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The looting of Golden ADA appears, finally, to be over.
But appearances are never what they seem when it comes to Golden ADA and the Committee for the Russian Federation on Precious Metals and Gems.
Picking Over the Carcass. San Franciso, 1996 and 1997.
Even though Golden ADA was bankrupt, in every sense of the word, when the IRS closed in, none of the firm's creditors would try to force it into bankruptcy for two years. And those two years appear to have been very good for Rajiv Gosain.
Space precludes detailing the imaginative scope of Gosain's activities, as laid out in the court record. One scheme would have liquidated Golden's $165 million debt by trading worthless Russian Treasury bonds for it. This does not come to fruition; the Russian government finally is blanching at the mention of Golden ADA.
There are, of course, the usual unusual expenditures. Gosain authorizes $2,000-a-day fees for two consultants at one of his companies, Intergest India International, to visit San Francisco. The final bill is $230,000. He authorizes a New Delhi law firm, Abacus Legal Group, to perform $230,000 of unspecified legal work. He runs up tens of thousands of dollars traveling the world on Golden's American Express card with Golden's receptionist, Barbara Page. In a four-month period, Gosain extracts $587,605 from the Golden gas stations' cash receipts, according to a Vietnamese woman named Mai Vu, who manages the string of Shell franchises.
In short, for two years Rajiv Gosain lives a life of luxury, financed by Kozlenok's leavings. But on Feb. 25, 1997, Mai Vu becomes Gosain's -- and the Committee's -- biggest nightmare when she files a Chapter 7 action against Golden ADA, finally forcing the company into involuntary bankruptcy.
Charles E. Sims is appointed bankruptcy trustee, with full powers of ownership over Golden ADA. Sims hires Pillsbury Madison & Sutro LLP as his lawyers.
And after lengthy investigation, Pillsbury bankruptcy partner Andrea Wirum brokers a multilawsuit settlement deal between the Russians and the IRS that makes lesser creditors whole. When the settlement is announced in April 1998, the Russian press trumpets it as a tremendous victory by the Russian government over "ravenous western tax collectors," and the criminal mastermind, Andre Kozlenok.
Diamonds Aren't Forever, They Just Seem To Be. April 1997 to Date.
True to its film noir story line, the denouement of the Golden ADA saga is suffused with almost artistic levels of irony and black humor. The settlement of Golden's affairs brokered by the bankruptcy trustee, for instance, is simultaneously an utterly reasonable attempt to untangle an astonishing mess, and a tragicomedy of multimillion-dollar dimensions.
On the reasonable side of that agreement, the Russian government allows the IRS and legitimate creditors of Golden ADA to be paid first.
The IRS has reduced its $100 million claim against the firm to $10.6 million.
Golden's smaller creditors will share $2 million of Golden's remaining assets.
Charles Sims, the bankruptcy trustee handling the Golden estate, expects that he and his lawyers will have been paid $2.3 million by the end of the case.
An army of lawyers, accountants, receivers, appraisers, taxing agencies, and bankers -- who have been feeding off more than a dozen Golden ADA-related lawsuits for nearly three years -- will pull down another $4 million or so.
The Committee for the Russian Federation on Precious Metals and Gems, which originally sued for $165 million, is expected to receive about $25 million.
And then come the other claims.
Rajiv Gosain -- now ambassador-at-large for the Republic of Liberia, a title that cost Golden ADA $20,000 -- recently filed papers claiming he is owed $30 million by the Golden ADA estate. Under the settlement, he may walk away with more than $3 million.
Russian oil and timber magnate Andre Chernukhin, the clever shadow who reportedly lives on the island of Cyprus, main-tains a multimillion-dollar claim against Golden ADA.
And Mai Vu contends she is the rightful owner of 10 percent of Kozlenok's Golden ADA stock, based on an oral promise from Irina Kozlenok.
As Golden ADA's remaining known assets are passed out to the deserving and the conniving alike, the high-level officials who are supposed to have had roles in the fiasco appear to be prospering. And it has never been a worse time to be Golden ADA small fry.
New Russian Minister of Taxation Boris G. Fyodorov, who is accused in official investigative reports of defrauding his government of tens of millions of dollars, was described recently as a "tough, brilliant and arrogant advocate of liberal market reforms" in an Associated Press dispatch from Moscow that ran under this headline: "Russians Believe in New Tax Chief."
It is unclear, at this point, who believes in Ashot Shagirian. Traveling on a Dominican passport that cost him $75,000, Shagirian was arrested on April 8 in London under an Interpol warrant based on Russian charges. He was headed to the U.K. from Capetown, South Africa, via Antigua. Since the British have no extradition treaty with Russia, they deported Shagirian to Antigua, which also has no extradition treaty with Russia. Antigua sent Shagirian to Puerto Rico, where U.S. marshals grabbed him. He has agreed to a plea bargain related to tax fraud charges, and is currently under house arrest at his mother's home in Burbank, Calif.