Nightmare in Boomtown

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

Technology, as well as the Torah, had long fascinated Seidenfeld, and when it became clear that performing circumcisions and teaching scripture weren't going to provide much of a living, he began moonlighting selling calling cards. He ran the operation from his dining- room table with Dvorah and quickly found he had a flair for business. In 1995, he cofounded a telephone company, Corbina, which grossed more than $150,000 in the first six months.

Soon enough, Seidenfeld, like Russia, began to change with the times. Even as the Russians were throwing off their old oppressions, Seidenfeld was sloughing off his orthodoxy, drawn to the many charms of the marketplace. And as he drifted away from his rabbinical work, he started moving in some shady circles. "In Moscow, he fell in with a bad crowd," says Dvorah. "He was going to bars and strip clubs. It all went to his head." In 1996, he left Corbina after a falling out with his partner and started Westcall, another telephone and Internet company, with offices in both Moscow and St. Petersburg. It was an immediate success, but plunged him still further into the seamy side of the city. In the summer of 1997, one of Seidenfeld's partners, Andre Yurievic, was murdered in broad daylight as he stepped out of an elevator. The killing was never solved; Seidenfeld won't talk about it.

"Mark freaked out," Dvorah says. Seidenfeld had a friend drive him to the airport with a security guard early one morning a few days later. He fled to New York. "He was so scared," she says. "I wasn't supposed to say anything to anybody." A few days later, she and the children (now five of them) left to stay with her mother in Israel. The family reconnected when Mark took a position in Belgium, but by then the marriage was falling apart. The allure of life as a single executive eventually won out. The couple split in 2000 and ultimately divorced.

In January 2002, Seidenfeld signed on as general director of Arna. The Kazakhstan telecom market at the time was exploding: 20% annual growth, projected to be worth $10 billion by 2010. Arna was a bloated, inefficient company when Seidenfeld came on board, and he attacked its problems with the same gusto he had brought to his early work as a rabbi.

The company's ownership was split two ways: 83% was held by a fund run by Eagle Venture Partners--a joint operation of the European Bank for Reconstruction and Development (EBRD) and Belgian investment bank GIMV--and 17% by Murat Zhunussov. At the time, Zhunussov was known to Seidenfeld only as a crucial local partner. By tradition, all foreign-owned businesses in Kazakhstan need an investor from inside the country, a sort of consigliere. The idea is that only a local can navigate the bureaucracy, bribe the right people, and stave off the predatory forces outside. In reality, the arrangement often aids the corruption and opens a back door into company coffers.

Zhunussov was aggressively carving a place for himself in the newly privatized Kazakhstan. A debonair figure in fine European suits, he drove a bright red Porsche, lifted weights, practiced jujitsu, and gambled avidly. He also boasted excellent connections within the government, including to President Nazarbayev's daughter, Dariga, who was married to Rakhat Aliyev, then one of the most feared and powerful men in the country. Short but heavily muscled, Aliyev inspires such terror that people are afraid to talk about him in public. He officially held senior government positions in the committee for national security and the ministry of foreign affairs, yet it was widely believed that he amassed his fortune by seizing companies and extorting businesspeople. (He has since left the country after being charged with abducting two Kazakh bankers who allegedly crossed him.) Aliyev's primary tool was the national financial police, a corps of 100 elite officers that reported to him. It was the financial police who eventually brought the charges against Seidenfeld and arranged for his arrest.

The warning signs were everywhere. Seidenfeld's British predecessor at Arna, Stephen Hobson, had left the country after angering Zhunussov, escorted to the airport under armed guard, terrified. But Seidenfeld plunged ahead. He fired staff and brought in new workers. He updated billing systems. He was fascinated with VoIP technology and installed phone lines everywhere from the American embassy to Kazakh government offices. Within two years, Arna was the second biggest broadband provider in Almaty, and the company's revenue had doubled.

Even though Seidenfeld was doing well, he was making enemies. "Mark used to fly by the seat of his pants," says John Ward, a member of Arna's board of directors. "He wasn't world-wise sometimes. He got the company humming, but he was out of his head." Zhunussov, in particular, grew increasingly annoyed with Seidenfeld's meddling, not to mention his growing savvy in the venal ways of Kazakh business. The American was making him look increasingly dispensable. Zhunussov was being paid $10,000 a month as a "consultancy" fee, and everyone knew it was a sinecure; he didn't even attend board meetings.