Bombing Suspect’s Uncle Accused Kazakh President of Fraud

The uncle of the suspects in last week’s Boston Marathon bombing told a London court in 2010 that Kazakhstan President Nursultan Nazarbayev had overseen the theft of state assets worth billions of dollars.

Ruslan Tsarni, who is from Kyrgyzstan, the former Soviet republic to the south of Kazakhstan, worked “in various capacities” with a closely knit network of associates led by Nazarbayev’s son-in-law from 2000 to 2008 that regularly engaged in fraudulent business practices, he said in a witness statement to the High Court in London in December 2010, when he was 39 years old. Tsarni said he moved to the U.S. in 2008 after working for the Kazakh group. He is now a U.S. citizen living in Montgomery Village, Maryland.

The claims against Nazarbayev, who has ruled Kazakhstan for more than two decades, were made in a defense statement for Mukhtar Ablyazov, the former chairman of BTA Bank accused of running a $6 billion fraud at the lender. The former executive is now on the run after being sentenced to 22 months in prison for contempt of court in the London case.

Tsarni grew up in Tokmak, Kyrgyzstan, and graduated from the Law School of Kyrgyz State University in 1994, he said in the witness statement. He became a legal consultant for a year for a U.S. company that was contracted by USAID under the organization’s program to assist Kyrgyzstan with economic reforms and “promote private enterprise,” he said.

Corporate Governance

Tsarni provided training on international standards of corporate governance and management, according to the filing. He was also an associate at an Almaty-based law firm, he said.

In televised statements after his nephews Tamerlan and Dzhokhar Tsarnaev were named as suspects in the April 15 terrorist attack that killed three and wounded more than 170, Tsarni called the brothers “losers” who had “put a shame on the Tsarni family.”

Tamerlan, 26, was killed in a battle with police, while 19-year-old Dzhokhar was captured later that day. Dzhokhar was charged yesterday by U.S. prosecutors with using and conspiring to use a weapon of mass destruction resulting in death.

Tsarni’s statement to the U.K. court, made more than a year before Ablyazov went into hiding, shows the brothers’ family was at one time well connected in the region and gives a link between the accused bomber’s relatives and one of the highest-profile commercial lawsuits in the U.K. and Kazakhstan in recent years.

Bank Denials

Lucy Bradlow, a spokeswoman in London for Almaty, Kazakhstan-based BTA Bank, declined to comment on Tsarni’s claims. Ablyazov has made similar allegations against Nazarbayev in his own defense papers and the government and the bank have denied them.

In his witness statement in defense of Ablyazov, Tsarni said Nazarbayev gave his “blessing” and protection to the group that rigged auctions of state assets, seized banks to sell for a fraction of their value to pre-determined buyers, and engaged in tax fraud and money laundering. Tsarni isn’t a party in the bank’s U.K. lawsuit against Ablyazov.

Tsarni said some members of the group are now in senior management positions at BTA Bank.

Nazarbayev’s office declined to immediately comment when contacted yesterday. A call today after regular business hours wasn’t answered.

Lender’s Default

BTA, the biggest Kazakh lender before defaulting on $12 billion of debt in 2009, filed a series of civil suits against Ablyazov and ex-Chief Executive Officer Roman Solodchenko claiming they siphoned money from the bank using fake loans, back-dated documents and offshore companies. Both men have denied the claims.

Ablyazov was sentenced to 22 months in prison in February 2012 for violating a 2009 court order in the bank’s lawsuit by failing to reveal all his assets, including a house in the British countryside and a London mansion. He failed to appear at the hearing and his whereabouts are unknown.

BTA, which was seized by the Kazakh government in 2009, sued Ablyazov in Britain after he fled there to avoid prosecution over the fraud allegations.

The group “has been looting the bank of anything that they can get their hands on following the forced takeover,” Tsarni said in the filing.

Seizing Assets

“Very soon after Mr. Ablyazov’s forced departure from Kazakhstan in early 2009, there were those within the regime who were intent on taking the opportunity of seizing whatever assets he held within the country that were connected to BTA,” Tsarni said.

Tsarni didn’t say how he was connected to Ablyazov or came to make the filing in his defense. The allegations of state fraud also didn’t help Ablyazov in court.

In February 2011, Judge Nigel Teare in London ruled that Ablyazov couldn’t use his claims about a presidential conspiracy led by Nazarbayev in defense against the bank. Teare said in a ruling on March 19 that Ablyazov had engaged in fraud by failing to inform the bank’s board of directors that he was connected to a company that was the recipient of money from the lender under compensation agreements that the board had approved.

“I consider it much more probable than not that the compensation agreements were dishonest and fraudulent devices orchestrated or authorized by Mr. Ablyazov to enable the bank’s money to be extracted from it,” Teare said in the judgment.

Dzhokhar Tsarnaev was found hiding in a covered boat in the back yard of a suburban Boston home on April 19. His capture ended an unprecedented manhunt by federal and state authorities that shut down Boston and surrounding cities.

Dzhokhar Tsarnaev is in a Boston hospital recovering from wounds sustained in a battle with police -- the same confrontation that led to the death of his 26-year-old brother. A police officer at the Massachusetts Institute of Technology was shot to death during the search. Another officer was wounded by gunfire.

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