Oligarch Looted Cash to Buy $100M+ of U.S. Properties: Suit

When Prince Nawaf bin Sultan bin Abdulaziz Al-Saud sold his $75 million triplex in the Heritage at Trump Place building on Manhattan’s Upper West Side, the anonymous buyer of the 10,500-square-foot manse, complete with a hair salon, a sushi bar, and three bulletproof panic rooms, was a mystery.

A real estate listing deemed the home ideal for a “member of the global elite.” The new resident would walk upon slabs of sumptuous Tuscan Calacatta marble, glide through doors of Makassar ebony, and sleep beneath ceilings of the finest Venetian plaster. The 2018 sale made headlines; the transaction was co-brokered by Robert De Niro’s son Raphael. However, the purchaser’s true identity remained frustratingly cloaked behind a web of LLCs.

Now, the previously nameless owner of the unit has been revealed as a Kazakhstani oligarch who allegedly stole a coal mine out from under the former Soviet republic’s top opposition leader during his unjust imprisonment on sham political charges, then snatched up the New York City spread at the relative bargain-basement price of $30 million—or, about 7,500 times the average annual household income in Kazakhstan.

That’s according to a bombshell lawsuit obtained by The Daily Beast, in which businessman and politician Galymzhan Zhakiyanov, arguably the Eurasian country’s highest-profile pro-democracy dissident, accuses Eduard Ogai, a member of autocratic former President Nursultan Nazarbayev’s “inner circle,” of plundering his mining operation’s assets and pouring them into more than $100 million worth of luxury U.S. real estate.

Zhakiyanov Galymzhan.

Zhakiyanov Galymzhan.

Public Domain

Zhakiyanov and his wife, Nurbike Zarubekova, allege Ogai, the CEO of Kazakh copper behemoth Kazakhmys, laundered the purloined loot and used it to buy not only the Trump triplex, but another spectacular Upper West Side pied-à-terre for $16 million; a trophy estate in Southern California featuring, among other things, a subterranean 10-car garage; and a 10-bed, 16-bath Italianate megamansion in Beverly Hills previously owned by hockey legend Wayne Gretzky. (The property, known as the Hacienda Estate, came complete with a master suite described in 2019 by Variety as “hedonistic,” and a fireplace it deemed “almost comically large.”)

The suit includes a cameo appearance by at least one member of the NHL Hall of Fame, and a slightly larger role played by a New York City official appointed by Mayor Eric Adams.

Reached on Saturday for comment, Zhakiyanov’s New York-based attorney Marc Lindemann said in an email, “We cannot comment on pending litigation; the complaint speaks for itself.”

The surreal saga’s origins can be traced back to the early 1990s, in the heady days of Kazakhstan’s independence from the Soviet Union. Zhakiyanov, a provincial governor and co-founder of the reformist party Democratic Choice of Kazakhstan, together with Zarubekova and several associates, founded the mining company STPAKK Semei—eventually reorganized as SK—to work the Karazhyra coal deposit in East Kazakhstan, according to the complaint.

“Under Mr. Zhakiyanov’s leadership, SK discovered and developed the coal deposit from scratch,” the complaint states. “SK built railways and other infrastructure, created hundreds of jobs, and made Karazhyra a profitable enterprise.”

Zhakiyanov, who resides in Kazakhstan but lived in Boston from 2010 to 2014 while earning an MBA at the Massachusetts Institute of Technology, launched his political career in 1994. He was first elected as governor of Semipalatinsk, and later won the governorship of Pavlodar Oblast, hard by the Russian border, while his business venture was also taking off.

By 2001, SK had more than 1,000 employees, produced 4.2 million metric tons of coal, with more than a billion metric tons of reserves, and saw annual net profits in excess of $15 million. But during that same period, Zhakiyanov “had become a vocal critic of the autocratic Nazarbayev regime and the corrupt political elite in Kazakhstan,” according to his complaint. “Mr. Zhakiyanov established an opposition movement that held street rallies in Almaty, the largest city in Kazakhstan, drawing tens of thousands of people dissatisfied with oligarchic rule and calling for democratic changes in the country.”

The Nazarbayev regime began to see Zhakiyanov as a threat, and set out to silence him, the complaint continues, stating that in April 2002, following “a standoff at the French Embassy in Almaty,” Kazakhstani authorities arrested Zhakiyanov and flew him to an abandoned factory to await trial.

“Following what independent observers described as a Stalinist show trial, Mr. Zhakiyanov was convicted by the Pavlodar City Court in Aug. 2002 on politically motivated charges of abuse of office,” according to the complaint. “International human rights organizations and [the] international community recognized Mr. Zhakiyanov as a political prisoner.”

The U.S. State Department quickly denounced Zhakiyanov’s conviction, calling his sentence “another case of Kazakhstani authorities selectively prosecuting political figures.” The following year, the European Parliament nominated Zhakiyanov for the Sakharov prize, an honor bestowed on those who have made “outstanding contributions to democratic development and the rule of law.”

Once Zhakiyanov was behind bars, the Nazarbayev regime, “in collusion with” Ogai and his cronies, drummed up bogus tax charges against SK, according to the complaint. In Oct. 2002, Ogai directed armed guards to seize SK’s operations under a phony mandate contained in allegedly fabricated shareholder minutes, the complaint states. Ogai then “installed puppet managers who quickly transferred SK’s key assets” to a shell company formed by Ogai, according to the complaint.

The scheme forced SK into bankruptcy, and sold it to Ogai for $900,000 at a “sham” 2004 auction, where, the complaint says, the only other bidder was Ogai’s brother Andrei.

While Zhakiyanov continued moldering in jail, Ogai registered a company in South Dakota to launder SK’s stolen financial assets, along with the proceeds of its future operations at the Karazhyra mine, states the complaint. Corporate registration documents reviewed by The Daily Beast list the firm’s managers as Sara and Edward Petre-Mears, a shadowy duo on the Caribbean island of Nevis, who have long been known as “sham directors” with their names on more than 1,200 companies, as of a decade ago, according to previous reporting.

Originally sentenced to a seven-year term behind bars, Zhakiyanov was released in 2006, after serving four years. Although he was finally free, the Kazakhstani government banned Zhakiyanov from returning to office of any kind.

Several years later, Ogai started amassing properties in America, using Zhakiyanov’s money, the complaint alleges.

In 2014, Ogai—who also maintains residences in Kazakhstan, Russia, and the United Kingdom—paid $39.9 million for the gargantuan Hacienda Estate in Beverly Hills, which sat on more than five acres of some of the most expensive land in the world, according to the complaint, which says the property was “formerly owned by an ice hockey star Wayne Gretzky.” The compound featured formal gardens, a lighted tennis court, and boasted 11,200-square-feet of living space. Neighbors at the time included Eddie Murphy, Sylvester Stallone, Kimora Lee Simmons, and Rod Stewart.

(In a 2019 interview, Ogai claimed the property was purchased by his company as an investment, later splitting it into two separate properties and listing them for sale at $28 million and $30 million respectively, according to the complaint, which says they have not sold.)

In 2016, Ogai purchased, “with fraudulent intent,” a fabulously luxurious 4,100-square-foot condo at 1965 Broadway in Manhattan for $15.75 million, the complaint states.

“The living and dining areas converge in a stunning leather-paneled lounge area, an ideal layout for entertaining guests,” the listing read. “Step into the grand hall leading to a gallery adorned in travertine, a masterpiece in its own right, sets the stage for the Boffi kitchen. Fit for a chef, this culinary oasis offers Giorgio Armani limestone flooring, graphite oak interiors, and solid Calacatta counters and backsplash… Retreat to the tranquil primary bedroom, where a bespoke closet by B&B Italia awaits, their exquisite craftsmanship nominated for the prestigious Wallpaper Design Awards.”

In 2018, Ogai bought the three-floor Trump-branded Upper West Side apartment for $30 million, according to the complaint. The mammoth space encompassed the fifth, sixth and seventh floors of the 31-story building, with one entire floor of the residence dedicated exclusively to “recreation space,” including a steam room, billiards room, and massage studio.

And in 2021, Ogai bought a spectacular estate in Encino, California for $10,550,000. The home boasted “10,900 sqft of refined luxury,” according to its listing, which described “quintessential California living featuring exceptional views radiating from massive glass pocket doors the moment you enter.”

“The romantic master retreat features a stunning fireplace, expansive walk-in closet, luxurious spa-like bathroom, and glass sliding doors leading out to the extensive balcony with incredible views,” the listing read. “Downstairs presents a large subterranean garage perfect for any car collector that can showcase up to 8 cars. Lower level can also accommodate music recording studios and recreation spaces. Additional conveniences include home gym, sports courts, and Creston smart home automation system and high-tech security. Architecturally designed with meticulous perfection, this trophy estate is unlike any other.”

It is unclear who brokered the California purchases for Ogai, but those in New York are tinged with no small bit of controversy.

“In transacting business in New York, Defendant Eduard Ogai relied on his two trusted agents, real estate broker Gennady Perepada and real estate lawyer Edward Mermelstein, both of whom owned One & Only Realty that, together with Mr. Mermelstein’s law firm, catered to oligarchs from the former Soviet Union, including Eduard Ogai,” Zhakiyanov’s complaint states. “… Following Mr. Mermelstein’s appointment as New York City’s Commissioner for International Affairs in 2022, the New York Mayor’s office faced criticism for elevating a former fixer for oligarchs purchasing properties in New York City.”

Perepada did not respond to a request for comment on Saturday. Mermelstein was unable to be reached.

Ogai concealed his role in all of the purchases by using LLCs to buy them, later transferring the deeds from the LLCs to his wife and other close associates in zero-dollar sales, then back again, to further obfuscate their true ownership, according to the complaint. Ogai’s wife, Marina, is also named as a defendant in the lawsuit.

Zhakiyanov’s complaint says he never knew who was behind the seizure of his mine until after massive anti-regime protests broke out in 2022.

Nazarbayev stepped down in 2019 and handed presidential authority over to his chosen successor, Kassym-Jomart Tokayev, while retaining a great deal of power and influence as chairman of the country’s Security Council. Tokayev forced Nazarbayev into an apparently grudging “retirement” 2.5 years later amid skyrocketing fuel prices, and ousted the former president’s allies from their official positions.

“The threat of retribution from Kazakhstan’s powerful security apparatus foreclosed any attempts to investigate the perpetrators of the mine’s takeover,” the complaint states.

It says Zhakiyanov “believed that the takeover of SK was attributable solely to Nazarbayev’s government against which they had no recourse.” But after Nazarbayev was gone, “key witnesses were finally able to speak truthfully and disclose… relevant information that exposed the Karazhyra Scheme and its perpetrators.”

Between 2022 and January 2024, Zhakiyanov managed to gain access to “previously inaccessible archival material relating to SK’s seizure and bankruptcy” 20 years earlier, meeting with SK’s bankruptcy administrator and Kazakhmys Group “insiders” who shared crucial information about what Ogai had done, according to the complaint.

“Throughout this time, the Karazhyra Joint Stock Company, controlled by Eduard Ogai, continued to obfuscate how it had acquired the coal mine,” it states. “… Even after former President Nazarbayev’s departure, and while [Zhakiyanov was] trying to determine what had happened to SK’s assets and who the… Conspirators were, [Ogai] continued to fraudulently transfer and conceal the assets in question.”

Zhakiyanov wants the property he says Ogai purchased with pilfered funds to be put into a trust for liquidation, and is asking for punitive and compensatory damages in amounts to be determined at trial.

Ogai, who does not have an attorney listed in court records, was unable to be reached.

This post was originally published on Daily Beast

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