The Case of the Trump Toronto Tower and Hotel—Alex Shnaider
Published on: December 19, 2016
RUSSIA & THE WEST
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Our fourth case study of Trump’s business associates concerns the 48-year-old Russian-Canadian billionaire Alex Shnaider, who co-financed the seventy-story Trump Tower and Hotel, Canada’s tallest building. It opened in Toronto in 2012. Unfortunately, like so many of Trump’s other Russia/FSU-financed projects, this massive Toronto condo-hotel project went belly-up this November and has now entered foreclosure.
According to an online profile of Shnaider by a Ukrainian news agency, Alex Shnaider was born in Leningrad in 1968, the son of “Евсей Шнайдер,” or “Evsei Shnaider” in Russian.30 A recent Forbes article says that he and his family emigrated to Israel from Russia when he was four and then relocated to Toronto when he was 13-14. The Ukrainian news agency says that Alex’s familly soon established “one of the most successful stories in Toronto’s Russian quarter, “ and that young Alex, with “an entrepreneurial streak,” “helped his father Evsei Shnaider in the business, placing goods on the shelves and wiping floors.”
Eventually that proved to be a great decision—Shnaider prospered in the New World. Much of this was no doubt due to raw talent. But it also appears that for a time he got significant helping hand from his (now reportedly ex-) father-in-law, another colorful Russian-Canadian, Boris J. Birshtein.
Originally from Lithuania, Birshtein, now about 69, has been a Canadian citizen since at least 1982.31 He resided in Zurich for a time in the early 1990s, but then returned to Toronto and New York.32 One of his key companies was called Seabeco SA, a “trading” company that was registered in Zurich in December 1982.33 By the early 1990s Birshtein and his partners had started many other Seabeco-related companies in a wide variety of locations, inclding Antwerp,34 Toronto,35 Winnipeg,36 Moscow, Delaware,37 Panama,38 and Zurich.39 Several of these are still active.40 He often staffed them with directors and officers from a far-flung network of Russians, emissaries from other FSU countries like Kyrgyzstan and Moldova, and recent Russia/FSU emigres to Canada.41
According to the Financial Times and the FBI, in addition to running Seabeco, Birshtein was a close business associate of Sergei Mikhaylov, the reputed head of Solntsevskaya Bratva, the Russian mob’s largest branch, and the world’s highest-grossing organized crime group as of 2014, according to Fortune.42 A 1996 FBI intelligence report cited by the FT claims that Birshtein hosted a meeting in his Tel Aviv office for Mikhaylov, the Ukrainian-born Semion Mogilevich, and several other leaders of the Russo/FSU mafia, in order to discuss “sharing interests in Ukraine.”43 A subsequent 1998 FBI Intelligence report on the “Semion Mogilevich Organization” repeated the same charge,44 and described Mogilevich’s successful attempts at gaining control over Ukraine privatization assets. The FT article also described how Birshtein and his associates had acquired extraordinary influence with key Ukraine officials, including President Leonid Kuchma, with the help of up to $5 million of payoffs.45 Citing Swiss and Belgian investigators, the FT also claimed that Birshtein and Mikhaylov jointly controlled a Belgian company called MAB International in the early 1990s.46 During that period, those same investigators reportedly observed transfers worth millions of dollars between accounts held by Mikhaylov, Birshtein, and Alexander Volkov, Seabeco’s representative in Ukraine.
In 1993, the Yeltsin government reportedly accused Birshtein of illegally exporting seven million tons of Russian oil and laundering the proceeds.47 Dmytro Iakoubovski, a former associate of Birshtein’s who had also moved to Toronto, was said to be cooperating with the Russian investigation. One night a gunman fired three shots into Iakoubovski’s home, leaving a note warning him to cease his cooperation, according to a New York Times article published that year. As noted above, according to the Belgian newspaper Le Soir, two members of Bayrock’s Eurasian Trio were also involved in Seabeco during this period as well—Patokh Chodiev and Alexander Mashkevich. Chodiev reportedly first met Birshtein through the Soviet Foreign Ministry, and then went on to run Seabeco’s Moscow office before joining its Belgium office in 1991. Le Soir further claims that Mashkevich worked for Seabeco too, and that this was actually how he and Chodiev had first met.
All this is fascinating, but what about the connections between Birshtein and Trump’s Toronto business associate, Alex Shnaider? Again, the leads we have are tantalizing.The Toronto Globe and Mail reported that in 1991, while enrolled in law school, young Alex Shnaider started working for Birshtein at Seabeco’s Zurich headquarters, where he was reportedly introduced to steel trading. Evidently this was much more than just a job; the Zurich company registry lists “Alex Shnaider” as a director of “Seabeco Metals AG” from March 1993 to January 1994.48
In 1994, according to this account, he reportedly left Seabeco in January 1994 to start his own trading company in Antwerp, in partnership with a Belgian trader-partner. Curiously, Le Soir also says that Mikhaylov and Birshtein co-founded MAB International in Antwerp in January 1994. Is it far-fetched to suspect that Alex Shnaider and mob boss Mikhaylov might have crossed paths, since they were both in the same city and they were both close to Shnaider’s father-in-law?
According to Forbes, soon after Shnaider moved to Antwerp, he started visiting the factories of his steel trading partners in Ukraine.49 His favorite client was the Zaporizhstal steel mill, Ukraine’s fourth largest. At the Zaporizhstal mill he reportedly met Eduard Shifrin (aka Shyfrin), a metals trader with a doctorate in metallurgical engineering. Together they founded Midland Resource Holdings Ltd. in 1994.50
As the Forbes piece argues, with privatization sweeping Eastern Europe, private investors were jockeying to buy up the government’s shares in Zaprozhstal. But most traders lacked the financial backing and political connectons to accumulate large risky positions. Shnaider and Shifrin, in contrast, started buying up shares without limit, as if their pockets and connections were very deep. By 2001 they had purchased 93 percent of the plant for about $70 million, a stake that would be worth much more just five years later, when Shnaider reportedly turned down a $1.2 billion offer.
Today, Midland Resources Holdings Ltd. reportedly generates more than $4 billion a year of revenue and has numerous subsidiaries all across Eastern Europe.51 Shnaider also reportedly owns Talon International Development, the firm that oversaw construction of the Trump hotel-tower in Toronto. All this wealth apparently helped Iceland’s FL Group decide that it could afford to extend a €45.8 million loan to Alex Shnaider in 2008 to buy a yacht.52
As of December 2016, a search of the Panama Papers database found no fewer than 28 offshore companies that have been associated with “Midland Resources Holding Limited.”53 According to the database, “Midland Resources Holding Limited” was a shareholder in at least two of these companies, alongside an individual named “Oleg Sheykhametov.”54 The two companies, Olave Equities Limited and Colley International Marketing SA, were both registered and active in the British Virgin Islands from 2007–10.55 A Russian restaurateur by that same name reportedly runs a business owned by two other alleged Solntsevskaya mob associates, Lev Kvetnoy and Andrei Skoch, both of whom appear with Sergei Mikhaylov. Of course mere inclusion in such a group photo is not evidence of wrongdoing. (See the photo here.) According to Forbes, Kvetnoy is the 55th richest person in Russia and Skoch, now a deputy in the Russian Duma, is the 18th.56
Finally, it is also intriguing to note that Boris Birshtein is also listed as the President of “ME Moldova Enterprises AG,” a Zurich-based company” that was founded in November 1992, transferred to the canton of Schwyz in September 1994, and liquidated and cancelled in January 1999.57 Birshstein was a member of the company’s board of directors from November 1992 to January 1994, when he became its President. At that point he was succeeded as President in June 1994 by one “Evsei Shnaider, Canadian citizen, resident in Zurich,” who was also listed as director of the company in September 1994.58 “Evsei Schnaider” is also listed in the Panama registry as a Treasurer and Director of “The Seabeco Group Inc.,” formed on December 6, 1991,59 and as treasurer and director of Seabeco Security International Inc.,” formed on December 10, 1991. As of December 2016, both companies are still in existence.60 Boris Birshtein is listed as president and director of both companies.61
The Case of Paul Manafort’s Ukrainian Oligarchs
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http://www.the-american-interest.com/20 ... nnections/
