Former Kazakh minister faces U.S. racketeering lawsuit

Wed May 14, 2014 1:33pm EDT

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(Reuters) - The largest city in Kazakhstan has sued former government minister Viktor Khrapunov and several of his relatives in the United States, accusing them of systematically looting state assets for their own benefit.

The lawsuit, filed on Tuesday by the city of Almaty in a Los Angeles federal court, alleges civil racketeering charges and several other counts. U.S. courts have jurisdiction because Khrapunov and his family have purchased real estate in Southern California, the documents show.

A spokesman for the city declined to comment. Khrapunov did not immediately respond to an email listed on his website.

Khrapunov was mayor of Almaty until 2004, and in 2007 became national Minister of Emergency Measures until he stepped down later that year, according to the lawsuit. He lives in Switzerland.

Khrapunov is the target of criminal fraud charges in Kazakhstan, and the Swiss government has frozen several family accounts, the documents show.

When he was mayor, Khrapunov engineered the sale of state-owned real estate to entities controlled by family members, the city's filing states. In some instances, Khrapunov then caused development permits to be issued in connection with the sites which increased their value.

Khrapunov and family members then resold the parcels "at a significant profit," the lawsuit says.

When he became aware that the Kazakh government had begun an investigation, he fled to Switzerland in a private jet, the lawsuit says. Khrapunov has accumulated a fortune worth between $324 million and $432 million, the lawsuit claims, placing him among the 300 richest people in Switzerland.

To conceal their activities, Khrapunov's family executed several transactions abroad, the lawsuit says, including buying homes in Beverly Hills and Studio City, California.

The case in U.S. District Court, Central District of California is City of Almaty vs. Viktor Khrapunov et al., 14-3650.

(Reporting by Dan Levine in San Francisco; Additional reporting by Dmitry Solovyov in Kazakhstan; Editing by Richard Chang)

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