The Times: Hermitage alleges fraud in high places in Moscow

October 19, 2009

In a let­ter Her­mitage Cap­i­tal accus­es senior gov­ern­ment offi­cials of con­spir­ing with a crim­i­nal gang to steal £235 million.

Fraud­sters oper­at­ing with­in the Russ­ian Inte­ri­or Min­istry and the Moscow Tax Author­i­ty have stolen 11.2 bil­lion rou­bles (£235 mil­lion) from the state bud­get, accord­ing to a com­plaint filed today with the Accounts Cham­ber of the Russ­ian Federation.

In a let­ter to Sergei Stepashin, the chair­man of the cham­ber and head of Russia’s anti-cor­rup­tion com­mit­tee, Her­mitage Cap­i­tal, a British-based hedge fund man­ag­er that for­mer­ly was the biggest for­eign port­fo­lio investor in Rus­sia, accus­es senior gov­ern­ment offi­cials of con­spir­ing with a pri­vate crim­i­nal gang to steal the money.

Lead­ing offi­cials in the Moscow Tax Author­i­ty cov­ered up crimes involv­ing bil­lions of rou­bles embez­zled from the state bud­get, Her­mitage alleges in its let­ter, which names indi­vid­u­als, accus­es them of cov­er­ing up the fraud­u­lent activ­i­ty and urges the Accounts Cham­ber to investigate.

Evi­dence uncov­ered by Her­mitage, the com­pa­ny stat­ed in its let­ter to Mr Stepashin, point­ed to “an organ­ised crim­i­nal group com­prised of pri­vate indi­vid­u­als and gov­ern­ment offi­cials”. The frauds “would not have been pos­si­ble with­out the direct involve­ment of offi­cials” from the Moscow Tax Author­i­ty, Her­mitage wrote.

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