MAGNITSKY CASE FILES SHOW RUSSIAN FSB BEHIND THE MASSIVE BUDGET THEFTS HE HAD UNCOVERED AND HIS SUBSEQUENT PERSECUTION

April 12, 2012

MAGNITSKY CASE FILES SHOW RUSSIAN FSB BEHIND THE MASSIVE BUDGET THEFTS HE HAD UNCOVERED AND HIS SUBSEQUENT PERSECUTION

12 April 2012 – Newly-released criminal case files from the posthumous prosecution case against Sergei Magnitsky reveal for the first time the central role that the FSB, Russia’s secret police, and in particular, Department K, the FSB’s Financial Counterespionage Department, played in the budget thefts uncovered by Sergei Magnitsky, his subsequent persecution and the state cover-up since his death.

“The first bundle of the Magnitsky case files show the web of corruption and the merger between the FSB, law enforcement agencies and organised criminals in the scheme to steal hundreds of millions of dollars of budget funds, and to conceal the liability of government officials involved,” said a Hermitage Capital representative.

While the remit of the FSB’s financial counterespionage unit is to safeguard Russia’s national secrets in the financial sphere from foreign spies, documents from the Magnitsky case file show that it has been intimately involved in the embezzlement of money from the Russian treasury in collusion with organized criminals. Department K has also shielded high-ranking officials, and their criminal accomplices, by using its status as a secret police organization.

The key figure from the Magnitsky criminal case files is Viktor Voronin, Chief of FSB’s Department K. General Voronin is No 26 on the U.S Helsinki Commission List of Russian officials involved in the arrest and death of Sergei Magnitsky and the corruption in the Russian government he had uncovered (http://www.csce.gov/index.cfm?Fuseaction=Files.Download&FileStore_id=1744).

According to the case files, on 22 May 2007, FSB General Voronin signed a report prepared by his subordinate, Captain Alexei Kuvaldin, authorising the initiation of a fabricated criminal tax case (http://russian-untouchables.com/rus/docs/D413.pdf). It sanctioned Russian Interior Ministry officer Kuzntetsov to raid the offices of Hermitage Capital Management and its law firm in Moscow, and seize all the corporate seals and documents of the Hermitage Fund’s Russian companies.

The documents were then placed in custody of Interior Ministry officer Karpov. A document in the files dated 23 October 2007 signed by investigator Karpov shows that the files and items seized in the Interior Ministry raids on Hermitage had in fact been transferred to the FSB for “analysis”. Two months later, on 24 December 2007, the documents were used to authorise an approval of the $230 million tax refund, with no checks by Moscow Tax Offices No 25 and 28. Families of both Interior Ministry officers and tax officials became inexplicably rich after the $230 million theft (http://www.youtube.com/watch?v=4ZB3YoAvEro, http://www.youtube.com/watch?v=1TWhlPqVddc&feature=relmfu,

).

After Sergei Magnitsky’s arrest and death in custody, his colleague Jamison Firestone, filed a petition with the Russian Investigative Committee on 15 April 2011 seeking to open a criminal investigation into the officers of the two Moscow Tax Offices exposed by Sergei Magnitsky in approving the fraudulent $230 million tax refund and whose families were found out to have $43 million in foreign property and bank accounts, not commensurate with their official salaries. The investigation into Mr Firestone’s petition about the tax officials was directed for an investigation on 25 May 2011 to the very same FSB General Voronin. On 6 June 2011, FSB General Voronin’s Deputy, Mr Kondratiev wrote a report stating that the witnesses and suspects “cannot be found and cannot be questioned” (http://russian-untouchables.com/rus/docs/D419.pdf). The case has been stalled since that FSB report was written. As a result, not a single government official has been charged in the largest known tax rebate fraud in Russian history.

The Magnitsky case files further show how the FSB’s Department K has been used to retaliate against the whistleblowers and repress Magnitsky. The FSB does not have any legal authority in the tax sphere, or the responsibility for tax crimes. Yet, it engaged in making false allegations of tax underpayment and fabricating criminal cases on that basis. According to the Magnitsky case files, FSB’s Department K played a key role in an operation to fabricate a case under which Sergei Magnitsky was arrested and to falsify documents for his arrest. The documents show:

• On 27 February 2008, General Voronin’s subordinate, FSB Captain Alexei Kuvaldin (http://russian-untouchables.com/rus/docs/D421.pdf), jointly with Interior Ministry officers Kuznetsov and Karpov, fabricated a criminal case alleging tax underpayment by two Hermitage Fund’s companies in 2001, in spite of the absence of any tax claims.

• On 24 November 2008, another of General Voronin’s subordinate, FSB Captain Laguntsov wrote a letter (http://russian-untouchables.com/rus/docs/D416.pdf) alleging that Sergei Magnitsky had applied for a visa with the UK embassy in Moscow in spite of the fact that Magnitsky’s passport had been seized previously by police and the UK embassy confirmed that had not applied for a visa (http://russian-untouchables.com/rus/docs/D417.pdf). This FSB report was the key document to used to justify Magnitsky’s arrest and detention.

In May 2010, FSB’s Department K produced a false report about Hermitage Capital’s Russian lawyer Alexander Antipov after he had filed a number of complaints about the abuse of rights and law in the proceedings trying to strip him of professional status and prevent him from performing his duties. The attempt was thwarted after the intervention from the Moscow City Bar Association.

The Magnitsky case files contain further documents from FSB General Voronin dated 2009-2010 referring to his on-going “operative support” of the case.

“In the coming weeks, as the documents become available, Hermitage Capital will be exposing further information contained in these case files, so the world can see the injustice done to Sergei Magnitsky, and the abuse and corruption inside the Russian legal system,” said a Hermitage Capital representative.

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