Hermitage Lawyer Dies in Russian Jail

November 17, 2009

A lawyer for invest­ment fund Her­mitage Cap­i­tal Man­age­ment, jailed on tax charges relat­ed to his work for the fund, has died in cus­tody, Iri­na Duduk­i­na, spokes­woman for the Inves­tiga­tive Com­mit­tee of Rus­si­a’s Inte­ri­or Min­istry said Tuesday.

She pro­vid­ed no fur­ther details, say­ing a release would be issued lat­er. Sergei Mag­nit­sky and his col­leagues had accused author­i­ties of deny­ing him nec­es­sary med­ical treat­ment in prison.

Mr. Mag­nit­sky, a 37-year-old part­ner at Moscow firm Fire­stone Dun­can, was jailed near­ly a year ago on charges of tax eva­sion relat­ed to his work for Her­mitage. At a court hear­ing on extend­ing his deten­tion in Sep­tem­ber, he com­plained that he had been denied med­ical treat­ment for weeks for seri­ous stom­ach pan­cre­at­ic ill­ness­es that he had­n’t suf­fered from before his impris­on­ment. He also com­plained of inhu­mane con­di­tions — includ­ing the absence of toi­let, hot water and win­dows — at the Butyrskaya jail where he was then being held.

“They held him for 11 months, ask­ing him to fab­ri­cate tes­ti­mo­ny against Her­mitage,” said Jami­son Fire­stone, man­ag­ing part­ner of Fire­stone Dun­can. “The more he refused, the worse his con­di­tions became.”

If con­vict­ed of tax fraud, Mr. Mag­nit­sky would have faced up to six years in prison. Russ­ian offi­cials have denied pres­sur­ing Mr. Mag­nit­sky for testimony.

Her­mitage, run by U.S.-born investor William Brow­der, denies the tax-eva­sion charges. The fund has accused offi­cials of the Russ­ian Inte­ri­or Min­istry of using doc­u­ments and seals tak­en from Her­mitage dur­ing a 2007 search to steal com­pa­nies used by the fund and apply for $230 mil­lion in fraud­u­lent tax refunds from the Russ­ian gov­ern­ment. The min­istry denies those charges.

Mr. Brow­der was one of the best-known for­eign investors in Rus­sia, with a rep­u­ta­tion for pub­licly cru­sad­ing against waste and mis­man­age­ment at Rus­sia state-con­trolled com­pa­nies. But Russ­ian author­i­ties stripped him of his visa in 2005 on nation­al-secu­ri­ty grounds and he has­n’t been able to return since. The Inte­ri­or Min­istry says he’s been charged with tax eva­sion, alle­ga­tions he denies.

By GREG WHITE, The Wall Street Journal

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