Soviet Bank Funds Frozen in Award Against Izvestia

More than $450,000 in Soviet bank funds were frozen Tuesday in New York on behalf of a Palo Alto businessman who has won a default libel judgment against the Soviet government newspaper Izvestia for calling him a spy, officials reported.

Raphael Gregorian, 56, owner of a Palo Alto medical equipment import-export company, said he could not comment about the fund seizure until he talked to his Los Angeles attorney, Gerald Kroll.

Gregorian, who claimed his $10-million-a-year business was wrecked by the 1984 Soviet newspaper article branding him an American agent, won a $413,000 judgment before Los Angeles U.S. District Judge David V. Kenyon in June after the Soviet Union declined to contest the libel suit in an American court.

A writ was served Tuesday on two accounts of the Bank for Foreign Trade of the U.S.S.R. at the New York international trade division of Bank of America, Kroll said. He added that the order froze $456,413.34, the amount of the judgment plus interest.

A spokesman for Bank of America said the frozen funds were separated from other assets in the two accounts so that the Soviet foreign-trade bank could continue to operate.

Gregorian had imported medical and laboratory equipment into the Soviet Union for 14 years until Izvestia accused him of spying. His Soviet business license was withdrawn and he was kicked out of the country in November, 1984.

Gregorian sued for $10 million and won a default judgment last year. The judge decided the actual damages last June 27. He awarded Gregorian $250,000 for injury to his reputation and $163,165.17 for the loss of medical equipment delivered to the Soviet Union, but never paid for.

Attorney Kroll said at the time of the unprecedented judgment that he had made a survey of Soviet assets in the United States in the event the Soviets did not pay the judgment willingly.

On Nov. 13, Kroll and two U.S. marshals seized a Russian-language typewriter from the Chevy Chase, Md., apartment of Izvestia correspondent Leonid Koryavin. Kroll said he had a writ to seize everything belonging to Izvestia, but “the typewriter was the only thing I could carry.”

Later, Kroll said, he had marshals confiscate about $5,000 in property from Izvestia’s office in Washington, D.C.

John Mage, an American attorney representing the Soviet Union in the case, said his client intends to file new motions in federal court, possibly including one to set aside the default judgment or dismiss the suit.

If the court grants a motion to set the judgment aside, Kroll said, the freeze on Soviet assets would be voided.