Russia to reopen tax case linked to lawyer's death

19th April 2011, Comments 0 comments

A court was to reopen a hearing on Tuesday into the alleged theft of hundreds of millions of dollars from a US investor by Russian police in a case that led to the death of his jailed lawyer.

The November 2009 death in Butyrka prison of 37-year-old attorney Sergei Magnitsky gained broad international attention and refocused Western concerns about corruption and the lack of judicial independence in Russia.

Magnitsky claimed to have unravelled an illegal scheme through which Russian interior ministry officers stole control of three subsidiary companies formed by the US investment firm Hermitage Capital.

Hermitage says the companies were then bankrupted in 2007 before being used to receive a refund of some 5.4 billion rubles (about $190 million at the current exchange rate) in taxes paid by the firm.

The company's attorney Magnitsky was jailed shortly after the case became public and then accused of the very theft he alleged to have uncovered.

Magnitsky began suffering from gallstones and other ailments while in prison and was denied treatment until the final days before his death.

The 10th Arbitration Court of Appeal in Moscow was due Tuesday to hear whether control of the three companies mentioned by Magnitsky had indeed been stolen by the Russian police.

Hermitage -- founded in 1996 by the US investor William Browder -- has pursued the case even though it has effectively ceased operating in Russia.

The same court has already ruled against Hermitage. But that ruling was overturned by a federal panel.

Barrons magazine reported last week that the interior ministry has claimed in its defence that all documents relating to the contested money were in a truck that crashed and exploded in 2008.

But Hermitage has led its own investigation that has resulted in the release of three separate films about how the alleged embezzlement scheme worked.

The last installment released this weekend said that a Moscow tax official managed to tranfer the false tax claim in the spand of one day and then used some the gains to purchase villas stretching from Dubai to Montenegro.

The film says the woman's husband also received $11 million in two secret Credit Suisse accounts in Zurich shortly after the money was transferred.

Credit Suisse has denied any knowledge of involvement in the alleged embezzlement scheme.

© 2011 AFP

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