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. Last Updated: 07/27/2016

New Details in RusAl Murder Suit

Citing new details from a "financial insider," a group of companies has filed expanded charges in New York against Russian Aluminum and its chief executive, Oleg Deripaska, accusing him of fraud, money laundering, extortion and complicity to murder.

The plaintiffs are seeking a revised $3 billion for the damages incurred during the takeover of several prized metals assets over the last several years that led to the consolidation of the aluminum industry and the creation of Russian Aluminum, now the world's second-largest aluminum producer.

The new charges, filed late Friday, are amendments to the original $2.7 billion lawsuit filed in late December.

New details in the amended suit filed Friday center mainly on testimony from Dzhalol Khaidarov, described as the former financial manager and close associate of Mikhail Chernoi and Iskander Makhmudov, alleged to be Deripaska's associates in the "conspiracy" to illegally acquire Russia's major aluminum-making and other metals assets.

The plaintiffs, including Base Metal Trading, Alucoal Holdings and the Russian company Mikom, are seeking triple damages under U.S. racketeering laws. They are claiming $900 million in losses from the false bankruptcy of the Novokuznets aluminum factory, or NKAZ, and $100 million from the takeover — "through pure physical force of armed thugs, bribery [and] extortion" — of the Kachkanar vanadium-mining complex, or GOK, both of which are now controlled by Russian Aluminum, or RusAl.

Mikhail Zhivilo, the former head of Mikom and director and major shareholder in NKAZ, is currently in France. He was arrested in Paris earlier this year as part of an extradition request from Russia, but was later released. He is accused of planning the assassination of Kemerovo Governor Aman Tuleyev.

Khaidarov was ousted as GOK's general director in an armed takeover in January 2000. Chernoi, who is currently under house arrest in Israel on money-laundering charges, and Makhmudov are defendents, as is Moscow's powerful MDM Bank, which the lawsuit alleges is controlled by Makhmudov.

"Makhmudov, Deripaska and MDM Bank … are directly involved in the laundering of funds through banks in the United States which are ultimately converted to cash and used for, among other things, bribes in Russia as described herein," the plaintiffs allege.

Both RusAl and MDM deny the charges. On Tuesday, an MDM spokesman said Makhmudov has no involvement in the bank. MDM head Andrei Melnichenko told Expert magazine in June that although Makhmudov held a stake in MDM through his company Urals Metals and Mining Plant for a short period starting in 1994, "since the end of 1996, no companies belonging to Makhmudov's group have been among our shareholders."

Listed among "defendants and related persons" in the 69-page complaint is "the Chubais team." The plaintiffs contend that in 1999, Anatoly Chubais ordered Zhivilo to cooperate with "the conspirators" in their efforts to consolidate the aluminum industry.

Chubais also allegedly told Zhivilo that he was responsible for Tuleyev's appointment as governor of Kemerovo, where the prized Novokuznets aluminum factory is located. Chubais allegedly then told Zhivilo that if he didn't follow instructions he would have Tuleyev transfer control of NKAZ to Deripaska and Makhmudov "by whatever means necessary."

The plaintiffs allege that the defendants paid $3 million to Tuleyev to fix the local court proceedings to bankrupt NKAZ and to frame Zhivilo. They also allege that Deripaska, Chernoi and Makhmudov paid $850,000 in "campaign contributions" to Eduard Roussel, governor of Sverdlovsk, where GOK is located, in exchange for helping the defendents take over GOK.

The suit also names U.S. companies as "victims of the conspiracy," including Alcoa, the world's largest aluminum company, Reynolds Aluminum Co., now part of Alcoa, and Transworld, which Chernoi helped found.

Alcoa's and Reynolds's attempts to buy a controlling stake in the Bratsk aluminum plant in 1998 failed when RusAl took over the plant. At the time, U.S. Treasury Secretary Paul O'Neill was Alcoa's CEO and board chairman.