Calvey Michael (Michael Calvey)

Calvey Michael (Michael Calvey)

Biography

Michael Calvey is a native of the American state of Wisconsin,. USA

He was involved in investment in energy projects at the European Bank for Reconstruction and Development (EBRD).

Since 1994, Calvey has worked for Baring Vostok.

2019

Detention in Moscow on suspicion of embezzlement of 2.5 billion rubles from Vostochny Bank

Shareholders of Vostochny Bank Artem Avetisyan and Sherzod Yusupov lured majority shareholder Michael Calvey from the United States to Russia.

According to the WSJ publication, it was at the invitation of Sherzod Yusupov and his partner Artem Avetisyan that Michael Calvey arrived in Moscow.

So, in early February 2019, Avetisyan invited Michael Calvey to dinner in Moscow to discuss the problems of Vostochny Bank. Sherzod Yusupov was supposed to be at the meeting. On February 7, he filed an application with law enforcement agencies, on the basis of which a criminal case was initiated against Michael Calvey.

On February 11, Mr. Calvey flew to Moscow, and a few days later received a WhatsApp message from Mr. Yusupov, in which he asked if the investor had flown to Moscow and whether the scheduled meeting was valid. Michael Calvey confirmed the meeting in a response message. The next morning, February 15, he was detained in his apartment on suspicion of fraud along with several other top executives of Baring Vostok Capital.

They are suspected of large-scale fraud. The corresponding article 159 part 4 of the Criminal Code provides for punishment in the form of imprisonment for up to 10 years. According to the information presented on the official portal of the courts of general jurisdiction of Moscow, the court session on the choice of a preventive measure is scheduled for February 15.^[1]

As the Basmanny Court told reporters, the Investigative Committee petitioned for the arrest of the detainees, and the likelihood that this wish would not be satisfied by the Basmanny Court is very low.^[2]

The prosecution stated that Kalvi and another detainee, the general director of the First Collection Bureau NAO Maxim Vladimirov, are suspected of stealing 2.5 billion rubles from Vostochny Bank: Kalvi, allegedly knowing that the First Collection Bureau controlled by him had a debt of 2.5 billion rubles, organized the sale of his shares to Vostochny Express Bank, which led to the actual theft of these funds. "

Baring Vostok published a short statement to the media confirming that Michael Calvey and three other employees of the investment company were detained "as part of a commercial dispute over Eastern Express Bank."

The actions of law enforcement agencies are not directly related to the activities of Baring Vostok and other portfolio companies, "Baring Vostok said in a statement[3]

Baring Vostok Capital owns a majority stake in the bank through the Cypriot firm Evison Holdings Ltd. Last year, it became known that between the key shareholders of Vostochny Bank - Baring Vostok, on the one hand, and the Artem Avetisyan fund Finvision Holdings Ltd., on the other, a serious conflict arose.^[4] Baring Vostok^[5] holds a controlling stake (more than 51%) in Vostochny; Avetisyan formally owns 32% of the shares, plus he holds the position of chairman of the bank's board of directors. A commercial dispute involving the long-standing issue of the bank's recapitalization led to a reshuffle on its board and litigation. Now we can state the transition of this dispute to a completely new level.

Baring Vostok Capital has been doing business in Russia and the CIS since 1994. Over 25 years, the company has invested more than $2 billion in the Russian economy, investing in dozens of companies. The company's first project was FGI Wireless, later VimpelCom/Beeline. In addition, Baring Vostok acted as a key investor in Yandex in the early 2000s, and subsequently invested in projects such as OZON, ER-Telecom, 1C , Avito.ru ("left" Avito in 2019), Tinkoff.ru, EMC, Golden Telecom and others. Thus, Baring Vostok was one of the most successful and productive investors in the Russian IT market.

Removal of arrest on an apartment in Moscow

The Moscow City Court in December 2019 canceled the arrest of the Moscow apartment on Bolshaya Dmitrovka, the founder of the Baring Vostok investment fund, Michael Calvey. In it, he is serving house arrest. The owner of the bank Vostochny Artyom Avetisyan in August imposed an arrest on the residential premises and 7.5 million rubles in the accounts of the American.

2020

Cancer detection

On June 23, 2020, it became known that Michael Calvey, who is under house arrest, had cancer. Michael Calvey, founder of the Baring Vostok investment fund, spoke about this during a court hearing.

On March 20, I was operated on due to the presence of a subcutaneous tumor of the right thigh. Further studies have shown that this tumor is malignant. Observing doctors are concerned about the low level of vitamin D in me and recommend, in addition to taking drugs, daily walks, "said Calvey (quoted by RBC).

Arrested Baring Vostok founder Michael Calvey found cancer

The businessman asked to soften the measure of restraint or at least allow walks in the sun. The defense provided health certificates to Calvey at the previous meeting. Lawyers saw in the extension of house arrest a violation of the principles of humanity and asked the judge this time to pay attention to this. However, the first court of appeal of general jurisdiction recognized the extension of the term of house arrest until August 13, 2020.

As  the lawyer of the accused Timofey Gridnev explained to RIA Novosti, after the operation, Calvey underwent a cycle of radiation therapy, by June 23, 2020 his health was stable.

The representative of Baring Vostok, in a conversation with Vedomosti, called the court's refusal to replace house arrest with a milder measure of restraint unlawful and illogical. 

Our colleagues have been sitting for a year and a half because of the stalled criminal case, which is based on a corporate dispute and the raiders' desire to keep the illegally obtained control in Vostochny Bank. And this is instead of returning to work and doing what our colleagues know how to do best - helping talented Russian entrepreneurs create their own business, create new jobs, thereby developing the country's economy, the fund said.[6]

Later, in September 2020, it became known that Russian investigators banned Michael Calvey, who is under house arrest, from removing an electronic bracelet from his leg to conduct an MRI scan of a cancerous tumor.

 As a result, according to the publication, doctors had to remove Calvey's tumor in the leg with a "more outdated" method, and because of this, the investor was forced to undergo an additional course of radiation therapy. However, the publication recalls that earlier the court allowed the investor to undergo treatment for cancer in a private clinic Baring Vostok.

The FT clarifies that Calvey is now in remission.

Extension of house arrest in criminal case of major fraud

On October 28, 2020, it became known that the First Court of Appeal of General Jurisdiction recognized the extension until November 13 of the term of house arrest of Calvey^[7]. Read more here.

Release from house arrest

In November 2020, the Supreme Court of the Russian Federation released from house arrests the founder of the Baring Vostok Foundation, Michael Calvey, and his alleged accomplices accused of embezzling 2.5 billion rubles belonging to Vostochny Bank.

Announcing the decision to change the preventive measure, the judge of the Armed Forces Vasily Zykin said that this decision was made because due to the end of the investigative actions, Calvey and other accused no longer have the opportunity to somehow influence the investigation of the case or put pressure on witnesses. At the same time, the court took into account the marital status of the accused, their social status, good characteristics from their place of work and residence, as well as the presence of children.

For his part, Michael Calvey indicated that he simply cannot hide abroad, put pressure on witnesses or interfere with the investigation of the case, since the investigation was completed a year ago, and Russia's borders with most countries are closed due to the coronavirus pandemic. Representatives of the defense side proposed to limit themselves to recognizance not to leave the place and proper behavior.

Having studied these materials, the Supreme Court came to the conclusion that it was necessary to change the preventive measure from house arrest to a ban on certain actions. Although most of the restrictions remained in place. As before, Michael Calvey is prohibited from using communications, Internet and mail, communicating with other suspects, representatives of Vostochny Design Bureau and unauthorized persons. At the same time, he got the opportunity to be on the street more often, but is obliged to appear in court in a timely manner, return home at eight in the evening and be in his home until six in the morning. Participation in mass events is also prohibited. The restrictions will last until January 13, 2021.

Changing the measure of restraint for the accused, Judge Zykin released their property from arrest, since Vostochny Bank was fully compensated for the damage in the amount of 2.5 billion rubles under an amicable agreement with PKB.

The representative of the bank, confirming this, said that the civil claim filed in the criminal case would be withdrawn immediately after the start of the trial on the merits, since the Vostochny management no longer has financial claims against the accused.^[8]

Back to work at Baring Vostok

On December 28, 2020, it became known about the return of Michael Calvey, who is being accused in the case of embezzlement of 2.5 billion rubles of Vostochny Bank through the issuance of a non-refundable loan to the First Collection Bureau, to work in the Baring Vostok investment fund.

I returned to work, yes, "Calvey told Interfax.

When asked about the continuation of investment activities in Russia, he replied:

Then I will answer this question.

Information about Calvey's return to work was confirmed to Vedomosti by the press service of Baring Vostok. The company also noted that all previously imposed restrictions on Calvey remain.

Michael Calvey returns to work at Baring Vostok

In November 2020, after a session of the Supreme Court, following which Michael Calvey was canceled house arrest, the businessman said that he would go to work in the near future, but at the same time he was looking forward to the trial, where he intends to prove his innocence. Then the case was transferred to the Meshchansky Court of Moscow for consideration on the merits. At the same time, the Supreme Court forbade Calvey and other defendants in the case to be in the premises of Vostochny Bank and the First Collection Bureau.

The Meshchansky court Moscow postponed from December 28 to December 30, 2020 the beginning of the trial in the criminal case of Michael Calvey and his colleagues, who are accused of embezzling money from Vostochny Bank. The preliminary meeting on the case was postponed due to suspicion of coronavirus COVID-19 infection in one of the defendants, an informed source told Interfax. According to the interlocutor of the agency, we are not talking about Calvey and not about the fund's industry partner, financial sector citizen France Philip Delpala.

Earlier it was assumed that the preliminary meeting will be held on December 16. However, according to the agency's source, it was postponed to December 28 due to the illness of one of the lawyers.^{[9][10][11][12]}

2021: Sentence - five and a half years of suspended imprisonment without the right to leave Russia

In July 2021, the prosecutor's office demanded that Michael Calvey, the founder of the Baring Vostok infestfund, be sentenced to six years in prison in the case of embezzlement at Vostochny Bank. For six other defendants, the state prosecutor requested a suspended sentence of four to five and a half years.

Calvey and other defendants in the case are accused of embezzlement of 2.5 billion rubles on the basis of a statement by one of the bank's shareholders, Sherzod Yusupov, who considered that the value of the shares of the Luxembourg company did not exceed 600 thousand rubles. At the same time, after the initiation of the case, independent examinations estimated the shares received at more than 4 billion rubles, considering the embezzlement the most profitable for the victims in history.

The founder of the Baring Vostok Foundation, Michael Calvey, in his last speech at the trial, declared the innocence of all the defendants in the embezzlement case at Vostochny Bank.

'Your Honour, I'm innocent and all my colleagues are innocent too. You have undisputed evidence of our innocence. Your decision will affect not only me and my colleagues, but also the entire Russian business community, "Calvey said, noting that the judge's decision" will become a symbol of the independence and justice of Russian justice. "

Calvey also drew attention to the fact that the defendants in the case are accused of a crime "that never happened, for which none of the accused received any benefit and for which no one suffered any damage." "There is not a single piece of evidence to support the allegations against us," Calvey said, adding that prosecutors themselves said "there is not a single witness who has confirmed corpus delicti in our actions."

In August 2021, Michael Calvey received 5.5 years probation. He will not be able to leave Russia without the permission of the authorities within five years of probation, as he is obliged to be registered with the FSIN. Calvey finds the court's decision offensive and dishonest.

2022: Leaving Russia

The founder of one of the oldest investment funds in Russia, Baring Vostok, Michael Calvey, left the country even before the start of a special operation in Ukraine and is not going to return, Bloomberg reported in May 2022. 

Customers and partners of Baring Vostok, including the CalPERS pension fund from California and the General Electric pension fund, doubt that they will be able to get money invested back in Russian financial instruments. Russian assets "are now virtually useless" for foreign investors, since the Russian authorities, together with the Central Bank, temporarily banned non-residents from selling them.

2023: Visa denial to Russia

American businessman Michael Calvey was unable to obtain a Russian visa to come to Moscow for a meeting of the Moscow City Court, which is considering an appeal against his verdict, lawyer Larisa Kashtanova said in May 2023. Another person involved in the case, a French entrepreneur and operating partner of the investment company Baring Vostok, Philippe Delpal, found himself in the same situation.

2024: Guilty plea, reduced probation

The founder of Baring Vostok, Michael Calvey, pleaded guilty to embezzlement of funds from Vostochny Bank and received a reduction in his suspended sentence. This became known on February 1, 2024.

The Judicial Collegium for Criminal Cases of the Second Cassation Court of General Jurisdiction, taking into account the additionally established extenuating circumstances, full admission of guilt, repentance for the deed, commuted Calvey's sentence of imprisonment for two months - up to four years and four months conditionally, - the court told Interfax following the consideration of the cassation appeal of Calvey's defense against court decisions in his case.

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Фото: TheBell

Earlier, the court found that Michael Calvey, as part of a criminal group, spent 2.5 billion rubles on Vostochny - this is how the investigation regarded the bank's acceptance of shares in the Luxembourg company IFTG as compensation for a loan of 2.5 billion rubles. In addition to Calvey, six more people were convicted in the case - colleagues of the businessman, who were also given suspended sentences. They did not appeal the verdict to the cassation instance. The defendants were found guilty of a particularly large embezzlement (part 4 of article 160 of the Criminal Code of the Russian Federation).

After the cassation court announced the reduction of the term to the founder of Baring Vostok in the case of embezzlement of Vostochny funds in connection with repentance, Calvey himself said that he did not admit guilt.

My lawyers filed a complaint about the reduction of punishment. The court partially granted the complaint and reduced my sentence and probation. I think this decision is sound and fair. As for my confession, I have never pleaded guilty in writing or verbally and I never admit. I did not participate in the court session and physically could not make such statements, "said Calvey (quote from RBC).

According to lawyer Michael Calvey, the cassation appeal did not affect the essence of the verdict, but raised the issue of reducing the punishment and probation in connection with the identity of the founder of Baring Vostok.^[13]

Notes