Czech reporter Jiri Nadoba was dispatched to Nassau recently by Mlada Fronta DNES, the Czech Republic's leading newspaper, to interview controversial Lyford Cay resident Victor Kozeny. A court in Prague has issued a long-awaited international arrest warrant on Kozeny for allegedly stealing $350 million from investors during the 1990s. And he has also been indicted by New York's state attorney for defrauding American investors, including AIG Insurance and Columbia University, of $182 million. Kozeny has an Irish passport and has lived in Nassau since 1994. Here is Nadoba's report of his encounter with Kozeny.
Viktor Kozeny is a life-time member of the Lyford Cay Club. He is also charged with multi-million fraud in two countries.
It appears his best days may be over. At least, he acts that way, confessing to be at a "low point" in his career.
"Material things are not the most important ones," says the 40-year-old, who used to be called the "pirate of Prague" for his creative approach to the Czech post-commmunist economic transformation, during which he enriched himself by about $350 million dollars, according to Czech police.
Czech authorities indicted him for theft during the 1990s and issued an international warrant for him this month, in an attempt to bring him before a Czech court on charges that carry a penalty of up to 12 years in prison.
He faces up to twice that long in another case brought by New York's state attorney, who indicted Kozeny for defrauding American investors, including AIG Insurance and Columbia University, of a total of $182 million.
The gated community in the West End of New Providence may be one of the last safe places for Kozeny as American and Czech authorities race to see who will be the first to drag him from his luxury home.
Prague and New York are each doing the best they can to cut through the red tape in their individual countries, and to deliver as fast as possible the necessary extradition documentation to Fred Mitchell, Bahamian minister of foreign affairs. The most widely read Czech newspaper, Mlada fronta DNES, run a three-page story on Kozeny this past weekend headlined "A Prisoner of Bahamian islands."
Kozeny himself appears calm and confident and insists all legal battles will end as soon as they reach a court in The Bahamas, France or England, rather than Prague, where he sees himself as a "victim of political fights," without a chance at a fair trial. Kozeny hopes to defend himself in Strasbourg' European court of civil rights, and predicts the New York case will not even get beyond Washington.
"Actually I am looking forward to these courts. The faster they will run after me, the harder will they get splashed on the wall," Kozeny said during a walk at Atlantis, which he chose as a good place to talk to a journalist.
"Sorry, the front door does not open," he said of his olive-green BMW 7, apologising for both that and the loud creaking of the rear axles.
"Local maintenance, you know," says the man from whom one would have expected a little more given his prestigious address and his big-money reputation in his native land. The next day at a meeting in front of the Lyford Cay Club, the creaking was the thing that announced
Kozeny's car even before it showed up from behind a line of trees.
As he drove, he pointed to two thick files of documents, which he said should save him from prison, lying on the front passenger seat.
"Here I have it. One for Americans, one for Czechs," smiles Kozeny, his shirt half unbuttoned because of the heat, which he said he's still not used to, even after nine years.
The Czechs indictments accuse Kozeny of mishandling huge amounts of money in investment funds created in the early 1990s, part of a giant project invented partially by Kozeny, a fresh Harvard graduate and adviser to the Czech minister of finance. The scheme was started as a tool to distribute shares of state industries and services to ordinary Czechs.
After each adult got a certain number of vouchers, they had an option of swapping them for stocks in a preferred factory or – if they felt confused by this capitalist storm after 40 years of communistic rule – they could hand them over to Kozeny's or other, less-aggressive funds.
After a massive TV campaign for his "Harvard funds" (which he named after the ivy league university where he picked up his degree) and a couple of tennis games with then economic transformer and now Czech president Vaclav Klaus, he eventually gained the confidence of
more than a million people, making his the most successful funds in the country, controlling not only the largest number of vouchers, but also a large portion of the new Czech economy.
However, since the Czech post-communist government seemed more concerned with economic turnover than building a solid legal system, Kozeny and his creativity were always a step ahead of it.
From a safe haven in The Bahamas, where he moved in 1994, he managed to orchestrate a complex system of transactions, options and financial operations that ended with his clients short about $300 million, according to Czech police and state prosecutors. Since privatising a huge economy was also a political project, Kozeny now sees himself as a political victim.
He says leftists who took sway in the late '90s and have attempted to gain popularity among those who are unable to adapt and are nostalgic for the old regime are the people out to have him prosecuted.
"Since the politicians keep threatening me and since I see the poor (results) of Czech police in my case, it is clear that there are political orders and that I cannot get a fair trial there."
Kozeny says transactions were complex, but not for those who went to business school, and that Czech capital market's regulators perhaps "just finished the kindergarten and start the elementary school, given how they judge me."
He said most clients got what he promised and the rest of them had to carry some business risk. Kozeny said the problems were created by others involved in the funds.
Contrary to his international image, Kozeny seems a fairly happy man. He lives in a nice house in the best Bahamian resort, has a lifetime membership in a prestigious club and moves in the same circles as movie star Sean Connery and writer Arthur Hailey.
All this is happening in the world of Lyford Cay, separated by a fence on one side and a reef on the other. Kozeny lost one of his two Lyford Cay houses, the one where he used to live. It was the better one, the one that cost $10 million, with a private beach and a pool.
Now, he is living in the other house with his mother, which is still only a short walk to a perfect beach, irresistible for a European, since one can swim anytime of a year.
To make the happy picture complete, Kozeny and his new French girlfriend Sophia are expecting a baby at the end of the year. It will be the fourth time he becomes a father.
His oldest daughter was from a wild and romantic and secret marriage during his youth in the United States. He divorced and then married a Czech, Ludka, with whom he had two daughters.
So finally a boy this time? Kozeny does not know yet and says "the only thing I care of is to have a healthy baby."
Another marriage? No such plans, despite his dreams to run a political campaign in the Czech republic one day, as a candidate of a new style, like Arnold Schwarzenegger.
"Czech society is fairly tolerant in these things; that is not America," Kozeny says, though two years ago he claimed his political program would be conservative and similar to that of George Bush.
As far as money is concerned, the image made by the creaking car may be symbolic. He does not use credit cards, does not try to impress with any spectacular dinners or expenditures and says the lavish days are likely gone.
There was a monthly expenditure limit set on him by civil courts in the cases against him by American investors, he said, but he tries to stay far below that limit.
Gone are the fancy house in London and the private yacht. What of the island in the Exumas and his controversial construction schemes that made him a target of Bahamian environmentalists?
"There was actually never any island which really belonged to me," Kozeny says. When asked to take a reporter to his house, Kozeny refused vehemently. Two years ago, he had been very open when Czech newsmen visited him.
"You have to understand that I have to protect the last piece of privacy I have," he said this time. However, with the help of people with access to Lyford Cay, I saw both his current house from the back and his old house on the beach. The Calypso residence, where Kozeny lives now and where he perhaps still has a plaque as a consul of Grenada (he still signs email as "Amb.Victor Kozeny"), has a boat behind it and an unusual modern-looking glass pyramid at the centre.
The other house is a different story. It is abandoned, the access lane is full of wild bushes and there is dirty green water in the legendary pool. Some of the equipment outside is rusty and broken.
Is this reality or a ruse by Kozeny so he looks destitute, as Wall Street creditors get closer. Kozeny has no big problem being seen as poor.
"People get on the top and then fall down, one cycle takes 10 to 15 years. For me, the peak came when I was fairly young."
"The worst thing is the stagnation. The material things are not the most important ones," according to the man said by the British Sunday Times to having spent five thousand pounds for a single bottle of wine and, to make the real point of the story, then returned it as
"little too young."
Is that true?
"Well, it tasted sort of like beaujolais, which I normally like, but not for this price," says Kozeny when we enter the casino on our Atlantis's walk.
"People around here may spend as much during a night, so why not for a wine?"
Once the legal battles are over (with him as a winner, of course), Kozeny plans a big return to Prague, with a revival of his major role in the national economy. Many people made money with him, many of them young ambitious people who could see a leader in him.
Given what just happened in California, does he want to be another Terminator?
"Not in terms of muscles, but certainly in terms of skills and knowledge."
However, until European courts agree with him and declare Czech justice politicised, he refuses to accept the bids by the Czech and American authorities to have the Bahamian courts expel him and is certain he will win.
"It is a good old-time English justice here."
The last morning, before I flew home (and perhaps made Kozeny nostalgic watching someone leaving freely), I met him at the Lyford Cay Club, where staff brought us toast, tea and coffee even though it was after breakfast time.
The club is said to have been a real launching pad for Kozeny in the Lyford Cay community. The newcomer, so young and successful, and from the former "evil empire," where he taught the communists their first free-market lessons and made millions, had a entrance ticket to this society.
A large fortune, combined with Kozeny's persuasive behaviour, brought him respect, cemented by generous gifts to local school and church. However, once bad stories started to outnumber the good ones in the Wall Street Journal, which hangs every day in the club's reading room in a place of honour between founder E.P. Taylor's picture and that of his dog, the reputation started to slip.
A club that hosts prominent members and guests is careful to guard reputations, particularly in a small financial community like this where competition is very fierce.
As the rumours started and Kozeny reduced his display of wealth, he started to lose allies. "They wished to kick him out, but his lifetime membership saved him," according to a Lyford Cay neighbour, who thinks that Kozeny wasted some wonderful opportunities.
"There are chances in your life to make money, but you should not overdo that. No one is lucky forever," a man who still considers himself a friend of Kozeny's family says.
"There were attempts like that, but it was over very quickly," Kozeny says of the bids to oust him, while sitting on a club sofa, taking off his shoes and stretching out his legs as though he were in his own living room.
By Jiri Nadoba
