A new mob on the waterfront

On the windswept streets of Brooklyn, a gang war is being fought out between Russian emigres. And the arrest of Ivankov, one of the leading mobsters, has done little to reduce the threat of the `Mafiya'.

"I have paid out over $8,000 this month to these animals," says Leon, chugging back a glass of vodka. "I can barely afford to stay in business." It's 9pm and the National Restaurant is full. Outside the wind howls along Brighton Beach Avenue, kicking up waste paper against shop fronts decorated with Cyrillic script. Whenever the wind stops, waves can be heard crashing over the two miles of sand that mark the seaward boundary of Brighton Beach, an area of Brooklyn that is home to more than 50,000 emigres from the former Soviet Union.

Leon has been my guide to Brighton Beach since we met last December. He owns a number of stores on streets that now look more like Vladivostok than New York. In Russia, he was a hospital administrator. For the past year he has paid protection money to two gangs. The alternative, involving his 14-year-old daughter, was explained to him in graphic detail. "They showed me a photograph of what they'd done to some poor kid. I knew they weren't joking."

The FBI Director, Louis Freeh, says that more than 2,000 of Brighton Beach's emigres are hardcore members of Russian gangs, representing a new branch of organised crime that federal officials call the "Mafiya". FBI sources say the gangs have international ambitions. After an apprenticeship in New York, many Russian mobsters are sent to set up cells in other countries.

In 1994, Oleg Karatayev, a distant cousin of Leon, left the Arbat Cafe in Brighton Beach in the early hours after celebrating the Orthodox New Year. As Karatayev, a former boxer, walked away, a mobster allegedly followed and shot him in the head. The assassin then went back to the party. The police interviewed hundreds of people who had been in the Arbat, a favourite haunt of Mafiya henchmen, that night, but none could remember seeing Karatayev.

"There is always silence, when the police come," says Leon. "These thugs hide behind the people, who feel the police are powerless." As we drink, several groups of men in the restaurant begin to stand out. They look exactly like Slavic mobsters should: guys with big muscles and designer suits surrounding a couple of smaller men who smoke and talk intently. When silent, their eyes look expressionless, like glass.

"You used to see Yaponchik in here," says Leon. "He thought he was the mobster big shot, but he is unimportant now." That's not what the FBI believes. The New York trial of "Yaponchik" ("Little Japanese" in Russian) begins in earnest today after two adjournments. Yaponchik, whose real name is Vyacheslav Ivankov, is charged with conspiracy to extort $3.5m from two Russian emigres who ran an investment advice company in lower Manhattan.

According to prosecutors, Ivankov is a treacherous criminal who created an international underworld organisation with branches in Bogota, Paris, Madrid, Milan, St Petersburg, Moscow and London. The FBI alleges Ivankov trafficked in drugs and munitions while extorting millions of dollars from Russian emigres.

Russian officials working with the FBI have designated Ivankov a Vory y Zakone, the highest criminal ranking in the old Soviet Union, whose name means "thieves in law".

James Kallstrom, head of the FBI's New York office, believes Ivankov's arrest has decapitated the Mafiya before it had a chance to grow deep roots in the United States. "It will show we took out the head guy sent over here," he said last month. "And that will send a powerful signal that we mean business."

"Ivankov is not the head guy, he never was," says Leon. It's a few days after our evening at the National. We are drinking sweet black coffee in the back room of his biggest store. Like many victims of Mafiya extortion schemes, Leon believes the FBI is deluding itself. "There are four main gangs here in Brighton Beach. All have large numbers of former KGB men and each one is growing more powerful. If the FBI thinks Ivankov was the big vory, that makes the gangs happy; they think the FBI will now pay them less attention."

Alexandre Grant, the editor of Novoye Russkoye Slovo, the leading US Russian language paper, agrees that the Ivankov trial is largely a public relations exercise. "The federal authorities want to give the impression the Russian Mafiya is under control. It's not. Ivankov was a criminal in Russia and he joined the first wave of immigration to the US. He was a minor thug who ran errands for the big guys."

Grant believes that Brighton Beach is home to a far more potent collection of criminals who are involved in a burgeoning drug trade with links in Colombia and a trade in arms which may include nuclear materials. "We are seeing the evolution of the Russian Mafiya which was built on a framework established in Moscow. KGB-linked gangsters there hoarded millions of dollars and they have brought much of that into the States. The Brighton Beach Mafiya is very well funded and ready to expand."

Sources inside the FBI and the New York Organised Crime Task Force say the Ivankov arrest has done little to contain the Mafiya's growth. "We have stepped up wire taps, visual surveillance and undercover operations against each of the main groups," says one senior New York Police Department detective. "Just this week we have begun a new undercover operation against one of the fastest-growing gangs."

The NYPD has increased the Russian section of its organised crime task force by 200 per cent in the past year; it now has more than 25 active agents. "We know Russian criminals are involved in drugs, prostitution, fraud and international money-laundering and we know the scope of their operations is increasing rapidly," says the NYPD source. "Brighton Beach is the headquarters of a gang with global ambitions."

The biggest threat posed by the Mafiya involves its "joint venture" with Colombian drug lords, the next phase of establishing what Russian mobsters call "Vorovski Mir" or "thieves world", an international order of gangs co-operating with each other. Law enforcement officials in New York and London are concerned that the Brighton Beach-Bogota connection could launch a more vicious era in the cross-border drug trade with high- grade cheap heroin flooding the streets of the UK and the US.

"Sure, I've run a few deliveries, from JFK airport across to Newark or up to Boston," says Anatole, a friend of Leon's who, like many Russian emigres, drives a limousine. "Since two years ago I reckon there have been many more drugs. There were also more killings for a while, but now that is not so. The Mafiya move in whenever they see a business is making good money."

Anatole saw a neighbour shot three times in the stomach just outside their apartment building. "There were some turf wars. Since the Russians and Colombians started to work with each other, that has stopped." Anatole claims he was forced to make drug deliveries. "They would not let me drive unless I did. The limo companies are all owned by gangs. It's one of their favourite ways of hiding money."

The Russian Mafiya's Colombian connection has grown out of the former Soviet Union's skill at money-laundering. Colombian narco-barons have been sending huge deposits to Russia for cleaning. "The money goes from Bogota to banks in Moscow and St Petersburg," says one senior New York banker. "In Russia, the tainted cash is converted to roubles then back into dollars via European banks in Geneva or London."

Once in London, the cash sits ready to be used as payment against crisp new $100 bills. "Three times a week Mafiya-controlled banks in Russia send a wire to London banks authorising the transfer of funds to a number of US banks that are processing orders for new $100 bills from Moscow," says the banker. "The money, often hundreds of millions of dollars, is flown to Russia on scheduled flights."

The new cash, now clean, is used to buy legitimate businesses throughout Europe. "We know Russian organised crime groups have bought property and companies in Paris, Frankfurt and London," says a senior FBI agent in New York who fears the Mafiya has acquired hidden control of banks in several European countries, including the UK.

Louis Freeh said the same thing at the World Economic Forum in Davos, Switzerland, in February. He then issued a grim warning: "Today's new tyranny of organised crime, occurring on a world stage, is more complex than America's La Cosa Nostra. Its international nature dictates co-operation among us. If we fail to take co-operative action against these groups, it will have disastrous consequences for all of us."

"It is already too late," says Alexandre Grant, who as a dissident in a Russian jail came across Yaponchik more than 10 years ago. "The Russian mafiya has a different business ethic, they don't want competition and gang warfare like the Italians. They want to bring organised crime together on a global scale so the mobs can concentrate their efforts. The Mafiya believes if global organised crime stopped all its in-fighting, they would become a world superpower."

That's a frightening thought, especially as the international mafia may already have its own nuclear weapons. In December, the Russian Admiral German Ugryumov warned that the Russian Mafiya was looting weapons from the Russian Pacific Fleet's arms depot in Vladivostok. The FBI's liaison officer in Moscow has written a series of memos in recent months warning that the control of the former USSR's vast nuclear arsenal has all but broken down.

"I have heard talk about these weapons," says Leon, fixing himself another cup of his favourite black coffee. "In the National often there is big talk made and several times I have heard men make threats of what will happen if the FBI or CIA moves against any of their strongholds. Many of the Mafiya here are ex-KGB and have ties to the military which no longer has money. There are many Russian officers who can be bribed. If the vory want they can easily buy weapons. Why not?"

Experts say an anarchic financial system in Russia has allowed many banks to fall into the hands of the Mafiya, giving them monetary carte blanche. "Organised crime in Russia has become the investment banker to mobsters in Italy, Spain, Colombia," says Jeffrey Sachs, an international economist at Harvard University. "We face a period ahead where the mafiosi of various countries will operate with a greater degree of international co-operation than ever before."

The trial of Mafiya vory Vyacheslav Ivankov marks the first time a Russian mobster has gone on trial in the US described as a godfather of organised crime. Ivankov's prosecution will give the American public the first detailed glimpse of the threat now encamped on their shores. The FBI wants the public to believe the danger is under control. Few Russian emigres in Brighton Beach believe that and, in private, many FBI agents seem to agree with them.

"I think Americans should demand more is done," Leon told me last week. "There is a cold-hearted viciousness about these gangs. Some of the ex- KGB guys see their crimes as some kind of revenge against the US, for helping to push the old USSR into chaos. But most are just professionals. They want a slice of the action wherever there is crime, and that includes your country, most definitely that includes Britain."

Whatever the merits of the Ivankov prosecution, the FBI has committed itself publicly to eradicating the Mafiya on American shores. US sources say the FBI has held meetings with members of UK law enforcement agencies and more are planned. Experts say that the Brighton Beach experience shows the Mafiya's threat of a new international crime wave is real. Britain must be prepared for the worst.