$135 Million of Russian Government Money Stolen by the Criminal Group Exposed by Sergei Magnitsky Has Been Found in Eight Different Countries

September 24, 2012

After two years of a forensic investigation involving the authorities and courts in four different countries, journalists from Novaya Gazeta and the Organized Crime and Corruption Reporting Project have identified where $135 million of the money stolen from the Russian treasury by a criminal group exposed by the murdered lawyer, Sergei Magnitsky, ended up. The money was traced through U.S., Swiss, Moldovan and Russian bank records to accounts in 8 different jurisdictions, 62 offshore accounts and 20 different banks. The money was found in Austria, Switzerland, Finland, Cyprus, Hong Kong and three Baltic republics.

This is the largest single discovery outside of Russia of bank accounts and individuals who were involved in the corrupt conspiracy to steal Russian treasury funds uncovered by late Sergei Magnitsky.


One of the most significant discoveries from this new investigation is documentary evidence showing a link between the funds from the Russian treasury through 10 different banks in 4 different jurisdictions and the accounts at Credit Suisse Private Bank in Zurich of a company belonging to Vladlen Stepanov, ex-husband of former head of Moscow tax office number 28. The money from this account was shown to have been used to pay for multi-million dollar properties in Dubai for Vladlen Stepanov (http://russian-untouchables.com/rus/docs/D252.pdf) and two officials of the Moscow Tax Office 28 – Olga Tsareva and Elena Anisimova – and their relatives (http://russian-untouchables.com/rus/docs/D247.pdf, http://russian-untouchables.com/rus/docs/D246.pdf).


Another important trail from the stolen treasury funds was a $1,468,023 payment to accounts at UBS in Zurich.


Previous investigations have revealed that $800 million was stolen by the Russian officials and criminals exposed by Sergei Magnitsky using the same scheme during a four-year period of 2006-2010, including $230 million paid in taxes to the Russian government by Hermitage Fund’s Russian companies in 2006. This money was illegally refunded in one day, on 24 December 2007, under the guise of a “tax refund” by criminals working with Russian tax and Interior Ministry officials. Families of those officials have since been shown to have become rich well in excess of their government salaries.


Hermitage Capital has filed 8 criminal complaints with the prosecutors and police in the eight foreign jurisdictions, alerting them to the stolen funds and asking for the accounts to be frozen and criminal investigations to be opened.


The applications say:

Our clients have discovered that the funds held at and which moved through these accounts represent a portion of some $800 million in illicit proceeds generated in a criminal scheme involving the theft of funds from the Russian Treasury, as well as proceeds of similar crimes earlier, payments to corrupt Russian officials and members of their families involved in the scheme, and fraud, of which $230 million relates to taxes paid to the Russian Treasury by Hermitage and the Hermitage Fund, as well as to other ongoing criminal activity.”


“Because the Russian authorities have blocked all applications to investigate the money trail and to bring implicated Russian officials to justice, our efforts have been focused on criminal justice opportunities outside Russia,” said a Hermitage Capital representative.


Sergei Magnitsky who uncovered the unprecedented fraud against the Russian people and the Russian state, was arrested by officers he had implicated, tortured and killed in custody. In November 2010, he was posthumously honored by Transparency International with the Integrity Award (http://www.transparency.org/getinvolved/awardwinner/sergei_magnitsky) for his fight against official corruption.


As of now, not a single member of the Russian government has been prosecuted for the theft of the funds or the murder of Sergei Magnitsky.


Earlier, Magnitsky’s former boss, U.S. lawyer Jamison Firestone, filed three applications with the Russian Investigative Committee seeking to open a criminal inquiry into the Russian tax officials who authorized the tax refunds, and into the high-ranking government officials who have been blocking any investigation. Firestone also filed seven requests to investigate the illicit wealth of the families of tax and police officials implicated in the thefts, and the criminal activities of the Klyuev organized crime group since 2002. The Russian authorities have not opened any probes into anyone named in Firestone’s applications.


For further information please contact:


Hermitage Capital

Phone:             +44 207 440 1777

Email:             info@lawandorderinrussia.org

Website:          http://lawandorderinrussia.org


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

Twitter:           @KatieFisher__

Livejournal:     //hermitagecap.livejournal.com/


Investigation by Novaya Gazeta here:

Investigation by the Organized Crime and Corruption Reporting Project: http://www.reportingproject.net/proxy/en/following-the-magnitsky-money


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