Sergei Magnitsky

Magnitsky Case Files Identify New Information on Russian Officials Involved In $230 Million Tax Fraud Cover-Up

Press Release
Hermitage Capital

18 April 2012 — New files from the posthumous case files against Sergei Magnitsky reveal the name of the main “expert” witness used to absolve Interior Ministry officers from liability for the $230 million corruption scheme uncovered by Sergei Magnitsky. The expert was Maxim Tretiakov, head of the legal department of Moscow Tax Office No 28, the office at the centre of the corrupt tax refunds scheme.

Sergei Magnitsky (Photo courtesy of Jewish Russian Telegraph)

In return for his “friendly testimony”, the Interior Ministry officers who themselves had a conflict of interest, exonerated him and his colleagues and claimed that the $230 million tax refund was executed by a “sawmill employee” and a “jobless” individual, and that all bank records proving otherwise had burned in a truck explosion and cannot be traced. As a result, officials from the Moscow Tax Office Number 28 were able to continue with their corrupt scheme, and were recently shown to have executed $1 billion in fraudulent tax refunds over a four-year period from 2006-2010. Families of the tax and Interior Ministry officers involved in the scheme have become $47 million richer after the thefts and have been shown to invest in luxurious foreign real estate and foreign bank accounts.

“The fact that the head of the legal department at the tax office who oversaw the theft of the $230 million that Sergei Magnitsky uncovered would be the expert witness justifying the police actions sheds further light on the absurdity and complete breakdown of law in Russia. In any other country, revelations like this would lead to mass resignations of cabinet ministers,” said a Hermitage Capital representative.

Documents from the case files indicate that Maxim Tretiakov from the Moscow Tax Office No 28 provided “expert” testimony on 12 February 2008, two months after his Tax Office perpetrated the $230 million tax refund. His testimony was obtained by Pavel Karpov, Interior Ministry officer directly implicated in the $230 million tax refund. Pavel Karpov was named by Sergei Magnitsky and in Hermitage Fund’s complaints, along with officer Artem Kuznetsov, for their role in the illegal seizure of documents of Hermitage Fund companies that were used by Russian officials and criminals to fraudulently re-register those companies and perpetrate the tax refund scheme.

Maxim Tretiakov whose office approved the $230 million tax refund in one day, claimed that there was a legal justification for Interior Ministry officers’ actions. To confirm his expertise, Mr Tretiakov said in his testimony to investigator Karpov: “My job responsibilities include the representation of the interests of tax inspection in court, sanctioning of decisions, and clarification of current legislation.”

A year later, on 27 February 2009, Mr. Tretiakov gave further testimony in relation to the $230 million tax refund. He claimed he had not been aware that the refund was illegal and requested to be declared a “victim,” claiming his “business reputation suffered” from the refund. “On 19 February 2009 from the documents received from the Interior Ministry’s Investigative Committee we learned that the directors of Parfenion and Mahaon, earlier in 2007, presented to the tax inspection Number 28 in Moscow false documents to justify the overpayment of income tax for 2006 and thus received illegally budget funds and caused damage to the business reputation of tax office Number 28 and material damage for the refunded amount,” said Mr Tretiakov in his 27 February 2009 testimony.

On the back of Mr Tretiakov’s testimonies, the Interior Ministry’s investigation into the $230 million tax refund was closed in March 2011 concluding that the tax officials, including Maxim Tretiakov, were “tricked,” “mislead” and “unaware.” The only persons prosecuted by the Interior Ministry for the largest single tax refund fraud in Russian history, were a sawmill employee and an unemployed man. Both men had previous links to Interior Ministry officers Artem Kuznetsov and Pavel Karpov named by Sergei Magnitsky as involved in the scam (http://www.ft.com/cms/s/0/bdae02a8-e784-11df-b5b4-00144feab49a.html#axzz1sKATheoD) who were absolved from responsibility.

At the same time, Mr Tretiakov’s tax office was in the middle of a four-year $1 billion tax refund embezzlement scheme, according to the newspaper Novaya Gazeta (http://www.novayagazeta.ru/inquests/51924.html).

Tax Official Maxim Tretiakov is Number 45 on the U.S. Helsinki Commission List of officials involved in the torture and death of Magnitsky and the corruption he uncovered. Investigator Pavel Karpov is Number 21 on the list.

The scale and duration of the tax refund scheme has raised questions over the role of Alexei Kudrin, former Russian Finance Minister. Public questions were formulated by Andrei Illarionov, former economic advisor to the Russian president (http://echo.msk.ru/blog/aillar/875912-echo/).In Kudrin’s reply on 11 April 2012, he said that neither he, nor his subordinates at the Federal Tax Ministry and Treasury gave instructions to execute the illegal tax refunds (http://akudrin.ru/news/otvety-na-voprosy.html). This prompted further questions from Mr Illarionov on 12 April 2012 (http://echo.msk.ru/blog/aillar/877960-echo/questioning) who is challenging whether Mr Kudrin is fit to lead the Committee for Civic Initiatives, an organization he unveiled on 5 April 2012, which stated fighting corruption as one of its goals (http://akudrin.ru/news/zayavlenie-o-sozdanii-komiteta-grazhdanskikh-initsiativ.html).

For further information please contact:

Hermitage Capital

Phone:              +44 207 440 17 77
Website:           http://lawandorderinrussia.org
 
Facebook:        http://on.fb.me/hvIuVI
Twitter:             @KatieFisher__
Livejournal:       http://hermitagecap.livejournal.com/

Former Russian Finance Minister Kudrin Tries To Explain Why $1 Billion Was Stolen From The Russian Budget In Connection To The Magnitsky Murder On His Watch And He Did Nothing

Hermitage Capital Press Release
Originally Sent April 11, 2012

In an extraordinary statement issued on his political website, former Russian Finance Minister Alexei Kudrin explained how it was not his fault that $1 billion was stolen from the Russian treasury on his watch between 2006 and 2010 through a corrupt scheme uncovered by Hermitage Fund’s Russian lawyer Sergei Magnitsky (http://akudrin.ru/news/otvety-na-voprosy.html#.T4Szz3lJri8.twitter).

In his statement referring to the illegal approvals of tax refunds for millions of dollars, Mr. Kudrin said: “Employees of the Treasury cannot challenge the appropriateness of such a decision. Neither the leadership of the Treasury, nor, especially, the leadership of the Ministry of Finance interfere in this process.”

This statement came in response to a series of 7 public questions to Kudrin from Andrei Illiarionov, an opposition politician, posted in his blog  on ‘Echo of Moscow’ website (http://www.echo.msk.ru/blog/aillar/875912-echo/), challenging Alexei Kudrin after an independent investigation by a Russian newspaper, Novaya Gazeta, uncovered that the same officers from the Federal Tax Service and the same organized criminals who were involved in the $230m theft that Sergei Magnitsky discovered, stole a further 11.4 billion Rubles in ($444 m) in 2009 and 2010. These thefts were in addition to another $240m that were stolen under the guise of “tax refunds” by the same group of officials and criminals in 2006 and 2007.

“It is remarkable that the man whose responsibility was to protect the finances of the Russian state could say that he shouldn’t interfere when crimes were going on under his nose, in which $1 billion was stolen directly from the Russian treasury,” said a Hermitage Capital representative.

Mr. Kudrin was also asked what he did when he learned about the theft of the $230m that Magnitsky discovered. He said: “I did not have this information in my possession then, but based on what I learned from the media reports at the time, I verbally asked the leadership of the Interior Ministry, if they were looking into it, and received an affirmative response… Neither the Ministry of Finance, nor I, at that time as Minister of Minister and Deputy Prime Minister, had the authority [to investigate the thefts].”

In fact, his statements about his lack of knowledge are directly contradicted by a series of petitions from Hermitage Capital seeking his intervention immediately after the illegal refunds were uncovered in 2008 and 2009. Hermitage Fund’s representatives wrote to Minister Kudrin providing detailed evidence of the involvement of tax officials in the thefts,  including 15 August 2008 (http://russian-untouchables.com/rus/wp-content/uploads/2012/04/D410.pdf) and again on 13 October 2009 (http://russian-untouchables.com/rus/wp-content/uploads/2012/04/D411.pdf). The first letter described evidence of the theft of $230 million via tax inspections No 25 and 28 in Moscow which took place within one day, on 24 December 2007. The second letter described 10 transactions used by the same tax inspections in Moscow to steal a total of $470 million from the Russian budget during 2006-2008. There was no answer to the first letter. The reply to the second letter signed by Deputy Finance Minister Shatalov on 28 October 2009 (http://russian-untouchables.com/rus/wp-content/uploads/2012/04/D412.pdf) said: “The Finance Ministry does not have authority to investigate the facts of budget thefts stated in your application.”This letter was sent 19 days before Sergei Magnitsky was killed in custody after exposing the officials perpetrating these thefts.

“It is notable that Alexei Kudrin fails to mention that not a single government employee had been charged or prosecuted for these successive crimes totaling $1 billion of budget funds over 4 years since they were discovered. It beggars belief that he thinks it is an acceptable explanation and he did nothing to stop the situation when he learned about it,” said a Hermitage Capital representative.

“This is further evidence that the Russian budget is no longer functioning for the Russian people, but is now an unrestrained source of financing for corrupt officials and organized crime,” said a Hermitage Capital representative.

For further information please contact:

Hermitage Capital

Phone:             +44 207 440 17 77
E-mail:             info@lawandorderinrussia.org
Website:          http://lawandorderinrussia.org

Facebook:        http://on.fb.me/hvIuVI
Twitter:           @KatieFisher__
Livejournal:     http://hermitagecap.livejournal.com/

Charges Against Magnitsky Doctor Dropped

By Terance Walsh
Impunity Watch Reporter, Europe

MOSCOW, Russia — Russian authorities have dropped charges against Larisa Litvinova, one of the doctors originally charged for her role in the torture and death attorney Sergei Magnitsky.  The charges are no longer applicable because the statute of limitations expired.

Sergei Magnitsky (Photo courtesy of BBC)

The decision to drop the charges was made last week but was not announced until Monday.

In a document to Magnitsky’s mother Investigator Marina Lomonosova said, “Hereby I order to terminate criminal proceedings in relation to Larisa Litvinova for the crime of causing death inadvertently, as a result of the improper conduct of professional duties due to the expiry of the statute of limitations.”

Authorities did not file charges until twenty months after Magnitsky’s death.  During that time officials disclaimed any wrongdoing in the matter.  It was not until international pressure mounted that authorities filed charges.

In December 2011 Russia reduced the statute of limitations for several crimes, including the crime for which Litvinova was charged.  According to President Dmitry Medvedev the amendements were part of “the humanization of the legal system.”

Litvinova was the doctor in charge at Moscow’s Butyrka maximum security prison while Magnitsky was detained there for almost four months.  Under her supervision Magnitsky never received treatment for the gallstones and pancreatitis he developed while detined prior to his trial.

Magnitsky was under Litvinova’s care for over a month leading up to his death and Litvinova never ran ultrasound tests or blood or urine tests, which would have been expected given Magnitsky’s symptoms.  Even in spite of twenty letters of complaint pleading for medical care from Magnitsky and his lawyers to the Prosecutor’s Office, the Interior Ministry, the Federal Penetentiary System, and the courts, Magnitsky still never received the care he needed.

In an official statement Investigator Lomonosova said, “The crime committed by the defendant [Litvinova L.A.] is an inadvertent criminal act, for which the maximum sentence does not exceed three years… Currently, the crime committed by Litvinova L.A. is considered by law as a crime of insignificant severity, for which the statute of limitation constitutes two years…L.A. Litvinova expressed her consent to the termination of prosecution on that ground.”

In charging Litvinova only with “shortcomings in the provision of medical care”, Russian officials refuse to admit that Magnitsky was tortured.  If they were to admit that Litvinova’s refusal to administer medical care was torture she would be subject to a ten year statute of limitations.

Hermitage Capital has harshly criticized the decision to drop charges against Litinova, calling it “the latest example of the reluctance within the Russian government to hold anyone accountable.”

Furthemore, Hermitage accused Russian authorities of dishonesty in the handling of the Magnitsky case.  “In dropping charges against Ms. Litvinova, the Russian investigators have refused to acknowledge that Sergei Magnitsky had been tortured in custody, a crime that has a 10-year statute of limitations.”

A spokesman for Hermitage commented, “It has become clear today that the whole process of prosecution of the scapegoats in Sergei’s death has been aimed at creating an illusion that at least someone would be punished.”

William Browder, Hermitage’s executive director, expressed his regrets that the doctors were even charged in the case, calling them scapegoats.  He further lamented that the Russians could not “even scapegoat the scapegoats.”

Litvinova is one of sixty Russian officials (the “List of 60”) that Magnitsky supporters have asked the international community to sanction for her role in the Magnitsky case.  The “List of 60” includes officials from the Interior Ministry, the Prosecutor’s Office, the Federal Penetentiary System, the Federal Security Service, and judges in federal courts. The only remaining member of the “List of 60” who is still facing charges is Doctor Kratov.

Magnitsky’s life ended after a series of events precipitating from his discovery of a tax fraud scheme run by Russian officials through his company, Hermitage Captial.  Officials turned the tax fraud accusations against Magnitsky and detained him in a maximum security prison.  There he was denied basis living amenities and emergency medical care.  He died in custody in November 2009.

Russian officials have acquiesced in the belief that Magnitsky died as a result of negligence by prison officials.  They refuse, however, to look further into the motives that seem apparent in light of the circumstances surrounding Magnitsky’s death.

After Magnitsky’s death, President Medvedev swore to oversee the investigation.  The investigation is slated to conclude later this month.

For more information please see:

The Sydney Morning Herald — Outrage As Investigators Drop Prison Death Charges — 10 April 2012

BBC — Magnitsky Death: Charges Against Russia Jail Doctor Dropped — 9 April 2012

The Moscow Times — Magnitsky Doctor No Longer Faces Charges — 9 April 2012

Washington Post — Russia Drops Charge Against Doctor At Prison Where Lawyer Who Reported Corruption Died — 9 April 2012

Amnesty International Slams Russian Government’s Posthumous Prosecution Of Sergei Magnitsky

Hermitage Capital Press Release
Originally Sent April 6, 2012

On the eve of April 8th, which would have been the 40thbirthday of the late Russian whistle-blowing lawyer Sergei Magnitsky, Amnesty International has publicly called on the Russian Government to stop his posthumous prosecution, and to bring his oppressors and those pressuring his family to justice.

“On 8 April 2012, lawyer Sergei Magnitsky would have turned forty. He died over two years ago, after months of ill-treatment and having suffered multiple human rights violations. For many in Russia and beyond, his death in custody in November 2009 has come to symbolize the injustices associated with Russia’s malfunctioning criminal justice system and widespread corruption,” said Amnesty International in its public statement. (http://www.amnesty.org/en/library/asset/EUR46/015/2012/en/6f21ef79-67fe-4014-a084-0f3e8fe8e95f/eur460152012en.pdf).

Amnesty International stressed in its statement that the Russian justice system has consistently failed to protect Sergei Magnitsky and his family from gross rights abuses.

“The [Russian] justice system has not only failed to uphold and protect his rights, but it has also been abused since to continue to violate his, and now his family’s rights in the form of his posthumous criminal prosecution, and by trying to force his close relatives to take part in this process,” said Amnesty International.

Amnesty International described the posthumous prosecution of a dead lawyer as a violation of international and national laws, and demanded that the Russian government stop the posthumous prosecution and stop pressuring his family.

“Amnesty International is calling on the Russian authorities to take immediate steps to rectify these injustices and stop the posthumous criminal prosecution of Sergei Magnitsky, and bring all those responsible for his death to justice,” said Amnesty International in its statement.

Amnesty International went on to say:

“Sergei Magnitsky’s relatives…and Russian and international human rights law regard him as innocent in virtue of the principle of the presumption of innocence, and no court decision is needed to confirm this…The posthumous criminal prosecution of Sergei Magnitsky must stop, and the pressure on his family in connection with their objections to this must cease.”

The Magnitsky family has been unable to stop his posthumous prosecution through the Russian legal system in spite of over 25 petitions filed with the Russian General Prosecutor’s Office, the Russian Interior Ministry and the Moscow courts protesting the illegality of the prosecution. All  petitions have been denied by the authorities. Earlier this week, on 3 April 2012, Judge Yulia Bobrova of the Ostankinsky District Court of Moscow approved the decision of the prosecutors to open a case against Sergei Magnitsky after his death in spite of the fact that he can’t defend himself. Judge Bobrova also sided with prosecutors allowing them to continue to treat Magnitsky’s mother and widow as defendants in this case.

The Russian court system has denied Sergei Magnitsky and his family any measure of justice. Last year, 14 Russian judges, including the chair of the Moscow City Court, Olga Egorova, refused all petitions from the Magnitsky family seeking access to his case file and to his tissue samples for an independent medical examination. When Sergei Magnitsky was still alive, 11 Russian judges rejected his 40 petitions about his unlawful arrest and repression by the officers he had accused of $230 million corruption.

In spite of the findings of gross human rights violations by the Russian President’s Human Rights Council, the Russian Interior Ministry and General Prosecutor’s Office “established no wrong-doing” in the actions of law enforcement officials who arrested and tortured Sergei Magnitsky to death in custody.

Amnesty International is now demanding that the allegations of the arbitrary criminal prosecution of Sergei Magnitsky made by the human rights activists are investigated “immediately, effectively and impartially”, and that “all those found responsible brought to justice”.

So far all Russian investigations in this case remain under control of Viktor Grin, Deputy General Prosecutor of Russia and Number 33 on the U.S. Helsinki Commission list of Russian officials involved in the torture and murder of Sergei Magnitsky and the corruption he had uncovered. Viktor Grin ordered the posthumous prosecution of Sergei Magnitsky on 30 July 2011, which was three days after he and other Russian officials were banned by US State Department for their role in the Magnitsky case, and was seen as an act of personal retaliation.

The case is also controlled by first deputy chief of the Interior Ministry’s Investigative Department Tatiana Gerasimova, who was named by the U.S. Senators last November for her role in the Magnitsky case in a petition to the U.S. State Department seeking to ban her U.S. visa.

“In pursuing the posthumous case against Sergei Magnitsky, Russian authorities have rejected the conclusions from the Russian President’s Human Rights Council. It is clear that no justice is possible and no investigation can be impartial and independent as long as it remains controlled by the same officials and bodies who committed crimes against him. To recognise that Magnitsky was right for them, means to recognise that they themselves had been wrong and committed grave crimes,” said a Hermitage Capital representative.

 

For further information please contact:

Hermitage Capital

Phone:             +44 207 440 17 77

E-mail:             info@lawandorderinrussia.org

Website:          http://lawandorderinrussia.org

Facebook:        http://on.fb.me/hvIuVI

Twitter:           @KatieFisher__

Livejournal:     http://hermitagecap.livejournal.com/

Statement on Sergei Magnitsky on Amnesty International’s website:

http://www.amnesty.org/en/library/asset/EUR46/015/2012/en/6f21ef79-67fe-4014-a084-0f3e8fe8e95f/eur460152012en.pdf

Lugar Endorses The Magnitsky Act

Press Release
Originally sent 3/27/12

Today, U.S. Sen. Dick Lugar (R-IN) made the following statement at the Senate Foreign Relations Committee’s Business Meeting:

“Mr. Chairman, several Committee Members have urged Committee consideration of the Magnitsky Rule of Law Act.  I’d like to take this opportunity to thank Senator Cardin for his hard work on the Magnitsky Act.  This bill has been pending before the Foreign Relations Committee for nearly a year, and we held a hearing on the bill last December.  My office has worked with Senator Cardin’s staff to develop a revised version of the bill, which I strongly support.  Therefore, I would look forward to the opportunity for the Committee to consider this legislation at the next business meeting.”

The Magnitsky Rule of Law Accountability Act of 2011 (S. 1039) would impose a travel ban on and freeze the assets of persons responsible for the detention, abuse, and death of Sergei Magnitsky.  The bill provides penalties for persons who commit similar human rights abuses in the future.

Sergei Magnitsky was a young Russian lawyer working for an American law firm in Moscow, who uncovered corruption and tax fraud by Russian officials.  He was subsequently arrested, placed in detention, and ultimately died of pancreatitis after being refused medical care.  The bill would strengthen supporters of modernization and rule of law in Russia.

http://lugar.enews.senate.gov/mail/util.cfm?gpiv=2100086110.20036.96&gen=1