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Galina Panin, a Russian national who owns a home in Miami, arrived at Miami International Airport on Oct. 18 on a flight from Moscow. After she showed her passport to officials at the customs and immigrations checkpoints, FBI agents suddenly appeared, handcuffed her and led her to the Miami Federal Detention Center. That’s where she’s spent the past eight months. Panin, 40, who speaks little English, had no idea she had been indicted six months before her arrival by a federal grand jury in Miami, according to her attorney, Hugo Rodriguez. The charge: 14 counts of money laundering and foreign and interstate transportation of fraudulently obtained proceeds. Her husband, Nikolas Panin, was part of the same indictment. The charges are connected to the business dealings of her husband, a Russian businessman who has been investigated by Russian authorities on suspicion of fraud stemming from a multimillion-dollar Russian-Chinese business deal and of being involved in the 1995 disappearance of two Chinese businessmen at the Russian-Chinese border. Her husband also has been investigated by the Organized Crime Task Force of the U.S. Department of Justice in Washington, D.C., which reviewed and approved the indictments against the couple. A plea deal in the works could mean a release from jail for Panin, who has been deemed a flight risk and denied bail. But, says Rodriguez, “I can’t give her back the last eight months.” The prosecution of Galina Panin illustrates how U.S. law enforcement officials are using federal money laundering statutes in increasingly aggressive ways. The laws allow authorities to go after anyone — including the lawyers of accused drug traffickers and wives of international businessmen — who takes or spends illegally obtained funds. The case also shows how difficult it is to investigate and prosecute cases where suspected crimes took place in foreign countries. But Rodriguez says his client’s story exemplifies the abuse of money laundering statutes by the feds, who he says are getting involved in international cases that are out of their jurisdiction. “What are we? The world’s police? The world’s prison?” he asks. “This is an overreaching use of money laundering statutes.” Rodriguez, of counsel to the Miami law firm Seiden Alder Rothman Petosa & Matthewman, was appointed by U.S. District Judge Joan Lenard in February to represent Panin. He says it took him months to find out the nature of the charges against his client; all he had was a six-page indictment that showed bank withdrawals and deposits. It was only when he filed several motions demanding information that he was able to unravel the case. “My client kept saying to me, ‘Why am I here, why am I in jail?’ ” he says. But two weeks ago Rodriguez obtained a copy of a translated, year-old police report from the city of Vladivostok in far eastern Russia and was able to piece together the government’s case. Rodriguez says the seven-page report clears his client of any wrongdoing. The document outlines a circuitous tale of a questionable international business deal, a murder investigation and the transfer of millions of dollars from half a world away. The report, titled “Order for Closing Criminal Investigation,” was filed by Rodriguez in Miami federal court. Prosecutors in Miami brought fraud charges against Galina Panin after learning of a contract her husband’s company, Nikos, signed in April 1995 with a Chinese company, Heipec. Both Galina and her husband, Nikolas, were officers in the corporation at the time. Rodriguez insists that Mrs. Panin had no knowledge of the company’s day-to-day operations. The contract called for Nikos to ship 4,000 tons of copper to Heipec for $7 million. Heipec wired advance payments totaling $2.3 million to Nikos in 1995. Four money transfers totaling $1.6 million were made by Nikos to a Citibank account in Miami in the name of Tolnic, a Florida corporation, and then were transferred into the Panins’ personal account. The Panins used about $1.2 million of the money, the government alleges, to buy a home in Coral Gables, Fla. (They later moved to Miami.) Under the contract, Nikos was supposed to have sent the first shipment of copper to Heipec on June 30, 1995. But the delivery never took place, according to the report drafted by Russian investigators. On July 28, Zhang Chuang Shen, the manager of Heipec, and his interpreter, Feng Xiao Ming, left Vladivostok in a Toyota Corolla driven by Sergey Kamayev, the commercial director of Nikos and an employee of the Panins. Kamayev drove the Chinese men toward the Russian-Chinese border, where an employee from Heipec had arranged to meet them, according to the court documents. The two Chinese men, however, never crossed the border. They were never heard from again. Kamayev subsequently fled to the United States; he eventually was deported back to Russia after being charged with immigration fraud by American authorities. The Panins, meanwhile, established a residence in Coral Gables, using the fraudulently obtained funds from the business deal in Russia to purchase their home in Miami-Dade, Assistant U.S. Attorney Diana Fernandez alleges. “The transfer of the $1.6 million to the United States and the use of the money by the defendant and her husband to purchase a personal residence constitutes the conversion of those funds for their own use, thereby defrauding the Chinese company,” according to court documents filed by the U.S. Attorney’s office. But the Russian criminal investigation report, dated June 19, 2000, concluded that the Panins’ money was not obtained through fraud. Rodriguez, a former FBI agent, got wind of the report through Russian connections and petitioned federal prosecutors for it. After obtaining it, he used it as a supplement to his motion to dismiss the charges against his client, saying the documents “completely exonerate and exculpate her from this indictment.” The Russian report states that Nikolas Panin had the authority, by way of a supplemental contract, to use Heipec’s funds for other investments, and that no fraud occurred. Furthermore, “the investigation was not able to collect any evidence that Panin and Kamayev did abduct and kill the citizens of the People’s Republic of China Zhang Chuang Shen and Feng Xiao Ming.” But Fernandez, the Fort Lauderdale, Fla.-based prosecutor who charged the Panins, raised serious doubts about the report in court documents, calling it “hearsay” and “highly questionable.” In her response to Rodriguez’s supplemental motion to dismiss, she notes that Nikolas Panin was the main source of the information for the report. Despite taking this position just two weeks ago, the U.S. Attorney’s office agreed to a plea bargain last week, said Rodriguez. At a status hearing this past Monday, Fernandez, who is assigned to the organized crime section of the U.S. Attorney’s office, told Judge Lenard that the government would waive the indictment and allow Galina Panin to plead guilty to a single charge of failing to declare the $40,000 in cash she brought into the U.S. last fall. Since the maximum sentence for that charge is six months and Panin has already served eight months, she would be released immediately to immigration officials. Because she would be a convicted felon, the government could seize her green card and she might never be able to enter the United States again, Rodriguez said. Barry Sabin, first Assistant U.S. Attorney in Miami, would not discuss why the government is dropping its 14-count indictment against her. But in open court, Fernandez told the judge the U.S. would have to conduct its own investigation abroad, a difficult task, since the trial was scheduled to begin in two months. “There was an order from Russia … that has raised a number of questions among Mr. Rodriguez and myself,” Fernandez told the judge. Rodriguez says he’s pleased with the plea bargain but still angry over the government’s prosecution of Galina Panin. “This case is egregious,” he says. “The money laundering statute was not intended to charge the wife of an international businessman over a contract dispute that occurred in another country. There are courts in their country that can deal with this. What if this happened to an American entering another country? We’d be up in arms.” Sabin insists the government is taking a “fair and balanced approach” to the money laundering statutes. But he acknowledges the U.S. Attorney’s office is using the laws, passed by Congress in 1988, more frequently in recent years. “It takes awhile to come up to speed,” he says. He also acknowledges the difficulty of using the statutes for international crimes. “Of course, it’s more complex,” he says. “But that doesn’t mean you shouldn’t tackle it.”

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