. Ex. 141. After reviewing the documents at the behest of the INS, Shvets concluded that they evidenced strong signs of a KGB covert operation to smuggle hard currency out of Russia. He testified that he told INS officers that the involvement of Volevodz, a military prosecutor, in a civilian case was the first indicator of a KGB covert operation. Shvets also testified that he recognized the names of active KGB officers in Applicant’s case. Shvets also testified that he told INS officers that Applicant would not receive a fair trial if returned to Russia and that by making public statements against corruption, Applicant had jeopardized the KGB operation. Shvets told INS officers that the KGB and the military prosecutor needed to "shut him down, to silence him, to make sure that he doesn’t make any statements any more" and to "send the strong message to other people, who were like Konanykhine in similar operations, that they shouldn’t follow his suit." Id. (Transcript pp. 34-35). If Applicant is returned to Russia, Shvets testified, Russian officials would need to "publicly crucify him." "[I]t doesn’t matter what he says or what his defense is going to say. It is all irrelevant. His fate is predetermined. He would be put in jail, and he will rot [to] death in the jail." Id. (Transcript pp. 35). Russian officials would ""create such an environment for him in jail that every single minute for the rest of his life he will dream to be executed, because [his] life will be intolerable." Id. This testimony was not available to the Court when it decided Konanykhine I.

Testimony of Jim Moody

Jim Moody is a 26-year veteran of the FBI with an extensive knowledge of Russian organized crime. He now owns a private security firm which specializes in overseas investigations. The Court fins Moody’s testimony to be reliable and credible. The testimony was also unbiased and clear. Moody testified that the criminal investigation of Applicant by a military prosecution was not unusual because KGB agents were involved in Applicant’s case. In Russia, cases involving KGB agents are usually within the purview of the military prosecutor. Moldy explained that while military prosecutors were less corrupt than their civilian counterparts, corruption in the military was still a "serious problem" and that this problem is "not minor." These statements echoed Moody’s testimony before Congress, where he stated that the "biggest obstacle facing Russian in its efforts to combat organized crime is the corruption within the government and corruption within the law enforcement community." App. Ex. 130. In his Congressional testimony, Moody also noted that "By far, the banking industry is the most vulnerable target for organized crime, as well as corrupt public officials." Id.

In the hearing before this Court, Moody testified that, based on his knowledge of crime and kidnapping, he did not believe Applicant’s kidnapping story. However, Moody also testified that Applicant would have gotten away with his alleged crime if he had not drawn attention to himself by writing letters to Russian government officials. He also stated that this one-year letter-writing campaign was unusual behavior for a criminal. He further noted that Applicant made little effort to hide the money he had allegedly stolen. One way to hide the money would have been to convert the money into cash and physically carry it from one bank to another. This method, unlike a normal electronic transfer, leaves no paper trail. Applicant never attempted to secret away money in this manner.

In April 1997, in a speech before the State Duma, Deputy Prime Minister Anatoly Kulikov accused Applicant of stealing $300 million. See App. Ex. 134. Moody discussed Kulikov’s accusation in his testimony. He speculated that the Russians may have had only enough evidence to charge Applicant with the theft of $8.1 million in the letters rogatory, even though they suspected him of stealing a much larger amount. He also admitted to another possibility: that Applicant was a scapegoat for the true criminals. Moody next discussed Applicant’s affidavit which was prepared in connection with Applicant’s civil litigation in Switzerland. The affidavit was prepared by Jones, Day, Reavis and Pogue. Moody explained that it was unusual for a lawyer to prepare an affidavit admitting to anything illegal. Probably the attorneys believed that no crime had been committed, Moody speculated. Moody also testified that it was strange for Applicant to transfer $3 million to the Russian Exchange Bank prior to withdrawing $3.1 million from the same bank. If Applicant intended to steal money from the bank, Moody stated, he would not have transferred his own money to the bank before committing the crime. Moody next commented on Applicant’s multiple passports. He stated that Russian business people who travel to many countries commonly hold multiple passports. Finally, Moody testified that Applicant was one of the first people to begin publicly exposing corruption in Russia and that those people in the government who were targeted for exposure would have had the ability to retaliate against Applicant judicially and extra-judicially.

Testimony of Alec Sarkisian

Alec Sarkisian is a former Soviet diplomat and criminal investigator who is now a United States citizen employed as a political, economic, and legal consultant on contemporary Russia. The Court found that the testimony of this witness was credible and reliable. Sarkisian testified that organized crime in Russia has a "very big" relationship with the government--it influences elections, corrupts employees, and tries to use government organizations to help implement criminal activities. He further testified that the Russian government seeks scapegoats to take the blame for society’s problems. He stated that if Applicant told the truth in the articles he published, he is likely to have a problem with the political/criminal justice system. Sarkisian also stated that once Kulikov announced to the Duma that Applicant had stolen $300 million, Applicant would no longer be safe in Russia and would not be able to get a fair trial there. Finally, Sarkisian testified that people who move money out of Russia are normally tried in civil court; Applicant’s case is therefore exceptional because he has been charged by a military prosecutor and would be tried before a military court.

Testimony of Nikolai Petrov

Nikolai Petrov is a Russian political analyst who currently serves as a scholar in residence at the Moscow Center for the Carnegie Endowment for International Peace. The court finds that his testimony was credible. Petrov testified that the Russian judicial system needs improvement. He also testified that it was easy to form banks in the early 1990’s and that many people used banks to launder money. Cooperatives and private security firms were also used for unlawful purposes. In his written statement, Petrov stated that although the Russian Military procuracy is not subordinate to the KGB, the two organizations are strongly related. See App. Ex. 148. Petrov stated that Applicant and Respondent would face danger from organized crime, from different factions in the government, and from hard core communists who want to use businesspeople as scapegoats. Finally, Petrov stated that Applicant would be vulnerable because he does not belong to any political "clans," and thus has no one to protect him.

Testimony of Professor Peter H. Solomon

Peter H. Solomon, a professor at the university of Toronto, was called as an expert witness to testify on Russia’s political atmosphere. The Court finds that his testimony was credible. Professor Solomon testified that Russia’s judicial system has gone through major changes since the fall of Communism, instituting reforms such as a presumption of innocence, a single standard of proof, and life tenure for judges. However, these reforms are not always followed and there is still some corruption throughout Russia’s judiciary and, to a greater degree, among Russian police. When questioned about possible corruption in the present case, Professor Solomon stated that there is no immediately apparent indicia of fabricated evidence by the Russian government. Professor Solomon did testify that there may still be political prosecutions, although he states that the judges in Russia are relatively adept at weeding out these cases. Professor Solomon noted that the present case is prosecuted at the highest level in Russia, with the Russian equivalent of our attorney general himself going to the United States embassy with the charge against Applicant.

Professor Solomon also testified that economic crimes are rampant in Russia, and that, before this case, he had not heard about any of them being prosecuted. Furthermore, if Applicant had not written letters exposing corruption in the Russian government, Professor Solomon stated, he probably would not have been prosecuted at all. Professor Solomon testified that he believed Applicant was being prosecuted for whistle blowing. He also stated that, if removed to Russia, Applicant would face at least thee years in overcrowded jails in sub-human conditions before his case would ever reach appeal. Professor Solomon testified that there are people who have written about corruption in the Russian government and who live in Russia today with no apparent problems. However, these people did not name names, as Applicant did. Other Russians who have written about specific people have been subject to persecution.

Testimony of Professor Louise I. Shelley

Louise I. Shelley is a professor at American University in the Department of Justice, Law and Society. She is also Director of the Center for the Study of Transnational Crime and Corruption at American University. Professor Shelly testified about fabricated prosecutions in Russia. The Court finds her testimony credible.

Professor Shelley confirmed that there have been fabricated prosecutions in the USSR and in post-communist Russia. Generally, these prosecutions are characterized by details and facts that can be controlled by the authorities/prosecutor. Professor Shelley said that, after looking at the information given to her about Applicant and Respondent’s case, she saw no indication that the prosecution was fabricated. She pointed out that the case was very complicated and involved international money transactions, which would be hard to control. Professor Shelley stated that it would have been easier to fabricate a case internally rather than one involving outside variables such as international currency flows and the Hungarian police.

Professor Shelley stated that there is now, in the post-Soviet period, less pressure on prosecutors to carry through on fabricated prosecutions. She also noted that the judiciary is more independent today than it was during the Soviet times. As to why a military prosecutor would be involved in Applicant’s prosecution, Professor Shelley stated that it was not unusual, since the case involved KGB personnel and possible state secrets. In such a case, military involvement would be appropriate.

Professor Shelley also testified on the phenomenon of capital flight, cooperatives, and the banking industry in Russia. She stated that the cooperative movement, which began in the late 1980’s, was tainted by organized crime from the beginning, especially in the construction industry. She also stated that banks in Russia are primarily "vacuum cleaners," collecting money and sending it out of the country. She also noted that there is scant similarity between a Russian bank and a bank in the United States. She stated that in Russia there is very little regulation, and that it is easier to establish a bank than to purchase a car.

Regarding Applicant’s kidnapping, Professor Shelley testified that it seemed implausible because the kidnappers were "too nice." She stated that the account was inconsistent with anything she has ever seen, because kidnappers in Russia tend to be very violent.

However, Professor Shelley also acknowledged that she was not aware of the details of Applicant’s case. For instance, she did not know that Applicant had contributed to Boris Yeltsin’s first presidential campaign, lived in a government dacha or had a security detail provided by Yeltsin.

OMITTED: parts A, and B1 of Legal Analysis


A. Excludability and Deportability

B. Asylum

1. Past Persecution

    1. Findings of Fact
    2. Political Opinion as a Grounds for Persecution
    3. Membership in a Particular Social Group as a Grounds for Persecution

2. Future Persecution

Applicant and Respondent claim that if they are returned to Russia, they will suffer from persecution because of their political opinion--opposition to corruption and support of democracy--and their membership in a particular social group--uncorrupted successful Russian financiers, bankers, and business people. See 1998 Asylum Application. As discussed above, "uncorrupted successful Russian financiers, bankers, and business people" is not a coherent social group. Accordingly, no relief will be forthcoming based upon that ground. However, Applicant and Respondent have demonstrated that they have a well-founded fear of persecution based on their political opinion.

The burden of establishing eligibility for asylum is on Applicant and Respondent. See Cardoza-Fonseca, supra. As noted above, Applicant and Respondent must demonstrate that they have a well-founded fear of persecution on account of their political opinion. See Elias-Zacarias, supra. One can have a well-founded fear of persecution even when there is less than a 50% chance of the persecution actually taking place. See Cardoza-Fonseca, 480 U.S. at 431. Relying on a "leading authority" in immigration law, the Supreme Court states, "Let us … presume that it is known that in the applicant’s country of origin every tenth adult male person is either put to death or sent to some remote labor camp… In such a case it would be only too apparent that anyone who has managed to escape from the country in question will have [a] ‘well-founded fear of being persecuted’ upon his eventual return." Id. (quoting 1 A. Grahl-Madsen, The Status of Refugees in International Law 180 (1966)). ‘The very low 10 percent chance factor, articulated [in] Cardoza-Fonseca, supra, recognizes the fact of our international obligations, as codified in domestic statutes, and anticipates that we should afford, at least, a finding of eligibility for protection to all those who appear to have a ‘well-founded fear.’" Matter of A-E-M-, Int. Dec. 3338 (BIA 1998).

"For the most part the Board has not considered that joining protest groups and making public statements after entering the United States supports" a finding of persecution. Matter of Nghiem, 11 I&N 541, 544 9BIA 1966). Where an alien "participated in absolutely no political activity of any sort prior to coming to the United States," his "application is weakened." Matter of Kojoory, 12 I&N 215, 219 (BIA 1967). However, neither of these cases precludes a finding of persecution even when that claim is based largely on political activities that took place in the United States. In Nghiem, for instance, the Board left open the possibility that an alien could be granted asylum where he established that he is "wanted by his government." See Nghiem, 11 I&N at 544. Nghiem did not hold that political activity in the United States would never support a finding of persecution; it held only that, "[f]or the most part," political activity in this country would not support a finding of persecution. In Kojoory, the BIA found that the alien had not "borne the burden of establishing that he will be persecuted on account of race, religion or political beliefs if returned to Iran," See Kojoory, 12 I&N at 219. Kojoory also held that an alien’s application is "weakened" when the alien has not been politically active in his home country. Kojoory did not hold that the alien is precluded from relief where he or she has been apolitical at home. The clear implication of Kojoory is that the alien could have established eligibility for asylum had he demonstrated reasonable likelihood that the Iranian government would persecute him for his political activities in the United States. Based on the above, the Court finds that Applicant and Respondent rely on their political activities in the United States to demonstrate a well-founded fear of persecution in Russia so long as their activities were genuine and were not committed for the purpose of creating a contrived asylum claim.

Where an alien has participated in "absolutely no political activity" in his or her home country, it will be difficult to establish that the purpose of the alien’s political activity in the United States is genuine. In this case, Applicant did participate in political activity before he escaped to the United States. First, Applicant was a strong supporter of Boris Yeltsin’s successful 1991 presidential campaign. He contributed approximately $10 million in-kind to Yeltsin’s campaign--this represented approximately 50% of Yeltsin’s total expenses. As a reward for his help, Yeltsin brought Applicant on his first formal trip to the United States to meet President Bush, and he gave Applicant bodyguards and the use of a lavish government dacha formerly used by Russian President Mikhail Gorbachev. Applicant contributed to Yeltsin’s campaign in order to support reform in Russia. Yeltsin’s early reforms included legislation to end the repressive political activity of the former KGB by dividing it into two separate agencies, banning those agencies from monitoring domestic political activities, requiring them to respect human and civic rights, and establishing presidential and legislative oversight of each agencies’ activities. See Country Reports on Human Rights Practices for 1992, p.884. Yeltsin’s platform also stood for democracy, as well as political and economic reform. See id. Applicant also started two companies to fight organized crime and to provide private security to businesses, the Russian National Economic Security Service and the Russian Detective Agency. In addition, Applicant’s expulsion from university and from Lenin’s Communist Union of Young People of the Soviet Union demonstrates his early commitment to free market reform and anti-communism.

As noted above, an alien’s activities in the United States are relevant to showing whether he will be persecuted at home as long as the activities were genuine and were not committed for the purpose of contriving an asylum claim. After reviewing the evidence and testimony, the Court finds that Applicant and Respondent’s efforts to expose corruption and promote democracy in Russia were genuine. The Service has presented no evidence to show that Applicant and Respondent’s letter-writing campaign was effected for the purpose of concocting a basis upon which asylum might be granted.

After Applicant lost his fortune, he fled to the United States and began writing letters to high level Russian officials in an attempt to prompt an investigation. Applicant and Respondent also wrote letters to the Russian media and posted articles on the internet. These letters and articles named specific individuals who had participated in the attack against Applicant and the theft of his wealth. The letters and articles also indicated that Russia’s fledgling democracy was threatened by a KGB-criminal alliance, and that the criminals were seeking domination of Russia’s banking sector and other key institutions. Expert testimony, especially that of Jim Moody before the Congress and during the hearing before this Court, demonstrated that Applicant and Respondent’s allegations were not unfounded. In addition, Applicant hired a prestigious law firm to press his case in Russia and Hungary, and to expose the takeover of his business by KGB and Russian Mafia. Further, Applicant filed a defamation lawsuit against ITAR-TASS after that news service referred to him as a "swindler." The Court finds that these activities evidence Applicant and Respondent’s genuine desire to expose corruption in Russia, and promote democracy and the rule of law.

There exists manifest evidence that Applicant and Respondent will be persecuted for their political activities if returned to Russia. In response to Applicant and Respondent’s letter writing campaign, an investigation was launched by A.G. Volevodz, a military prosecutor in Moscow. However, by early 1994, the focus of the investigation shifted to Applicant. Volevodz charged that Applicant had stolen $8.1 million from his own bank. Volevodz also accused Respondent of being a fugitive, even though she was accused of no crime. In 1993, Applicant’s deputy at the Russian Exchange Bank was kidnapped and beaten, The deputy’s brother was kidnapped and beaten in the same incident. Also in 1993, Vadim Avdeev stated in a news article that the would not give one dollar for the life of Applicant. In 1995, Applicant learned that the Russian mafia had placed a contract on his life. In 1997, Deputy Prime Minister Anatoly Kulikov accused Applicant of stealing $300 million.

Based on the testimony and evidence which has come to light subsequent to Konanykhine I, the Court now finds that Volevodz engineered the case against Applicant in order to secure his return to Russia. Volevodz wanted Applicant returned to Russia in order to punish him for exposing corruption amongst Russian government and business officials. According to an expert on KGB operations, Yuri Shvets, the KGB hopes to make an example of Applicant in order to dissuade others from speaking out against corruption and in favor of democracy. Jim Moody testified that Applicant was one of the first people to begin publicly exposing corruption in Russia and that those people in the government who were targeted for exposure would have had the ability to retaliate against Applicant judicially and extra-judicially. The expert witnesses disagreed about whether the involvement of a military prosecutor in a civilian case was unusual. Yuri Shvets and Alec Sarkisian said that it was, Jim Moody and Professor Shelley disagreed. However, all the experts agreed that corruption among prosecutors in Russia is a serious problem. Professor Solomon stated that if not for his letter writing campaign, Applicant would not have been prosecuted at all. In fact, he stated that although economic crimes are rampant in Russia, he has heard of only one such case being prosecuted--Applicant’s. Professor Solomon also stated that other Russians who have written about specific people being corrupt have been subject to persecution, and that he believes Applicant is a whistle blower. Moody also testified that Applicant probably would not have been prosecuted if he had not drawn attention to himself by publicizing his plight. Finally, David Satter, an expert on Soviet and Russian affairs who submitted a written statement in support of Applicant and Respondent, stated that "In light of the fact that more than $350 billion has been removed from Russia illegally in the last ten years and considering the [Ministry of the Interior’s] well known laxity in pursuing cases of corruption, it is hard to understand the [Ministry’s] disproportionate interest in Mr. Konanykhine’s case." See App. Ex. 140. Based on the foregoing, the Court finds that Applicant and Respondent are being sought by Volevodz in order to punish them for expressing their political opinions about corruption and about the criminalization of government in Russia. See Matter of Janus and Janek, 12 I&N 866, 873 (BIA 1968) (prosecution as punishment for expressing a political view may be persecution).

If returned to Russia and imprisoned, Applicant would, according to Professor Solomon and Yuri Shvets, face subhuman conditions, including severe over-crowding, rampant tuberculosis, and other communicable diseases. Solomon testified that the likelihood of acquittal was almost non-existent and that, even if he was acquitted, Applicant would still face at least three years in prison. The harsh conditions in which Applicant would be kept, combined with the length of incarceration even if Applicant is found not guilty, contribute to the Court’s finding that Applicant would face persecution if returned to Russia. See Fatin v. INS, 12 F.3d 1233, 1240 (3rd Cir. 1993) (persecution includes "threats to life, confinement, torture, and economic restrictions so severe that they constitute a threat to life or freedom").

In April 1997, Deputy Prime Minister Kulikov told the Duma that Applicant had stolen $300 million. The Court finds the $300 million figure fanciful; it serves as evidence that some members of the Russian government are willing to engage in hyperbole against Applicant in order to secure his return to Russia. Sarkisian stated that once Kulikov announced that Applicant stole $300 million, it would be impossible for him to get a fair trial in Russia. Moody echoed this view--he testified that Applicant might be a scapegoat for real criminals. The zealous and exaggerated attacks against Applicant suggest that the charges are not legitimate and that he is being sought because his political statements were damaging to corrupt government official. Were the charges legitimate, there would be no need for such exaggeration and distortion. In addition, the fact that Kulikov’s charge was made so recently, indicates that the danger in Russia to Applicant and Respondent had not abated.

In 1993, Applicant’s deputy at the bank and the deputy’s brother were kidnapped and beaten by the same group that attacked Applicant. Not only does this demonstrate the continuing danger to Applicant, it also shows that the men who attacked Applicant are willing and able to use force, and that the Russian authorities are unable or unwilling to provide protection. Further, the attack against the deputy banker’s brother shows that these men are able and willing to attack the relatives of their principle victims; thus, Respondent is in danger because these men have targeted her husband.

Also in 1993, Vadim Avdeev, the leader of the group that took over Applicant’s bank and threatened this life, stated in the Russian publication Kommersant that: "[I]t is not to our advantage to kill Konanykhine until the time when the bank gets the 3 million dollars back. But as for me, I would not give a single dollar for the life of this man." This implied threat in a public forum indicates that Avdeev does not fear the authorities in Russia. It also demonstrates Avdeev’s strong desire to inflict harm on Applicant.

Finally, the evidence indicates that the murder of Russian businesspeople in general, and bankers in particular, is not uncommon in Russia. For example, a 1994 article in the San Antonio Express states that "More than a dozen Russian bankers have been slain in the past year, most of them for refusing to pay protection fees to criminal gangs." In November 1998, Galena Starovoitova, a member of the Russian Parliament who forcefully opposed corruption, was gunned down in her apartment building. The murder appeared to be a contract killing.

Based on the foregoing, the Court finds that Applicant and Respondent have a well-founded fear of persecution on account of their political opinion if they are returned to Russia. Furthermore, it is apparent that the men who seek to harm them cannot be controlled by the Russian authorities. Accordingly, Applicant and Respondent have met the statutory requirement for a grant of asylum.

In addition to demonstrating statutory eligibility for asylum, an alien must also show that he or she merits a favorable exercise of the Court’s discretion. There exists no substantial facts which would cause the Court to exercise its discretion negatively. Accordingly, the Court will grant to Applicant and Respondent the refuge of asylum in the United States in the exercise of its discretion. The following orders will be entered:


It Is ordered: that Applicant’s application for asylum under INA 208(a) be GRANTED.

It Is Further Ordered: that Applicant be admitted to the United States as a refugee.

It Is Further Ordered: that Respondent’s application for asylum under INA 208(a) be GRANTED

It Is Further Ordered: that these proceedings be terminated.


February 19, 1999

John Milo Bryant
United States Immigration Judge