The Caviar Kings

Plants & Animals / by Simon Cooper /

Inside the cartels that built empires and destroyed species.

Page 1 of 4

simoncaviar.jpg Credit: Kelly Cline

Like nearly every other luxury in the world, caviar is tinged with hues of danger. It has the reek of gangsters and the taste of a dying species. Now, with exclusive access to multiple federal investigations, Simon Cooper reveals just how far greed will take those who seek Russia’s black gold.

If you would abolish avarice, you must abolish its mother, luxury.—Cicero

In a crackdown on smuggling and poaching in the Caspian region, border guards seized 1.6 tons of contraband black caviar in the first quarter of the year. Guards intercepted 1,232 pounds en route to the United Arab Emirates. Fake bills accompanying the cargo suggested that local customs officials were involved. —The London Observer Service

EARLY FALL 1998—CASPIAN SEA
In a small fishing camp tucked behind the reeds guarding the shores of the Caspian Sea, a poacher prepares to process his catch. In the gunnels of his boat is a thick, writhing carpet of sturgeon, living dinosaurs that have swum the waters of the great blue earth for more than 250 million years. The poacher selects a fat female. She is about four feet long and swollen with eggs. He hits her hard with a plank of wood—not hard enough to kill, but enough to stun. Blood trickles from her eyeballs, mouth, and gills. Quickly, the poacher rolls her over, slits open her belly, reaches inside, and carefully extracts a plump, gray-black sac about the size of a pillow. He puts the egg sac into a large plastic bucket and throws the eviscerated fish on the ground, where she flaps and thrashes, her abdomen gaping, until she succumbs and dies. Later he will butcher her for meat.

The poacher works quickly, as the eggs must be processed before they spoil. Once he has finished extracting the egg sacs he pushes them through a fine sieve, gently massaging them to avoid breaking the eggs as they separate from the surrounding membrane. Once they’re sieved, he washes them in salty water to remove blood and stubborn bits of egg sac. The clean eggs are then mixed with dry salt—enough to equal around 4 or 5 percent of the total volume of the eggs. Voila! Caviar.

The poacher takes his illicit product to the dealers, where he earns perhaps $20 a kilo. He hands over some of his money to the local mafia, payment for the protection he is “offered,” which keeps the border patrol and his fellow poachers away from his fishing grounds and camp.

A few months later, that same caviar will go on sale in New York for $2,500 a kilo.

The caviar mafia are thought to have been behind a terrorist bomb attack in the town of Kaspiysk that killed 67 people, including 21 children, and destroyed a nine-story apartment building. Most of the victims were Russian border guards and their families. The guards, who patrol Russia’s new boundaries, had begun to produce results in regulating illegal traffic and, in doing so, made dangerous enemies. More than 100 people lived in the bombed building, including the commander of the locally based border guards unit, Lt. Col. Valery Morozov. Morozov reportedly had told a Russian newspaper, Rossiysky Vesti, that he had been threatened by the “sturgeon pirates.”—The London Observer Service

MAY 2, 2003—US FEDERAL COURT, BROOKLYN, NEW YORK
“My point is, Judge, and let me just say this: Mr. Panchernikov is not some kind of serial caviar criminal. He is not. He was conducting a lawful business and made mistakes in judgment that were criminal in nature. He did that. He accepts responsibility.”

Gerald Shargel stood before the Honorable Charles B. Sifton delivering an impassioned mitigation on behalf of his client, Arkady Panchernikov—president of Caspian Star Caviar, then the largest importer and exporter of caviar in the US. Panchernikov was in court that day for sentencing after pleading guilty to illegally selling and shipping various types of caviar.

The case against Panchernikov was the culmination of a series of investigations, resulting in the jailing of around 70 percent of the United State’s major caviar importers for trafficking, smuggling, and poaching offenses. Over those five years, Special Agents and inspectors of the US Fish and Wildlife Service (FWS), state conservation officers, and federal prosecutors unraveled and exposed an illegal trade in endangered sturgeon eggs that has left some species on the verge of extinction.

It had taken three years for investigators and prosecutors to get to this day in court, with Panchernikov and his lawyers fighting them every inch of the way. And the sentencing hearing, held on a mild Friday morning on the second day of May, proved to be no different.

In court, attorney Gerald Shargel is known as an energetic advocate, emphasizing important points with finger wagging or expansive hand gesticulations. His mitigation for Panchernikov was exacting. He and the prosecutor, Assistant US Attorney Cynthia Monaco, clashed repeatedly over precise meanings and legalistic nuances, as well as Panchernikov’s continued wriggling about the extent of his guilt. Key to Panchernikov’s mitigation was testimony regarding his good character. Panchernikov was, Shargel stated, “a good and decent man, a good and decent father, a good and decent husband, a good and decent businessman who made mistakes, made judgment errors, thought that he was perhaps dealing with bureaucracy, like he had experienced earlier in his life in another country, and self-help was the order of the day.”

The Ukraine, under the old Soviet Union, is where Arkady Panchernikov was born in 1949, the son of a supermarket clerk and a gymnastics coach. His childhood, he stated, was one of considerable hardship. Until he was nine, his family lived in a one-room house adjoining a horse stable. At age 27, Panchernikov gave up his Soviet citizenship and left the Ukraine, first for Rome and then for America. By his own account, he had just $90 in his pocket when he first stepped onto US soil.

He settled near Washington, DC, finding work as a technician at a Maryland factory. Slowly at first, Panchernikov began transporting small quantities of caviar from New York and selling it in and around DC. In 1987 Panchernikov secured enough backing to start his company, Caspian Star, and begin importing beluga, sevruga, and oscetra caviar. Initially he sold his product mainly to domestic clients—particularly to fellow Russian immigrants, who had brought with them to the US their taste for sturgeon eggs. By its second anniversary, Panchernikov’s Caspian Star was grossing $1 million per year.

Soon Panchernikov set his sights on a bigger market—the cruise-line industry. Traditionally large consumers of caviar, cruise companies tended to acquire their supplies in Europe. Panchernikov worked to change that and was phenomenally successful: He soon became the largest supplier of caviar to such major cruise lines as Cunard, Princess, and Holland America.

However, the caviar market changed dramatically in the early 1990s with the breakup of the USSR. The tight regulations that had been imposed on caviar exports by the Soviet government went the way of the Iron Curtain—not just pulled down but stomped all over. Blackmarket caviar began to flood out of the former Soviet Republics, posing a major threat to Panchernikov and Caspian Star. With his wholesale market being eroded by cheaper underground imports, Panchernikov shifted his focus from wholesale to retail, aggressively pursuing and winning top New York clients such as Zabars, Balducci’s, and the Russian Tea Room.

On June 19, 1997, Panchernikov took his business to a new level by opening Caviar Russe, a bar, restaurant, and retail shop on Madison at 54th Street in New York City. Caviar Russe boasted crystal chandeliers and a simple menu planned around imported Russian caviar.

By the time Panchernikov landed in court, he was, by most standards, rich. He’d created a life for his family that was the exact opposite of his own upbringing. Now that he was about to lose the life he had sought out and worked so hard to enjoy, his family and friends rallied behind him. Filed with the court was a 39-page sentencing memorandum containing more than 40 character references from Panchernikov’s family, colleagues, and clients.

The memorandum also contained more vociferous protestations from Gerald Shargel of his client’s good background. The memorandum noted that since the investigation into Panchernikov had begun, his “…business records and practices have been viewed under a microscope by law enforcement, and his business integrity has, consequently, been impugned.”

Anyone dropping in to Courtroom 2 that day would have been forgiven for believing Panchernikov to be a victim rather than a criminal who, according to the presiding judge, was motivated by nothing more complicated than greed.

A Russian naval inspector who fiercely fought poachers involved in the illegal harvest of caviar in the Caspian Sea was killed in southern Russia, a spokesman for a regional Russian border-guard unit said.

The body of Vyacheslav Lomakin, an inspector in the Russian autonomous republic of Kalmykia on the western shores of the Caspian, was found with three bullet holes in a car in the coastal city of Lagan.

Lt. Col. Sergei Livantsov of the North Caucasus branch of the Border Guards said, “Lomakin had worked for only a year but fiercely fought against the poachers. It could be an act of revenge.”—Associated Press

Page 1 of 4

Tags crime ecology food law

Share this Stumbleupon Reddit Email + More

Now on SEEDMAGAZINE.COM

  • Ideas

    I Tried Almost Everything Else

    John Rinn, snowboarder, skateboarder, and “genomic origamist,” on why we should dumpster-dive in our genomes and the inspiration of a middle-distance runner.

  • Ideas

    Going, Going, Gone

    The second most common element in the universe is increasingly rare on Earth—except, for now, in America.

  • Ideas

    Earth-like Planets Aren’t Rare

    Renowned planetary scientist James Kasting on the odds of finding another Earth-like planet and the power of science fiction.

The Seed Salon

Video: conversations with leading scientists and thinkers on fundamental issues and ideas at the edge of science and culture.

Are We Beyond the Two Cultures?

Video: Seed revisits the questions C.P. Snow raised about science and the humanities 50 years by asking six great thinkers, Where are we now?

Saved by Science

Audio slideshow: Justine Cooper's large-format photographs of the collections behind the walls of the American Museum of Natural History.

The Universe in 2009

In 2009, we are celebrating curiosity and creativity with a dynamic look at the very best ideas that give us reason for optimism.

Revolutionary Minds
The Interpreters

In this installment of Revolutionary Minds, five people who use the new tools of science to educate, illuminate, and engage.

The Seed Design Series

Leading scientists, designers, and architects on ideas like the personal genome, brain visualization, generative architecture, and collective design.

The Seed State of Science

Seed examines the radical changes within science itself by assessing the evolving role of scientists and the shifting dimensions of scientific practice.

A Place for Science

On the trail of the haunts, homes, and posts of knowledge, from the laboratory to the field.

Portfolio

Witness the science. Stunning photographic portfolios from the pages of Seed magazine.

SEEDMAGAZINE.COM by Seed Media Group. ©2005-2015 Seed Media Group LLC. All Rights Reserved.

Sites by Seed Media Group: Seed Media Group | ScienceBlogs | Research Blogging | SEEDMAGAZINE.COM