Bloomberg’s David Glovin’s got the coverage. Here’s a bit from yesterday’s session:
Thomas Farrell, a top Kozeny aide in Azerbaijan, admitted on cross-examination today that he helped Kozeny steal as much as $80 million from another investor in the deal, hedge fund Omega Advisors Inc. Defense lawyers sought to show that Farrell, who testified last week that Bourke was aware of the bribery scheme, is corrupt and shouldn’t be trusted, and that Bourke is a victim of Kozeny’s alleged fraud and not a wrongdoer.
Was Kozeny using money from Omega “for his own personal expenses?” defense attorney John Cline asked Farrell during a two-hour cross-examination.
“I helped him do it,” said Farrell, who pleaded guilty in the case and is testifying in exchange for leniency.
Farrell was also peppered with questions from Cline suggesting he got a sweetheart deal from prosecutors in exchange for his testimony.
Farrell told Cline that the U.S. government hasn’t forced him to return $700,000 in secret bonuses he received from Kozeny and that he’s been allowed to travel between the U.S. and Russia, where he lives. Farrell hasn’t been sentenced and may be ordered to serve prison time or pay a fine.
$350 Million Deal
Bourke was one of about a dozen investors in Kozeny’s $350 million deal to buy the oil company, known as Socar. He is accused of conspiring with Kozeny in violation of the U.S. Foreign Corrupt Practices Act. Kozeny, a Czech national who also was charged, is a fugitive living in the Bahamas.
Bourke denies knowing of the bribes and says Kozeny stole more than $180 million from Omega and other investors, including $8 million from him. Azerbaijan never sold the oil company, wiping out the investments. Bourke says he complained to Azeri leaders after discovering Kozeny’s theft and claims he wouldn’t have complained had he been involved in Kozeny’s bribery scheme.
Farrell said he helped Kozeny cheat Omega by sending falsified documents to the hedge fund. He said Kozeny used Omega’s funds to pay for his plane and yacht and a home in Aspen, Colorado. Farrell acknowledged that part of a bonus paid to him and a co-worker may have come from Omega’s money.
When asked about a bonus, Kozeny replied, “Why don’t you guys just split $1 million,” Farrell testified.
Also today, Cline sought to show that Kozeny paid other accomplices millions of dollars in secret kickbacks. The defense will argue that Bourke, unlike the accomplices, received nothing from Kozeny. Cline also challenged Farrell about inconsistencies in earlier statements to prosecutors.
Farrell concluded his testimony today. He lives in St. Petersburg, Russia, where he’s an investor in a bar owned by a former Kozeny bodyguard.
The case is U.S. v. Bourke, 05-cr-00518, U.S. District Court, Southern District of New York (Manhattan).