Hermitage Lawyer Dies in Russian Jail

November 17, 2009

A lawyer for investment fund Hermitage Capital Management, jailed on tax charges related to his work for the fund, has died in custody, Irina Dudukina, spokeswoman for the Investigative Committee of Russia’s Interior Ministry said Tuesday.

She provided no further details, saying a release would be issued later. Sergei Magnitsky and his colleagues had accused authorities of denying him necessary medical treatment in prison.

Mr. Magnitsky, a 37-year-old partner at Moscow firm Firestone Duncan, was jailed nearly a year ago on charges of tax evasion related to his work for Hermitage. At a court hearing on extending his detention in September, he complained that he had been denied medical treatment for weeks for serious stomach pancreatic illnesses that he hadn’t suffered from before his imprisonment. He also complained of inhumane conditions — including the absence of toilet, hot water and windows — at the Butyrskaya jail where he was then being held.

“They held him for 11 months, asking him to fabricate testimony against Hermitage,” said Jamison Firestone, managing partner of Firestone Duncan. “The more he refused, the worse his conditions became.”

If convicted of tax fraud, Mr. Magnitsky would have faced up to six years in prison. Russian officials have denied pressuring Mr. Magnitsky for testimony.

Hermitage, run by U.S.-born investor William Browder, denies the tax-evasion charges. The fund has accused officials of the Russian Interior Ministry of using documents and seals taken from Hermitage during a 2007 search to steal companies used by the fund and apply for $230 million in fraudulent tax refunds from the Russian government. The ministry denies those charges.

Mr. Browder was one of the best-known foreign investors in Russia, with a reputation for publicly crusading against waste and mismanagement at Russia state-controlled companies. But Russian authorities stripped him of his visa in 2005 on national-security grounds and he hasn’t been able to return since. The Interior Ministry says he’s been charged with tax evasion, allegations he denies.

By GREG WHITE, The Wall Street Journal

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