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From a Belarus prison, U.S. lawyer's last battle

Emanuel Zeltser had a career dogged by fraud allegations. Then a case involving a supposed secret will ended with his closed-door trial and conviction. As his health falters, the U.S. wants him back.

March 04, 2009|Bob Drogin

NEW YORK — One of post-Soviet Russia's most powerful oligarchs, Badri Patarkatsishvili, left a business empire worth billions of dollars when he died of a heart attack in England on Feb. 12 last year.

What he didn't leave, according to his family, was a will.

But two days later, an obscure New York lawyer named Emanuel Zeltser appeared at the wake and told the grieving widow that her late husband had signed a secret will, given him power of attorney, and named a half-cousin in Florida as executor.

The news stunned the family. So did the events that followed.

Over the next month, Zeltser and the half-cousin sought access to the mogul's investments around the globe. The family sued in U.S. federal court, accusing the two Americans of trying to loot the huge estate with forged documents.

Then Zeltser flew -- or was kidnapped -- to Belarus, a former Soviet republic. He was immediately arrested and charged with economic espionage and use of false official documents to defraud the estate. He denied the charges, but was sentenced in a closed-door trial to three years in prison, where he remains today.

How Zeltser landed in Penal Colony #15 in eastern Belarus involves more than a bare-knuckle legal battle. It is a startling tale of a hard-charging U.S. lawyer who has fought allegations of fraud and forgery in the past, and now is ensnared in a case that may cost him his life.

That has turned the situation into an official U.S. concern.

U.S. Secretary of State Hillary Rodham Clinton is "focused" on Zeltser, her spokesman said, and seeks his immediate release for medical treatment. Twelve members of Congress wrote to the president of Belarus to express their "grave concern." Amnesty International has called for his release on humanitarian grounds.

"This is worthy of Dostoevsky," said Zeltser's older brother, Mark, a concert pianist. "It has money, politics, everything!"

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Much of Zeltser's life seems straight from a novel. He was born in Siberia in 1953 after his family was banished to a Soviet mining camp, and later attended school in Moldova, then a Soviet republic.

But records filed in U.S. courts indicate he never attended the state university law school, as he often claimed, and that his law degree and transcript were fake. He had majored in piano at a conservatory instead.

Zeltser clearly had moxie. In 1974, at the age of 21, he joined an early wave of Soviet Jews permitted to emigrate abroad.

Landing in Texas, he cleared tables at a Burger King. When his family followed him to America, he moved to New York to try his hand at business. He was sued at least three times for alleged fraud.

In the most serious case, a New Jersey jury concluded he had illegally seized a medical clinic from its owners. He was ordered to pay more than $2 million in damages.

By then, Zeltser had decided to become a lawyer.

"He said, 'Lawyers always say, 'I'll call you back' and never do so,' " explained his brother, Mark. "He said: 'I want to do that. Only lawyers can afford to do that.' "

Despite his lack of formal training, he passed the New York state bar and was admitted to practice in 1990, just as the Soviet Union was starting to crumble. He found a lucrative niche as Russian companies scrambled to adjust.

In 1993, he was retained by Inkombank, then Russia's second largest bank, in New York. But he sued the bank in U.S. court two years later, claiming he had been fired because he had uncovered fraud and theft.

Inkombank counter-sued Zeltser for allegedly using his position "to steal nearly $6 million from investment accounts." In an affidavit, the bank's chief U.S. attorney called Zeltser a "career con man" who "forges documents on a routine basis." Inkombank collapsed in 1998, and the lawsuits stalled.

The following year, Zeltser became a key source for reporters and FBI investigators seeking to unravel an alleged $10-billion money-laundering scheme by Russian mobsters at the Bank of New York. Zeltser portrayed himself as an expert on Russian organized crime. He gave written testimony to the House Committee on Banking and Financial Services, and his face popped up on CNN, Fox News and other media outlets.

The publicity backfired in 2000 when the New York Times reported that Zeltser had supplied a document on the bank fraud that proved to be a fake. Other evidence also collapsed.

Zeltser denounced all accusations against him as attempts by Russian gangsters and their allies to silence him. He faded from public view after that -- until early last year.

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When the 52-year-old Patarkatsishvili died at his mansion in southeast England, Zeltser called Joseph Kay, a former business associate and half-cousin of the billionaire, in Florida.

The two Americans flew to London and informed the widow and her lawyers about Zeltser's documents. They demanded access to accounts and companies from the Caribbean to the Caucasus. Kay gained control of a TV station in the Republic of Georgia and then sold it, infuriating the family.

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