Arrest in Deripaska Blackmail Case

Police have detained a once-affluent journalist whose gambling addiction cost him his fortune for attempting to blackmail Basic Element owner Oleg Deripaska for $42,000, officials said Tuesday.

Police detained journalist Felix Medvedev as he was collecting money in exchange for withholding compromising material about the head of a large company and members of his family, said Filipp Zolotnitsky, a spokesman for the city police economic crime division.

Zolotnitsky would not comment on the exact time and place of the handover, saying only that Medvedev was apprehended some time last week.

A Basic Element representative, who requested anonymity because of the sensitivity of the case, confirmed on Tuesday that the company was involved and that Medvedev claimed to be holding harmful information pertaining to Deripaska personally.

"The lead investigator felt that Medvedev should be released from custody after questioning, bearing in mind his age," Zolotnitsky said.

Medvedev, 66, initially demanded $10,000 for every month he withheld an article revealing the information, but company representatives managed to bargain him down to a sum of $42,000 for six months, Zolotnitsky said.

Medvedev admitted that he received the cash but said he was collecting it for Sergei Nikitin, his editor at Express-Gazeta, a small tabloid paper owned by the Komsomolskaya Pravda publishing house.

Secretly recorded conversations between the company's representatives, who went straight to the police when Medvedev first contacted them, and Medvedev "gave a different account," Zolotnitsky said, without elaborating.

Nikitin could not be reached Tuesday, but his assistant and director of promotions, Yekaterina Shumeiko, denied that the cash was to be paid to Nikitin and said Medvedev was not employed by the paper anymore.

"This was a person we hardly ever saw in the newsroom," Shumeiko said. "He was here so rarely and filed so few stories that we asked him to resign," which he did on Jan. 1, she added.

"He's not our man," she said.

The case of Medvedev, who faces a maximum of 15 years in prison if convicted, comes right on the heels of Saturday's arrest of Oleg Lurye, an investigative journalist who also worked for Express-Gazeta. Media reports suggested that Lurye might have been arrested in an attempt to extort money from Federation Council Senator Vladimir Slutsker.

Medvedev made his wealth in the early 1990s. He owned an apartment in central Moscow, three cars and a library of expensive books, news reports said. In a 1997 interview with Kommersant Money magazine, he talked about his "roulette addiction" that began when a friend introduced him to the game at a Paris casino in 1992 and ultimately caused his world to collapse. Medvedev amassed debts of over $1 million, which he attempted to cover with other debts -- a route that destroyed friendships and eventually led him into the criminal underworld. "Among my creditors were ministers, cosmonauts and culture personalities," he said in the interview. "Everyone is surprised I am still alive."