Nightmare in Boomtown

Dark Days: Seidenfeld enters the courtroom to await a verdict.

In October 2006, after 11 months in Siberia, Seidenfeld was loaded aboard a prison train to be extradited from Russia to Kazakhstan. For 32 days, he was stuffed into a 3½-foot-by-7-foot cell in a boxcar with one toilet for 60 convicts. His fiancée, Natiya, doggedly followed the train on its 3,000-mile journey, intercepting it as it stopped at detention centers. Word of the presence of a wealthy Western businessman had traveled fast among the prisoners, and Seidenfeld learned early on the importance of isolating himself as much as possible. Natiya secured lawyers wherever the train stopped, bribed officials, and did whatever she could to make sure Seidenfeld traveled in his own cell. He kept his head down while shuffling to and from different prison stops to avoid the batons of the more-sadistic guards. "If I had been kept with the rest of the population, I might not be around today," he says.

Seidenfeld arrived back in Almaty in a juddering Soviet prison truck. In the city where just two years before he'd lived the high life of a corporate executive, he now took up residence at Institution LA 155, a broken-down building east of town with a cracked roof and a rusty blue gate.

Outside the walls of Seidenfeld's prison, a Central Asian answer to Dubai is fast rising from the steppe. The smell of wet concrete coats the streets of Almaty as migrant Uzbek crews erect the city's countless mirrored towers, their facades muscling up at sunset to remake the dreary Soviet-era skyline. Real-estate prices here have shot from $150 a square foot in 1995 to close to $900 today; in the posh neighborhood where the velvety foothills become the mountains of Tien Shan, a basic four bedroom runs upward of $3 million. Aston Martins, Ferraris, and Benzes are everywhere, reflecting the neon-lit windows of Chanel and Armani as they slide past. (Never mind that the roads peter out a few miles beyond the city, impassable in anything less than a 4x4.) A table at Cristobal nightclub will cost you $1,000; a standard room at the Hyatt, $450 a night. As one American businessman says flatly: "You won't find any losers here. The losers have to go home."

If there were ever any real rules for business in Almaty, the city's cash-crazed culture devoured them as fast as they were written. "A small- to medium-size company coming here will have to break the law left, right, and center," says Nicholas Levenetz, director of sales and marketing at the real-estate company Scott Holland. "It's impossible to stay clean. Some people like to jump out of airplanes to get a high; I like doing business here on any given day. Just don't ask anyone how they made their first million."

Secrecy and fear seep into every aspect of business life here, and few are willing to put their heads above the parapet to talk. "Kazakhstan is one of the most difficult operating environments on the planet," says an oil executive I'll call Brian, who says he was nearly forced to hand over his company to local government officials. "It's all a big sucker punch. They bring you in close so that they can bleed you, punch and kick you, and take what you have. It's gangster capitalism. If you build a business that makes money, then the vampires come. And you have to have repellent." When Brian refused to cooperate, he says, "some guys tried to poison me. I slept with a loaded shotgun under my bed. I had a Kalashnikov with three clips in my car and an RPG by my bed for a month." He says he managed to escape with his firm only after counterattacking with a platoon of lawyers who cost him millions. "If you are not in a position to defend yourself," he says, "you will get fucked. Period."

"You won't find any losers here. The losers have to go home."

Seidenfeld himself acknowledges it was impossible to operate without paying bribes. "Everyone has his hand out," he says. "It takes up a lot of time for anyone doing business in this part of the world." He explains: "No one says, 'Give me a bribe.' How it works is that the fire department comes around and says it will get all sorts of anonymous tips that it will have to come and investigate. That could really disrupt your workflow. If you get the tax people, it's even worse. They can tie up your accounting staff anywhere from a week to two months."

Mark "Menachem" Seidenfeld originally came to Russia in 1991 with his wife, Dvorah, and their two young children--not to make a fortune but as a newly ordained rabbi. He was an ambitious, confident young man who wore his black hat at a rakish angle and felt a missionary urge to return the faithful to the fold after Judaism's ban under the Communists. "He was such a good, holy person," says Dvorah. "He was well liked. And he had this beautiful singing voice; he was a cantor."