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Judge says government can seize convicted Russian exec's London flat

A federal judge yesterday issued a preliminary order of forfeiture for the London flat owned by Vladislav Klyushin, convicted last September of orchestrating a hacking scheme that netted him and employees of his Moscow firm some $93 million in profits through advance looks at corporate financial statements via a data center in the Downtown Crossing Macy's building.

In her order, US District Court Judge Patti Saris said the sale of the apartment could help the government claw back at least some of the roughly $34 million it says Klyushin himself made in stock-trading profit through hacking into servers used by publicly held corporations to store their financial data before releasing the documents to the SEC and the public.

The 786-square-foot apartment on the second floor of 4 Emperor's Gate, in London's Royal Borough of Kensington and Chelsea, has a valuation of about £2.6 million, or about $3.3 million.

Klyushin currently resides in a cell at the minimum-security Fort Dix prison in New Jersey.

However, the US government will have to wait before asking the British government to let it sell the flat. Notice of the impending seizure first has to be published on the government's online listing of property up for forefeiture for 30 days.

Also, Klyushin is currently appealing his conviction to the federal First Circuit Court of Appeals in Boston.

Also, in a filing before Saris issued her ruling, his attorney argued that Klyushn doesn't even own the flat anymore - he signed it over to his wife.

And, in any case, his lawyer argues, the treaty between the US and the UK relating to forfeiture says property there can only be seized if it was obtained with proceeds from the crime in question, and Klyushin purchased it well before the hacking scheme began - back in his salad days, when he had his own yacht and could hire private planes and helicopters to take him and his family to skiing vacations in Switzerland - such as the one he never got to take because Swiss police, acting on behalf of the FBI, arrested him as he and his family were walking from the private plane that had just flown them into Switzerland from Moscow, to the private helicopter they were about to take to a ski resort.

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Considering the relative importance, economic and otherwise, of Macy's and the Internet exchange in the same building, we should really be talking about that building as the Internet exchange building that incidentally has a department store on the ground floor.

Seems like an appropriate fate for a user-unfriendly mall built like a fortress.

Entrance is at the corner of Summer and Chauncey streets.

Let's just see how it goes in London. Oh, and I won't be holding my breath.

US and UK do not have a treaty enforcing civil judgements. Although this arises out of a criminal case, the forfeiture of property in the UK will be like Jarndyce v. Jarndyce.