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. Last Updated: 07/27/2016

Muscovites Lose Flats in Housing Scam

REDKINO, Central Russia -- Misha was cheated out of his Moscow apartment and now lives in a crumbling wooden house in Redkino, a village of 15,000 residents located some 200 kilometers west of Moscow. Right across the street is the man who Misha says put him there.


He is known to police as "The Gypsy," and although he has been charged of no crime, villagers say he has resettled several dozen elderly people or families in Redkino by swindling them out of their apartments.


Redkino, in the Tver Region, with its abundance of misled, disappointed alcoholics, is emblematic of property-related crime that is still prevalent in Russia, several years after people were first offered the chance to privatize their homes to keep or sell in 1992.


With more than 1.5 million Moscow apartments now in private hands and market prices reaching an average of $1,000 per square meter, crimes involving swindles with privatized apartments are a serious issue, said Mikhail Kurtov, head of the criminal disap "The Gypsy" -- who declined repeated requests for an interview -- will also be referred to for the purposes of this report only by his first name, Vanya.


The scheme is simple, said Kurtov. Vanya finds a single alcoholic or poor family unable to maintain a Moscow apartment and promises them a nice house outside the city and cash up front. After all the paperwork is completed and it is too late to complain, Kurtov said the victims find themselves in a crumbling village house with just enough money to drown their grief in vodka.


"You ask me to sell the flat, so I do," said Misha, a man in his late 50s. "Then I get completely plastered. I come back to you and you give me cash for another bottle and then tell me in plain words to go to hell. This way, you have given me about 500,000 rubles [$100] while my flat is worth $30,000. The difference is yours -- and I am a bum."


Many people in Redkino, as well as the Moscow police investigators, seem to know how Vanya earns his money. But he is still walking free.


"This man is still around," said Kurtov, explaining that investigators have yet to build a solid case. "We are aware of his doings and working on his case. He has been in business for more than two years."


As the actual apartment sale is conducted in a flawlessly legal way, it is almost impossible to reverse the deal once it is completed, Kurtov said. The con men act only as mediators. They find buyers, then buy a cheap house in some distant village for the sellers and pocket the difference. The transaction is legitimate on paper and happens directly between the victim and the unsuspecting buyers.


Although Vanya's role in each swindle is obvious, his signatures do not appear on a single document and the police are unable to bring up any charges.


Given a market price of between $6,000 and $10,000 for a tumble-down house in Redkino and prices for Moscow apartments of between $20,000 and $250,000, the kind of transaction described by Misha can result in a huge profit.


Anatoly, a former driver for Vanya, also declined to give his last name. He said he is still on good terms with his former boss, but quit after he discovered what Vanya was doing and became fearful of retribution from the victims.


"A while ago they used to move five to 10 families every month," Anatoly said. "Now, [Vanya] has slowed down a little, but he hasn't stopped." According to Anatoly, Vanya is taking more precautions now as Moscow investigators intensify their investigation.


Sergei said he used to live in a three-room apartment in Moscow. Today, his family of four occupies one-quarter of a log cabin in Redkino with no telephone, hot water or indoor toilet.


"A man came around, promised a large house and lots of money on top -- and then cheated us out of our skulls; the story couldn't be shorter," said Sergei's father, adding that his wife succumbed to Vanya's promises while he was in prison and Sergei was in the army. "And my wife is a weak person, she swallowed the bait."


Kurtov said such accounts are all too common as criminals seek out the weak and relatively defenseless.


"The most likely targets are those with unstable psyches, alcoholics," Kurtov said. "Such people fail to go to the police at the right moment and end up being deceived."


"My mother has written to the police once," Sergei said. "A policeman from my old Moscow police station No. 144 came out here, wrote something down and said we were lucky to be alive at all."


Some are less lucky. In 1994, Kurtov's department solved a murder case after three unidentified corpses were found lying unburied at the Redkino cemetery.


"The criminals had spotted single elderly people, alcoholics, and bought out their Moscow apartments and then killed them out of fear that the victims might turn them in to the police," Kurtov said. He added that the killers have been arrested.


To combat such housing crimes, Moscow's city government has introduced a legislative system obliging Muscovites in "risk groups" to obtain permission from several of the city's social assistance and medical institutions before selling their privatized apartments.


The Moscow Realtors' Association registered its own arbitration court last April to review real estate swindle suits. According to Sergei Bagayev, chairman of the association, this court has already heard 78 such cases, while about 70 complaints are telephoned in daily.


"The number of crimes connected with privatized apartments will not stop growing for some time to come," Kurtov said. "Moscow, as well as other big cities, attracts capital and this pushes the prices up. As a consequence, there will always be people who want to stuff their pockets illegally."