Menu

Eugeni ‘Zhenya’ Tsvetnenko: Russian tech tycoon jailed in WA gives up US extradition fight

A Russian tech tycoon has surrendered after almost three years of fighting his extradition to the US from behind bars in Australia.

A Russian-born technology mogul who has spent almost three years behind bars in Perth has given up his fight against extradition to the US, where he is accused of being part of a lucrative text message scam.

Eugeni “Zhenya” Tsvetnenko, 40, was charged by New York authorities with wire fraud, conspiracy to commit wire fraud and conspiracy to commit money laundering in mid-2016.

The father of two wasn’t arrested until December 2018 and has been detained at Hakea Prison ever since, having lost three bids to secure bail after being deemed a flight risk.

He was due to face a four-day extradition hearing in Perth Magistrates Court starting Tuesday but instead gave his consent to surrender to US authorities in a surprise move.

Mr Tsvetnenko, who has consistently denied the allegations, appeared in court in person and smiled broadly at his supporters in the public gallery before being led away.

His estranged wife Lydia and parents, who attended previous hearings, were noticeably absent.

In December, the United Nations Human Rights Committee rejected an appeal to dismiss a petition lodged by prominent human rights barrister Geoffrey Robertson on behalf of Mr Tsvetnenko in late 2019 around Australia’s common refusal of bail in extradition cases.

His camp argued it was out of step with other democracies that recognised allowing bail in extradition proceedings was consistent with the right to be presumed innocent unless proven otherwise by a court.

“He remains locked in a cell for more than 12 hours a day alongside murderers, rapists and pedophiles,” Mr Robertson said at the time.

US authorities claim Mr Tsvetnenko and his alleged co-conspirators – including former Mobile Messenger executives Darcy Wedd and Fraser Thompson, who were respectively sentenced to 10 years and five years in jail – reaped more than $US150m ($A208m) from an “auto-subscription” scheme and used the cash to fund lavish lifestyles.

Under the scheme, mobile phone customers in the US were allegedly charged for recurring text messages about trivia and horoscopes that they never signed up for.

After Thompson was sentenced in January 2018, the now former US attorney for the Southern District of New York, Geoffrey Berman, described it as “gross ‘main street’ fraud” that “ripped off everyday cellphone users $10 a month”.

“The plan to auto-subscribe with Tsvetnenko came about in early 2012 in connection with discussions between Thompson and three other Mobile Messenger executives … about how to increase revenue at Mobile Messenger in the wake of the decreasing profitability of premium text messaging services,” Mr Berman’s office said.

“Tsvetnenko had been kicked off Mobile Messenger’s aggregation platform in the past due to suspicious subscribing practices, including past incidents of auto-subscribing.”

Nevertheless, they agreed to allow Mr Tsvetnenko to establish two new content providers, CF Enterprises and DigiMobi, to conduct the auto-subscription scheme on Mobile Messenger’s aggregation platform, Mr Berman’s office said.

The multi-millionaire was a prominent figure in Perth’s high-flying social scene, holding extravagant parties and appearing at red carpet events.

He and Lydia co-founded fashion label Zhivago, arrived in a horse-drawn carriage for their manor house wedding and had rapper Snoop Dogg as a guest at Mr Tsvetnenko’s 29th birthday bash.

Mr Tsvetnenko co-owned the Voyeur Bar in Subiaco with AdultShop.com founder Malcolm Day, but the venue closed after being targeted in arson attacks in late 2018.

In 2013, Mr Tsvetnenko co-founded a Bitcoin “mining” company – the world’s first publicly-listed digital currency firm – which is now known as DigitalX.

It in February booked a $1m half-year net loss but last week advised it had $26.5m worth of Bitcoin and digital asset holdings.

Mr Tsvetnenko was a BRW Young Rich lister, Ernst and Young Entrepreneur of the Year Award winner and also once scooped the Business News “40 Under 40” award.

Read related topics:Perth

Leave a Reply

Your email address will not be published. Required fields are marked *