// Press Releases (in English)
US Appeals Court to Hear Emergency Motion on Disqualification of Lawyer John Moscow in the Magnitsky Case in New York
January 18, 2016
US Appeals Court to Hear Emergency Motion on Disqualification of Lawyer John Moscow in the Magnitsky Case in New York
18 January 2016 – The United States Court of Appeals for the Second Circuit has agreed to an emergency hearing to be held at 10 am on Friday, 22 January 2016, on an application from Hermitage Capital Management seeking to suspend the case of US vs Prevezon, to hear an appeal which will determine whether lawyers with a serious conflict of interest should be allowed to remain on the case.
Hermitage’s application arises out of U.S. law firm Baker Hostetler and its partner, John Moscow, switching sides in the Russian money laundering case from representing the victim – Hermitage, to representing the beneficiary of the crime – Prevezon Holdings.
Hermitage said in support of its motion for stay in the legal proceeding:
“A stay pending appeal is in the public interest. A lawyer’s obligation to preserveclient confidences “touches upon vital concerns of the legal profession and the public’s interestin the scrupulous administration of justice.”
Hermitage’s motion is supported by the US Department of Justice, who said to the Appeals Court that the conduct of Baker Hostetler represents an “unheard of”, “extremely rare” and “egregious” case of conflict of interest given that the law firm not only switched sides but went further by accusing Hermitage, its former client, of the crime of which Hermitage has been the victim.
“The egregious situation seen here, where an attorney for a victim attempts to switch sides to represent a beneficiary of the offense, is extremely rare, and it is unheard of that such attorney would go further and accuse his former client, the victim, of committing the offense. Accordingly, courts have seldom been called upon to rule on such an extreme conflict, often because it is simply not done,” said the US Department of Justice in their affirmation of Hermitage’s motion.
On 18 December 2015, the district court judge Thomas Griesa in the Southern District of New York granted Hermitage’s motion to disqualify Baker Hostetler and John Moscow, finding it would be improper for Baker Hostetler to continue to represent defendants Prevezon Holdings because of Baker Hostetler’s prior representation of Hermitage. However, on 8 January 2016, Judge Griesa reversed his decision ruling that Prevezon’s right to the choice of lawyers was more important than Hermitage’s right to not be betrayed by former counsel.
Prevezon Holdings is owned by the son of a senior Russian government official and, according to the U.S. Department of Justice’s lawsuit, has been involved in laundering proceeds from the US$230 million fraud uncovered by Hermitage’s late lawyer Sergei Magnitsky. The US Department of Justice, having traced proceeds stolen in Russia to Prevezon’s real estate properties in Manhattan, filed a civil lawsuit seeking money laundering fines and forfeiture of US$14 million in Prevezon’s US assets. After the assets were frozen, Prevezon sought the services of John Moscow and Baker Hostetler. In spite of the obvious conflict of interest, John Moscow and Baker Hostetler agreed to represent alleged beneficiaries of the US$230 million crime – ignoring the fact that they had been previously hired by Hermitage to identify and bring to justice perpetrators and beneficiaries of this crime.
On 13 January 2016, Hermitage filed an emergency motion to suspend the proceedings in the asset forfeiture case against Prevezon until the issue of John Moscow and Baker Hostetler’s disqualification is resolved.
In supporting the Hermitage’s motion, the US Department of Justice stated:
“After taking almost $200,000 of Hermitage’s money to attempt to prevent Hermitage from being accused of committing the fraud, [Baker Hostetler’s partner] Moscow is now taking the money of an alleged beneficiary of the very same fraud to himself accuse Hermitage of committing the fraud.”
“Allowing the trial to take place in this fashion, and to expose Hermitage to such irreparable injury at the hands of its former counsel, would be a miscarriage of justice setting a precedent that would severely harm crime victims’ interests and could chill the cooperation of victims with law enforcement,” said the US Justice Department in its filing.
The US$230 fraud and money laundering case was uncovered by Hermitage’s Russian lawyer, Sergei Magnitsky, who was tortured and killed in Russian police custody after he had given testimony implicating Russian government officials in the scheme. To perpetrate the US$230 million fraud, the Russian criminal organisation stole three Russian companies belonging to the Hermitage Fund and then sought an illegal refund of US$230 million of taxes previously paid by those companies.
When Hermitage’s Russian lawyers reported the officials involved, the lawyers themselves became subject of retaliation from Russian authorities. In 2008, Hermitage hired Baker Hostetler’s partner John Moscow to protect Hermitage and its lawyers and executives from the retaliation. Mr. Moscow had previously been a specialist in combating Russian organised crime and corruption in the New York District Attorney’s office. He assisted Hermitage with the identification of the beneficiaries of the US$230 million fraud and liaising with the US law enforcement in bringing those beneficiaries to justice. Several years later the US Department of Justice traced some of the US$230 million proceeds to Manhattan properties owned by Prevezon and filed a lawsuit in which John Moscow and Baker Hostetler appeared for Prevezon.
The hearing will take place in New York in the Thurgood Marshall U.S. Courthouse, 17th floor, Room 1703 later this week, on 22 January 2016.
For more information, please contact:
Justice for Sergei Magnitsky Campaign
+44 207 440 1777
e-mail: info@lawandorderinrussia.org
www.lawandorderinrussia.org
Twitter: @KatieFisher__
www.facebook.com/russianuntouchables
Sergei Magnitsky’s Mother Demands Answers from Russia’s General Prosecutor Chaika About False Statements Against Her Son
December 22, 2015
Sergei Magnitsky’s Mother Demands Answers from Russia’s General Prosecutor Chaika About False Statements Against Her Son
Yuri Chaika
22 December 2015 – Sergei Magnitsky’s mother has demanded answers from Russian General prosecutor Chaika over his hysterical letter containing false information about Sergei Magnitsky published last week in Russian newspaper Kommersant. Chaika’s letter was a response to Russian blogger Alexei Navalny’s explosive video about the corruption and abuse of office involving Chaika’s two sons and senior prosecutors in the country.
In Chaika’s14 December 2015 letter to Kommersant, he claimed that Sergei Magnitsky had never investigated the $230 million theft from the Russian budget.
In Sergei Magnitsky’s mother’s application to the General Prosecutor’s office which was filed at the end of last week, she refuted Chaika’s false statements and placed the responsibility on Chaika himself for the cover up of the $230 million theft and its perpetrators implicated by Sergei Magnitsky in sworn testimony.
“The information you have disseminated inflicts pain on a mother who lost her son, it is not based on facts, it has not been corroborated by courts, and it is refuted by documents, including the criminal case files about Magnitsky’s death,” said Ms. Magnitskaya to Prosecutor Chaika.
“Thanks to Sergei Magnitsky’s investigation which he conducted on instruction from his client – the Hermitage Fund – the theft of 5.4 billion rubles [$230 million] was uncovered, and reported to you on 25 July 2008 in an application seeking to investigate the fraud and prosecute its perpetrators. In response your senior aid Bumazhkin replied that the investigation had been terminated …due to the lack of crime. Your aid also reported that the outcomes of this investigation were under control of the General Prosecutor’s Office,” said the application from Ms. Magnitskaya.
“It follows that under the control and with knowledge of the Russian General Prosecutor’s Office headed by you, perpetrators who committed a grandiose theft of 5.4 billion rubles from the budget, remained for a long time free, had opportunity to destroy evidence of their crime and continue it unhindered through laundering the proceeds stolen from the Russian people via bank wire transfers,” said Ms. Magnitskaya’s application.
Sergei Magnitsky’s mother’s application asks Chaika whether the information he had disseminated was his personal opinion, or his official conclusion as General prosecutor of Russia tasked by Russian president to personally oversee all cases connected to Sergei Magnitsky. The reply from Prosecutor Chaika to Magnitsky’s mother application is yet not known.
For more information please contact:
Justice for Sergei Magnitsky
+44 207 440 1777
e-mail: info@lawandorderinrussia.org
Twitter: @KatieFisher__
www.facebook.com/russianuntouchables
New York Federal Court Disqualifies Lawyer John Moscow and BakerHostetler in Magnitsky Money Laundering Case
December 21, 2015
New York Federal Court Disqualifies Lawyer John Moscow and BakerHostetler in Magnitsky Money Laundering Case
21 December 2015 – The federal court in New York has disqualified lawyer John Moscow and his firm, BakerHostetler, who represented the alleged Russian recipients of money laundering proceeds from the US$230 million Russian fraud that Sergei Magnitsky uncovered, in a civil forfeiture case brought by the US Department of Justice. The case alleges money laundering of proceeds of Russian fraud into multi-million dollar Manhattan real estate by Prevezon, a company owned by a son of former Vice-premier of the Moscow Region and the current Vice-president of Russian Railways Pyotr Katsyv.
John Moscow and BakerHostetler had originally worked for Hermitage in 2008 to defend Hermitage against unfounded accusations relating to the fraud, including (among other projects) by tracking the stolen US$230 million and its recipients, and bringing the evidence of this complex Russian fraud which victimised Hermitage, to the US Department of Justice. On Hermitage’s behalf, John Moscow personally presented the findings from the Hermitage’s and Sergei Magnitsky’s investigations of the $230 million fraud to the U.S. Attorney’s Office.
On 25 November 2008, one day after Sergei Magnitsky’s arrest by corrupt Russian officials on false charges, John Moscow also became involved in Hermitage’s legal actions to free Sergei Magnitsky from Russian detention. Prior to his arrest, Sergei Magnitsky gave testimony to Russian authorities implicating Russian officials in the theft of Hermitage’s Russian companies and of US$230 million the Hermitage’s companies had paid to the Russian government.
One year later, on 16 November 2009, Sergei Magnitsky was killed in Russian police custody before he could testify in an open trial.
In 2013, John Moscow and BakerHostetler switched sides, and went from representing Hermitage to representing Russian-owned Prevezon, an alleged beneficiary of the US$230 million fraud, that Sergei Magnitsky’s investigation had led to after his death. The US Department of Justice has traced to Prevezon nearly US$2 million of the US$230 million fraud proceeds and more funds in false and questionable transactions. The US court has frozen about US$14 million in Prevezon’s assets, including bank accounts and several Manhattan properties.
In November 2015, John Moscow and BakerHostetler made filings on Prevezon’s behalf in which they explicitly accused Hermitage of committing the US$230 million fraud that they originally have been hired to defend against.
On 15 December 2015, Hermitage filed a motion to disqualify BakerHostetler and John Moscow.
In Judge Griesa’s opinion, issued on 18 December 2015, the U.S. Court for Southern District of New York ordered:
“The court is now convinced that it would be improper for BakerHostetler and Moscow to continue as counsel to defendants. …Hermitage’s motion to disqualify BakerHostetler and Moscow as counsel to defendants is granted.”
Hermitage Capital’s representative said of the disqualification of John Moscow and BakerHostetler:
“This disqualification is a stark reminder that lawyers can’t switch sides just because there is money being offered to them.”
Under Rule 1.9 of the New York Rule of Professional Conduct, lawyers are not allowed to betray their former clients. In particular, the rule says:
“A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.”
Hermitage became the victim of the US$230 million fraud in 2007 when a Russian criminal organisation, comprising FSB, Interior Ministry and tax officials and headed by a convicted fraudster Dmitry Klyuev, raided offices of Hermitage and its law firm in Moscow, unlawfully seized statutory and financial documents for its corporate Russian subsidiaries. Using those documents, the Russian crime group forged contracts and powers of attorney, fraudulently re-registered the stolen Hermitage companies to felons previously convicted for violent crimes, and through sham court proceedings obtained about US$1 billion judgments against the stolen Hermitage companies, in order to claim US$230 million in purportedly “overpaid” taxes.
The fraudulent US$230 million tax refund was granted by Russian tax officials, who were members of the crime group, in one day, and paid out two days later to two small Russian banks, where fraudsters had opened bank accounts, and then laundered through Russian banks and around the world.
Through efforts of Hermitage and law enforcement authorities around the world, about US$40 million connected to the US$230 million fraud uncovered by Sergei Magnitsky have been identified and frozen.
BakerHostetler is an “Am Law 100 law firm” with more than 900 attorneys and 14 offices. John Moscow is a former New York prosecutor and a partner at Baker Hostetler.
For more information please contact:
Justice for Sergei Magnitsky
+44 207 440 1777
e-mail: info@lawandorderinrussia.org
Twitter: @KatieFisher__
www.facebook.com/russianuntouchables
U.S. Senate Unanimously Passes the Global Magnitsky Act
December 18, 2015
U.S. Senate Unanimously Passes the Global Magnitsky Act
18 December 2015 – In a ground-breaking move, United States Senate unanimously passed the Global Magnitsky bill. The bill officially called, “S.284 – Global Magnitsky Human Rights Accountability Act”, directs the President to sanction human rights violators from anywhere around the world. The specific sanctions are visa bans, asset freezes, and public placement on the US Treasury’s OFAC registry.
“This is the new technology for fighting human rights abuse and an important legacy for Sergei Magnitsky who gave up his life fighting for the truth in Russia,” said Bill Browder, author of “Red Notice”, a book dedicated to Sergei Magnitsky.
In December 2012, the US Congress adopted the Sergei Magnitsky Rule of Law Accountability Act, which imposes visa and financial sanctions on violators of rights of human rights defenders in Russia.
The bill is named after Sergei Magnitsky, a Russian lawyer, who uncovered the largest publicly-known corruption case in Russia involving the theft of $230 million. Sergei Magnitsky testified about it naming complicit Russian officials. He was arrested by some of the implicated officials, held in pre-trial detention for 358 days, and killed in Russian police custody on 16 November 2009. After Sergei Magnitsky’s death, the Russian government promoted and honoured officials involved in his detention and death.
The Global Magnitsky bill was sponsored in the Senate by U.S. Senator Ben Cardin, and had 10 co-sponsors:
Sen Blumenthal, Richard [CT] – 1/28/2015
Sen Coons, Christopher A. [DE] – 7/23/2015
Sen Cruz, Ted [TX] – 2/25/2015
Sen Durbin, Richard [IL] – 1/28/2015
Sen Kirk, Mark Steven [IL] – 1/28/2015
Sen Markey, Edward J. [MA] – 1/28/2015
Sen McCain, John [AZ] – 1/28/2015
Sen Rubio, Marco [FL] – 1/28/2015
Sen Shaheen, Jeanne [NH] – 1/28/2015
Sen Wicker, Roger F. [MS] – 1/28/2015
The next step is for the House of Representatives to consider the bill.
For more information please contact:
Justice for Sergei Magnitsky
+44 207 440 1777
e-mail: info@lawandorderinrussia.org
Twitter: @KatieFisher__
www.facebook.com/russianuntouchables
Prosecutor Chaika’s Role in Magnitsky Case Explains His Unhinged Attack on Bill Browder in Response to Corruption Expose Produced by Navalny
December 18, 2015
Prosecutor Chaika’s Role in Magnitsky Case Explains His Unhinged Attack on Bill Browder in Response to Corruption Expose Produced by Navalny
Yuri Chaika
18 December 2015 – Russian General Prosecutor Yuri Chaika played a significant role in the ill-treatment and death in custody of Sergei Magnitsky and the subsequent cover up in his case. Chaika’s recent emotional attack on Bill Browder, the head of Magnitsky Justice Campaign, can be explained by his complicity in the Magnitsky case and the pressure it has put on him internationally.
“It is no coincidence that in response to allegations of brazen abuse by his sons and senior prosecutors made in Alexei Navalny’s video earlier this month, General Prosecutor Chaika decided to unleash his frustration on Magnitsky justice campaigners. This is because of Chaika’s personal role in the Magnitsky case and its subsequent cover up,” said Bill Browder, head of the Magnitsky Justice Campaign, and author of ‘Red Notice’.
The chronology of Chaika’s role in the Magnitsky case is summarized below:
1) On December 3rd 2007, the Hermitage Fund wrote a criminal complaint to Prosecutor Chaikabased on Sergei Magnitsky’s investigation about the theft of Hermitage Fund’s companies and the creation of $1 billion of fake liabilities which were executed with documents seized by the police. This was three weeks before $230 million were stolen from the Russian budget. Chaika assigned the crime report to his deputy Victor Grin, who took no action. Had Chaika and Grin acted, they would have prevented the theft of $230 million from the Russian people.
2) On July 23rd 2008, the Hermitage Fund filed a second criminal complaintto Prosecutor Chaika prepared based on Sergei Magnitsky’s investigation describing the discovery that the theft of the Hermitage Fund’s companies was perpetrated in order to steal $230 million of taxes paid by Hermitage Fund’s companies to the Russian Government. Prosecutor Chaika became personally involved in overseeing the investigation, with his senior aid prosecutor Bumazhkin responding on 18 August 2008 that the investigation was under the control of the General Prosecutor’s Office and had exonerated the low-level perpetrators for the lack of crime in their actions. Chaika’s office later also exonerated all tax officials who approved the largest tax refund in Russian history in one day saying they were ‘tricked and deceived.’
3) On November 24th 2008, Hermitage’s lawyer Sergei Magnitsky was arrested by the same police officials who were implicated in his testimony and the crime report Hermitage submitted to Chaika that summer. He was subsequently tortured in prison to get him to retract his testimony.
4) On June 8th 2009, the International Bar Association wrote to Prosecutor Chaika seeking his intervention in the case of unlawful arrest of Sergei Magnitsky. A similar letter of intervention was addressed to Chaika on 24 July 2009 by the English Law Society. In September 2009, Chaika’s office responded that there were “no violations in Sergei Magnitsky’s case and no reasons to intervene.”
5) On August 17th 2009, Sergei Magnitsky filed a complaint against Prosecutor Chaikaand held him personally responsible for the violation of his human rights in detention by Chaika’s subordinates (prosecutors Burov and Pechegin) who by law were mandated to intervene.
6) On September 11th 2009, Sergei Magnitsky’s lawyers wrote to Prosecutor Chaika about the pressure being applied to Sergei Magnitsky to force him to give false testimony and the withholding of medical care. Chaika’s office replied in October 2009 stating that ‘no physical or psychological pressure was exerted on defendant S.L.Magnitsky…There are no grounds to take measures of prosecutorial response.”
7) On November 16th 2009, after suffering from months of torture and neglect, Sergei Magnitsky died after a beating with rubber batons by guards.
8) In July 2010, Prosecutor Chaika commented on Magnitsky case not finding any responsibility of the General Prosecutor’s office, only of prison personnel.
9) In May 2011, Chaika’s senior subordinate issued conclusions exonerating Interior Ministry officers from responsibility for the false arrest and torture in detention of Sergei Magnitsky.
10) On 31 May 2011, President Medvedev ordered Chaikato exercise personal control over the Magnitsky death investigation and the investigation into the $230 million fraud.
11) On 1 June 2011, Prosecutor Chaika announced that he would bring creme de la creme of prosecutors to oversee the Magnitsky case. The official General Prosecutor’s Office statement said: “Due to the public resonance on instruction from the President of Russia, the General Prosecutor’s Office has created a group of prosecutors comprising employees of different specialised departments in order to strengthen and ensure qualified oversight over the process and results of the investigation of criminal cases by the Investigative Committee of Russia and the Investigative Department of the Interior Ministry of Russia.”
12) On January 23d 2012, Prosecutor Chaika personally blocked the proposal from the President’s Human Rights Council to combine the investigations of Sergei Magnitsky’s death and the $230 million fraud he had uncovered, having concealed in his report to the President that the conclusions drawn by his senior subordinates had exonerated Interior Ministry officials in the Magnitsky case.
13) In March 2013, the investigation into Magnitsky’s death was closed, finding no crime occurred, the conclusion that was approved by Chaika’s subordinate prosecutor Bochkaryev.
14) In 2013, Chaika’s Prosecutor’s Office advanced the posthumous trial over Sergei Magnitsky, the first in Russian legal history, with posthumous indictment of Sergei Magnisky sanctioned by Chaika’s deputy Victor Grin.
“Prosecutor Chaika was one of the key Russian officials responsible for the human rights violations of Sergei Magnitsky when he was still alive and the cover-up of official responsibility of Sergei Magnitsky’s murder after he died. It’s clear that he wants to silence the people who are calling him out,” said Bill Browder.
For more information please contact:
Justice for Sergei Magnitsky
+44 207 440 1777
e-mail: info@lawandorderinrussia.org
Twitter: @KatieFisher__
www.facebook.com/russianuntouchables
For more information please visit