Police in Russian fraud case implicate dead lawyer
Tuesday, November 16, 2010
MOSCOW - A year ago, lawyer Sergei Magnitsky died in prison here months after testifying about police involvement in the theft of millions of dollars in tax receipts. On Monday, the police accused the dead man of that very theft.
William F. Browder, a U.S.-born investor who was Magnitsky's client, calls the accusation evil.
"It's beyond absurd, beyond cynical - it is pure evil," Browder, the head of Hermitage Capital Management, said Monday. "They are trying to blacken the name of Sergei on the anniversary of his death at their hands, accusing him of the very crime they committed."
Magnitsky died Nov. 16, 2009, at age 37, after more than a year in pretrial detention. He had not been given medical treatment, although he was suffering from pancreatitis, and a public oversight committee called the conditions of his detention "torturous."
Well before that, Browder, whose Hermitage Capital had been the largest foreign investment fund in Russia, had become a business dissident, an activist stockholder who was denied entry to the country in late 2005. Magnitsky provided legal work for Hermitage, and Browder has been tireless in his efforts to pressure Russia into pursuing those involved in Magnitsky's arrest and death.
Last year, President Dmitry A. Medvedev ordered an investigation into Magnitsky's death, and about 20 prison officials were fired, but no charges have been filed. On Monday, the Interior Ministry - the police department - informed reporters that it had thoroughly investigated during the past year and pronounced Magnitsky guilty.
The case dates to October 2007, when Magnitsky alleged that three Hermitage companies had been stolen and registered in other names, using documents police had seized in a raid on Hermitage that June. Hermitage filed three criminal complaints in early December, describing a complicated scheme involving police and fake tax deductions that would result in a tax refund of $230 million to the stolen, shell companies.
Those complaints failed to prevent the fraud, Browder said. On Dec. 24, 2007, the swindle was carried out with a $230 million tax refund - the largest ever paid in a single day.
In June 2008, Magnitsky testified that police were involved in the scheme. In November, some of the same people he accused were appointed to investigate the missing $230 million, and later that month Magnitsky was arrested. One year later, he died.
"They spent the last year trying to figure out how to make this go away," said Jamison Firestone, managing partner of Firestone Duncan, the law firm where Magnitsky worked. "Now they want to pin it on Magnitsky."
Firestone, who left Russia while Magnitsky was in prison, said Magnitsky died refusing to falsely implicate Browder and Hermitage in the scheme.
On Monday, at a Moscow news conference, Irina Dudukina, spokeswoman for the Ministry of Interior Investigative Committee, accused Magnitsky of the crime.