Bahamas appeals court rejects US bid to extradite fugitive financier to New York

By David Mcfadden, AP
Wednesday, January 27, 2010

Bahamas rejects US extradition bid for financier

SAN JUAN, Puerto Rico — A Bahamas court has rejected a U.S. bid to extradite a Czech-born financier on charges of plotting to bribe officials in the former Soviet republic of Azerbaijan in the late 1990s to get favorable treatment in oil deals, officials said Wednesday.

The Bahamas Court of Appeal affirmed a lower court ruling that Viktor Kozeny, who has lived in the islands since 1995, cannot be extradited to stand trial in New York because bribing foreign officials isn’t a local crime and he is not subject to American anti-bribery laws.

“An extradition offense must be an offense under the law of both states,” wrote Justice Hartman Longley, one of three judges on the Bahamian panel.

Kozeny was indicted in October 2005 on 27 counts of bribery in U.S. District Court in Manhattan under the Foreign Corrupt Practices Act, which makes it a crime to offer payment to foreign government officials to obtain or retain business.

U.S. prosecutors also allege he stole tens of millions of dollars from 15 investment funds managed by Omega Advisors that had agreed to invest the money in the expected privatization of Azerbaijan’s state-owned oil company about a decade ago.

Prosecutors contend that when the privatization efforts failed, Kozeny, nicknamed the “Pirate of Prague” by the media, used $14 million of Omega’s money for personal expenses and $73 million more hasn’t been located.

On Wednesday, Kozeny’s lawyer, Clive Nicholls, did not return an e-mail seeking comment. Kozeny, who lives in the exclusive gated Bahamian community of Lyford Cay, did not immediately return a message left on his Facebook page.

The federal government and the Bahamas attorney general can appeal the extradition ruling to the London-based Privy Council, the highest court of review for the Bahamas and many former British colonies.

Laura Sweeney, spokeswoman for the U.S. Justice Department, said the agency had no comment. Franklyn Williams, the Bahamas assistant director of legal affairs, said only that authorities were “taking the matter under advisement.”

Beatrice Edwards of the Washington-based Government Accountability Project, which promotes whistleblowing to reveal government and corporate wrongdoing, said that if the U.S. had sought Kozeny’s extradition on theft charges he would likely have had to stand trial in New York.

“Inexplicably, however, the extradition request was based on bribery charges, and because the Bahamas does not have comparable anti-bribery laws, extradition failed. We have never understood why U.S. prosecutors structured the request in this way,” Edwards said.

Born in Prague, Kozeny, 46, emigrated to the United States, but returned to his home country after the 1989 anti-communist revolution as an investment banker. He amassed riches during post-communist privatization there.

Kozeny — who also holds Irish, Venezuelan, Grenadian and Brazilian passports — later tried his luck unsuccessfully in the privatization in the post-Soviet state of Azerbaijan with the help of several U.S. financiers.

In November, one of those financiers, Connecticut businessman Frederic Bourke, was sentenced to a year in prison for conspiring to corrupt the oil privatization process in Azerbaijan. He was also fined $1 million for his conviction for conspiracy to violate the Foreign Corrupt Practices Act and making false statements to the FBI.

Kozeny, who has said his investors knew he planned to offer tens of millions of dollars to Azerbaijan officials to secure the oil deal, spent more than a year in the Bahamas’ Fox Hill prison until a judge ordered his release in 2007.

(This version CORRECTS spelling of Bahamian official’s first name to Franklyn instead of Franklin.)

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