Posts Tagged ‘WSJ’
U.S. Alleges Further Laundering in Magnitsky-Linked Case
A federal judge on Wednesday granted a request from U.S. prosecutors to file an amended complaint alleging further money laundering by a Russian businessman, as well as a forfeiture order narrowing the assets to be seized in the case.
U.S. District Judge Thomas P. Griesa approved the request at a contentious hearing between prosecutors and lawyers for companies owned by Denis Katsyv, who is accused of laundering some of the proceeds of an alleged $230 million tax fraud in Russia exposed by deceased lawyer Sergei Magnitsky. The amended complaint, prosecutors said, provides additional allegations of money laundering and “significantly narrows” the amount of property the U.S. seeks to forfeit.
“It is necessary to have” the amended complaint and forfeiture order for the case to continue, said Judge Griesa.
The civil forfeiture case brought by the Manhattan U.S. attorney’s office in September 2013 alleged that Mr. Katsyv used some of the laundered money to buy real estate in New York. Prosecutors say a portion of the funds traveled through several shell companies into Prevezon Holdings, a Cyprus-based real estate company that laundered the money into its real estate holdings, including those subject to the forfeiture action.
Mr. Katsyv and his company, Prevezon Holdings, deny the allegations, having tried to dismiss the case in March, and through its lawyers they denied the new accusations raised Wednesday.
The amended forfeiture order, prosecutors said, seeks about $14 million in assets, including $10 million in property in New York and about $4 million, in euros, at an account in the Netherlands. The original forfeiture action sought all assets, known and unknown, tied to Mr. Katsyv and his partners; Judge Griesa had told prosecutors to restrain the order after hearing from lawyers for the defendants that unrelated assets in Russia and elsewhere were frozen.
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Former New York Prosecutor Faces Confidentiality Breach Hearing
John Moscow, a prominent former New York prosecutor, faces a hearing this week on whether he breached a prior client’s confidentiality when he began defending companies belonging to a Russian accused of buying Manhattan properties with the proceeds of a $230 million tax fraud.
Mr. Moscow is defending companies owned by Denis Katsyv that prosecutors allege funneled laundered money to buy the properties. Mr. Moscow was previously hired as an outside lawyer for London-based hedge-fund manager William Browder, a witness in the U.S. government case against Mr. Katsyv’s companies.
A New York judge will consider at a hearing Thursday whether Mr. Moscow and his law firm, Baker & Hostetler LLP, have information that will give them an advantage in questioning Mr. Browder.
“Our law firm concluded we had no conflict of interest; and our role as counsel is to insist the government prove its case,” Mark Cymrot, a BakerHostetler partner, told The Wall Street Journal.
The stakes are high, according to Lara Bazelon, visiting professor at Loyola Law School in Los Angeles and co-chair of an American Bar Association ethics committee.
“If the judge finds that Mr. Moscow relied upon information that he learned as a matter of confidence from a past client, that would be a violation of the duty of confidentiality,” Ms. Bazelon said. “That would be a very strong finding, particularly against someone so high-profile and well-respected.”
Mr. Moscow spent three decades at the New York County District Attorney’s Office, serving as chief of the fraud bureau and deputy chief of the investigations division. He led the investigation of money laundering and fraud at the Bank of Credit and Commerce International in the 1990s.
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A European Magnitsky List
The Foreign Affairs Committee of the European Parliament voted on Tuesday to sanction 32 Russian officials involved in the persecution of Sergei Magnitsky, the Moscow lawyer who died in custody in 2009 after exposing official graft. The legislation follows America’s 2012 Magnitsky Act that currently targets 18 officials. When the European Parliament convenes in April, passage would send a signal that Russia’s neighbors will no longer ignore the nature of the Putin regime.
The bill would require all EU states to impose a “visa ban on these officials and to freeze any financial assets that they, or their immediate family, may hold within the European Union.” Among them are a number of Interior Ministry officers, including Oleg Logunov, who as head of the legal department of the ministry’s investigative committee was instrumental in Magnitsky’s unlawful detention. Also included is Igor Alisov, the judge who presided over Magnitsky’s Kafkaesque posthumous “tax-evasion” trial, and who read a “guilty” verdict to an empty defendant’s cage in 2013.
Europe may be tardy in targeting Magnitsky’s killers, but the Obama Administration’s record is worse. It first tried to kill the Magnitsky Act and then tried to water it down. An overwhelming majority in Congress from both parties forced the law on President Obama. Vladimir Putin retaliated by putting U.S. officials on a sanctions list of his own, and he even stopped Americans from adopting Russian orphans.
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Exiled Fund Chief: U.S. Should Sanction Russians With ‘Magnitsky List’
The U.S. should sanction Russian officials involved in the Ukraine military campaign by using a 2012 U.S. human-rights law named for a dead Russian whistleblower, according to one of his former colleagues.
The Magnitsky Act lets the U.S. freeze the accounts of Russian citizens placed on a list of suspected human-rights abusers and fine companies that do business with anyone on the list.
The law was named after Sergei Magnitsky, a tax lawyer for an international investment fund in Russia who earned the ire of Russian officials after he accused police and tax officials of stealing $230 million. His death in prison in 2009 at the age of 37, under suspicious circumstances, stirred an international uproar.
The Obama administration, which was seeking to “reset” relations with Moscow, initially opposed the law but signed it in December 2012 in conjunction with a measure giving Russia permanent normal trade relations after the country joined the World Trade Organization.
The U.S. administration put 18 Russians on the list last year, many with direct links to Mr. Magnitsky’s death, but hasn’t added any new names this year, disappointing Russia’s critics. The Kremlin responded to the law by preventing Americans from adopting Russian children.
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Lifting England’s Libel Chill
Tourists will always flock to London to shop and see Big Ben. But they’re less likely to keep coming to settle legal scores after two High Court rulings Monday set clear limits against libel tourism in England and Wales. Along with new legislation from Parliament, the rulings might finally lift the chill on free speech and the free press under England’s plaintiff-friendly defamation laws.
The dispute at the center of Karpov v. Browder began with Russian lawyer Sergei Magnitsky’s prison death in Moscow in 2009. Magnitsky had been investigating a multimillion-dollar tax fraud by Russian officials against his client, Hermitage Capital. Pavel Karpov, a retired Moscow policeman, claimed that Hermitage CEO William Browder defamed him in a 2011 BBC interview, a 2012 article in Foreign Policy magazine, and in online videos about Magnitsky’s case.
Russian courts dismissed Mr. Karpov’s civil and criminal suits, so he took his case to London. Mr. Browder lives in Britain and is a U.K. citizen, but he argued before the High Court that Mr. Karpov has no reputation in England and Wales for Mr. Browder to have besmirched. Mr. Karpov rebutted that he has former schoolmates and an ex-girlfriend who live in England, and that he had previously traveled there “on five or so occasions.”
Justice Peregrine Simon threw the case out. Mr. Karpov’s “connection with this country is exiguous,” Justice Simon concluded, “and, although he can point to the [videos’] continuing publication in this country, there is ‘a degree of artificiality’ about his seeking to protect his reputation in this country.”
Mr. Karpov’s real intent—as he admitted in his libel claim—is to fight the sanctions against him imposed by America’s Magnitsky Act, for which Mr. Browder campaigned vigorously. The 2012 law prevents Mr. Karpov from entering and making financial transactions in the U.S. Justice Simon declared that the English justice system was hardly an appropriate forum to pursue that fight, especially considering that Russian courts had already rejected Mr. Karpov’s complaints.
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US Sues Over Magnitsky Scandal-Linked Assets
Prosecutors filed a civil complaint seeking the assets of 11 companies linked to a $230 million Russian tax-refund fraud uncovered by deceased Russian lawyer Sergei Magnitsky.
Mr. Magnitsky’s death in 2009 led to tit-for-tat recriminations between Washington and Moscow as the relationship between the two countries, which the U.S. had sought to “reset,” also deteriorated around other issues.
The 65-page complaint, filed Tuesday in New York federal court, accused 11 corporations of laundering a portion of the money through the purchase of real estate, including four luxury residential apartments and two commercial spaces in Manhattan.
“While New York is a world financial capital, it is not a safe haven for criminals seeking to hide their loot, no matter how and where their fraud took place,” said Preet Bharara, the Manhattan U.S. attorney, in a statement.
Among the properties targeted by thee forfeiture are four units at 20 Pine St., in Manhattan, an “office-to condo pioneer” in the borough’s Financial District.
According to the complaint, a Russian criminal organization stole the identities of portfolio companies owned by Hermitage Capital Management, an investment fund operating in Russia. (The story of the alleged scam was reported in 2011 by Barron’s.)
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U.S. Seeks to Seize Properties Linked to Russian Tax Scheme
U.S. prosecutors seeks to seize high-end real estate they claim was bought with proceeds from a $230 million tax fraud allegedly committed by corrupt Russian officials
— The prosecutors allege the scheme took control of entities owned by U.S.-born investment fund manager Wiliam Browder
— Critics say the suit is emblematic of the Kremlin’s abuse of the legal process and has sparked tensions between the U.S. and Russia
U.S. prosecutors said Tuesday that they’re seeking to seize several luxury apartments and other high-end commercial spaces in New York that they claim were purchased with proceeds from a $230 million tax fraud allegedly committed by corrupt Russian officials.
Prosecutors said the fraud was allegedly uncovered by Sergei Magnitsky, a Russian lawyer who died in a Moscow prison in 2009 under suspicious circumstances. Mr. Magnitsky, before his death at age 37, claimed Russian police and security officials took control of entities owned by his client, U.S.-born fund manager William Browder, and defrauded the Russian government of hundreds of millions dollars in tax refunds. Mr. Magnitsky was arrested in 2008 after he provided testimony about the alleged fraud.
In July, a Russian court sentenced Mr. Browder without him being present in court to nine years in prison for tax evasion and returned a guilty verdict against Mr. Magnitsky, despite his death, on similar charges. Mr. Browder is a U.K. citizen living in London.
Critics of the Russian government have said the case is symbolic of the Kremlin’s abuse of the legal process and it has fueled tensions with the U.S., leading to a series of tit-for-tat recriminations between the nations. Russian President Vladimir Putin and other officials have denied allegations of judicial abuses in the case.
In a civil lawsuit filed in federal court in Manhattan on Tuesday, U.S. prosecutors alleged that a criminal organization, including officials at two Russian tax offices, corruptly sought tax refunds in the amount of 5.4 billion rubles, or about $230 million, on behalf of companies associated with Mr. Browder’s Hermitage Capital Management.
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Rare Assault on Putin Hits Russian Evening News
Viewers of the nightly news in the central Russian city of Chelyabinsk were given a rare glimpse recently of a report condemning President Vladimir Putin, when an allegedly disgruntled employee slipped the critical clip between glowing reports about pig farming and the region’s pro-Kremlin governor.
The anti-Putin item appeared on the Eastern Express channel during its evening news report on July 31, after the newsreader introduced a relatively benign story about new medical equipment in local hospitals, according to a portion of the broadcast later uploaded to YouTube.
Instead of that report, the item that appeared was called “The Epoch of Putin”—a polemic that blamed the president for the deaths of slain journalist and anti-Kremlin critic Anna Politkovskaya and lawyer Sergei Magnitsky, who died in prison after exposing alleged corruption. It compared corruption levels under Mr. Putin to those in Togo and Uganda.
It also accused Mr. Putin of benefiting from a boost in the polls following a series of terrorist attacks around Russia that started just before his first term as president in 2000.
The report ran for more than two minutes before the channel switched abruptly back to footage of the regional governor, according to the online footage, which spread widely following the broadcast.
Critical broadcast news reports about Russia’s president are almost unheard of in the country, where national television networks are state controlled or have close ties to the Kremlin, and privately owned local stations tend to hold a similar line.
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Free Alexei Navalny
The conviction and five-year prison sentence given on Thursday to Alexei Navalny makes Russia’s opposition leader a political prisoner and dissident. As any number of history’s disgraced dictators could tell Kremlin strongman Vladimir Putin, jailing your opponents can bring unforeseen consequences. Think Mandela, Walesa, Havel and, at a not-so-distant time in Russia, Andrei Sakharov and Natan Sharansky.
As the Putin regime bears down on the democracy movement, such comparisons might seem fanciful. Mr. Navalny, who came to prominence as an anti-corruption activist, had no chance against the Russian state. He offended President Putin by labeling his ruling clique “the party of crooks and thieves,” a nickname that stuck, and by leading large protests starting in late 2011.
The Kremlin then revived a local investigation into the alleged theft in 2009 of about $500,000 in timber from the Kirov district, which had been dismissed for lack of evidence. Mr. Navalny briefly worked in the northeastern city as an adviser to a then reform-minded local governor. During the trial, the defense wasn’t allowed to cross-examine the prosecution’s witnesses or call its own. Nearly all cases in Russia end in convictions, certainly all political cases.
Other opposition figures face different criminal cases, but Mr. Navalny’s was the most prominent political trial since at least the 1970s. The sentence takes him out of the running for mayor of Moscow, an opposition bastion, in September elections. It will also keep the 37-year-old father of two small children in jail beyond the end of Mr. Putin’s third term as president in 2018.
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