Justice Department's indictment of Semion Mogilevich

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Ukraine and Russia, in order to make it more difficult for law enforcement authorities, securities regulators, as well as YBM’s auditors and forensic examiners, to uncover the true nature of their criminal operations. B. THE GENESIS OF THE NETWORK OF YBM COMPANIES 31. Commencing in or about January 1993, the defendants, MOGILEVICH, FISHERMAN and BOGATIN, and others known and unknown to the grand jury, formulated plans to establish and control a new, publicly-owned company in North America (which became known first as PRATECS, and later as YBM). It was part of the scheme to defraud that this publicly-owned company would be given the appearance of an international magnet manufacturer and distributor, and would be structured in such a way that it could sell its stock on the securities exchanges, first in Canada and, eventually, in the United States. It was the defendants’ intention to build the scheme around a Canadian publicly-owned company because the defendants believed securities regulations in Canada were more lenient than in the United States, and provided the easiest access to the North American capital markets. 32. To carry out this scheme to defraud, in a series of corporate mergers and acquisitions involving companies owned and controlled by defendant MOGILEVICH, namely, YBM MAGNEX, ARIGON, MAGNEX RT and ARBAT, as set forth in paragraphs 32a-32e below, the defendants took the following steps, among others, to create the publicly-owned company, PRATECS/YBM, and to ensure that MOGILEVICH would have effective control of the resulting publicly-owned company. (a) Defendant MOGILEVICH authorized and financed the plans to fund this venture by providing seed money totaling approximately $2.4 million through his offshore 16
company ARIGON between approximately February 1993 and November 1995. This money was funneled through bank accounts of ARIGON to bank accounts controlled by defendant BOGATIN in the Eastern District of Pennsylvania, in order to pay expenses related to the creation, promotion, and operation of the public company, as well as to acquire stock of the public company. (b) In or about February 1994, the defendants, MOGILEVICH, FISHERMAN and BOGATIN, and others known and unknown to the grand jury, caused the creation of YBM MAGNEX in Pennsylvania. Subsequently, in or around December 1994, as part of the scheme to defraud, YBM MAGNEX acquired ARIGON as a wholly-owned subsidiary, along with ARIGON’s subsidiaries, MAGNEX RT and ARBAT. (c) In or about March 1994, the defendants, MOGILEVICH, FISHERMAN and BOGATIN, and others known and unknown to the grand jury, caused the creation of PRATECS, the Canadian shell corporation, that was to become the public company. Defendant BOGATIN served as a Director of PRATECS/YBM from the time of its creation until at least September 1998. PRATECS became a publicly-owned company in July 1994 through a public offering of its stock in Canada. (d) On or about October 31, 1995, PRATECS acquired YBM MAGNEX and its wholly-owned subsidiaries, ARIGON, MAGNEX RT, and ARBAT. Thereafter, in or about November 1995, PRATECS changed its name to YBM MAGNEX INTERNATIONAL, INC. (e) In or about April 1996, UNITED TRADE became a wholly-owned subsidiary of YBM. UNITED TRADE acquired the assets of ARIGON, including the 17
Page 1 and 2: IN THE UNITED STATES DISTRICT COURT
Page 3 and 4: operated businesses, described here
Page 5 and 6: Indictment, MOGILEVICH resided in B
Page 7 and 8: The Network of YBM Companies YBM Ma
Page 9 and 10: YBM Network of companies and did no
Page 11 and 12: ORIGON's bank account in Israel wer
Page 13 and 14: 25. The Toronto Stock Exchange (“
Page 15: Network of YBM companies, including
Page 19 and 20: for stock in YBM MAGNEX. As a resul
Page 21 and 22: investors, recorded, and caused to
Page 23 and 24: UNITED TRADE had a diverse customer
Page 25 and 26: productive between September and De
Page 27 and 28: UNITED TRADE and MAGNEX RT to be ap
Page 29 and 30: ARBAT, ARIGON, and MAGNEX RT; (2) e
Page 31 and 32: (b) On or about November 20, 1997,
Page 33 and 34: 43. At various times during the sch
Page 35 and 36: listed: Defendant Amount (a) FISHER
Page 37 and 38: and investing money received from t
Page 39 and 40: The Scheme To Defraud 9. The defend
Page 41 and 42: circumstances under which they were
Page 43 and 44: Bank of Scotland, London, England (
Page 45 and 46: 18 1/26/97 Facsimile of false audit
Page 47 and 48: (ph# 215-579-5695) to FISHERMAN, in
Page 49 and 50: Solis-Cohen, 111 South 15 th Street
Page 51 and 52: Overt Act Date Description Transfer
Page 53 and 54: Overt Act Date Description Transfer
Page 55 and 56: COUNTS TWO THROUGH TWENTY-THREE (Wi
Page 57 and 58: 8 7/2/97 Facsimile of false “sale
Page 59 and 60: 21 5/12/98 4:50 p.m. 22 5/13/98 9:1
Page 61 and 62: Count 24 Date 3/5/95 Description Fa
Page 63 and 64: 3. The defendants violated those pr
Page 65 and 66: COUNT THIRTY-TWO (Filing False Repo
Page 67 and 68:
THE GRAND JURY FURTHER CHARGES: COU
Page 69 and 70:
transportation, transmission and tr
Page 71 and 72:
10/28/96 Proceeds totaling approx.
Page 73 and 74:
Date Description Transferred from T
Page 75 and 76:
Date(s) Description Sold & Transfer
Page 78 and 79:
COUNTS THIRTY-SIX THROUGH THIRTY-NI
Page 80:
COUNTS FORTY THROUGH FORTY-FIVE (Mo
Page 83 and 84:
THE GRAND JURY FURTHER CHARGES: NOT
Page 85 and 86:
NOTICE OF FORFEITURE (Money Launder
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Justice Department's indictment of Semion Mogilevich

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