Prayers for, and questions about, Ukrainian trader/pastor indicted in stock-trading case
Prayers are flying fast and thick for Vitaly Korchevsky, the pastor of Slavic Evangelical Baptist Church in Brookhaven, Delaware County, indicted Tuesday in what is being called a $100 million cyber-hacking scheme to commit securities fraud.
The 50-year-old preacher from Glen Mills leads a small but extremely loyal congregation, many of whom refuse to believe the charges. Church members and friends in the Slavic community have created a Facebook page, “Pray for Vitaly Korchevsky and Family,” filled with words of support in Russian and English and Bible verses.
“Vitaly is the best preacher,” Pavel Pavlenko wrote in a post. “Innocent!” posted another supporter.
Ruvim Lypyak, a contractor and the owner of Master Home Renewal in Swarthmore, said in an interview: “He’s a good pastor, I know he’s good. I just pray for him.”
On Wednesday, Korchevsky, who also worked as a money manager and financial adviser, was being held at the Federal Detention Center in Center City, according to his lawyer, Steven Gary Brill. A federal judge in New York stayed a local federal judge’s Tuesday decision to release Korchevsky on a $100,000 recognizance bond.
Brill said a hearing was likely to be held in the next few days.
Korchevsky is one of a group of stock traders and others, all Ukrainian and Russian émigrés, who are facing sweeping insider-trading charges in a case that involves a ring of hackers, several nations, and shell companies laundering alleged profits of $100 million.
His net take from the profits was $17 million, U.S. government lawyers said Tuesday.
Local congregants of his Slavic Evangelical Baptist Church were stunned to learn of the charges against Korchevsky, known as a generous leader in the Russian- and Ukrainian-language community. He has traveled extensively to preach to Baptist congregations around the country and even has his own YouTube channel.
“Nobody saw signs of this among people I’ve tal”ked to, Kirill Chernikov, an employee at Home Trimwork in Huntingdon Valley and a Ukrainian émigré to Philadelphia, said in an interview Wednesday. “Everyone in the church is in a huge shock about it. He’s a very good person. He helped families who just moved here settle in, helping them in any way.”
The church sponsored missionaries to countries such as Kazakhstan, Ukraine, and Mexico. “They bring food, gifts, and especially to children. And with the gifts they also bring spiritual assistance, tell people about God,” Chernikov said.
He recalled that his father had taken time off from work to help build the church. Delaware County real estate records show the church property at 415 Edwards Dr. in Brookhaven was purchased in 2007 for $500,000.
Korchevsky was born in Kazakhstan and moved around what was then the Soviet Union. In 1989, he immigrated to the United States and married in 1990. His wife is listed as Svetlana Korchevsky; congregants said the couple have two children.
In 1981, he embraced the evangelical Baptist faith. Since 2000, he has been chairman of the Association of Slavic Baptist Churches USA.
Korchevsky also is known in the émigré community through the financial-planning advice for families he offered in a series of Russian-language YouTube videos.
He has a legitimate background in the investment field and started his own hedge fund, NTS Capital Fund, in 2009. But according to the criminal and civil indictments filed by the Department of Justice and the Securities and Exchange Commission, NTS Capital was a vehicle for illegal stock transactions carried out by a half-dozen traders with the help of some computer hackers.
The indictments allege that Korchevsky and the others bought and sold shares of public companies based on advance financial information hacked from several press-release services widely known in business circles.
The insider-trading strategy was so successful, the indictments allege, that Korchevsky and a co-conspirator began recruiting hackers online to expand the operation.
The two men exchanged emails in January 2013, discussing a “proprietary trading business” that “never lost money in the twelve months of 2012,” with profits of between $40,000 and $50,000 a month.
“Public companies report four times a year, and the stocks react sometimes dramatically. All that news has to come out at the same time for there to be a level playing field,” said James Nolen, senior vice president of equity trading for Drexel Hamilton brokerage in Center City.
“If someone gets a hold of it beforehand, that’s insider trading,” Nolen said.
A referral four years ago from the SEC about unusual trading patterns culminated in an investigation by agencies including the Department of Homeland Security, the attorneys general of New York and New Jersey, the Department of Justice, and the SEC.
A concurrent SEC complaint alleges that Korchevsky used proceeds to buy real estate in Southeastern Pennsylvania, including houses at 1591 Meadow Lane, 3 Skyline Dr. and 7 Skyline Dr. in Glen Mills; 9 Blackhorse Lane in Media; 316 Willowbrook Rd. in Upper Chichester; and 674 Cheyney Rd. and 1290 Samuel Rd. in West Chester.
The complaint says he also purchased a shopping center at 122-134 Lancaster Ave., Malvern, and a property at 1801 E. Kings Highway in Coatesville. In some cases, the owner was listed as a corporation called Bayview One Trust.
Ken Marcellus, of Berkshire Hathaway Home Services Fox & Roach Realtors in Newtown Square, acted as broker on the Korchevskys’ 2002 purchase of the Glen Mills house that served as headquarters for Vitaly Korchevsky’s hedge fund.
“At the time, he was working in finance in New York, so he was commuting. I knew he was a minister at his local church. And they were very nice people,” Marcellus said.
In addition to working for firms such as Morgan Stanley in New York, Korchevsky achieved in 1998 what is known as the gold standard in his field, the chartered financial analyst designation, which requires years of exams and financial analysis.
A spokeswoman for the CFA Institute in New York would not say whether his designation was still active.