Alex Konanykhin

Alex Konanykhin (born Alexander Pavlovich Konanykhin (Russian: Александр Павлович Конаныхин) September 25, 1966) is an entrepreneur and former banker. He started his career by founding a private bank in Russia towards the end of communist rule. Konanykhin is sometimes spelled as Konanykhine.[2][3]

Alex Konanykhin
Александр Павлович Конаныхин
Born (1966-09-25) September 25, 1966
Ostashkov, USSR
CitizenshipRussia, Italy, and Argentina[1]
OccupationKMGi, TransparentBusiness
Known forEntrepreneur, former banker
Awards2004 New York Businessman of the Year, Republican National Committee
2011 WW IT Visionary Award from CIO Magazine

Konanykhin and his wife left Russia in 1992, and seven years later were granted political asylum in the United States.[3] The asylum grants were reversed in 2004, but reinstated in 2007.[4] He spent his business career largely in the United States, being a citizen of Italy, Russia, and Argentina.[1] He has founded companies including KMGi Group and TransparentBusiness.

Early life

Konanykhin studied at the Department of Space Research at the Moscow Institute of Physics and Technology to pursue a career in engineering.[5] In 1986, he was expelled from MIPT for running a small business during his summer vacation.[6][7] After his expulsion, he took advantage of the loosening business climate during Mikhail Gorbachev's economic reforms (perestroika). Within a few years, he became the head of a $30 million construction enterprise.[8]

Career in Russia

In 1991, Konanykhin was the founder, co-owner, and President of the Russian Exchange Bank,[9][10][11] which became the first institution to receive a currency-trading license from the Yeltsin government.[3] In 1992, he was one of the delegates to accompany Yeltsin to Washington, D.C., where they met with President George H. W. Bush, and afterwards, in Canada with Prime Minister Brian Mulroney.[8] Richard Sakwa named him the wealthiest person in Russia at that time,[12] with an estimated $300 million in net worth.[13][14] He had developed about 100 different companies within Russia by this time, when he was twenty-five years old.[15]

In 1992 he was kidnapped while on a business trip to Budapest, Hungary, during which time his business assets in Russia were seized. This account is according to Alex himself. Russian sources have a different account of events, based on a US court case.[16][17] Konanykhin claims he fled to New York where he delivered protest letters to senior Moscow officials and members of the press warning of the looming "mafiocracy". This prompted an investigation by the Moscow-based military prosecutor's office, and Konanykhin soon found himself under investigation. The prosecutor, Alexander Volvodez, now charged Konanykhin with illegally wiring $8.1 million from the Russian Exchange Bank to overseas accounts, and many other crimes, and demanded his extradition to Russia.[15] All charges were later dropped.[18]

As hearings in American federal court would later show, during this time the FBI had opened a division in Moscow; because American prosecutors and FBI officials were anxious to develop a relationship with Russian law enforcement officials, they had agreed to assist Volvodez in his request for Konanykhin's deportation. However, as Russia and the United States do not have an extradition treaty, Justice Department officials agreed to try to deport him for violating immigration laws under a minor visa violation.[15] The allegation was later proven false and dismissed during Konanykhin's first grant of asylum in 1999.[19]

First immigration trial

On June 27, 1996, Immigration and Naturalization Service (INS) agents along with Russian federal prosecutors arrested Konanykhin and his wife, Elena Gratcheva, at their Watergate apartment in Washington, D.C. The couple was taken to Arlington, Virginia, and charged in federal immigration court with violating the conditions of their temporary U.S. visas.[5] Between July 19 and August 2, 1996, hearings were held by Judge John M. Bryant to determine if, as Konanykhin claimed, his deportation was being masterminded by Russian prosecutor Volvodez for political reasons, and if Konanykhin's life and/or freedom were in danger. The trial touched upon issues as to whether the secret police had taken over the Russian banking industry, and also if the United States government had been fooled into going after Konanykhin.[15]

In court Konanykhin testified he was being targeted by Volvodez and the Russian government because of his anti-corruption campaign, and his lawyers argued that he had transferred money to private accounts to prevent it from being stolen.[20][21] Appearing as witnesses at the trial were FBI agents who testified that the Russian mafia had previously taken out a contract on Konanykhin's life. Also appearing were former INS prosecutor, Antoinette Rizzi, who had previously been in charge of the government's case against Konanykhin, and former KGB agent Yuri Shvets. Both Rizzi and Shvets testified that they had serious doubts about the charges filed against Konanykhin by Volvodez and the American government.[15]

On August 26, 1997, in Federal Court in Arlington, Virginia, a settlement agreement was reached between Konanykhin, who had spent more than 13 months in INS custody, although Gratcheva had been released on supervision, and the District Director of the Arlington INS District Office, and endorsed by District Judge T.S. Ellis III.[22] Judge Ellis stated that he found the testimonies of Yuri Shvets and Antoinette Rizzi in Konanykhin's immigration case “credible and somewhat disturbing”.[6] ordered the INS to pay $100,000 of Konanykhin's legal fees to pro bono counsel at Arent Fox Kintner Plotkin & Kahn.[23] The settlement also ordered Assistant U.S. Attorney Robert Spencer to confirm within 30 days that there would be an internal probe by the Department of Justice into the conduct of INS lawyers at the hearing.[23]

Libel lawsuits and political asylum

In a lawsuit filed in February 1997 with the Arlington County Circuit Court, Konanykhin alleged defamation against the daily Russian newspaper Izvestia which had reported that Konanykhin was involved in various criminal acts. The suit claimed that the information was erroneous and published with "reckless disregard for its truth or actual malice.”[24] An Arlington County Circuit Court jury recommended Konanykhin be awarded $33.5 million.[24] Soon thereafter the same court awarded him an additional $3 million in a libel case against the Russian financial journal Kommersant.[25] According to The Sunday Times, in 2010 the amount remained the largest amount ever awarded to an individual in a libel suit.[26]

On February 23, 1999, Judge Bryant granted political asylum to Konanykhin and Gratcheva, saying the former banker faced persecution and possible death if returned to Russia to face embezzlement charges. In his decision, Bryant wrote that testimony from several experts had convinced him that Konanykhin was being targeted for prosecution for political reasons.[3]

Temporarily freed from his trials with the Russian and American governments, Konanykhin and Gratcheva went on to develop a $100 million Internet startup in New York called KMGi, among other businesses.[27] On November 20, 2003, however, the Board of Immigration Appeals revoked Konanykhin's political asylum and ordered him returned to Russia.[28] The ruling came less than a month (October 25, 2003) after the arrest of Mikhail Khodorkovsky, Konanykhin's former banking rival in Russia and business partner during his exile. Konanykhin had served as vice president for the international development of Khodorkovsky's bank, Menatep.[28]

Second immigration trial

Konanykhin and Gratcheva fled to the Canada–United States border to evade immigration authorities. There, on December 18, 2003, they were arrested by several Department of Homeland Security agents at the Peace Bridge.[29] Konanykhin and Gratcheva were saved from deportation at the last minute by a series of emergency hearings in Federal Court. On January 26, 2004, Judge Ellis delivered his ruling, which found the arrest unlawful, and allowed the couple to stay in the United States temporarily until appeals in their immigration case were exhausted.[30]

For the second time the Department of Justice was ordered to pay compensation to Konanykhin for unlawful arrest.[31] In 2005, all charges against him in Russia were dropped.[18][32]

On September 18, 2007, in a federal courtroom in Alexandria, Virginia, Konanykhin was granted asylum for the second time.[31] Overall, Konanykhin successfully filed five different lawsuits against the US government as a part of the process.[7]

Career in America

He and his first wife established the Internet firms KMGi (an advertising agency), Publicity Guaranteed (a public relations firm),[33] and The Syndicated News, an online marketplace.[34] In 2004, Konanykhin was named “New York Businessman of the Year” by the Republican National Committee.[35]

His firm, KMGI established a subsidiary, WikiExperts.us, a business centered around creating Wikipedia articles for companies.[36] Paid editing of Wikipedia has sparked considerable debate due to conflicts of interest.[37] Konanykhin has called for a boycott of Wikipedia fundraising campaigns, "We believe that boycotting fundraising efforts of Wikipedia might compel it to raise billions via advertising and develop content of significantly better quality."[38] His company WikiExperts.us, which offers editing services on Wikipedia, was banned from editing on the online encyclopedia on October 17, 2013.[39]

In 2011 Konanykhin was named the winner of the WW IT Visionary Award by CIO Magazine (in Spanish: WW IT Visionary 2011 de CIO America Latina).[40] In 2011 Konanykhin's firm KMGi founded TransparentBusiness,[41] which allows employers or clients to monitor the activity of those working for them on computers.[42] He developed the idea for the company while dealing with the monitoring of those in his own company, before the software grew into its own business.[7] As of 2017 the software was in use in 98 countries.[43] In 2018, Konanykhin began working with legislators in states including Rhode Island in order to introduce bills such as H-7788 and S-2660 to try to mandate government contractors to verify the hours they billed to the government.[44] He also worked with the New Jersey State Assembly on draft bill NJ A3989, in addition with other states such as Missouri, Illinois, and Minnesota, with twenty-two states having proposed bills for billing verification as of February 2019.[45] In 2018 the company opened a $10 million 506(c) offering for a ten percent stake, following a $1.5 early investment round.[46] In 2019 Konanykhin appeared on the City & State "New York Tech Power 50" list.[47]

Published works
  • Defiance: How to Succeed in Business Despite Being Hounded by the FBI, the KGB, the INS, the Department of Homeland Security, the Department of Justice, Interpol, and Mafia Hitmen Renaissance Publishing, 2006; ISBN 978-0-9727377-0-8 [48][49]

Personal life

Brian Haig's book, The Hunted (ISBN 0-446-19559-6), is a novel based on the life of Alex Konanykhin and Elena Gratcheva. The book is dedicated to the late Gratcheva.[50] In 2016 the USA Today reported that Konanykhin was moving to Canada due to the election of Donald Trump.[51]

See also
  • List of people granted political asylum

References
  • St. Petersburg Times[52]
  • U.S. Judge Rules Konanykhin Can Stay, For Now[53]
  • Escape from the KGB and FBI[54]
  • The USA is going to send the former financier of President Boris Yeltsin back to Russia[55]
  • Doing Business With Russia[56]
  • Konanykhin Hearing Begins[57]
  • U.S. Judge Rules Konanykhin Can Stay, For Now[58]
  • U.S. Rethinks Konanykhin Case[58][59]
  • US COURT TO HEAR FORMER RUSSIAN BANKER'S CASE[60]
  • US authorities arrested Khodorkovsky's former partner[61]
  • Geopolitics: The new Cold War [62]
  • Konanykhin Finds No Freedom in U.S.[63]
  • Immigration panel backs off effort to deport Russian banker[64]
  • Russian Banker Released From Custody In USA[65]
  • 'Not terrorists': Hysteria over MH17 fails to take account of both law and facts [66]

References
  1. "Billions in Taxpayer Money Lost to Overbilling". Washington Informer. September 18, 2013. Archived from the original on December 3, 2014. Retrieved October 9, 2013.
  2. Shane, Scott (2006-12-10). "When an Ex-K.G.B. Man Says They're Out to Get Him". New York Times. Russia; UK. Alex Konanykhin, a former Russian banker who fled to the United States in 1992 after former K.G.B. officers muscled him out of his own business.
  3. Shane, Scott (1999-02-23). "Federal judge grants Russian banker political asylum". The Baltimore Sun.
  4. "Konanykhin Granted Political Refugee Status – Kommersant Moscow". Kommersant.com. Archived from the original on 2012-10-10. Retrieved 2010-12-28.
  5. Constable, Pamela “Russian Pair in Custody, Accused of Embezzlement.” Washington Post, June 29, 1996
  6. William Norman Grigg, “Cozy with the KGB”, The New American, Volume 13, Number 20, September 29, 1997.
  7. Warner, Christina D. (February 5, 2019). "Big Ideas: "A dashboard to monitor your remote workforce" with Alex Konanykhin, CEO of TransparentBusiness". Medium.
  8. Pamela Constable, "From Russia with Chutzpah", The Washington Post, August 18, 1996.
  9. "US authorities arrested Khodorkovsky's former partner". Pravda. January 13, 2004.
  10. "Press Review". Old Moscow Times. July 27, 2016.
  11. "Escaped Banker Acknowledged Victim of Russia". Kommersant. September 20, 2007. Archived from the original on March 30, 2014.
  12. Richard Sakwa (2014). Putin and the Oligarch: The Khodorkovsky-Yukos Affair. I.B.Tauris. p. 245.
  13. Patricia Davis (December 16, 1999). "Jury awards $35.5 Million to Russian in libel case". Washington Post.
  14. Samuel Oakford (June 3, 2014). "Ukraine Turns Up the Charm to Capture Billions in IT Outsourcing". Vice.
  15. Pamela Constable (August 18, 1996). "FROM RUSSIA WITH CHUTZPAH". The Washington Post.
  16. K, Alex. "From Russia with Chutzpah". Washington Post. Washington Post. Retrieved 21 December 2019.
  17. Ralitsa Vassileva (host) and Jonathan Mann (interviewer) (November 24, 2006). "New Outbreaks of Violence in Iraq After Sadr City Attacks; Radioactive Element Found in Body of Ex-Spy; Vladimir Putin Denies Kremlin Involvement in Poisoning". CNN.com. Retrieved June 29, 2012.
  18. Andres Amerikaner (January 6, 2008). "Luxury Food Market Targeted By Entrepreneur". Miami Herald. Retrieved June 29, 2012.
  19. “Federal Judge Orders an Internal Justice Department Probe”, Baltimore Sun, February 23, 1999.
  20. Archived 2011-07-27 at the Wayback Machine, michaelmaggio.org; December 10, 1996.
  21. Emily Compston, “My Fear of the Mobski”, The London Daily Express, December 10, 1996.
  22. Alexander, Karen, “Russian Freed, INS Faces Ethics Probe”, Legal Times, September 1, 1997.
  23. Alexander, “Russian Freed, INS Faces Ethics Probe”.
  24. Jessica S. Buel, “Jury Awards Russian $33 M Damage Ruling”, The Arlington Journal, December 15, 1999.
  25. “U.S. Court Finds Kommersant Guilty of Libel”, The Moscow Times, January 25, 2000.
  26. Ciara Kenny (November 21, 2010). "The Naked Truth about Libel". The Sunday Times.
  27. Baroney, Michael, “Russian Rebel”, Profit Magazine, September, 1999.
  28. "Ex-banker ordered to return to Russia". Articles.baltimoresun.com. 2003-11-25. Retrieved 2010-12-28.
  29. Douglas Farah, “Couple Tied to Putin Foes, Fights Deportation”, Washington Post, January 9, 2004.
  30. Jerry Marken, “Deportation Threat Lifted, Decisions Allow Russian to Stay in U.S. Indefinitely”, Washington Post, January 30, 2004.
  31. "Escaped Banker Acknowledged Victim of Russia". Kommersant (in Russian). Russia. 2007-09-20. Archived from the original on 2011-04-30. Retrieved 2011-01-13. Judge Bryant upheld Konanykhin instead of the Department of Justice
  32. Andres Amerikaner (January 6, 2008). "Luxury Food Market Targeted By Entrepreneur". Miami Herald. Retrieved June 29, 2012 – via redOrbit.com.
  33. Staff (2009-07-08). "Deal Radar 2009: Publicity Guaranteed". Sramana Mitra. Retrieved 2010-12-28.
  34. "About Us". Intuic. Archived from the original on 2010-11-22. Retrieved 2010-12-28.
  35. Al Kamen, “In the Loop”, The Washington Post, February 13, 2004, page A25.
  36. "The promise and perils of crowdsourcing content". The Economist. London, UK: The Economist Newspaper Ltd. 2011-01-13. Archived from the original on January 20, 2011. Retrieved 2011-01-26. Alex Konanykhin of WikiExperts...
  37. Read, Brock (2007-01-24). "Wikipedia Blocks a Pay-for-Play Scheme". Chronicle.com. Retrieved 2012-02-12.
  38. MarketWatch (March 1, 2011). "Wikipedia Experts Call for No Donations to Wikipedia". Retrieved October 11, 2013. reprinted on wikiexperts.us
  39. SeeCommunity ban proposal for paid editing firm wikiexperts.us
  40. Marcelo Lozano (October 24, 2011). "ALEX KONANYKHIN – WW IT VISIONARY 2011". CIO Magazine.
  41. "KMGI control software presents the use of work time". PC World. February 23, 2012.
  42. Kelsey Gee (February 7, 2017). "Big Employers Go It Alone in Push to Help Refugees". Wall Street Journal.
  43. Olga Garicichina (June 10, 2017). "Alex Konanykhin – KGB most wanted makes it big in the tech world". Russian Time Magazine.
  44. "Saving RI "Tens of Millions of Dollars" Through Transparency is Goal of Legislation". Go Local Providence. June 9, 2018.
  45. Thomas Claburn (February 13, 2019). "If you want a vision of the future, imagine not a boot stamping on a face, but keystroke logging on govt contractors' PCs". The Register.
  46. Steve Gelsi (October 26, 2018). "Russian Software Entrepreneur Draws Backing Through Specialty Offering". The Deal.
  47. "The New York Tech Power 50". City and State. February 10, 2019.
  48. Konanykhin, Alex (2006). Defiance: How to Succeed in Business ... ISBN 9780972737708. Retrieved 2010-12-28.
  49. "Defiance, or: How to Succeed in Business While Being Targeted by the FBI, the KGB, the Department of Homeland Security, the INS and the Mafia Hit Men". Defiancethebook.com. Archived from the original on February 2, 2011. Retrieved 2010-12-28.
  50. The Hunted. Thorndike Press. 2009. Retrieved 2010-12-28 – via Internet Archive.
  51. John Swartz (November 8, 2016). "Trump's vague plans could reverberate in tech". USA Today.
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  55. "The USA is going to send the former financier of President Boris Yeltsin back to Russia". English pravda.ru. 2003-11-27. Retrieved 2010-12-28.
  56. "Doing Business With Russia". Franchise in Russia. Archived from the original on 2011-07-11. Retrieved 2010-12-28.
  57. "Konanykhin Hearing Begins". Themoscowtimes.ru. 2004-01-15. Retrieved 2010-12-28.
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  59. "U.S. Rethinks Konanykhin Case". The Moscow Times. 2004-01-29. Retrieved 2010-12-28.
  60. "US COURT TO HEAR FORMER RUSSIAN BANKER'S CASE". En.rian.ru. 2004-01-16. Retrieved 2010-12-28.
  61. "US authorities arrested Khodorkovsky's former partner". English pravda.ru. 2004-01-13. Retrieved 2010-12-28.
  62. Jeff Sanford. "Geopolitics: The new Cold War". Canadianbusiness.com. Archived from the original on 2007-08-27. Retrieved 2010-12-28.
  63. "Konanykhin Finds No Freedom in U.S." The Moscow Times. 2004-01-19. Retrieved 2010-12-28.
  64. "Immigration panel backs off effort to deport Russian banker". Articles.baltimoresun.com. 2004-01-28. Retrieved 2010-12-28.
  65. "Russian Banker Released From Custody In USA". En.rian.ru. 2004-01-29. Retrieved 2010-12-28.
  66. Fuller, Roslyn (25 July 2014). [rt.com/op-ed/175496-hysteria-mh17-ukraine-facts-terrorists/ "'Not terrorists': Hysteria over MH17 fails to take account of both law and facts"] Check |url= value (help). RT. RT. Retrieved 24 December 2020.
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