Swiss Money Laundering Investigation in the Magnitsky Case Widens With New Requests Sent to Multiple Swiss Financial Institutions and Accounts Frozen

January 9, 2013

The Swiss Prosecutor has widened its probe into the money laundering involving Russian officials connected to the crimes uncovered by Sergei Magnitsky. The Swiss authorities have sent requests to multiple financial institutions and frozen accounts, reported Tages-Anzeiger, one of Switzerland’s main newspapers.

A number of bank accounts have been frozen containing millions of funds in unspecified currency, according to the newspaper article “Suspicion of Money Laundering: Confederation Blocked Millions” (http://www.tagesanzeiger.ch/schweiz/standard/Verdacht-auf-Geldwaescherei-Bund-blockiert-Millionen/story/10790179).

This information comes on top of a previous announcement by the Swiss authorities that they froze accounts at Credit Suisse in Zurich last year belonging to Vladlen Stepanov, former husband of a senior Russian tax official Olga Stepanova, who approved numerous illegal tax refunds through which hundreds of millions of dollars were stolen from the Russian treasury. Some of the funds in the frozen Swiss accounts had been used to buy luxury real estate in Dubai for Russian tax officials and their families. Following the revelation of the Swiss action, Mr Stepanov stated that approximately 8 million Euros in his Swiss accounts had been frozen. It is not specified who the persons are who are now connected to the widening Swiss probe.

“All financial transactions leave a permanent and inerasable trail. Those who were connected to the theft and laundering of the money, and the false arrest and killing of Sergei Magnitsky to cover it up may be able to get away with murder, but they won’t be able now to hide the proceeds of their crime in the West,” said a Hermitage Capital representative.

The Russian authorities have recognised that $230 million had been stolen from the Russian treasury and blamed it on a sawmill employee and a jobless man. They contended that the money could not be traced because bank records blew up in a truck explosion. As of now, not a single Russian official involved in the $230 million fraudulent tax refund and theft has been prosecuted.

In the meantime, Russian authorities have acquitted Dmitry Kratov, former head of Butyrka detention center and the only official brought to trial for the death of Sergei Magnitsky. The acquittal of Mr Kratov was requested by the Russian state prosecutor in an unusual U-turn just four days after the public claim by Russian President Vladimir Putin that Sergei Magnitsky had not been “tortured” and had died of “heart failure” in spite of the documentary evidence of the use of rubber baton and injuries on his body revealed during his funeral.

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