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Case 1:13-cv-06326-TPG Document 336 Filed 09/09/15 Page 1 of 11

U.S. Department of Justice


[Type text]
United States Attorney
Southern District of New York

The Silvio J. Mollo Building


One Saint Andrew’s Plaza
New York, New York 10007

August 28, 2015

BY ECF AND HAND DELIVERY

The Honorable Thomas P. Griesa


United States District Judge
Southern District of New York
500 Pearl Street
New York, New York 10007

Re: United States v. Prevezon Holdings, Ltd., et al., 13 Civ. 6326 (TPG)

Dear Judge Griesa,

The Government writes in response to the Court’s August 25, 2015 Order to set forth
additional specific facts giving rise to a reasonable belief that the Prevezon Soho and Prevezon
Alexander properties were involved in money laundering, and to set forth its views regarding
whether such facts may be considered in deciding the defendants’ motion to vacate the Amended
Protective Order or whether leave to file a second amended complaint should be granted.1 As set
forth below, there are numerous facts supporting such a belief. Given the overlap between the
motion to vacate the Amended Protective Order and portions of the defendants’ motion to
dismiss the Amended Complaint, the Government believes that should these facts be material to
the Court’s ruling, the Court should grant leave for the Government to file a second amended
complaint setting them forth.

I. Facts Supporting a Reasonable Belief that the Prevezon Alexander


Properties Were Funded In Part With Fraud Proceeds, Acted as a Conduit
for Fraud Proceeds, and Supplied Funds for Money Laundering
Transactions

As set forth below, the following facts support a reasonable belief that the Prevezon
Alexander properties—specifically the Prevezon Alexander Account, Am. Compl. ¶ 3(a), and the
250 East 49th Street, Unit Comm3 Sale Proceeds (the “Prevezon Alexander Real Estate”), Am.
Compl. ¶ 3(k)—were funded with fraud proceeds derived from the tainted Prevezon Holdings

1
In an abundance of caution, this letter is being served prior to public filing pursuant to
paragraph 13 of the confidentiality order, Docket Item (“D.I.”) 280, though the Government does
not believe any portion of this letter needs to be redacted and intends to file an unredacted
version after seven days pursuant to that paragraph.
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8160 Account, and then supplied funds for transactions involving other funds derived from the
tainted 8610 Account.2

The Prevezon Alexander Real Estate was purchased in part with funds that were derived
from the tainted 8160 Account from rent payments on other of the New York properties
purchased with funds from the tainted Account. The contractual deposit for the Prevezon
Alexander real estate was paid with funds including several hundred thousand dollars of rent
payments generated from Prevezon Seven, a different New York property which had been
bought with funds from the tainted 8160 Account. As such, the Prevezon Seven rent payments
were proceeds of the tainted 8160 funds, and thus traceable to the tainted account. See, e.g.,
United States v. All Funds on Deposit in Dime Savings Bank, 255 F. Supp. 2d 56, 67 n.16
(E.D.N.Y. 2003) (loan secured by real property bought with crime proceeds forfeitable); see also
In re 650 Fifth Ave. & Related Props., 777 F. Supp. 2d 529, 552 (S.D.N.Y. 2011) (rental income
was forfeitable proceeds of illegal management of building). The Prevezon Alexander Real
Estate then generated rent payments of its own, some of which were transferred into the
Prevezon Alexander Account and commingled with rent proceeds from the other New York
properties (which were also bought with assets from the tainted 8160 Account). These
commingled funds were then transferred to an account at Kolevins Ltd. held abroad.
Specifically:

1. On September 28, 2011, the tainted 8160 Account sent $650,000 to the Prevezon
Soho Account. This $650,000 included rental income from 20 Pine Street Units 2009
and 1810, both of which were purchased with funds from the tainted 8160 Account,
see Am. Compl. ¶ 125.3
2. The Prevezon Soho Account then used this $650,000 as a contractual deposit for the
purchase of 127 Seventh Avenue, together with over $2 million in other funds from
the tainted 8160 Account, and funds from the Prevezon Holdings Marfin account.
See Am. Compl. ¶ 129. Thus 127 Seventh Avenue was purchased in large part with
tainted funds.4
3. From January to June of 2012, 127 Seventh Avenue generated over $300,000 in
rental income, which was transferred into the Prevezon Seven Account.
4. The rental income generated by 127 Seventh Avenue, commingled with other money,
was used to pay the $625,000 contractual deposit for the Prevezon Alexander Real
Estate by two checks written on the Prevezon Seven Account on July 2, 2012 and
made out to the seller’s attorney, bearing the notation “250 E 49 Str, Comm 3.”

2
The Court has already found the Amended Complaint alleges that the Prevezon Holdings 8160
Account was tainted following its February and March 2008 receipt of $1,965,444.55 in Russian
treasury fraud proceeds. See D.I. 310 at 14-17 & n.4.
3
Both Units 2009 and 1810 have been sold, but their sale proceeds are defendants in rem in this
case.
4
127 Seventh Avenue has been sold. The Prevezon Seven Account is a defendant in rem in this
case.
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5. The remainder of the payment for the Prevezon Alexander Real Estate was later paid
in part from the Prevezon Marfin Account and in part by a loan from TD Bank.
6. The Prevezon Alexander Real Estate generated rental income; over $100,000 of that
rental income was transferred into the Prevezon Alexander Account in October
through December of 2012.
7. In the Prevezon Alexander Account, the rental income received from the Prevezon
Alexander Real Estate up until mid-December of 2012 was commingled with rental
income from other New York properties that had been purchased with funds from the
tainted 8160 Account, including 20 Pine Street, Units 2009, 1810, 1711, 2308, and
1816. 5 Of this commingled amount, $400,000 was transferred to an account of
Kolevins, Ltd. at Marfin bank in Cyprus.
8. The Prevezon Alexander Account’s current balance is approximately $13,134.

Accordingly, like the other New York properties the Court has already found are proper
defendants in rem, the Prevezon Alexander Real Estate and its associated account were funded in
part by funds traceable to the tainted 8160 Account. The Prevezon Alexander Account (which
currently has a balance of under $14,000) also served as a conduit for consolidating the proceeds
of other of the defendant New York properties (also bought with proceeds of the tainted 8160
Account) and sending those proceeds abroad to the related company Kolevins Ltd.

II. Facts Supporting a Reasonable Belief that the Prevezon Soho Property
Received Fraud Proceeds, Acted as a Conduit for Fraud Proceeds, and
Supplied Funds for Money Laundering Transactions

The only Prevezon Soho property at issue in this case is the Prevezon Soho Account,
which has a small current balance. That account received proceeds of the tainted 8160 Account
and transmitted them on to fund other related company transactions, thus serving as a conduit for
fraud proceeds. Similar to Kolevins and Ferencoi, the Prevezon Soho Account was also used to
provide additional funds in transactions involving commingled fraud proceeds.6 Specifically:

1. As set forth in paragraphs I.1 and I.2, above, the Prevezon Soho Account received
$650,000 from the tainted 8160 Account, including rental income generated by real
estate purchased with fraud proceeds, and used this $650,000 as a contractual deposit
for the purchase of 127 Seventh Avenue (a purchase that also involvedover $2 million
in other funds from the tainted 8160 Account).
2. On January 18, 2011, the Prevezon Soho Account transferred $140,000 into the
Prevezon Pine Account, an account which had previously received rental proceeds
from New York real properties purchased with proceeds of the tainted 8160 Account

5
20 Pine Street, Units 1711 and 2308 have been sold, and their sale proceeds are defendants in
rem in this case. 20 Pine Street, Unit 1816 has not been sold.
6
The Court has found that the Amended Complaint alleges that these actions by Kolevins and
Ferencoi constituted money laundering. D.I. 310 at 31-32.
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and had previously sent that money back to the tainted 8160 Account. This amount
was commingled with other money in the account, and of the commingled funds,
$250,000 was sent to the tainted 8160 Account on that date.
3. On December 15, 2011, the Prevezon Soho Account sent $308,000 to the Prevezon
Pine Account, which as described in paragraph II.2, above, had twice sent money to
the tainted 8160 Account. This money was commingled with rental proceeds from
other New York properties purchased with funds from the tainted 8160 Account,
including 20 Pine Street, Units 2009, 1810, 1711, and 2308. Of this commingled
sum, $400,000 was transferred to the Prevezon Seven Account on that date, where it
was commingled with other funds. The Prevezon Seven Account then transferred
$490,000 of the commingled funds back to the tainted 8160 Account on December
21, 2011.
4. On December 3, 2012, the Prevezon Soho Account transferred $75,000 to the
Prevezon Alexander Account. As described in paragraph I.7, above, these funds were
commingled with rental income from New York properties that had been purchased
with funds derived from the tainted 8160 Account, including 20 Pine Street, Units
2009, 1810, 1711, 2308, and 1816, and the Prevezon Alexander Real Estate, and
$400,000 was transferred to a Cyprus account of Kolevins.
5. The current balance of the Prevezon Soho Account is approximately $5,693.

Accordingly, the Prevezon Soho Account directly received fraud proceeds from the
tainted 8160 Account and served as a conduit for those funds. Additionally, like the Prevezon
Alexander Account, as well as Kolevins and Ferencoi, the Prevezon Soho Account provided
funds that were commingled with fraud proceeds traceable to the tainted 8160 Account to
perform transactions.

III. Facts Supporting a Reasonable Belief that the Russian Treasury Fraud
Proceeds Were Credited into All of the Prevezon Holdings New York
Property Through Informal Transactions

Beyond the direct transfers of funds, which as described in Sections I and II show that the
Prevezon Alexander and Prevezon Soho assets received and conveyed proceeds traceable to the
tainted 8160 Account, powerful evidence supports the belief that Prevezon Holdings actually
commingled the Russian Treasury fraud proceeds into its New York property through informal
agreements.

As set forth below, there is direct evidence of at least one such informal arrangement, and
powerful circumstantial evidence that multiple such arrangements were made regarding
Prevezon’s New York property. The one agreement most clearly showing such a transfer is the
purchase of 20 Pine Street, Unit 1810, where contractual documentation shows that Prevezon
agreed to use funds from other sources to purchase real estate for the benefit of a supposed
investor, in exchange for the receipt of some of the Russian treasury proceeds, which were—on
paper—invested in the Netherlands.
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The admissions of a representative of claimant Denis Katsyv, as well as other


documentation, strongly suggest that the same arrangement was used for Prevezon’s other New
York properties. That is, in exchange for receiving fraud proceeds which were nominally
invested in the Netherlands, Prevezon apparently agreed to invest other money it had access to
into the purchase of New York real estate.7 As described in the Government’s opposition to the
motion to vacate the Amended Protective Order, such informal value transfer mechanisms can
constitute money laundering. See, e.g., United States v. Covey, 232 F.3d 641, 646 (8th Cir.
2000) (a check drawn on an untainted account constitutes crime proceeds if mailed in exchange
for an earlier handoff of cash derived from crime); United States v. Anderson, 391 F.3d 970,
975-76 (9th Cir. 2004) (sending funds between untainted bank accounts is money laundering if
done in exchange for cash from crime).

1. As set forth in the complaint, Bunicon and Elenast sent $857,354 in proceeds of the
Russian treasury fraud into the tainted 8160 Account in February of 2008. See Am.
Compl. ¶¶ 101-02.
2. A purported one-page, one-sentence “notice” from Prevezon Holdings to supposed
third-party investor Leonid Petrov dated March of 2008 stated that Prevezon
Holdings had received the $857,354 from Bunicon and Elenast “for further
reinvestment of the funds described above real estate property, in accordance with the
previously agreed upon agreements.”
3. In May and June of 2008, large portions of the contents of the 8160 Account were
converted into euros, commingled with other funds, and invested in AFI Europe in
the Netherlands. 8 The tainted 8160 Account contained few funds after the AFI
Europe investment was complete in June of 2008.
4. An unsigned purported one-page, one-sentence “notice” from Prevezon Holdings to
Petrov, apparently created in March of 2008, notifies Petrov of Prevezon Holdings’
receipt of $3,950,000 “transferred by you to our company’s account for the purpose
of investing the aforementioned funds in real estate pursuant our verbal agreement
reached earlier.”
5. In late 2009, Prevezon Holdings bought 20 Pine Street, Units 1810 and 2009 with
funds from the tainted 8160 Account. See Am. Compl. ¶ 125. Among those funds
were dollars traceable to 395,000 euros that had been returned from AFI Europe as
interest on the Netherlands investment, as well as funds from Kolevins and Ferencoi.
6. A purported one-page, one-sentence “notice” from Prevezon Holdings to Petrov dated
December of 2009 notified Petrov of “the acquisition by our company on December
25, 2009 of real estate property located at: 20 Pine Street Apartment 1810, NY USA,

7
As set forth above and in the Amended Complaint, Prevezon largely made these investments
through the tainted 8160 Account, or with other accounts or property that had received rental
income traceable to those tainted investments.
8
As described below, the vast bulk of the funds with which the $857,354 was commingled were
either directly traceable fraud proceeds or highly suspicious funds.
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for further transmission into your possession, in accordance with the previously
agreed upon agreements.”
7. The purchase price of 20 Pine Street, Unit 1810 was approximately $829,351, see
Am. Compl. ¶ 125, hundreds of thousands of dollars higher than the 395,000 euros
returned from AFI Europe, even if all of those euros had been allocated to that
apartment alone. Accordingly, the apparently verbal “agreements” between Prevezon
and Petrov must have contemplated Prevezon’s use of other funds to assist in the
purchase of the apartment.
8. Prevezon Holdings’ defense counsel has represented that any further document
production will be “small in volume,” D.I. 312-3 at 3, apparently suggesting that
Prevezon Holdings does not have substantial additional documentation for the
apparent multimillion dollar international investment agreements with Petrov.
9. The Government is not aware of any other contractual documentation concerning the
“transmission” of Unit 1810 into Petrov’s possession, and apart from these “notices”
the owner of Unit 1810, on paper, is Prevezon 1810 USA. This is consistent with the
defendants’ sworn statements that they agreed with Petrov that “the apartment
belonged to Mr. Petrov, but would be maintained in the name of Prevezon 1810.” D.I.
200, 204.
10. Despite the scarcity of contractual documentation, Prevezon Holdings has stated that
Petrov’s money was invested not just in one but in “various” pieces of New York real
estate. Specifically, a representative of Denis Katsyv, the owner of Prevezon
Holdings, reported, after Katsyv undertook a “full review” of the $857,354 sent from
Bunicon and Elenast to Prevezon Holdings, that these funds “were invested in various
New York properties.” Am. Compl. ¶¶ 108, 124.
11. These statements were not impromptu oral remarks; they were made in an email
message sent by Katsyv’s representative. The email was sent over two months after
the representative first contacted the organization and was invited to provide Katsyv’s
account of events.

Accordingly, the evidence strongly indicates that fraud proceeds were allocated into the
purchase of at least one of Prevezon’s New York real properties by an informal, off-the-books
arrangement under which funds from separate accounts are invested in exchange for the receipt
of the fraud proceeds. Moreover, given the volume of Petrov’s apparent investment, the entirely
off-the-books and scantily documented nature of these arrangements, and Prevezon Holdings’
own written admission that Petrov’s funds were allocated into “various” New York properties, it
is highly likely that the fraud proceeds were allocated into all of the New York properties in a
similar informal and easily concealed manner.

IV. Facts Supporting a Reasonable Belief that Prevezon Holdings Was Involved
in Pervasive Money Laundering

Beyond the evidence demonstrating the specific means by which the New York
properties were used in laundering (i.e., directly receiving proceeds traceable to the tainted 8160
Account, serving as a conduit for and bankrolling transactions with commingled proceeds
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traceable to the tainted 8160 Account, and being exchanged for the receipt of Russian Treasury
fraud proceeds), there is additional evidence that Prevezon Holdings’ money laundering activity
was highly pervasive and that the entire business entity thus was involved in money laundering.
Specifically:

1. As alleged in the Amended Complaint, Prevezon Holdings received at least


$1,965,444.55 traceable to the Russian Treasury fraud through a pattern of money
laundering. The details of these transfers are highly similar to the details of other
suspicious transfers. Regarding the traceable Russian Treasury funds:
a. In two transfers on February 6 and 13, 2008, the Prevezon Holdings 8160
Account received $857,354 from Moldovan shell companies Bunicon and
Elenast. Am. Compl. ¶¶ 93-94, 101-02. These payments were falsely
described in bank records as prepayment for sanitary equipment. Am. Compl.
¶¶ 110-12. These payments appeared on Prevezon Holdings bank statements
as prepayments for sanitary equipment or goods.
b. In seven transfers between February 28 and March 20, 2008, Prevezon
Holdings 8160 Account received $1,108,090.55 from the British Virgin
Islands shell company Reaton, Ltd.9 Am. Compl. ¶ 122. These payments
were falsely described in Prevezon Holdings bank statements as payments for
auto spare parts.
2. Between February and June 2008—during the same time period as the Prevezon
Holdings 8160 Account received the $1,965,444.55 in fraud proceeds from shell
companies under false payment descriptions—Prevezon Holdings received other
highly suspicious transfers of funds from other companies that appear to be shell
companies without any significant internet presence, both in its 8160 Account and in
another linked account, the Prevezon Holdings 8170 Account.
a. On February 14, 2008, the Prevezon Holdings 8160 Account received $70,000
from the Belize company Mobiner Trade Ltd., which appeared in the
Prevezon Holdings bank statements as payment for “technical equipment.”
b. In two transfers on May 29 and June 4, 2008, the Prevezon Holdings 8160
Account received $697,408.30 from the Belize company Cefron Invest Ltd.,
which appeared in the Prevezon Holdings bank statements as payment for
“computer equipment.”
c. On May 30, 3008, the Prevezon Holdings 8160 Account received $272,400
from Apasitto Ltd., which appeared in the Prevezon Holdings bank statements
as payment for “video equipment.”
d. On June 4, 2008, the Prevezon Holdings 8160 Account received $292,039.18
from the Cyprus company Nysorko Ltd., which appeared in the Prevezon
Holdings bank statements as payment for “home appliances.”

9
This company, a British Virgin Islands company, appears to be unrelated to a Latvian company
with the same name.
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e. On June 13, 2008, the Prevezon Holdings 8160 Account received $779,128.80
from the Cyprus company Weldar Holdings Limited, which appeared in the
Prevezon Holdings bank statements as payment for “goods.”
f. On May 12, 2008, the Prevezon Holdings 8170 Account received 93,717.03
euros from British Virgin Islands company Genesis Trading Investments Ltd.,
which appeared in the Prevezon Holdings bank statements as payments for
“computer equipment.”
3. Prevezon was not in the business of supplying sanitary equipment, auto spare parts,
technical equipment, computer equipment, video equipment, home appliances, or
other goods.
4. During this time period, these false and questionable payments represented the
substantial majority of the inflows into the Prevezon Holdings 8160 and 8170
accounts.
5. As noted in paragraph III.8, above, it appears that Prevezon Holdings has minimal
documentation regarding the sources of many of its funds. For example, if the March
2008 “notice” described in paragraph III.4, above, refers to the questionable funds
described in paragraph IV.2, it is patently inadequate, as it was apparently written
before many of those funds were received, does not explain why the funds are
described as being sent for goods Prevezon Holdings did not supply, is one sentence
long, and is not signed.
6. Indeed, the treatment of the corporate entity Prevezon Holdings itself by its principals
also appears to be strikingly informal. At the time of accepting the false and
questionable funds described above, Prevezon Holdings was owned on paper by
Timofey Krit, a young man who was a previous business associate of Katsyv, and its
UBS accounts were beneficially owned by Alexander Litvak, another business
associate of Katsyv. See Am. Compl. ¶ 8-10, 12-13, 106. On or about June 19, 2008
(less than a week after the receipt of $779,128 from Weldar Holdings for “computer
equipment” and before completing the investment of funds in AFI Europe), Katsyv
became official shareholder of Prevezon Holdings by purchasing the company from
Krit for $50,000. Am. Compl. ¶ 106. There are several suspicious features of this
transaction.
a. At the time that Katsyv purchased Prevezon Holdings, it had over $2 million
in its UBS bank accounts. Am. Compl. ¶ 106. Although defense counsel has
claimed that Petrov’s investment caused Prevezon Holdings to incur a
corresponding liability, the Government is unaware of any written
documentation of such liability besides the unsigned one-sentence “notice” to
Petrov.
b. Indeed, the actual purchase of the company seems to be supported by patently
inadequate documentation. The only contractual documentation the
Government is presently aware of concerning the transfer of ownership of the
entire company is a one-page “receipt” in which Krit represents that he
received $50,000 for the 100% of the shares of Prevezon Holdings. Like the
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“notices” to Petrov, it is only one sentence long. Like the “notice” for the
bulk of the funds referred to in paragraph III.4, it is unsigned.
7. Given the apparent small volume of additional documentation, there are reasonable
grounds to believe that many key activities of Prevezon Holdings, including the sale
of the entire company, are supported by insufficient documentation.
Accordingly, there is every reason to believe that the receipt of $1,965,444.55 is not an
aberrational incident in Prevezon Holdings’s business. To the contrary, the facts support a
reasonable belief that Prevezon Holdings is engaged in pervasive money laundering and that its
corporate form (and thereby all its assets) are used for that purpose.
V. Even If the Prevezon Alexander and Prevezon Soho Properties Were Not
Involved in Money Laundering, They Would Be Subject to Restraint Under
18 U.S.C. § 1956(b)(3) to Preserve Their Availability to Satisfy a Penalty
Judgment

Even if the Prevezon Alexander sale proceeds and the modest sums in the Prevezon
Alexander and Prevezon Soho bank accounts were not involved in money laundering, pretrial
restraint of these assets would be appropriate to preserve their availability to satisfy a judgment
on the Government’s civil money laundering penalty claims.

The money laundering statute makes any person committing money laundering liable for
a civil in personam penalty up to, as relevant here, “the value of the property, funds, or monetary
instruments involved” in the money laundering transaction. 18 U.S.C. § 1956(b)(1)(A). In order
to prevent defendants from dissipating assets and frustrating any eventual judgment, the statute
provides broad authority to restrain U.S.-based assets pending trial. See 18 U.S.C. § 1956(b)(3)
(“A court may issue a pretrial restraining order or take any other action necessary to ensure that
any bank account or other property held by the defendant in the United States is available to
satisfy a judgment under this section.”). 10 The value of the possible penalty the defendants
face—the property the Court has already found to be alleged to be involved in money laundering,
D.I. 310 at 16-17—is substantially greater than the value of the Prevezon Alexander and Soho
assets. 11 Accordingly, these are just the circumstances where pretrial restraint under section
1956(b)(3) is appropriate.

10
The only foreign assets subject to this case, the AFI Europe debt, were plainly involved in the
alleged laundering and are properly restrained pursuant to the in rem forfeiture statute, 18 U.S.C.
§ 983(j)(1)(A), and the cooperation of the Government of the Netherlands. See United States v.
All Funds on Deposit in Any Accounts Maintained in Names of Meza or De Castro, 63 F.3d 148,
153-54 (2d Cir. 1995). Accordingly, § 1956(b)(3) is not relevant to those assets.
11
Since title to any property to be forfeited in rem relates back to the time of the offense, see 18
U.S.C. § 981(f), the money laundering penalties would need to be satisfied by other assets such
as the Prevezon Alexander and Soho assets.
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VI. Should the Court Wish to Rely on Disputed Facts Outside the Complaint, it
Should Grant Leave to File a Second Amended Complaint

The Government respectfully submits that the Amended Complaint sets forth probable
cause, complies with Supplemental Rule G, and is sufficient to sustain the restraint, but should
the Court wish to rely on the additional facts set forth here, the Government believes that it is
appropriate to grant leave to file a second amended complaint.

Although the Court has already found the Amended Complaint sufficiently pled to avoid
dismissal, given that it reserved certain issues related to Prevezon Soho and Prevezon Alexander,
D.I. 310 at 17 n.4, the Government believes that the prudent course is to set forth any additional
facts material to those issues in a pleading. There is no per se rule against considering facts
outside the pleadings giving rise to probable cause supporting a pretrial asset restraint,12 but to
the extent the defendants’ objections to a restraining order overlap with their (rejected)
arguments for dismissal, all of the facts upon which the Court relies should be set forth in a
pleading.

In addition, a second amended complaint would have many benefits beyond creating a
proper record. The consolidation of relevant facts into one verified document serves the goals of
order and efficiency.13 And in light of the Court’s rejection of wire fraud as a specified unlawful
activity, the Government may present evidence that the defendants laundered money from the
specified unlawful activity of transportation of stolen property in violation of 18 U.S.C. § 2314.
See. e.g., United States v. LaSpina, 299 F.3d 165, 171-73, 178 (2d Cir. 2002); see also United
States v. Lazarenko, 564 F.3d 1026, 1032 (9th Cir. 2009) (sustaining indictment alleging
laundering proceeds of interstate transportation of stolen property relating to the United States
transport of funds obtained in a fraud scheme violating Ukrainian law). Given the complete
overlap in factual matter—proof of the theft in Russia, proof of the transfer of funds to the

12
Even where defendants are entitled to an adversarial hearing on vacating a pretrial restraint,
the Court may rely on “‘evidence and information that would be inadmissible under the Federal
Rules of Evidence.’” United States v. Walsh, 712 F.3d 119, 124 (2d Cir. 2013) (quoting United
States v. Monsanto, 924 F.2d 1186, 1198, 1203 (2d Cir. 1991); see also United States v.
Bonventre, 720 F.3d 126, 132 (2d Cir. 2013) (applying Monsanto to civil forfeiture case). Here,
because no Sixth Amendment rights to counsel are implicated, defendants are not entitled to an
adversarial hearing. See United States v. Cosme, --- F.3d ----, 2015 WL 4716437, at *5 (2d Cir.
Aug. 10, 2015) (holding adversarial hearing unavailable absent interference with Sixth
Amendment rights). Accordingly, there is no rule precluding reliance on facts not contained in
the Amended Complaint to find that there is probable cause supporting the restraining order. Cf.
Cosme, 2015 WL 4716437, at *7 n.8 (allowing Government to present newly discovered
evidence to sustain pretrial restraint).
13
Indeed, the defendants have repeatedly complained that, in their view, not enough of the
Government’s facts or theories are contained in the Amended Complaint. See D.I. 299 at 3 n.3,
6-9, 13, 14 & n.8, 18-20; D.I. 320 at 5 & nn.1-2, 12, 13 & n.4, 15. Though the Government
disagrees with these objections, see Fed. R. Civ. P. 15(b)(1), it is certainly willing to
accommodate them with an amended pleading.
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United States, proof of the defendant’s laundering activities—the Government may proceed to
trial on this theory pursuant to Rule 15(b)(1) of the Federal Rules of Civil Procedure, but it
would be efficient to lay it out in advance of trial in a second amended complaint.

Finally, a second amended complaint need not engender any delay. The relevant
materials are already being exchanged in discovery and the Government does not believe the
amended pleading would require any new witnesses. Accordingly, if the Court wishes to
consider the facts set forth in this letter, the Government believes that the leave to file a second
amended complaint should be granted. See Fed. R. Civ. P 15(a)(2) (“The court should freely
give leave when justice so requires.”); see also Loreley Financing No. 3 Ltd. v. Wells Fargo
Secs., LLC, --- F.3d ----, 2015 WL 4492258, at *24-25 (2d Cir. July 24, 2015) (reversing denial
of leave to replead, noting liberal spirit of rule).

Respectfully submitted,

PREET BHARARA
United States Attorney

by: /s/ Paul M. Monteleoni


Paul M. Monteleoni
Andrew C. Adams
Margaret Graham
Jaimie L. Nawaday
Assistant United States Attorneys
(212) 637-2219/2340/2923/2275

cc: Counsel of Record (by ECF)