A Russian court has yet again postponed hearings into the tax evasion case against late auditor Sergey Magnitsky and his former boss William Browder after the state-appointed defense attorney asked for more time to prepare for the process.
Magnitsky’s defense attorney was appointed by the state as the auditor’s relatives refuse to take any part in the process. His family has repeatedly said that the trial of the deceased man is a mockery of justice and blasted even the participation of a state-appointed defense attorney as it makes the process legitimate.
However, investigators insist that according to the law they need the consent of all close relatives in order to stop the process that could clear the late suspect’s name. At present Magnitsky is neither convicted nor acquitted of the crime he was suspected of, since the process was stopped due to his death.
Magnitsky died in a Moscow prison in 2009 after spending about a year in pre-trial custody while under investigation over a multi-million-dollar embezzlement scheme. Russian authorities established that the cause of death was severe pancreatitis and heart disease.
Two doctors have been charged with criminal negligence over the death.
The former colleagues and bosses of the late auditor, including William Browder who is a suspect within the same tax evasion case, claim that Magnitsky in fact uncovered a tax evasion scheme he was suspected of. They also claimed that a group of corrupt officials allegedly organized the auditor’s imprisonment and eventual death in order to cover up their crimes.
Russian investigators, in turn, claim Magnitsky’s statements were not reports about crimes, but a testimony within the criminal case that had been already opened against him and his bosses.
Tit-for-tat sanctions
Hermitage Capital and William Browder have sponsored a major PR campaign accusing Russian authorities of human rights violations. In late 2012, the United States introduced the so-called Magnitsky Act – a law imposing sanctions on some Russian civil servants involved in the case.
Russia blasted the move as an attempt to influence justice in a sovereign country and replied by adopting the similar Dima Yakovlev Law – a set of sanctions against foreign officials suspected of violating Human Rights or the rights of Russian citizens who were detained and tried abroad.
Russian also continues the probe against William Browder, who has been charged in absentia as he resides in the United Kingdom and refuses to appear before the Russian court. He also refused to choose a defense attorney and is also represented by a state-appointed lawyer.
Gas bill
On March 4, Russia’s Interior Ministry announced that additional charges had been pressed against Browder.
The businessman is suspected of illegally purchasing shares in the Russian natural gas monopoly Gazprom. According to the Russian law only Russian companies were allowed to trade in Gazprom securities and in other cases special government permission was required. Hermitage Capital Management conducted such operations through affiliated structures without permission, investigators claim.
Apart from this, Russian state-run television has aired several programs disclosing Browder’s alleged criminal schemes, such as receiving tax benefits for hiring disabled persons, though these people were not actually working for him.
The reporters went further, claiming that Browder used his companies to buy a significant stake in Gazprom to begin influencing the strategic decisions of the natural gas monopoly – and these decisions were not in the interests of Russia and its citizens. Investigators also told TV crews that they estimated direct damages from the illegal stock acquisitions at two-and-a-half billion rubles (over US$83 million).
The authors of the programs claim that the Federal Security Service and the military intelligence launched a probe into the illegal accumulation of Gazprom stock as far back as in 2005, but it lingered to this day as Browder allegedly enjoyed protection on the high levels of power.
Tragic witness deaths
They also noted that Sergey Magnitsky’s death was not the only tragic incident surrounding Browder’s operations. For example, businessman Oktay Gasanov who closely cooperated with Magnitsky, died of a heart attack. The director of one of Hermitage Capital’s subsidiaries, Valery Kurochkin, died in suspicious circumstances. And banker Semyon Korobeynikov, who helped in Browder’s cash transfer operations, plunged to his death from the top floor of a high-rise that was still under construction.
Russian reporters also reminded the audience that William Browder founded Hermitage Capital together with Edmond Safra – the former head of the Republic National Bank of New York, who died in a fire in his Monaco house in 1999.
Investigators established that the fire was a result of an arson which occurred as Safra was planning to give testimony to the FBI. The bureau was investigating the fate of the stabilization credit that the IMF extended to Russia in 1998. The credit vanished from the accounts of Safra’s bank. Soon after that, Hermitage Capital Management somehow came into the possession of significant sums of money, which it used to buy Gazprom shares, Russian journalists reported, hinting that such a course of events could not be mere coincidence.
Hermitage Capital on Monday dismissed all accusations and said
that the TV program was pure propaganda.