President Medvedev Fires Major General Anatoly Mikhalkin of the Moscow Interior Ministry

December 15, 2009


– Mikhalkin headed the Department that coordinated the campaign against HSBC and Hermitage Capital and the persecution and illegal detention of Sergei Magnitsky –

15 December 2009 – President Dmitry Medvedev today signed a decree dismissing Major General Anatoly Mikhalkin, Head of the Tax Crimes Department of the Moscow Branch of the Interior Ministry.

In the summer of 2007 Major General Mikhalkin sent a number of requests, prepared by his subordinate, Lieutenant Colonel Artem Kuznetsov, to the Moscow branches of international banks seeking confidential information about the holding companies of the Hermitage Fund. One month later these investment companies were stolen by an organized criminal group using the materials seized by Kuznetsov in the June 2007 raids of Hermitage’s and its lawyers’ Moscow offices. In December 2007, $230 million was ultimately stolen from the Russian budget under the guise of refunds of supposedly “overpaid” taxes. This colossal tax refund – the largest in Russian history – was approved and paid out by Moscow Tax Inspectorates Nos. 25 and 28 in a single day. According to statements by tax inspectorate employees, they approved the tax rebate based on the results of a check conducted by the Moscow Interior Ministry into the validity of the tax refund requests.

In June and October 2008 Sergei Magnitsky testified about the role of the Moscow Interior Ministry and in particular Kuznetsov in the theft of the Hermitage Fund companies and subsequent theft of $230 million from the state budget. One month later Magnitsky was arrested by subordinates of Kuznetsov on false pretenses. One month before his death, on 13 October 2009, Sergei Magnitsky again confirmed his statement regarding Lieutenant Colonel Kuznetsov and testified:

“Kuznetsov and other law enforcement officers who entered into a conspiracy with him, could be complicit in my opinion in the theft of Rilend, Mahaon, and Parfenion and in the subsequent theft of 5.4 billion rubles ($230 million) from the state budget as described above. They were extremely interested in the suppression of my activities to assist my client in the investigation of the circumstances of the crimes against my client, and that was the reason for my unlawful criminal persecution carried out by investigator Silchenko.”

“President Medvedev has taken an important step by going after the people who are directly responsible for the persecution of Sergei Magnitsky and the loss of $230 million in state funds. However, the loss of someone’s job can never be compared to the loss of an innocent man’s life. We are calling for all those individuals who were involved in Sergei Magnitsky’s illegal detention and death – along with those involved in the $230 million theft he uncovered – to be brought to justice,” said William Browder, CEO of Hermitage Capital, commenting on today’s firing of Mikhalkin.

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