Death of Hermitage Capital Management Tax Consultant Sergei Magnitsky

Sputnik International

When a 37-year old auditor Sergei Magnitsky died in a Moscow prison, the incident generated international media attention. This factbox shows a detailed review of the incident and its subsequent development.

MOSCOW, November 16 (Sputnik) — Five years ago, on November 16, 2009, Sergei Magnitsky, a tax and legal consultant of the Hermitage Capital Management investment fund accused of corporate tax evasion, died at the Matrosskaya Tishina pretrial detention facility.

On November 24, 2008, Sergei Magnitsky, also a managing partner at the auditing company Firestone Duncan, was detained by the Moscow Police’s tax crimes division. The Investigative Committee of the Russian Interior Ministry, now the Investigation Department of the Russian Interior Ministry, charged Magnitsky with corporate tax evasion, while investigating the Hermitage Capital criminal case.

On November 26, Moscow’s Tverskoy District Court issued a warrant for Magnitsky’s arrest.

Hermitage Capital Management, a British investment fund, specializes in Russian market operations. In the early 2000s, the fund invested heavily in the Russian market. Hermitage was among the clients of Firestone Duncan, which provides legal services for taxes, auditing and accounting.

Russian law enforcement agencies charged the fund with failure to pay four billion rubles in taxes. In the summer of 2007, investigators conducted the first searches at the Hermitage Capital office and affiliated companies. The fund’s CEO, Bill Browder, claimed that Hermitage Capital had exposed the corruption fraud of the century in Russia, and that the 5.4 billion rubles paid by the fund had been embezzled by raiders.

Magnitsky was charged with committing crimes listed in Articles 33.3, 33.5 and 199.2 of the Russian Criminal Code (organization of and complicity in large-scale corporate tax evasion schemes by a group of persons by prior collusion).

According to the Investigative Committee, Magnitsky had allegedly established an illegal tax evasion scheme involving the companies Dalnyaya Steppe and Saturn Investments, which were registered in the Republic of Kalmykia and managed by Hermitage Capital. These companies allegedly employed people with disabilities and therefore received 50 percent tax rebates. This resulted in federal revenue shortfalls exceeding 500 million rubles.

Browder, who has not been to Russia since 2005, was charged in absentia. Magnitsky spent 11 months at the Butyrka pretrial detention facility.

On November 16, 2009, Magnitsky died at the Matrosskaya Tishina pretrial detention center.

The Prosecutor General’s Office said that, according to preliminary reports, the 37-year-old lawyer had succumbed to cardiac decompensation. However, Magnitsky’s lawyer, Dmitry Kharitonov, noted that his client had been diagnosed with toxicological shock and pancreonecrosis. Moreover, he claimed that the repeated requests that Magnitsky be examined at a hospital, so as to determine whether the suspect could remain in custody for health reasons, were turned down. Investigative Committee officials claimed that Magnitsky had never complained about his health. A Hermitage Capital Management press release, issued shortly after the lawyer’s death, claimed that, from 2007, Magnitsky had defended the interests of the fund and the HSBC bank in connection with instances of fraud involving a number of corrupt officials that were committed against them.

While investigating the fraud, Magnitsky testified against a number of law enforcement officers involved in the fraud, linked with the takeover of the fund’s companies. This eventually led to the embezzlement of budget funds worth 5.4 billion rubles. Shortly afterwards, Magnitsky was arrested by the very same Interior Ministry officers. His death caused a public outcry.

Ella Pamfilova, Chairperson of the Council for Civil Society Institutions and Human Rights, expressed concern about the tragedy’s circumstances on behalf of human rights activists.

On November 24, the media reported that then Russian President Dmitry Medvedev had instructed Russian Prosecutor General Yury Chaika and Minister of Justice Alexander Konovalov to investigate the circumstances of Magnitsky’s death.

That same day, the Investigative Committee of the Prosecutor General’s Office, now the Investigative Committee of the Russian Federation, said its Moscow division had opened a criminal case in connection with the November 16 death of Hermitage Capital lawyer-auditor Sergei Magnitsky at a pretrial detention facility.

The criminal case was opened in line with crimes listed by Article 124.2 of the Russian Criminal Code (failure to provide medical assistance to a sick person) and Article 293 of this Code (negligence).

Many high-ranking officials of the Federal Penitentiary Service resigned following Magnitsky’s death.

In December 2009, Vladimir Davydov, Head of the Federal Penitentiary Service’s Moscow division; Pyotr Posmakov, Head of the Federal Penitentiary Service’s Moscow Region division; and Major General Igor Bachurin, Head of the Federal Penitentiary Service’s Operational-Technical and Search Measures Directorate, were all dismissed. Fifteen other senior Federal Penitentiary Service officials were also forced to resign.

Disciplinary action was taken against deputy heads of the Federal Penitentiary Service’s Moscow division, and Vadim Magomedov, Head of Pretrial Detention Facility No. 2 (Butyrka), was also dismissed.

Due to the public attention that the case received, the Russian president instructed the Prosecutor General’s Office to establish a prosecutorial squad for monitoring the investigation of the so-called “Magnitsky case”.

On July 4, 2011, Investigative Committee Spokesperson Vladimir Markin said that, judging by the results of yet another forensic medical examination, Magnitsky’s death had been caused by failure to provide a timely treatment for him. The Presidential Council for Civil Society Institutions and Human Rights also investigated this case in line with President Dmitry Medvedev’s instructions.

On July 6, the Presidential Council for Human Rights submitted a preliminary report on the Magnitsky case to the head of state. According to the document, Magnitsky had not received medical attention at the detention facility, and his death was probably caused by beating. Human rights activists believe that the lawyer’s case was examined by an illegitimately appointed investigation team that included persons accused by Magnitsky of complicity in the crime. Members of the Presidential Council also exposed procedural violations during Magnitsky’s arrest.

On July 18, the media reported that the Investigative Committee of the Russian Federation had opened a criminal case against two former officials of the Butyrka detention facility, namely, Larisa Litvinova and Dmitry Kratov, in connection with Magnitsky’s death. Dr. Litvinova, who treated Magnitsky, was charged with a crime listed by Article 109.2 of the Russian Criminal Code (infliction of death by negligence caused by the inadequate fulfillment of professional duties).

Dmitry Kratov, the former deputy head of the detention facility and Litvinova’s immediate superior, was suspected of negligence resulting in manslaughter, as stipulated by Article 293.2 of the Russian Criminal Code. Initially, the Investigative Department of the Russian Interior Ministry closed the criminal case against Magnitsky in connection with his death, a non-exonerating circumstance.

In August 2011, the Russian Prosecutor General’s Office rescinded a resolution on closing the criminal case against Magnitsky in connection with the July 14, 2011 decision of the Constitutional Court. Under a precedent decision, investigators and courts shall no longer be able to close criminal cases against deceased suspects and defendants without the prior consent of their relatives. The Constitutional Court decided that a guilty verdict passed on a deceased person violated the presumption of innocence principle, and ruled that the relatives of deceased persons had the right to insist on their exoneration and to object to the closing of criminal cases.

Officials at the Investigation Department of the Russian Interior Ministry explained that investigators would compile a complete list of Magnitsky’s immediate relatives in order to find out their opinion. For this purpose, investigation deadlines for this criminal case will be extended. On November 28, the media said Hermitage Capital had published a 100 page report titled “The Torture and Murder of Sergei Magnitsky and the Cover-up by the Russian Government.”

The report, which was submitted to the Russian Presidential Council for Human Rights, contains documents showing that all government agencies had turned down Magnitsky’s complaints, voiced during his 11 month incarceration. The documents also prove that his complaints were subsequently concealed and highlight the role of these agencies in depriving Magnitsky of his freedom, health and life.

According to the fund, the report is based on official papers, court records and public statements. The document lists the full texts of Magnitsky’s complaints regarding failure to receive medical attention and official denials of his complaints.

The report on the Magnitsky case was sent to members of the Russian Presidential Council for Human Rights, to the US Congress and the parliaments of Canada and European Union member-countries.

In April 2012, the case against former doctor and laboratory assistant Larisa Litvinova of the Butyrka detention center was closed due to changes in the national Criminal Code that reduced the statute of limitations for her crime. On December 28, 2012, Dmitry Kratov, the former deputy head of the Butyrka prison, was acquitted by Moscow’s Tverskoy District Court. The court agreed with a prosecutor who requested Kratov’s acquittal because he perceived no link between Magnitsky’s death and the defendant’s actions.

In early November 2012, the media reported that the Magnitsky case had been fully investigated and submitted to a prosecutor’s office for finalization and approval of the indictment.

The Investigation Department of the Russian Interior Ministry was responsible for investigating this criminal case. In December 2012, the United States passed the “Magnitsky Act,” stipulating sanctions against Russian citizens allegedly involved in human rights abuses. In turn, Russian authorities have repeatedly noted the inadmissibility of politicizing the “Magnitsky case.”

On March 19, 2013, forensic medical experts revealed that Magnitsky’s death was caused by acute cardiac decompensation, cephaledema and lung edema, followed by acute hemorrhages, as a result of ventricular fibrillation. This amounted to complications from his two main health disorders, specifically, dysmetabolic cardiomyopathy secondary to diabetes mellitus and chronic active hepatitis.

Investigators closed the criminal case in connection with Magnitsky’s death due to the lack of corpus delicti.

On July 11, 2013, Moscow’s Tverskoy District Court found Sergei Magnitsky, who had died at the detention facility in 2009, guilty of tax evasion and closed the case in connection with his death.

The court also sentenced Bill Browder, CEO of the Hermitage Capital Management investment fund, to nine years in absentia at a medium-security penitentiary. According to the judge, Magnitsky had acted in Browder’s interests.

In October 2014, the Investigative Committee of the Russian Federation denied the fourth request by Magnitsky’s mother to reinvestigate the circumstances of her son’s death and conduct an independent medical examination. Accordingly, the court turned down an appeal by her lawyer, who insisted on resuming the investigation, so that it would become possible to question important eyewitnesses, to append previously concealed evidence and to allow Magnitsky’s family to conduct an independent medical examination of archive organs and tissues. займы на карту без отказа онлайн займ https://zp-pdl.com/best-payday-loans.php https://zp-pdl.com/get-a-next-business-day-payday-loan.php срочный займ на карту онлайн