Russia: Steel Billionaire Arrested for Embezzlement in Cyprus

The billionaire owner of a Russian steel company and two basketball teams has been detained in Cyprus on charges of being involved in an alleged US $65 million fraud, local media reported Thursday.

Krasny Oktyabr logoLogo for Gerasimenko's basketball team BC Krasny Oktyabr (Photo: D-plan, CC BY-SA 4.0)Dmitry Gerasimenko is accused of funneling a $65 million loan from VTB Bank meant for his steel company at the time, Red October Volgograd Steel Works, through the accounts of several other businesses between 2007 and 2009.

Gerasimenko was initially arrested after fleeing to Cyprus in November on embezzlement charges, but was quickly released on bail.

A Nov. 29, a Moscow court decided in absentia to change the charge against Gerasimenko to fraud; he was added to Interpol’s wanted list shortly after. Gerasimenko was re-arrested this week on the updated charge.

Red October Volgograd Steel Works went bankrupt in 2012, several years after the alleged embezzlement. The proceeds from an auction of its assets were used to start a new company with the exact same name.

An associate of Gerasimenko, Sergey Zatsepin, is in detention in Moscow on charges of “aiding and abetting fraud,” according to local media.

Gerasimenko is the owner of Russian basketball team BC Krasny Oktyabr and Italian team Pallacanestro Cantu.