Suspect in Insider Trading Case Granted Bail

The New York Times, August, 26, 2015

Vitaly Korchevsky was arrested on Aug. 11 at his home outside Philadelphia. He is said to have made $17 million
in the insider trading-hacking scheme. Credit Peter Foley/Bloomberg News, via Getty Images
A Pennsylvania man accused of being the biggest beneficiary of a brazen scheme that blended sophisticated
computer hacking with old-school insider trading may be getting out of jail, more than two weeks after he and four
other men were arrested by federal authorities.
But Vitaly Korchevsky’s freedom will not come cheap: A federal judge in Brooklyn ordered him to post $2 million in
a bond secured to property and $200,000 in cash, and to be placed under home detention, with certain
exceptions. Mr. Korchevsky was also required to hand over his passport, as were his wife and two children, who
sat behind him during a nearly one-hour hearing on Wednesday.
Prosecutors argued that Mr. Korchevsky, 50, a United States citizen who was born in the former Soviet Union, was
a rogue trader who posed a substantial flight risk. His lawyer, Steven Brill, countered that his client had lived for
decades in the United States and was a trustworthy member of the community and a man of God.
In the end, Judge Raymond J. Dearie of Federal District Court for the Eastern District of New York decided that
although he had reservations about releasing Mr. Korchevsky, he was unlikely to flee, given that his immediate
family lived in the United States and that he had strong ties to his community, where he served as a senior pastor
at the Slavic Evangelical Baptist Church outside Philadelphia.
Mr. Korchevsky’s release with strict conditions set for his bail would be sufficient, “given the faith that hundreds of
people have put in him that he would be violating,” Judge Dearie said.
At the end of the hearing, the judge again referred to Mr. Korchevsky’s supporters, saying, “If you don’t play ball,
you’re going to disappoint an awful lot of people.”
Mr. Korchevsky, a former Morgan Stanley mutual fund manager and a hedge fund manager, was arrested this
month at his home in Glen Mills, Pa. Prosecutors contend that he was connected to a sophisticated, multiyear
insider trading scheme in which a large circle of traders and hackers reaped more than $100 million in illegal
proceeds. He personally reaped $17 million in illegal profits from the scheme, according to prosecutors.
As Judge Dearie spoke, 80 people sat listening in the Brooklyn courtroom and in an overflow room nearby, most of
them members of the community where Mr. Korchevsky is a pastor. One man showed up at the Brooklyn
courthouse early in the morning with his suitcase, having just arrived from Spokane, Wash., Mr. Brill told the court.
Mr. Korchevsky turned and waved to the audience when he walked into the courtroom and again when he left.
During the hearing, his wife, Svetlana, and their two children, 13 and 8, looked on quietly.
In an effort to highlight Mr. Korchevsky’s “exceptional ties” to his community, Mr. Brill said the support for his client
kept “rolling in” from places like Massachusetts, Ohio, Oregon and Washington.
The prosecutors had asked the court to continue to deny bail to Mr. Korchevsky and two other men, citing fears
that they posed “substantial flight risks” because of their longstanding ties to Ukraine, a country with no extradition
treaty with the United States. Mr. Korchevsky bought his home in Glen Mills in 2002 for $600,000, property records
show.
Some confusion exists about Mr. Korchevsky’s place of birth. Prosecutors, in court filings, have said he was born
in Ukraine and has strong family ties there. After the hearing, Mr. Brill said his client lived in Kazakhstan for the
first 12 years of his life and later in Ukraine before coming to the United States.
Federal prosecutors in New Jersey are similarly trying to keep at least one other man charged in the case, Arkadiy
Dubovoy, in jail pending trial. Separately, Mr. Dubovoy, 51, who authorities said made more than $11 million from
the scheme, appeared on Wednesday afternoon before a magistrate judge in Newark, and will remain in custody
pending his bail hearing next Wednesday.
Mr. Dubovoy, who had been held in a county jail near Atlanta since his arrest, was flown by the United States
Marshals Service to a county jail in New Jersey on Tuesday and will remain there until his bail hearing. Mr.
Dubovoy’s attorney, Michael J. Diamondstein, was not available for comment.
Prosecutors in court filings said Mr. Dubovoy is believed to own real property in the United States worth $22 million.
The detention status of two other defendants who were also arrested and are facing trial in Brooklyn, Leonid
Momotok, 47, and Aleksandr Garkusha, 47, is pending. Judge Dearie has ordered a hearing on whether they
should be released on bail as well. The men are being detained in Georgia and are waiting to be moved to New
York, Nellin N. McIntosh, a government spokeswoman, said.
The request by the federal prosecutors to deny bail is somewhat unusual for a white-collar crime. None of the
defendants have been accused of engaging in violent behavior, and three of them are United States citizens. But
authorities contend that the unusual step is warranted, given the ability of all the men to flee the country.
There are indications that the defendants will eventually be granted bail, but that the terms will be steep. Mr.
Dubovoy’s son, Igor, 28, who was also arrested and charged, has yet to post the $3 million bond a federal judge
set for his release.
When Judge Dearie questioned Mr. Korchevsky’s religious fervor on Wednesday, Mr. Brill recounted a story Mr.
Korchevsky told him about his experience while living in Kazakhstan, then part of the Soviet Union, when the
Communist regime would confiscate religious texts.
Mr. Korchevsky drove around with a car full of Bibles, Mr. Brill said, and he was once stopped by the Soviet secret
police, the K.G.B., and beaten for possessing them.


* * * * * * * * * *

Church praises pastor arrested in $30M insider-trading ring

New York Post, August 17, 2015

Baptist fundamentalists from the former Soviet Union are praying for one of their own — a Pennsylvania pastor
indicted last week for being part of a massive Ukrainian insider-trading ring.
Vitaly Korchevsky, the pastor of the Slavic Evangelical Baptist Church of Brookhaven, Pa., since its inception in
2003, was arrested on Aug. 11, along with four other Ukrainians living in the US and connected to the alleged $30
million scheme.
“It’s very painful situation for us and for the church,” Andrey Chumakin, the pastor of the Slavic Baptist Church in
Washington state, told The Post.
Korchevsky has been a leader of the tight-knit religious community of Soviet immigrants for 10 years.
“I know he is good and honest Christian,” said Chumakin, one of several religious leaders who wrote to the court
asking for Korchevsky to be released on bail.
Prosecutors have asked the court to keep the pastor locked up, saying his frequent travels to Ukraine and Russia
make him an “extreme flight risk.”
Korchevsky’s lawyer Steve Brill has asked for $1 million bail.
Supporters also wrote emails to The Post proclaiming Korchevsky’s innocence.
“Everyone who knows him (over 5,000 people), know that he was set up by his workers,” said one person, who
requested anonymity.
The feds claim that Korchevsky, 49, partnered with fellow Ukrainian immigrant Arkadiy Dubovoy, 50, the alleged
mastermind.
Emails between Korchevsky and others allegedly in the scheme discuss specifics of a scam, court papers charge.
Korchevsky wasn’t able to tend to his flock last Sunday, but a substitute pastor read a letter Korchevsky wrote to
the parish.
“I am fine, I am calm, and I know in my heart I am clean before the Lord,” Korchevsky wrote, according to a report
on philly.com.