The Telegraph: Russia jails sawmill foreman for largest ‘tax fraud’ in country’s history

October 19, 2009

Vik­tor Markelov has plead­ed guilty to “fraud by pri­or col­lu­sion by a group of per­sons and in an espe­cial­ly large amount” in a Moscow court, after the case was brought to the author­i­ties’ atten­tion by Her­mitage Cap­i­tal Man­age­ment, the hedge fund bat­tling to expose cor­po­rate cor­rup­tion in Russia.

Accord­ing to the ver­dict, Mr Markelov, 42, “a fore­man for deliv­er­ies of lum­ber from sawmill DOZ-160”, used three for­mer Her­mitage sub­sidiaries to reclaim RUB5.41bn (£106m) of cap­i­tal gains tax­es paid by the hedge fund in a high­ly com­plex fraud. He will serve five years “in a cor­rec­tion­al colony … with no fine”. There is no men­tion of any attempt to recov­er the lost tax­es in the ver­dict or pur­sue oth­er conspirators.

Mr Markelov’s sen­tence was reduced from 10 years after the court took “into con­sid­er­a­tion per­son­al infor­ma­tion”. It omit­ted to men­tion that he had pre­vi­ous­ly been sen­tenced to two-and-a-half years for manslaughter.

Her­mitage, the biggest for­eign investor in the Russ­ian stock mar­ket until 2006, has claimed that the sophis­ti­cat­ed fraud could only have been com­mit­ted with the col­lu­sion of senior fig­ures in the nation’s law enforce­ment agen­cies and tax offices.

Bill Brow­der, the founder of Her­mitage, has stepped up his cam­paign against Russ­ian cor­rup­tion by post­ing his alle­ga­tions on YouTube.

Arti­cle by Philip Aldrick was pub­lished in The Tele­graph.

Comments

• Link