Now that the money-laundering part is clear, let us see what the embezzlers were doing to scrub their tarnished reputations clean, and that is where the fraud saga took a stunning plot twist.

Just to be clear, Leontiev and Zheleznyak did not embark on a reputation-laundering journey because they suddenly got filled with remorse for the crimes they had committed and sought to start with a clean slate. Of course, not. It was about the money and their own safety.

Indeed, making enemies seems to be part and parcel of someone pilfering one billion bucks. There are the victims of the scam naturally seeking justice and reimbursement. Then there are the foreign financial intelligence agencies busting their chops to build an airtight court case. The fraudsters are in for quite a ride. Here they have their accounts frozen. Others want them to be extradited. And they can never discount the odds of being prosecuted for money laundering in a Western country.

But once you have conjured up a reputation as a victim of an autocratic rule and convinced everyone that the embezzlement charges are politically motivated, you get a shot at having your assets back and winning an extradition court case. Therefore, investing in your suddenly revamped reputations can pay off big time.

But invoking politics was not exactly Leontiev’s or Zheleznyak’s brainchild. The two had notable predecessors.

In 2011, Andrei Borodin, the former president of Bank of Moscow, fled Russia and applied for political asylum in the U.K. At the time, the bank came under scrutiny over using a shell firm to withdraw over $400 million.

Sergei Pugachev, Mezhprombank’s beneficiary, also insisted he was being persecuted as a political dissenter. As a result, his name got struck off Interpol’s wanted list, even though in 2010, the official inquiry uncovered a $2B gap in Mezhprombank’s finances.

How were the devious banksters supposed to cook up a credible theory proving their political affiliations, seeing as they had none?

The most popular methods include cooperating with famous organizations or non-profits, doing charity work, and mingling with well-respected public figures.

The banksters decided to go for the ACF affiliations. They took part in the foundation’s events, snapped pictures of them alongside the famous members, donated the money, and even infiltrated the company’s management structure. The ACF employees were penning letters of support and publicly pledged their trust in the bankers’ reputation. They could not have asked for more, right?

The second tactic is doctoring the media coverage. Ordering a couple of puff pieces, making sure the smear mentions are limited to a bare minimum, and hiring seasoned public relations wizards with great command of the local media landscape.

In October 2021, an American lawyer named Jonathan Reich made an appearance on Free Russia’s Foreign Office podcast. The host and the attorney discussed how Russia “manipulates the anti-money laundering systems.”

Now, what makes Mr. Reich and the podcast episode he appeared on worthy of a separate chapter? The thing is, Jonathan Reich hails himself as a provider of “creative legal strategies.” Besides, he represents Sergei Leontiev. Credit where credit is due: the strategy he came up with for Leontiev was creative indeed. Under it, his client is posing as an exiled political dissident targeted by the Russian regime.

But back to the podcast. The episode in question features Mr. Reich breaking down Leontiev and Zheleznyak’s criminal defense strategy leveraging the motif of honest entrepreneurs being politically persecuted. Go ahead and give it a listen or read the episode’s transcript.

Throughout the episode, the host and the guest discussed if Russian authorities could at all be trusted when it came to financial crime. After all, Russia is an autocracy and a kleptocracy that cannot be taken seriously. Reich doubts that European financial intelligence agencies should seize any assets in countries like Switzerland solely based on the Russian oversight agency’s claims that those were stolen from Russia.

Besides, he goes on to question the integrity of Western financial intelligence units investigating Russian entrepreneurs and their money because these institutions may, too, be bribed by the Putin regime.

Reich then argues that any money withdrawn from the Russian banks should be, by default, considered clean without even bothering to look into the evidence offered by the Russian side. In addition, he basically says there is essentially nothing wrong with money laundering. According to him, it is merely the movement of assets. After all, honest money can, too, be shoved back and forth to hide the origin of these funds.

But again, like we said in the chapter on money laundering, an attempt to hide the funds’ origin is considered a felony regardless of the origin’s “cleanliness”.

Nonetheless Reich’s musings clarifies the logic that underlies Leontiev and Zheleznyak’s whole criminal defense strategy. That very logic spawned the political aspect narrative with regards to Probusinessbank’s fraud allegations.

What is the upside to this narrative? If swallowed by the foreign courts, it will lead them to drop the charges without trying the case on the merits. They will refuse to look into the official records or interrogate the witnesses in a bid to find out if the money has indeed been stolen and needs to be returned to its rightful owners. The political argument will outweigh it all and help the fraudsters keep the money and remain free.

But it takes more than just fleeing abroad and declaring yourselves political exiles and regime critics for the persecuted bankers narrative to get off the ground. The courts are not exactly known for their disarming credulity, and this excuse may prove a tough sell. It is further exacerbated by the evidence pointing to Probusinessbank’s scheming.

Importantly, these events were unfolding in the mid-to-late 2010s when Russia was not yet a pariah state. Russia’s law enforcement was still fruitfully cooperating with their foreign counterparts in the anti-money laundering department. The bankers needed solid proof of their story. In July 2017, the duo got a lucky break.