Russia reopens tax case linked to lawyer’s death

Agence France Presse

A Moscow court on Tuesday reopened a hearing into the alleged theft of hundreds of millions of dollars from a US investor by Russian police in a case that led to the death of his jailed lawyer.

The November 2009 death in Butyrka prison of ailing 37-year-old attorney Sergei Magnitsky sparked Western outrage and refocused investor concerns about corruption and the lack of judicial independence in Russia.

Magnitsky claimed to have unravelled a clandestine scheme through which Russian interior ministry officers won control of three subsidiary companies formed by the US investment firm Hermitage Capital.

Executives at Hermitage — formed in 1996 and once ranked as the world’s best-performing fund in emerging markets — discovered the theft after learning that their own companies had inexplicably moved to different cities.

Hermitage founder William Browder had by then been expelled from Russia but was still pursuing a campaign as a minority shareholder to uncover illicit business dealings at some of the country’s biggest institutions.

The fund claims its three subsidiaries were taken by the Russian police in 2007 and then used to receive a refund of some 5.4 billion rubles (about $190 million at the current exchange rate) in taxes paid by Hermitage.

Browder’s attorney Magnitsky was jailed shortly after the case became public and then accused of the very theft he claimed to have uncovered.

The case — seen by some investors as evidence why Russia remained an unsafe bet — turned tragic when Magnitsky began suffering from gallstones while in prison and was denied treatment until the final days before his death.

Russia ordered a new forensic probe in November as the anniversary date of his death approached but the interior ministry responded to the scandal by awarding medals to three of the officers handling the case.

The hearing picked up by the 10th Arbitration Court of Appeal in Moscow on Tuesday involved the theft of Hermitage’s companies rather than the death of its attorney — a criminal case that is a part of separate suits.

Hermitage has been trying to recover its missing millions for about three years and responded with a shrug when Tuesday’s hearing was immediately adjourned until April 26.

“This means that (the three firms) are now technically recognised as belonging to Hermitage,” one company official said by telephone.

Barrons magazine reported last week that the interior ministry has claimed in its defence that all documents relating to the contested money were in a truck that crashed and exploded in 2008.

But Hermitage has led its own investigation that has resulted in the release of three separate films about how the alleged embezzlement scheme worked.

The last instalment released this weekend said that a Moscow tax official managed to transfer the false tax claim in one day and then used some the gains to purchase villas stretching from Montenegro to Dubai.

The film says the woman’s husband also received $11 million in two secret Credit Suisse accounts in Zurich shortly after the money was transferred.

Credit Suisse has denied any knowledge of involvement in the alleged embezzlement scheme.

The woman allegedly responsible for organising the tax refund now works in a state company in charge of military procurements — an opaque organisation which President Dmitry Medvedev wants to see reformed.

“This is the amazing thing: it is clear that neither Medvedev nor (Prime Minister Vladimir) Putin touched these 5.4 billion rubles,” observed Russian anti-corruption crusader Alexei Navalny.

“But (they) do not have the political power to bring to justice obvious thieves and killers,” he added in a blog post. онлайн займ payday loan https://zp-pdl.com/fast-and-easy-payday-loans-online.php https://www.zp-pdl.com займ на карту онлайн