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A Russian billionaire with a criminal record and alleged links to organized crime has been making large investments in US companies, including the ride-hail service Lyft, a biotech firm that does work for the Defense Department, and a prominent software company.
Gavril Yushvaev, who according to Forbes is worth $1.6 billion, invested a reported $100 million in Lyft. On a 2018 list of its investors that the company filed with the Securities and Exchange Commission last year—which named LeBron James, General Motors, the Kuwait Investment Authority, and scores of other individuals and investment funds—Yushvaev stood out with his checkered past, which includes being cited in a Spanish government report as an associate of a Russian banker linked to organized crime and money laundering.
Yushvaev’s path to becoming an investor in American tech follows a familiar course for Russian billionaires, many of whom built their fortunes in the 1990s following the collapse of the Soviet Union, when business ventures and shady, if not criminal, enterprises often overlapped in a Wild West atmosphere of unbridled crony capitalism.
In 1980, Yushvaev was convicted of a “violent crime” and served nine years in a Soviet prison, according to an SEC filing submitted in 2002 by a Russian company of which he was a shareholder. Shortly after his release, Yushvaev met David Yakobashvili, a Russian businessman who had helped start a Russian company called Trinity, which was essentially a group of about ten people pulling together different deals. Trinity would come to own various properties, including Metelitsa, an expensive and wild Moscow dance club and casino where Russia’s new millionaires and mobsters mingled. (The club shut down in 2009 after Russian leader Vladimir Putin pushed through a law prohibiting gambling in most of Russia.) In a report on corruption in Russia, the Organized Crime and Corruption Reporting Project (OCCRP) noted that Trinity’s “first serious business was selling used cars from the United States. One of its early operators, Vladislav Vanner, led the Bauman criminal gang, an influential crew in Moscow at the time. Vanner was shot and killed by another gangster in 1994.”
Yakobashvili tells Mother Jones that Yushvaev joined the Trinity group and soon became a partner and that Trinity eventually embodied over 300 different enterprises, which included setting up street-side slot machines, selling stockings and women’s underwear, restoring kitchens, peddling coal, and running hotels in boats docked on rivers. Its used car business led Trinity to acquire the first GM distributorship in Russia. Yakobashvili—his name is also sometimes spelled Iakobachvili—acknowledges that Vladislav Vanner worked for Trinity but insists he was no gangster and maintains Vanner was killed because of a financial dispute related to a bar.
As part of their many ventures, Yushvaev and Yakobashvili went into the diary and juice business—”in 1992 we were the first to mass-produce juice in the Soviet Union,” Yakobashvili says—and became top investors in Wimm-Bill-Dann, a dairy and juice company with nearly half a billion dollars in annual sales that the Wall Street Journal in 2002 called “Russia’s biggest consumer-goods firm.”
But when that firm submitted an SEC filing that year, as it was preparing to offer shares on the New York Stock Exchange, Yushvaev brought it negative publicity.
The filing noted that “our largest shareholder…was convicted of a violent crime in 1980,” and it listed Yushvaev as that shareholder, with control of 18.8 percent of the company. A Wall Street Journal article reported, “A respected diary and juice company preparing to make Russia’s fourth-ever New York Stock Exchange listing on Friday is running into some last-minute embarrassment, disclosing in its prospectus that its largest shareholder is a former convict who was imprisoned in the Soviet Union for violent crime.” Yet Bloomberg noted, “Investors appear unfazed that Gavrill Yushvaev, the company’s biggest shareholder, was convicted for armed robbery in 1980 and served nine years in a labor camp.”
Worse for the company, the filing also reported that certain shareholders and directors, including Yakobashvili, its chairman, “are shareholders in, and directors of, a group of related companies sometimes referred to as ‘Trinity.’ The Trinity group engages in automobile distribution, financial services, security services, casinos, construction, advertising and engineering…The Trinity group has been the subject of speculation in the Russian press, including with respect to possible links with organized crime.”(Yushvaev’s position as a partner in Trinity has been reported by both the OCCRP and Bloomberg.)
Yakobashvili asserts that Trinity “never had any kind of links to organized crime. It was reported by yellow newspapers… It never had any kind of relationship with the government or crime. But we tried to protect ourselves—but not to be part of any criminal group.” He points out that Wimm-Bill-Dann did acknowledge Yushvaev’s criminal past and the speculation about Trinity and organized crime in the SEC filing in order to be “absolutely transparent.”
In this SEC filing, Wimm-Bill-Dann stated that “no charges have been brought by governmental authorities against any of our shareholders or directors and, to the best of our knowledge, none has been threatened.” But the document said that “press speculation” about Trinity and about Yushvaev “could adversely affect our reputation” and the price of the company’s shares. “A few people will be scared by that,” Mattias Westman, an investment fund manager in Moscow, told Bloomberg in 2002. “But a lot of people are aware that many on the Russian business scene don’t have a squeaky-clean past. It’s important that the company itself made this information public.”
“Honesty was the smart move for us,” Yakobashvili says. And his and Yushvaev’s involvement in the company did not hamper the firm. In 2011, Pepsico, the US-based beverage company, bought 66 percent of the firm in a $3.8 billion deal that left Yushvaev with about $1.1 billion in exchange for his large stake of the Russian company.
Yushvaev was now a billionaire. In 2013, he bought one-fifth of Russia’s largest gold mining company, Polyus Gold International Ltd., from Russian tycoon Mikhail Prokhorov for $1.85 billion. Yushvaev’s ownership interest in Polyus, which held large coal deposits, placed him on a “dirty dozen” list, compiled by the Guardian, of 12 super-rich “investors whose combined coal holdings are equivalent to the entire annual emissions of China.” He also invested $300 million in a major Moscow real estate development. In 2015, he sold his interest in Polyus to the family of Russian oligarch Suleiman Kerimov.
By now, Yushvaev was becoming a bit famous as a globe-trotting Russian tycoon. A French media report noted in 2015 that he owned a villa snuggled between two coves on Saint-Jean-Cap-Ferrat, a peninsula on the Cote d’Azur. It was then valued at 130 million euros. And about this time, Yushvaev began deploying his wealth in the United States.
At the end of 2015, Yushvaev made his $100 million investment in Lyft, according to the Bell, a Russian website that covers business news. “While everyone was running to Uber, he was smarter and invested in Lyft,” a Yushvaev colleague told the Bell. At that point, Lyft was not a publicly traded company.
Alexandra LaManna, Lyft’s communications director, says Yushvaev is no longer an investor in the company. But Lyft would not reply to specific questions about Yushvaev’s investment: How did Yushvaev become an investor? Did Lyft vet him before he bought a chunk of the company? When did did he sell his shares?
Yushvaev is hardly the first Russian tycoon to invest in American tech firms. Alisher Usmanov, one of Russia’s richest men, sunk $200 million into Facebook in 2009 and cashed out for over half a billion dollars in 2013. Russian billionaire Yuri Milner, backed up by hundreds of millions of dollars from a Kremlin-owned bank, invested heavily in Facebook and Twitter. At one point, his companies owned 8 percent of Facebook and 5 percent of Twitter. His firms sold those holdings a few years ago.
In 2017, the New York Times reported that Milner “retains investments in several other large technology companies and continues to make new deals. Among Mr. Milner’s current investments is a real estate venture founded and partly owned by Jared Kushner, President Trump’s son-in-law and White House adviser.” In a statement released following the Times‘ story, Milner’s investment firm, DST Global, insisted there was “nothing unusual” about its investments in Facebook and Twitter and noted it had invested in “more than 30 internet companies around the world,” including Airbnb, Spotify, and Alibaba. The firm also said that of the $7 billion it had invested in the consumer internet sector since 2009, less than 5 precent had come from Kremlin-controlled funds.
Both Usmanov and Milner appeared on a list released by the US Treasury in 2018 of Russian oligarchs and politicians presumably on good terms with Putin. In a recent interview, Usmanov said of Putin, “I respect him. I think he is the number one leader in the world today.”
Last year, Rusal, the large aluminum company owned by the Putin-connected oligarch Oleg Deripaska, purchased a 40 percent stake in a Kentucky plant, after the firm successfully lobbied Washington lawmakers, including Senate Majority Leader Mitch McConnell, who represents Kentucky, to free it from certain sanctions. In 2018, the US Treasury Department had imposed sanctions on Deripaska and several of his companies, stating, “Deripaska has said that he does not separate himself from the Russian state. He has also acknowledged possessing a Russian diplomatic passport, and claims to have represented the Russian government in other countries. Deripaska has been investigated for money laundering and has been accused of threatening the lives of business rivals, illegally wiretapping a government official, and taking part in extortion and racketeering. There are also allegations that Deripaska bribed a government official, ordered the murder of a businessman, and had links to a Russian organized crime group.” (Emails with a request for comment from Deripaska that were sent to two of his companies received no replies.)
In addition to his Lyft investment, in 2015, Yushvaev joined a consortium that invested $150 million in Humacyte, a biotech company based in Durham, North Carolina. The CEO of the company at the time, Carrie Cox, said then, “We believe this is one of the largest private funding rounds in biotech to date, comprised of investors from the U.S. and around the world.” Humacyte was then developing Humacyl, a bioengineered tubelike product for patients with kidney failure; the product would provide vascular access for dialysis. In 2017, the firm received a $3.4 million contract from the Defense Department to support its research into using Humacyl for the treatment of traumatic vascular injuries that could result from battlefield events, automobile crashes, or industrial accidents.
A 2017 SEC filing listed Yushvaev as an investor in Domo, a Utah-based cloud software company specializing in business intelligence and data visualization. Its other investors have included Blackrock, Fidelity Investments, and Bezos Expeditions, which manages Jeff Bezos’ venture capital investments.
Mother Jones sent several emails to Domo asking it to explain Yushvaev’s investments in the firm. “All I have is that he has been a long-term investor like many of those who have invested in Domo,” Julie Kehoe, a company spokesperson, replied. Humacyte did not respond to multiple requests from Mother Jones. Messages left for three senior Humacyte executives and a public relations consultant for the company were not returned.
Yushvaev’s ascension to billionaire investor status has been accompanied by public controversy. In 2013, the Spanish government released a report on Russian organized crime activities in that country that included a reference to Yushvaev. The report said that a Russian banker—who was tied to a Russian business leader allegedly involved in a Moscow-based crime syndicate—“maintained a subordinate relationship to” Yushvaev and that this relationship “related to Eastern European criminal organizations.” It did not spell out the details of this connection or explain these links any further. (This report also alleged that Alexander Torshin, a high-ranking Russian official who served in Putin’s party, had helped Moscow-based mobsters launder money through Spain—a charge Torshin has denied. Torshin is best known in the United States for having worked with—or run—confessed and convicted Russian agent Maria Butina, as the pair spent years infiltrating the National Rifle Association and other corners of the American conservative movement.)
In November 2017, two of Yushvaev’s security guards were involved in a shooting at a Moscow restaurant during which a person was killed. The OCCRP reported that Yushvaev “attended the birthday party of Dmitry Pavlov, a businessman with criminal connections who was known to law enforcement as ‘Pavlik.’ Also in attendance were other well-known criminal leaders, including Oleg Shishkanov…At the birthday party in a restaurant in Moscow’s Oko tower, a shootout erupted between [Yushvaev’s] and Pavlov’s bodyguards…One person was killed and five wounded.” (Days after that incident, the Crime Russia website posted a photo that purportedly showed Yushvaev at the party with Russian mobsters.) This past November, the prosecutor general of Russia announced indictments in the shooting case.
In late 2018, Yushvaev was named in a lawsuit that drew press attention—with filings in the case casting him as a nefarious character. A London-based firm called Lehram Capital Investments Ltd. in November of that year filed a lawsuit in an Illinois state court in Chicago accusing Baker McKenzie LLP, one of the largest global law firms, of malpractice. Lehram Capital claimed the law firm had screwed up its effort to recover a Siberian coal mine that was allegedly swiped from Lehram by a cabal of Russian business people and officials. In the suit, Lehram stated that after it purchased the mine, a local government official imprisoned a Russian-based director of Lehram and forced him to transfer ownership of the facility to a local coal magnate. Lehram hired Baker McKenzie to help get the mine back.
In the lawsuit, Lehram alleged that a Baker McKenzie partner introduced Lehram’s principal shareholder, Daniel Rodriguez, to Yushvaev and told Rodriguez that Yushvaev was another client of the law firm and a “reliable and successful businessman” and that Lehram should make $300,000 in payments to Russian public officials through Yushvaev to “incentivize” these officials to help Lehram recover its assets. In an affidavit, Rodriguez asserted that he refused to engage in “what I perceived as bribes to Russian Government officials,” and he maintained that afterward he became the target of death threats, harassment, and hacking that he attributed to a Yushvaev associate. “I was threatened that if I mentioned Gavril Yushvaev’s name, I would have to hide in Antartica,” he claimed. In one exhibit in the lawsuit, Baker McKenzie told Lehram it was not responsible for Yushvaev’s actions.
In a filing opposing Baker McKenzie’s attempt to move the case from Chicago to Russia, Rodriguez, a Spanish citizen, cited the Spanish report on Russian organized crime to claim Yushvaev is “one of the patrons” of a “Russian criminal group,” and he noted that a Spanish law enforcement official had told him that Yushvaev had a “leading role in the Russian criminal world” and advised him not to travel to Russia. In this affidavit, Rodriguez also said an FBI agent had provided him a similar warning.
The lawsuit is still underway in the Chicago court. The lawyer representing Baker McKenzie in the case did not respond to emails and phone calls requesting comment. A spokesperson for Baker McKenzie said the firm had “no comment at this time. If anything changes, we will let you know.”
Yushvaev also has a family connection to players in the Trump-Russia scandal. In 2016, one of his daughters married a Russian businessman named Murad Beniaminov, and the wedding was hosted by Russian billionaire Aras Agalarov at his estate. Agalarov, a developer from Azerbaijan, partnered with Trump in 2013 to hold that year’s Miss Universe contest in Moscow, when Trump owned the pageant. Agalarov and Trump subsequently tried to develop a tower project in the Russian capital, but the venture fizzled. But in 2016, Agalarov’s son, Emin, a middling pop star in Russia, helped broker the Trump Tower meeting that brought together top Trump campaign advisers with a Kremlin emissary who they were told would deliver dirt on Hillary Clinton as part of a secret Russian effort to help Trump win the White House. (Donald Trump Jr., who set up this meeting, later claimed it yielded no material of any use, but by taking this meeting, Trump Jr. and the other attendees—Paul Manafort and Jared Kushner—signaled they were open to colluding with a secret Russian effort to assist Trump.)
The 2016 wedding at the Agalarov home was an extravagant affair attended by business elites and famous entertainers, including Emin, a friend of the groom, who serenaded the guests.
In Special Counsel Robert Mueller’s report, a man who shares the same last name as the groom—Roman Beniaminov—is identified as an assistant for Emin. And Ike Kaveladze, an executive in Aras Agalarov’s company, told Mueller’s team that it was Roman Beniaminov who had informed him that the point of the Trump Tower meeting was for the Kremlin emissary to convey “negative information on Hillary Clinton.” Yet Roman Beniaminov told Mueller’s investigation he had no recollection of knowing or saying that. An American lawyer for Kaveladze and Emin Agalarov did not respond to a request for comment.
Yushvaev’s overall strategy for investing in the United States is not publicly known. Mother Jones sent to a Russian business associate of Yushvaev a long list of detailed questions for Yushvaev about his investments, his past, and the allegations linking him to organized crime. The list included these queries: “What is your relationship to President Putin? Are you a political supporter of him or his political party? Have you ever socialized with him?”
This business associate, Vladislav Shubaev, communicating on behalf of Yushvaev, replied in an email that Yushvaev would be willing to discuss the questions only if a Mother Jones reporter would meet Yushvaev in Europe or Israel. He noted that Yushvaev could not travel to the United States because his US visa had expired. When Mother Jones asked if Yushvaev would agree to an interview via a phone or video call, Shubaev replied, “In [Yushvaev’s] opinion, the discussion of such a wide range of issues by telephone is not acceptable.”
In a subsequent email, Shubaev wrote, “I do not quite understand your reference to the criminal past of Gavril Abramovich [Yushvaev], because, as far as I know [in] 2001 or 2002, before going to IPO the company Wimm Bill Dann completely disclosed information about the biography of Mr. Yushvaev from the place of his birth and ending with the information of his criminal record… [I]t is not a secret! All information regarding his past is available in open sources.” When told that Mother Jones wanted to ask Yushvaev about specific reports regarding his past, his business activities, and the organized crime allegations, Shubaev responded with a blanket statement: “Given your questions, we would point out that the information in the media you refer to is obviously unreliable and disreputable. Gavril Abramovich Yushvaev pays no regard to such sources.” Shubaev did not specify which information Yushvaev disputed.
The Bell reported that by the end of 2017 Yushvaev had invested about $500 million in foreign companies. According to Anders Aslund, a Swedish economist who tracks Russian finances, there is no way to determine how much money is directly invested in US companies by Russian oligarchs. (He estimates that $200 billion in Russian “dark money” pours into the US through offshore havens, such as the Cayman Islands—but this flow is different than direct investments from Russian billionaires.) And there’s no way to tell if Yushvaev has bigger plans for investing in the United States.
Yakobashvili, who says he has not had any business dealings with Yushvaev in about ten years, notes his old partner “is a very good gambler and likes to gamble… He was always a winner.” And this, according to Yakobashvili, includes Yushvaev’s financial investments: “He’s a good investor. He understands where to put money. The world is very small and he puts money into projects that he finds interesting all around the globe.” Noting that Yushvaev has nine children, he adds, “For him it is important to create a fortune to give to his children.”
UPDATE: After this story was published, a spokesperson for Russian billionaire Yuri Milner sent Mother Jones this statement regarding the 2018 US Treasury list of Russian oligarchs and politicians cited above: “As confirmed by the Department of Treasury in its published FAQs, the CAATSA report (the so called “Treasury list”) included all Russian national individuals (total 96) with an estimated net worth of $1 billion or more. No reference was made that all these individuals are ‘on good terms with Putin.'”
Photo Credit: Mother Jones illustration; Getty; Rafael Henrique/Zuma; Alexander/Zuma
