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Court sanctions arrest of main suspect in Central Banker murder -1

Moscow court formally sanctioned the arrest Monday of banker Alexei Frenkel, a suspected paymaster in the killing of a senior Central Bank executive four months ago.
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MOSCOW, January 15 (RIA Novosti) - A Moscow court formally sanctioned the arrest Monday of banker Alexei Frenkel, a suspected paymaster in the killing of a senior Central Bank executive four months ago.

Frenkel was taken into custody Thursday as a main suspect in the murder of the Central Bank's First Deputy Chairman Andrei Kozlov September 13. Kozlov, 41, was in charge of bank licensing and closed down VIP Bank over alleged money laundering three months before his killing. Frenkel's lawyer has not confirmed his client's former top position in the VIP Bank.

Prosecutors said they would press charges against Frenkel Wednesday, and the banker said he would appeal the court decision to sanction his arrest. "Of course, I will appeal," he said.

On Friday, the court issued an arrest warrant for another suspect in the case, Liana Askerova, who put the blame on Frenkel during her questioning, Frenkel's lawyer said.

"Askerova is blaming Frenkel, saying he is allegedly involved in the crime," Igor Trunov said, adding that Frenkel, who pleaded not guilty, insisted on confronting his co-defendant.

"Askerova's questioning is the only evidence the Prosecutor General's Office has," Trunov said.

The woman's lawyer Yevgeny Martynov said Friday, "Liana Askerova is involved in finance, but is not officially on the staff of any bank."

Russia's leading business daily, Kommersant, quoted sources close to the investigation as saying that a personal conflict between Kozlov and Frenkel erupted in 2005 when the Central banker refused to include VIP Bank into the deposit insurance system. Frenkel then resigned as chairman of the bank's board and appealed the decision in the Arbitration Court.

Witnesses said the banker also tried to organize a personal meeting with Kozlov, who simultaneously began receiving phone calls from top prosecutors and the FSB, KGB's successor, demanding that VIP Bank be included in the deposit insurance system, the paper said.

Frenkel won the appeal against the Central Bank's decision but Kozlov conducted a separate check into VIP Bank and withdrew its license, which infuriated Frenkel and prompted him to order the killing, investigators told the paper.

Frenkel addressed his acquaintance, Askerova, whom he met in her restaurant, Trish, in Moscow and who had been under investigation for fraud but was never found guilty. She contacted a Ukrainian businessman, Boris Shafrai who in turn found three people in eastern Ukraine through another contact. Shafrai and the four other Ukrainians agreed on a meager "reward" of $10,000. Investigators later established the suspected "killers" were not professionals.

One of the three men was found while trying to sell his personal car he was driving on the day of the killing. He gave away his two associates. The fourth man, Shafrai's contact, was detained in late December and implicated Shafrai, who declined to cooperate with investigators, Kommersant said.

Following Shafrai's arrest, Askerova began looking for a lawyer to help the businessman, a fact that attracted police attention. Investigators' shadowing helped to gather enough evidence to detain the woman who gave away Frenkel's name when police told her Shafrai had revealed all the details, the paper said, adding that all the seven suspects in the case have therefore been arrested.

Frenkel has described his custody to Kommersant as "the Central Bank's provocation against its opponent," and his lawyer Trunov said his client had addressed all issues with the Central Bank legally.

"There was a huge distance between Andrei Kozlov and Alexei Frenkel," he told the daily. "Figuratively speaking, it is the same as if somebody had ordered the killing of the Moscow mayor because the hall in their apartment block was poorly cleaned."

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