In Russia, Corporate Thugs Use Legal Guise

The delivery of the coffin spooked Likhachev, an elderly man. He sold his shares to two colleagues, Gubinsky and Ilya Dyskin, who had the spirit to fight the raiders' next moves. One occurred at a private depository company, where Na Ilyinke stores its official documents that list its shareholders.

Last September, a Ukrainian citizen named Sergei Shevchuk came to the firm and presented a power of attorney document that indicated he had the legal right to manage the shares of Gubinsky and Dyskin.

Shevchuk then sold the shares, 58 percent of the company's total, to Tamara Tobiya, another Ukrainian. Three days later Tobiya sold them again, to a man named Evgen Halynski, who provided a Warwick, N.Y., address on official forms.

The Warwick address, it turns out, is a dry-cleaning shop. A person who answered the phone there said there was no one named Evgen Halynski living or working in the building. And no one responded to messages left at the Brooklyn, N.Y., address of a man by that name.

Both Shevchuk and Tobiya, who worked at a stall at an open-air market in Moscow, later vanished.

None of this was known at Na Ilyinke, Gubinsky said, until after a letter arrived from the depository last fall informing it of the company's new ownership structure. "It was like thunder from a blue sky," Gubinsky said.

The rightful shareholders quickly secured an investigation by the Federal Financial Markets Service. A report it issued last November documented the fraudulent sales and concluded that the power of attorney document that set them in motion had been forged. The agency suspended the transactions and, in January, revoked the license of the depository company, according to agency documents, on grounds it should have tried to ascertain that the power of attorney was real.

"We know about maybe 1,000 cases a year, but the real scale of these attacks is probably closer to 10,000 or 15,000," said Gennady Gudkov, head of a parliamentary working group examining the issue. "This problem is almost impossible to solve in a corrupt state."

"Big business can usually protect itself," said Yuri Glotser, head of the Federation for the Protection of Entrepreneurs' Rights in Moscow. "Smaller businesses are much more vulnerable, and their property can be worth a lot of money."

In Na Ilyinke's case, the fraudulent share sale was just one element of the attack. Last year it also found itself fighting off three separate court orders. Each one followed a pattern: Legal papers would arrive at the company informing it that a judgment had been returned against it, in a proceeding that the company was entirely unaware of. The company then had to respond with its own attorneys.

One order was issued by a court in St. Petersburg and another by a court in Moscow, freezing the company's assets, Gubinsky said. The third originated in the city of Tuva, near the border with Mongolia. A court there ordered the company to vacate its Moscow building, saying it had been leased to a Tuva company. The person listed as the Tuva firm's director turned out to be a student at the local agricultural college.

Gubinsky estimates the company has spent $300,000 defending itself.