A jailed Wasilla businessman portrayed by Alaska’s largest newspaper as “a charming self-made millionaire and aspiring YouTube star” who dabbled in cellphone repair stores” appears now to have been one of the state’s historically most successful conmen.
Ukrainian-born Dmitry Kudryn, 33, puts the legendary Jefferson Randolph “Soapy” Smith of Klondike Gold Rush fame to shame, if federal prosecutors can be believed, but then Smith lacked access to the internet.
Kudryn used the tubes to run a scam that generated an estimated $60 million, according to federal court documents.
“Mr. Kudryn is an enterprising and industrious business person whose activities have
been the subject of law enforcement attention for most of this decade,” says a federal court sentencing report. “Beginning around 2012, Mr. Kudryn began purchasing grey-market or refurbished Apple products, repackaging them as new using counterfeit Chinese manufactured packaging, and marketing them for sale in Europe, primarily through the use of Amazon.com seller accounts.
“Due to the effort and industry of Mr. Kudryn, this grey-market scheme was staggeringly successful, netting somewhere in the area of $60 million dollars between 2011 and 2015.”
Friend David Johnston, a well-known Alaska ultradistance runner, says Kudryn is also “a great human being” who Johnston believes was targeted by the feds because “he was the richest Russian in the (Matanuska-Susitna) valley.
“He was an Alaska Airlines pilot, but he made more money being an entrepreneur. He wanted to be an entrepreneur.”
When exactly and how federal investigators first became suspicious of Kudryn’s multi-million dollar online dealings is unclear, but it appears they never really had the evidence to charge him with a crime related to those activities.
Instead, they busted him for wire fraud connected to his use of the popular website Craigslist to sell falsely advertised furniture.
Federal court documents indicate that what prosecutors called the “Apple scheme” was what they really wanted Kudryn for, but what he was eventually charged with was selling Chinese-made, copycat furniture as original Italian goods.
Kudryn offered a guilty plea to one charge related to that crime in exchange for a 12-month sentence and payment to the federal government of almost $600,000. Johnston, who said he had talked at some length with Kudryn about his legal problems, said the man didn’t have much choice.
“The feds, they don’t lose,” Johnston said. “I think there were other things they wanted to peg him for but they couldn’t. But they told him if he didn’t plead, ‘we’ll be the bear in your backyard every day.'”
According to federal court documents, the sofas and Kudryn’s other dealings did have an interesting connection.
“Given shipping and import fees and duties, Crave (a Wasilla company started by Kudryn and his brother Vitaly) found it was easiest and cheapest to rent entire container vans for shipping. But the business did not purchase enough product to fill up a container van,” according to that document.
“Consider how many iPhone charging cords it would take to fill up a container van. So the company had extra space in its container vans. (Dmitry) realized he could contract with a Chinese manufacturer to make furniture sets that would occupy the remaining room in his container vans and he could sell them below the market price for similar furniture sets to cover his shipping expenses.”
Dmitry attorney Steven Wells tried to downplay this as a not-so-big deal by noting that the furniture was the same as that “sold throughout this country. Similar sets are on
sale at Bailey’s in Anchorage as evidenced by the comparison of various furniture sets
attached to this sentencing memorandum. (Dmitry) purchased these furniture sets,
loaded them into the container vans and then sold them on Craigslist. Some he sold direct to customers and some he sold to family members in Washington State and Hawaii.
“Those family members presumably sold their sets to others. (Dmitry’s) furniture sales, then, were him purchasing furniture directly from the factory, using existing space in cargo container vans for shipment, and then selling them on Craigslist to defray some shipping costs.”
Money in tech
The big money, however, wasn’t in Chinese sofas sold at half price as products of Italy, but in the iPads Dmitry was moving on Amazon.
A pre-sentencing report details how he “set up numerous companies to deal with
Amazon, how he had to purchase boxes that looked like boxes from Apple Computer, how he used various identities to sell products through Amazon, and what he did with proceeds from Amazon sales.”
Since Dmitry was never charged for his involvement in those activities, Wells – his attorney – argued he shouldn’t’ suffer punishment for any crime.
“The sales for the count of conviction did not involve any of the companies (Dmitry)
used to do business with Amazon,” Wells wrote. “The iPad sales were done throughout Europe and other parts of the world. The furniture sales were done by (Dmitry) in Alaska. These were two separate businesses and the pre-sentence report writer’s conflation of the two, and inclusion…in the pre-sentence report, are wildly excessive.”
Whether, and if so why, Dmitry shut down the iPad business in 2015 is not clear in the court documents. And the U.S Attorney for Alaska eventually accepted Wells’ argument his client shouldn’t be punished for crimes with which he wasn’t charged and agreed to a final sentencing recommendation that netted Dmitry only a year in jail and three years on supervised release.
“By any standard Mr. Kudryn has demonstrated the ability to be successful in any field,” that sentencing agreement added. “Unfortunately for he and his family some of those many and varied activities have verged from ‘gray-market’ to outright fraudulent.
“According to the presentencing recommendation (PSR), (Dmitry) is a hardworking first-generation American who emigrated from the Ukraine as a young child and became a prosperous member of his community here in Alaska, where he has raised a family. The PSR also notes that the conduct resulting in the offense of conviction relating to the sofa scheme as well as the civil forfeiture relating to the stipulated facts of the Apple scheme reflect a longstanding and escalating pattern of occasionally criminal business activity.
“This tension – not uncommon in this type of offense – between (Dmitry’s) obvious ability to succeed in business and his equally obvious inclination to skirt the law in pursuit of that success has no obvious answer other than the hope that his conviction in this case presents him with the opportunity to refocus his entrepreneurial abilities on legal
That conclusion was one with Johnston could agree, saying that “when he’s done with this, he’ll be just fine. I agree that maybe they should have fined him.”
The prison sentence, however, Johnson sees as overkill. He believes Kudryn was targeted because he is Russian and ended up in deep trouble because of the Russian paranoia now running rampant in the U.S.
“Dmitry Kudryn is good man, bottom line,” Johnston said. “I’m so sad. It breaks my heart. He has a beautiful wife and children.”
Out of sight
Amazingly, Dmitry’s ability to build a $60-million business selling mislabeled consumer electronic goods from an Anchorage bedroom community best known as the hometown of polebrity Sarah Palin almost passed unnoticed.
A Justice Department media statement announcing his sentencing glossed over the “Apple Scheme,” saying only that “Kudryn also admitted his involvement in another long-running scheme to obtain refurbished and or promotional Apple products, which were then repackaged in Alaska in counterfeit packing and sold as new to overseas purchasers using the Amazon and eBay marketplaces. Kudryn forfeited $586,748.22 in illicit proceeds from that scheme.”
There was no hint that the nearly $600,000 Dmitry paid the government was but the tip of a $60 million business iceberg. And the story of Dmitry’s success as Alaska’s most successful modern-day con man might have remained unwritten forever, but for another of his business schemes – a simple YouTube channel called Crave Life.
It was on that channel that Dmitry last year tried to turn the disappearance of family friend Vladimir Kostenko into an Alaska mystery and wilderness training exercise in hopes of attracting subscribers.
Crave, according to the court report from Dmitry’s attorney, was a business first set up to sell “electronic accessories, such as iPhone/iPad cords, external charging batteries, decorative cases and the like…around the world.”
The Kudryns in 2011 offered a phone “case for only $1.99 and a free screen protector with a purchase” at a cellular business they opened a business called Wireovia in the Matnanuska-Susitna valley just north of Anchorage, their local newspaper reported at the time.
The Mat-Su Valley Frontiersman noted then that the brothers were “continuing their parents’ legacy of chasing the American dream by launching another entrepreneurial venture” although there appears little family history of entrepreneurial activities.
Kudryn patriarch Pytor “Peter” Kudryn, who died tragically on New Year’s Day 2016 when his car was hit head-on by a drunk driver, immigrated to Walla Walla, Wash. from Novokubansk, Russia in 1989 with his wife and three boys and there went to work for an irrigation company and delivered newspapers.
His obituary in Walla Walla’s Union Bulletin described the Kudryn family “as the first Russian immigrant family in Walla Walla.” After moving to Wasilla, Peter spent the 16 years before his death as the chief of maintenance for the Palmer Police Department.
While he was doing this, Dmitry had another operation going of which Wireovia was a part, the iPad scam. Dmitry’s success at moving relabeled products might have stayed buried in court records forever if not for the YouTube channel begun in May of last year and Kostenko’s sister.
She turned to a reporter at the Anchorage Daily News (ADN) for help in finding out what happened to her brother. This eventually led to a lengthy newspaper story portraying Kostenko as a man missing on a “spiritual quest” in the Alaska wilderness alla Chris McCandless in “Into the Wild,” although neither McCandless nor the novel about his death were ever mentioned specifically.
Dmitry entered the Kostenko story as the main, surviving character – the “family friend and successful entrepreneur” who asked Kostenko to drive a delivery truck full of furniture to Alaska; then allowed Kostenko to retreat to a sturdy, well-stocked cabin the Kudryns had built back in the Talkeetna Mountains; and finally documented Kostenko’s disappearance.
The ADN identified Dmitry as “the oldest of 12, from a Ukrainian family that also came to the United States as refugees fleeing both religious and political persecution. The decor of his office, in a new construction building just off the Parks Highway, features a framed copy of the U.S. Constitution and an American flag.”
Dmitry was three years old when the family arrived in the states. He largely grew up in Wasilla.
Whether the family was fleeing persecution is unclear. The Union Bulletin, which describes Peter as “well known in the community in many ways,” makes no mention of his arriving in Walla Walla to escape Soviet oppression, but that is possible.
Novokubanks is a city on the Kuban River in the Novokubansky District of Russia between Ukraine and Georgia. And persecution of Christians was on the rise in the eastern part of what was then the Soviet Union in the 1980s. The Kudryn all appear to be good Christians, but it is unclear what influence any of this might have had on an infant Dmitry.
Dmitry could not be reached for comment. Vitaly refused to say where his brother is, but he appears to be in federal custody. There are no records of Vitaly being charged with any crimes.
Crave Life last posted a fresh video a week ago. Crave, the parent company, now sells a variety of power banks, one of which has been endorsed Johnston who says its performance in cold weather beats that of any other power bank he’s used.
And Kostenko remains missing.