The former Russian air force officer Viktor Bout, who is due to make a second appearance in a New York court today, had close relations with officials in the Kremlin, according to a well-placed source in Moscow.
Mr Bout is appearing on charges of conspiring to kill Americans and sell weapons to a foreign terrorist organisation.
"He had very close relations with some people in the president's office in both Yeltsin's and Putin's time," said the source, who previously held a senior government position himself.
Mr Bout, who is accused of being one of the world's most prolific illegal arms dealers, was arrested three years ago in the Thai capital, Bangkok, in a sting operation by agents from the United States Drug Enforcement Administration.
'Merchant of death'
The agents posed as Marxist rebels from Colombia and Mr Bout is alleged to have offered to supply them with surface-to-air missiles and automatic weapons, and was reported to have been told American nationals could be targeted.
In a recording of the conversation, he is alleged to have said: "We're together, we have the same enemy."
After finally being extradited to the US last November, he now faces the prospect of a life prison sentence on these charges alone, if found guilty by the New York court.
But experts who have done extensive research on the man known as the "Merchant of Death" also claim he had been trying to sell weapons to other organisations designated as "terrorists" by Western countries.
"The direct accusation is that his planes brought in weapons for al-Shabab, which at the moment is pretty much top of the wanted list in terms of terrorist activity and Islamic militant activity in Somalia," says Alex Yearsley, an arms control expert, who is currently working as a consultant for the United Nations.
"There are also potentially allegations he was negotiating with Hezbollah to bring in missiles for them, and there is much talk within intelligence circles that Israel was so concerned it tried to take Viktor out several years ago."
After running his operation from the United Arab Emirates, Belgium and South Africa in the 1990s, Mr Bout returned home to the Russian capital, Moscow, about ten years ago.
The UN had imposed sanctions and a travel ban on him accusing him of breaking embargoes on supplying weapons to rebels in Angola and to Charles Taylor's government in Liberia.
In 2002 the Belgian government issued an international warrant for his arrest.
Despite this, Mr Bout was able to live freely in Russia, according to the former government official in Moscow, who wished to remain anonymous.
"Everyone from our police and special services knew where he was in the capital," the former official says.
But the allegations run much deeper than the state simply giving Mr Bout the freedom to continue his business.
"In the latter part it's clear he had official protection," says Douglas Farah, author of a book about Viktor Bout called Merchant of Death.
"When he was working in Iran in 2005 and when he appears in Beirut in 2006 with the Hezbollah-Israel war - when Russia was supplying a great deal of weapons through Iran, which ended up in Hezbollah hands - at that point he was very useful to them and he was working on behalf of the Russian state," Mr Farah says.
As a graduate of Russia's elite military institute of foreign languages, it is widely suspected that Viktor Bout had begun his working life as a military intelligence officer.
He moved into the air cargo business after the Soviet Union collapsed in 1991, but some claim he never lost his links with the intelligence world.
"Viktor was not an intelligence agent of the state. He was a money-making machine, but also a foreign policy tool principally of Russian military intelligence," claims the arms control expert, Alex Yearsley.
The Russian government along with Mr Bout vehemently deny all these allegations insisting the only business he was involved in was the transportation of legal cargo.
"For the past ten years, the US authorities have been directly and through the media waging war against me and my family," Mr Bout said in a recent interview with the Russian news agency RIA Novosti.
"We have been buried under a torrent of lies," he said.
Mr Bout's brother Sergei, who's accused of being an integral part of the business, is currently living in Moscow and agreed to be interviewed at a restaurant in an upmarket shopping centre.
Sipping green tea during the interview, he also dismissed the allegations against them.
But he quickly shifted from charm to aggression when pressed about evidence gathered by a United Nations investigator called Johan Peleman.
"I know Mr Peleman… yes very nice investigator," he said.
"They came to Dubai to a five-star hotel, very nice, beautiful hotel and sat there and investigated… is that an investigation?
"He is a diamond expert, he does not know about ammunitions," he added.
The big question now hanging over the trial in New York is whether much more will be revealed than what Viktor Bout is alleged to have said during the sting operation in Bangkok.
For Russia it could be extremely embarrassing.
But it could be equally embarrassing for the United States and other Western countries, which are also alleged to have taken advantage of Mr Bout's services to fight their wars in different parts of the world.