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On occasion, Mr. Zhadanov used cash to pay Vortex expenses,
including raw materials and employee salaries.
D. Swiss Bank Account and Trips to Europe
The Zhadanovs made several trips to Russia and Europe during
the years at issue.
In April 1992, the Zhadanovs traveled to Switzerland and
opened an account in the names of Sam, Anna, and Eli Zhadanov at
the Union Bank of Switzerland (UBS) in Zurich.6
In July 1992, the Zhadanovs traveled to Switzerland. From
Switzerland, they traveled to Kiev to investigate potential
materials to use in manufacturing a new medical x-ray screening
device.
On the July 1992 trip to Switzerland the Zhadanovs deposited
several marked U.S. Postal Money Orders (the money orders)
totaling $12,000 into the UBS account and withdrew a
corresponding amount of cash, which they used, at least in part,
to pay travel and related expenses.7 The money orders originated
6Over the course of the next year, the Zhadanovs deposited
$300,000 into the Union Bank of Switzerland (UBS) account. The
Zhadanovs did not disclose the UBS account on their 1992 or 1993
income tax returns. The Zhadanovs claimed that the funds in the
UBS account were given to them by Russian businessmen interested
in bringing money into Europe to invest. Mr. Zhadanov did not
know the names of the Russian businessmen but claimed that his
son Eli had developed the contacts through his video rental
business at the U.S. embassy in Moscow.
7Mr. Zhadanov testified that the unspent portion of the
$12,000 was brought back to the United States. Mr. Zhadanov also
(continued...)
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