U.S. Magnitsky List Near-Finalized
The U.S. government is expected this week to finalize the list of Russian officials to be punished for suspected human rights abuses under the Magnitsky Act. But the final version of the list, due to be released by Saturday, may become a sticking point between Congress and the State Department.
Congress is apprehensive about the White House’s decision to release only 15 names so as not to fuel tensions with the Kremlin, Kommersant reported, citing a source in Congress who did not specify why the number was 15. Representative James McGovern, a Massachusetts Democrat who was one of the authors of the law, sent to Obama’s administration on Friday his own list of 280 names.
McGovern said a shortlist such as the one by the White House might produce a conflict between the State Department and Congress, and the latter would insist on gradually updating the list. “If the final version is short, we will have to pass a new, tougher amendment,” he told Kommersant in an interview published Monday.
The law is aimed to punish Russian officials implicated in whistle-blowing lawyer Sergei Magnitsky’s death in jail in 2009, a year after he had accused officials of embezzling $230 million in state funds. Officials placed on the list would be banned from entering the U.S., and their assets there would be frozen.
According to the Magnitsky Act, signed into law in December, the list of officials must be sent to Congress by April 13. U.S. President Barack Obama said in a memorandum Friday that he had delegated functions for creating the list to the U.S. Treasury and State Departments.
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President Obama Should Uphold the Magnitsky Act’s Legislative Intent
The Foundry – Heritage Foundation
Next week, the Obama Administration faces an important foreign policy decision in U.S. relations with Russia—how to champion human rights and the rule of law. The State Department is trying to avoid a gust of chilling wind from Moscow.
However, the last thing the Administration should do is show weakness to Moscow or subvert the will of Congress as stipulated in the recent Sergei Magnitsky Rule of Law Accountability Act of 2012 signed by President Obama last December.
Under the Magnitsky Act, the State Department is supposed to submit a list of corrupt Russian officials who are gross violators of human rights. The U.S. will then ban these violators’ travel to the U.S. and freeze any assets they hold in American banks. The State Department has until April 13 to compile such a list for implementation.
The Magnitsky Act’s intent is to name and shame the corrupt officials responsible for whistleblower Sergei Magnitsky’s brutal death in 2009 and send a message that the U.S. takes human rights violations in Russia seriously.
However, one of the law’s co-sponsors doubts Obama’s resolve to implement the list. Representative Jim McGovern (D–MA) created his own list of officials as he fears for how the Magnitsky Act will be enforced and whether the Administration’s list will have enough teeth. McGovern’s list includes 280 names, including Yuri Chaika, the Prosecutor General of Russia who closed the investigation into Magintsky’s death; the head of the Russian Investigative Committee; and numerous secret policy and law enforcement officials involved in this and other cases.
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Piercing the secrecy of offshore tax havens
A New York hedge fund manager allegedly swindles $12 million from a prominent Baltimore family. An Indiana couple is accused of bilking hundreds of customers by charging for free trials of cosmetic products. A financial manager in Texas promises 23-percent returns but absconds with $33.5 million of his investors’ money in a classic Ponzi scheme.
All three cases have one thing in common: money that ended up in offshore accounts and trusts set up in tax havens around the world.
The existence of the trusts surfaced during a joint examination of the offshore world by The Washington Post and the International Consortium of Investigative Journalists, a D.C-based nonprofit news organization. ICIJ obtained 2.5 million records of more than 120,000 companies and trusts created by two offshore companies, Commonwealth Trust Ltd. (CTL) in the British Virgin Islands and Portcullis TrustNet, which operates mostly in Asia and the Cook Islands, a South Pacific nation. The records were obtained by Gerard Ryle, ICIJ’s director, as a result of an investigation he conducted in Australia.
Many people use the offshore world for legitimate purposes, for legal tax shelters or to smooth the way for international trade. Overseas havens vaulted into public consciousness last year with stories about Republican presidential nominee Mitt Romney’s accounts in the Cayman Islands. Recent coverage of the Cyprus banking crisis has thrust the issue back into the spotlight.
U.S. citizens are permitted to move money offshore as long as they report their account information to the Internal Revenue Service. But there have long been concerns that much of the money is not reported and bleeds tax revenue from governments worldwide. Recently, aspects of the offshore world came under assault after whistleblowers alerted the IRS to thousands of unreported U.S. accounts in Swiss banks, resulting in an amnesty offer to violators who paid billions in fines to the U.S. government.
The records reviewed by The Post and ICIJ expose how havens in the South Pacific and Caribbean in some cases have become sanctuaries for individuals seeking to conceal their activities from investigators and investors.
Among the 4,000 U.S. individuals listed in the records, at least 30 are American citizens accused in lawsuits or criminal cases of fraud, money laundering or other serious financial misconduct.
They include billionaire hedge fund manager Raj Rajaratnam, who was convicted in 2011 in one of the biggest insider trading scandals in U.S. history, and Paul A. Bilzerian, one of the most famed corporate raiders of the 1980s, who was convicted of securities fraud.
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Lawyer for Magnitsky Requests to Be Removed From Case
A lawyer appointed by the state to represent Sergei Magnitsky in a tax evasion case said at a hearing Friday that his participation in the posthumous trial was illegal, and he asked to be removed from the case.
“I have not found a single declaration from relatives asking that the case be reopened,” Nikolai Gerasimov said in comments carried by Interfax.
People are typically tried posthumously in Russia only when a family wants to clear their names, but Magnitsky’s family fiercely opposes the trial against him. Magnitsky’s mother, Natalya, has called it “blasphemy” and refused to allow any lawyer to represent him, saying anyone who would assume such an obligation would be acting against her son’s interests.
Magnitsky’s name has become known around the world since he died in a Moscow jail in 2009 while awaiting trial on tax evasion charges, which his supporters say were retaliation for accusing officials of stealing $230 million in state funds.
A Kremlin human rights council investigation said Magnitsky was severely beaten before he died, but the Investigative Committee closed a criminal case into his death earlier this year, saying there was no evidence of a crime.
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The tax haven shell game
Frederic Zalac has the details about a company run by a Toronto businessman and its role in a multi-million dollar scam that turned in to an international murder mystery.
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Russian court brushes aside lawyer’s protest in posthumous trial
A Russian judge said on Friday the posthumous trial of whistleblower Sergei Magnitsky would continue despite a protest from a court-appointed defense lawyer who argued the state had no right to try a dead man without his relatives’ consent.
Judge Igor Alisov’s decision appeared to underscore Russia’s determination to press ahead with a trial that has caused an outcry among rights groups and added to Western concerns about human rights and the rule of law under President Vladimir Putin.
Magnitsky, a lawyer working for Hermitage Capital Management, once one of the biggest investors in Russia, was arrested shortly after accusing Russian officials of stealing $230 million from the state through fraudulent tax refunds.
He died in November 2009, after nearly a year in jail during which he said he was denied medical treatment. A Kremlin human rights council has aired suspicions he was beaten to death, but Putin has dismissed allegations of foul play.
Russia has abandoned investigations into Magnitsky’s death, for which nobody has been held criminally responsible, and in 2011 reopened a tax evasion case against the dead lawyer despite opposition from his family.
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Caribbean go-between provided shelter for far-away frauds
The tangled trail of the Magnitsky Affair, a case that’s strained US-Russian relations and blocked American adoptions of Russian orphans, snakes through an offshore haven in the Caribbean.
The death of Moscow tax attorney Sergei Magnitsky sparked international outrage. It also fueled a push to unravel secret deals that had prompted him to claim that gangsters and government insiders had stolen $230-million from Russia’s treasury.
Magnitsky and other private attorneys investigating the affair on behalf of a major hedge fund followed a path from Russia to bank accounts in Switzerland and luxury properties in Dubai – ending up at a small firm based in the British Virgin Islands that specialises in setting up offshore companies for clients who want to remain in the shadows.
This is the story of behind-the-scenes players in the Magnitsky affair – and the tale of how an offshore go-between provided shelter to fraudsters, money launderers and other shady characters from Russia, Eastern Europe and the United States.
In early 2008 , lawyers working for a London-based hedge fund scrambled to prove that their client had been the victim of a corporate heist.
A gang of mobsters, the lawyers believed, had quietly transferred ownership of three Russian businesses belonging to the hedge fund to a secrecy-cloaked company in the Caribbean.
The offshore company had been established by Commonwealth Trust Limited, a firm in the British Virgin Islands that sets up overseas companies and trusts for clients around the world.
Lawyers for the hedge fund’s owner, Hermitage Capital Management Limited, contacted CTL and demanded answers.
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Canadian’s firm used in huge Russian tax scandal
It’s a tale with the cloak-and-dagger intrigue of a Hollywood thriller: a $230-million heist, corrupt Russian police and government officials, prison beatings, a dead lawyer, Kafkaesque trials and a diplomatic spat between international superpowers.
And now, for the first time, secret files reveal how a Canadian-run offshore company in the Caribbean enabled the transfer of some of that money into a labyrinth of shell corporations around the world in a scandal known as the Magnitsky affair.
The company, Commonwealth Trust Limited or CTL, operated out of the British Virgin Islands, one of the most secretive jurisdictions in the shadowy world of offshore finance. Founded by Toronto millionaire Tom Ward, CTL’s business was registering and administering new BVI corporations for a global clientele.
While there’s no evidence CTL or Ward actively participated in schemes to rob the Russian treasury, documents found amid a massive leak of financial records indicate that the company often failed to check who its real clients were and what they were up to — a practice that allowed the colossal fraud at the heart of the Magnitsky case to unfurl.
“In a sense, CTL became a really good tool in the toolkit of organized criminals,” said Jamison Firestone, a lawyer who represented the company victimized in the Russian heist.
“Organized criminals figure out, ‘Who can we contact to help us move money? Who can we contact to set up offshore companies and help us open bank accounts abroad?’ It’s because firms like CTL exist that this stuff can go on.”
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Will Putin’s friends be on the Magnitsky list?
Next week, the State Department is expected to release a list of Russian human rights violators who could be subject to visa bans and asset freezes in the United States, but Congress is worried that State will avoid naming senior Russian officials in an effort to placate the Kremlin.
The list is required to be sent to Congress by April 13, according to the Sergei Magnitsky Rule of Law Accountability Act of 2012, which was passed by both chambers of Congress and signed by President Barack Obama last December. Lawmakers and NGOs working on the Magnitsky list want the State Department to include top Russian officials and several close associates of Russian President Vladimir Putin.
The State Department is using a narrow interpretation of the law, arguing that a higher standard of evidence is required for legal reasons. But some lawmakers involved in the issue believe the narrower scope is meant to placate Moscow.
“We want to ensure that the administration carries out the law in the same spirit that Congress passed it. We didn’t do this for a press release; we did this because of the deteriorating human rights situation in Russia,” said Rep. Jim McGovern (D-MA), an original sponsor of the bill, in an interview.
McGovern sent the administration his own list of 280 Russian officials (PDF) he believes should be included in the State Department’s Magnitsky list. Many of them are directly related to the case of Magnitsky, the anti-corruption lawyer who died in Russian prison after allegedly being tortured, and some are close personal associates of Putin.
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To learn more about what happened to Sergei Magnitsky please read below
- Sergei Magnitsky
- Why was Sergei Magnitsky arrested?
- Sergei Magnitsky’s torture and death in prison
- President’s investigation sabotaged and going nowhere
- The corrupt officers attempt to arrest 8 lawyers
- Past crimes committed by the same corrupt officers
- Petitions requesting a real investigation into Magnitsky's death
- Worldwide reaction, calls to punish those responsible for corruption and murder
- Complaints against Lt.Col. Kuznetsov
- Complaints against Major Karpov
- Cover up
- Press about Magnitsky
- Bloggers about Magnitsky
- Corrupt officers:
- Sign petition
- Citizen investigator
- Join Justice for Magnitsky group on Facebook
- Contact us
- Sergei Magnitsky
