D-day for the Bouncing Czech

A web of dodgy dealings has caught up with Viktor Kozeny, writes Dinah A Spritzer.

IF YOU thought the most embarrassing moment of the investment-for-passports scheme was Taoiseach Charles Haughey handing over 11 passports to Osama bin Laden’s brother-in-law Khalid bin Mahfouz at a swank hotel dinner in 1990, think again.

Another investment-for-passports poster boy stands accused of cheating two countries’ investors out of millions of euro, money laundering and bribing heads of state.

Viktor Kozeny - the Pirate of Prague, the Bouncing Czech, and yes, Irish citizen - has been contemplating his future since October 5 in at a maximum security jail in Nassau, in The Bahamas.

Kozeny, 42, has been running from Czech and US prosecutors for more than a decade. The jig is up today, however, when the Nassau court holds hearings on a US request to have Kozeny extradited to stand trial there.

US prosecutors charged Kozeny in 2003 with trying to bribe Azerbaijani government officials in an oil deal. He promised investors - who say he defrauded them of e150 million - the Azerbaijani government would privatise its state oil company. It never happened. Kozeny blamed political partners, who some observers say scammed a scammer.

“They sued the weakest guy and not the guy who is guilty and that’s the Azerbaijani,” Kozeny told The Prague Post newspaper in 2002, referring to then Azerbaijani President Hedyar Aliyev.

Kozeny is wanted by Czech prosecutors for swindling €332m - this time from inexperienced investors and pensioners - promising one million Czechs to swap privatisation coupons in the early 1990s for shares in Harvard funds.

He told the novice investors they would make back within one year 10 times what they spent on the coupons.

They believed him. After all, he went to Harvard.

Not surprisingly, he fast became the richest man in the Czech Republic.

But his firm went bust and the investors’ money vanished in the ether.

Kozeny denied any wrongdoing, saying privatisations were “risky” and losses were “the nature of the business.”

The financier fled the country in 1994 and made a comfortable life in the Bahamas, where his €14m swimming pool and tales of donating mammogram machines to Czech hospitals went over well with naïve neighbours.

He used his Irish citizenship to run for the European Parliament in 2004 after he was stripped of Czech citizenship.

Like 188 other foreigners with cash to spare between 1989 and 2004, Kozeny was a participant in Ireland’s investment-for-passports scheme.

Dublin lawyer Remy Farrell, an extradition expert, describes the policy as: “Give us your slightly nervous wealthy who want an escape route.”

Justice Department officials have been scratching their heads about what to do. “It’s embarrassing, he hurts our reputation,” a Government source confided.

Any move to revoke citizenship would be a long and difficult process. One loophole may lie in the fact Kozeny has applied for Bahamian citizenship, which might conflict with his Irish citizenship.

“The core issue is whether or not the person concerned was granted naturalisation appropriately in the first instance and is entitled to continue to be an Irish citizen,” Justice Minister Michael McDowell said. “I have asked my officials to examine the case.”

THE Labour Party’s Justice spokesman Joe Costello is pressing for legislation alowing for the withdrawal of passports for those who obtained them through investment and later became fugitives or entangled with serious offences abroad.

The Irish are not the only ones stymied by Kozeny.

The Czech government has repeatedly petitioned the Bahamas to respect a pre-World War II extradition treaty signed between Czechoslovakia and Britain, of which Bahamas was then governed. However, the Bahamians have treated the Czechs like unwelcome suitors. Attorney Remy Farrell is not surprised.

“Look at the map, look at the politics, look at the money. Who do you think the Bahamians are going to listen to, the Czechs or the Americans?” he said.

The Bahamians signed an extradition treaty with the US that went into effect in 1994.

After it was revealed Kozeny had some eight to 13 passports from countries including Venezuela and Brazil, as well as a pilot’s license, a Bahamian judge labelled him a flight risk and he was put away for safekeeping.

The legal wrangling could take weeks, months or even years. Kozeny is represented by celebrity attorney Benjamin Brafman, whose clients have included Michael Jackson and rapper Sean “Puff Daddy” Combs

If convicted in the US Kozeny faces 20 years in jail and a $5m (€4.1m) fine, after which he may finally have to face justice in the country of his birth.

But most observers agree expecting any payback from Kozeny would be foolhardy. He is already crying poor following three divorces.

What are his chances of pulling a Houdini?

His lawyers aren’t talking, but a leading expert on US extradition law, Douglas McNabb, had this to say: “Since Bush Two, the US has been extremely aggressive about prosecuting crimes that involve violations of US law in foreign countries. I think it’s just a matter of time before they get him back.”