Mobster or Central Banker? Spanish Cops Allege This Russian Both

2011 Russia Day Awards

Russian Prime Minister Vladimir Putin, Federation Council Deputy Chief Alexander Torshin, and State Duma Speaker Boris Gryzlov.

Photographer: Konstantin Zavrazhin/Getty Images
  • Torshin called ‘boss’ by alleged mafia members, police say
  • ‘I’m a public individual and I’m not hiding anywhere’: Torshin

A former senator in Vladimir Putin’s United Russia party directed dirty-money flows for mobsters in Moscow before he was named a deputy head of the central bank last year, according to investigators in Spain.

Alexander Torshin instructed members of the Moscow-based Taganskaya crime syndicate how to launder ill-gotten gains through banks and properties in Spain while he was a deputy speaker of the upper house of parliament, the Spanish Civil Guard said in a confidential report, seen by Bloomberg, on a three-year probe that ended in 2013. Torshin denies any wrongdoing and said his ties to the alleged Taganskaya leader in Spain, Alexander Romanov, are purely social. Torshin hasn’t been charged or summoned in relation to the report.

“Within the hierarchical structure of the organization, it’s known that Russian politician Alexander Porfirievich Torshin stands above Romanov, who calls him ‘godfather’ or ‘boss”’ and conducts “activities and investments” on his behalf, investigators concluded in the report. Romanov was sentenced to almost four years in a Spanish prison in May, after pleading guilty to illegal transactions totaling 1.65 million euros ($1.83 million) and $50,000. 

Spain has been at the vanguard of European and U.S. efforts to eradicate suspected Russian criminal networks, whose tentacles prosecutors say reach into the highest echelons of power in Moscow. A Spanish judge earlier this year issued arrest warrants for 12 Russians as part of the crackdown, including two top officials, one of whom got his warrant dismissed on appeal.

Trump, NRA

The allegations related to Torshin in the Civil Guard report are based on recordings made of phone conversations he had with Romanov in 2012 and 2013, as well as documents seized during a raid on a villa on the island of Majorca that Romanov owned at the time. Cristobal Martell, a lawyer for Romanov, didn’t respond to e-mails and calls seeking comment.

Torshin said in an interview at the central bank’s headquarters in Moscow that he first met Romanov in the early 1990s and that they later worked at the bank at the same time, Torshin in the position he has now and Romanov as a lower-level employee. The two men kept in touch off and on, he said, but haven’t spoken since Romanov was arrested in Spain almost three years ago. He admitted to being a godfather, but only in the Russian Orthodox sense, to Romanov’s teenage son, who was baptized in 2000.

“I’m a public individual and I’m not hiding anywhere,” Torshin said.

Torshin, a veteran politician who served as deputy speaker for more than a decade, said his network of contacts extends to the U.S., where he’s a member of the National Rifle Association. He said he’s met Republican presidential nominee Donald Trump and in May shared a dinner table with the billionaire’s son, Donald Trump Jr., at the gun lobby’s annual convention in Louisville, Kentucky. He keeps photos of the event on his computer tablet.

Neither the Trump campaign nor the NRA responded to requests for comment.

FSB, Politics

One of Torshin’s superiors at the bank between 1995 and 1998, former First Deputy Governor Sergey Aleksashenko, said Torshin may have returned to his old post at the behest of the Federal Security Service, or FSB, with which he appears to have longstanding ties. Aleksashenko, a former head of Merrill Lynch in Moscow, is now a senior fellow at the Brookings Institution in Washington.

At the time he left parliament, Torshin, as deputy speaker, was part of the powerful National Anti-Terrorism Committee, a state body whose members include the director of the FSB and the ministers of defense, interior and foreign affairs. He may be best known in Russia for leading the official inquiry into the 2004 Beslan school siege that left 334 dead, more than half children. His report concluded that the worst terrorist attack in modern Russian history could have been prevented if local police had followed orders from Moscow to intensify surveillance and tighten security.

Torshin, who keeps a small bust of Putin next to an Orthodox icon in his office, didn’t elaborate on his FSB ties beyond what is publicly acknowledged. The FSB’s press service in Moscow didn’t respond to a request for comment. The central bank’s press service said only that Torshin was hired by Governor Elvira Nabiullina for his political acumen.

“The need for a better quality of interaction with the legislature became particularly evident during the acute phase of the decline in oil prices and the subsequent decline of the ruble at the end of 2014,” the bank said.

A senior Spanish official said on condition of anonymity that prosecuting Torshin isn’t worth the effort because Russia doesn’t cooperate in cases involving high-ranking officials. The press services of the Civil Guard and the prosecutors office didn’t respond to requests for comment.

‘Mafia’ State

In a 488-page complaint reviewed by Bloomberg last year, the product of a decade of investigations, Spanish prosecutors said members of another Russian syndicate, the St. Petersburg-based Tambovskaya group, moved into Spain to launder criminal proceeds in 1996, when Putin was deputy mayor of the former czarist capital.

One of the prosecutors who wrote that report, Jose Grinda, told U.S. officials in 2010 that Putin runs a “virtual mafia” state where the activities of criminals are indistinguishable from those of the government, according to a classified cable from the U.S. Embassy in Madrid that was published by WikiLeaks. Grinda declined to comment.

Romanov may be sidelined in jail, but that hasn’t curtailed Russian criminal activity in Spain. In June, Spanish police announced the detention of eight people accused of moving money for both the Taganskaya and Tambovskaya groups, according to Spain’s ABC newspaper. Police said the raid, in Catalonia, led to the freezing of 142 bank accounts and 191 properties.

Prosecutors said in a summary of their case against Romanov that one of the sources of funds that he laundered related to the Taganskaya mob’s violent takeover of a prime piece of Moscow real estate, the Univermag Moskva department store, during which a lawyer was murdered. 

Kremlin Partners

The documents recovered from Romanov’s villa show that Torshin used his position as a senior legislator to petition Russian law-enforcement authorities to intervene on behalf of alleged Taganskaya members in their dispute with the store’s ousted management, according to the Civil Guard report. Torshin said in the interview that responding to requests for assistance was part of his job.

One of the people who allegedly orchestrated the department store grab was Grigory Rabinovich, a partner at a law firm in Moscow called Kremlin Partners, according to the prosecutors’ case against Romanov.

Rabinovich said in an interview that he’s done nothing wrong. He said that while he’s done business with Romanov in the past, he’s never met Torshin and had nothing to do with the lawyer’s killing.

“There was no point in his death,” he said. “He wasn’t of use to anyone.” 

‘Happy Birthday’

As for Romanov, who left Russia for Spain sometime around 2008, after he finished a prison sentence for embezzling money from a vodka producer, Torshin said he hasn’t talked to him in more than 2 1/2 years.

“The last time we spoke was on Nov. 27, 2013, when I turned 60,” Torshin said. “He called to wish me happy birthday.”

Now Torshin’s a senior official at an institution whose mandate includes stanching outflows of dirty money, which surpassed $1 trillion from 2004 to 2013, according to Washington-based research group Global Financial Integrity.

In Russia, more than most countries, the central bank plays such a pivotal role in the overall economy that any hint of impropriety could have far-reaching consequences, said Wolf-Fabian Hungerland, an economist at Berenberg Bank in Hamburg, Germany.

“Any claim related to money laundering should be followed by a thorough investigation to illuminate quickly what was and may still be affected,” Hungerland said. “Credibility is the central bank’s dearest reserve.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE