Sentences Handed Down in Massive Vostochny Embezzlement Case

Soyuz rocket blasts off from Vostochny on Nov. 28, 2017. (Credit: Roscosmos)

Prison terms have been handed down for the embezzlement of more than 5 billion rubles ($88 million) during the construction of Russia’s Vostochny Cosmodrome, Russia media report.

Yuri Khrizman, the former head of state-run Dalspetsstroy construction firm, was sentenced to 12 years  in prison for his role in the fraud. Another employee, Vladimir Ashikhmin, was sentenced to seven years behind bars.

Khirzman’s son, Mikhail, was sent away for five-and-a-half years while a regional deputy, Viktor Chudov, was sentenced to six years in prison.

The spaceport’s construction in Russia’s Far East has been plagued by delays, corruption and unpaid workers. Vostochny is intended to reduce Russian dependence on the Baikonur Cosmodrome in Kazakhstan.

  • Andrew Tubbiolo

    I wonder if the Russians might have some moral leverage over us. They put people in jail for stealing ~100 million bucks. We have kelptrocrats who got thousands of billions from the public of today and for generations to come and got rich. Heck, one of them is in the White House after carpetbagging Atlantic City New Jersey.

  • Michael Halpern

    Not really they are an oligarchy, in many ways that makes it easier for people to get away with this, these people got caught badly

  • Andrew Tubbiolo

    I was thinking much the same thing. Could be that they were ‘competition’. Once a kelptocrat sets up power you don’t want competition. But even that’s a justice of sorts.

  • Michael Halpern

    Or they could be scapegoats we don’t know

  • Kirk

    Were they punished for embezzlement as much as for failing to deliver on time? Would they have received medals instead had Vostochny construction run to schedule despite their embezzlement (assuming they passed an appropriate cut up the food chain)?

  • Andrew Tubbiolo

    We of course can’t know for sure. Embezzlement is easy to believe in Russia, just like gun deaths on par with automobile deaths are a signature of American social ills. They’re both expected and easy to believe. One way or the other they fell out of favor from the government and they were either not protected from Russian prosecutors, or they were thrown to them. But given their response to the new American leadership, they could be the most honest bunch in the world and they’re still going down.

  • duheagle

    You might more reasonably have pointed at the previous administration’s first Sec’y. of State and her ex-President spouse as your prime exemplars of American kleptocrats.

    Nor is “carpetbagger” an appropriate term. The post-bellum carpetbaggers who swarmed the Old Confederacy were looking to screw over the defeated South for personal gain from the get-go. Trump went to Atlantic City to make money and did so – for awhile. That his foray into the casino gambling business ultimately came-a-cropper was not part of the initial business plan. Things just didn’t work out. That happens sometimes.

    Turns out there are upper limits on the price elasticity of demand in some markets. One of these has turned out to be the inclination of Americans to piss away good money on games of chance. So long as there were only a handful of significant places in the whole U.S. they could legally indulge this inclination – Vegas, Atlantic City and a few Mississippi riverboats – things were okay in ACNJ. Then came a wave of Native American tribes opening more modest establishments closer to New York – and many other places in the U.S. Many U.S. states also officially entered the numbers racket, as it used to be called, with newly legal lottery games. Trump – and others, too – got done in by an unlooked-for wave of what one might reasonably call partial deregulation of the gambling business in the U.S. Same thing happened to a lot of airlines starting in the late 70’s.

    Nor were the failed Trump airline and the failed Trump university deliberate scams as some have alleged. They were merely unsuccessful attempts at moneymaking outside Mr. Trump’s proven “envelope.” He has long since proven himself to be a very good entrepreneur so long as he sticks to areas that engage his core competencies – i.e., real estate development and promotion. The latter explains Trump’s success in reality TV as well as no small part of his electoral success.

    That he is not uniformly good at all forms of entrepreneurship should hardly come as shocking. Nor should the fact that a man with his ego sometimes finds his reach exceeding his grasp.

    Trump is hardly unique in that respect. The top management of Alphabet/Google, for example, have left a lot more entrepreneurial wreckage behind them than has Trump since their initial quite successful foray into ad-supported search engines. They’ve succeeded also in web services and cell phones but have been serial failures at most everything else to which they’ve turned their hands – notably space and robots.

    Coming, as you do, from academia, I allow for the fact that entrepreneurs seem always to have struck the professoriat as creatures of magical evil. I also allow for the fact that progressives share with Europeans the attitude that failed entrepreneurship marks one for life as a pariah. What could one reasonably expect, after all, from a class of people who have devoted their entire lives to achieving guaranteed sinecures in long-established institutions.

  • duheagle

    Most likely more than a bit of both. Scapegoats are often fellow criminals who have managed to get themselves on the outs with the Powers That Be.

  • Andrew Tubbiolo

    No, the Clinton’s took bribes from rich people and foreign governments, Donald Trump funded his business in Atlantic City off the backs of the taxpayers of New Jersey. Then he used the City of Atlantic City to skew zoning such that any mom and pop shop around his casinos were driven out of business. Then, after all that he still went broke. And after doing so, got bailed out again from the State of New Jersey. So for him, I think Carpetbagger is apropos. And just so you are reminded Donald Trump went broke before the advent of Indian gaming.

    I’m all for business. I’m all for capitalism. Capitalism like this. I watched this enterprise start from nothing but a collection of old machine tools from WWII. PotterUSA was built from scrap and almost no debt. They own their property, own their tools, don’t get special tax cuts, pay their workers a middle class wage, provide benefits, are not subsidized by public funds, don’t use Chinese labor, don’t outsource to Mexico and fold their profits to expand. All the while taking on child labor in Pakistan, government subsidized enterprises in China and India. That’s a business man.

    Most of the corporate world are a bunch of socialists who want one government or another to fund their enterprise, provide workers who can’t demand a living wage, use government provided skilled labor, use government to dodge paying taxes, use government subsidized bricks and mortar, tools, and raw material. I understand all that requires skill, but don’t call yourself a capitalist. Businessmen like that are socialists who look at me as competition for government largess. I understand you’re being sore at me for taking those government dollars that you think should be going to you, but don’t call yourself a capitalist.

  • Paul451

    Donald Trump funded his business in Atlantic City off the backs of the taxpayers of New Jersey.

    Also money laundering for the Russian mob.

  • Andrew Tubbiolo

    Probably not at that point. Trump started his casinos in the late 80’s and early 90’s, it’s unlikely the Soviet/Russian mob had the kind of money he needed then. They were in New York already though. Likely they had the kind of money he (Trump) needed only after the left overs of the USSR were liquidated, which would have been during the 90’s and mostly the late 90’s by the time those monies would have reached here. It became big money in the early 2000’s. A mark of that is the slew of Luk Oil gas stations in the NJ region having displaced Hess and Texaco and Sinclair. That takes money.

  • Paul451

    The FBI investigation into his casino money laundering was focused on the late ’80s, early ’90s. But it took nearly a decade before the casinos settled (for a trivial fine). But the focus even then was on Russian Mafia in NYC who loved to use Trump’s casinos to launder cash because they didn’t report large transfers, as required by law.

    (As did Trump himself. He hid an illegal loan by having his lawyer bring in a cheque for several million dollars, buy a suitcase worth of chips, and walk straight out.)

  • Andrew Tubbiolo

    Wow, interesting. I’m going off memory from the day, I did not remember a Russian connection then. Well no surprise. Their leadership nature, and their belief in the cult of personality as being the nation itself goes along with Trump’s leadership style.

  • Jacob Samorodin

    Punished? They already live in Siberia.

  • duheagle

    The FBI isn’t exactly a credible source about Trump-related matters. A significant fraction of its senior leadership, including its former head, were involved in trying to scupper Trump’s campaign and to conduct the current witch hunt aimed at forcing him from office after he was elected.

  • duheagle

    In what way did Trump “fund his business in Atlantic City off the backs of the taxpayers of New Jersey?” The Trump casinos were not built with government money. Had they been, they might not have gone broke.

    As for the bankruptcies, there were four and only the first pre-dated Indian gaming in New York. The bridge too far was the Trump Taj Mahal. The thing cost the ruddy Earth and went broke – the first time – barely a year after opening. If Trump had settled for just running the three earlier casinos, he’d probably still be in the casino business even with competition from Indian gaming.

    Perhaps my sympathies for Trump’s failures derive, at least in part, from my own history of failed attempts at entrepreneurship.

    I share your admiration for hardworking entrepreneurs who make it. My own “Potter” is Fisher Machine Products, a family-owned business located in the same town – Hawthorne, CA – as SpaceX. The link is to a page on the website of one of their distributors as Fisher has no website or retail presence. The son of the founder was a classmate of mine back in the day. Fisher also does no foreign sourcing. None of its employees are here on H1-B visas.

    You are correct that too many in the modern corporate world are socialists. That seems especially true of the more recently founded tech companies. That trend, I think, is not destined to end well.

  • Andrew Tubbiolo

    Hey, thanks for that link. I’m an amateur machinist. 20,000 lbs of hand crank and CNC in the garage. I might just buy some of their wares.

  • duheagle

    Happy to help out.

  • Paul451

    “Witch hunt”? That explains all the people pleading guilty.