Interior Ministry Officer Responsible for Torture of Sergei Magnitsky Seeks the Arrest of Hermitage Executive

March 29, 2010

Russ­ian Inte­ri­or Min­istry Offi­cer Respon­si­ble for Tor­ture in Cus­tody of Lawyer Sergei Mag­nit­sky Seeks the Arrest of Her­mitage Executive

29 March 2010 – Recent­ly, Her­mitage Capital’s lawyers received a decree signed by Major Oleg Silchenko of the Russ­ian Fed­er­al Inte­ri­or Min­istry seek­ing the arrest in absen­tia of Ivan Cherkasov, a senior exec­u­tive of Her­mitage Capital.

Major Silchenko is the same Inte­ri­or Min­istry offi­cer who was respon­si­ble for the inves­ti­ga­tion and 12-month deten­tion with­out tri­al of anti-cor­rup­tion lawyer Sergei Mag­nit­sky. Silchenko detained Sergey Mag­nit­sky, after Sergey tes­ti­fied that Inte­ri­or Min­istry offi­cers were involved in the theft of $230 mil­lion from the Russ­ian gov­ern­ment. In deten­tion, Major Silchenko fab­ri­cat­ed evi­dence in the inves­ti­ga­tion files, and ignored over 450 com­plaints regard­ing gross breach­es of Magnitsky’s legal and human rights. He denied Mag­nit­sky med­ical treat­ment for the pan­cre­ati­tis and gall­stones he devel­oped in deten­tion, and sub­ject­ed him to tor­tur­ous con­di­tions to force a false tes­ti­mo­ny. Sergei Mag­nit­sky died in cus­tody on 16 Novem­ber 2009 at the age of 37.

An inde­pen­dent Moscow prison watch­dog estab­lished in their Decem­ber 2009 report that:
“The case of Sergei Mag­nit­sky can be described as a breach of the right to live.. Mag­nit­sky had been expe­ri­enc­ing both psy­cho­log­i­cal and phys­i­cal pres­sure in deten­tion, and the con­di­tions… can be jus­ti­fi­ably called torturous.”

The action against Her­mitage began in June 2007 when Lt Col Artem Kuznetsov of the Moscow Inte­ri­or Min­istry raid­ed the offices of Her­mitage and its law firm, Fire­stone Dun­can. The pre­text of the search was a report by Lt Col Kuznetsov that OOO Kameya, of which Mr Cherkasov was Gen­er­al Direc­tor, had alleged­ly under­paid div­i­dend with­hold­ing tax­es. Dur­ing the raids, all the statu­to­ry doc­u­ments and seals for Her­mitage Fund Russ­ian enti­ties were seized with­out a war­rant. Fol­low­ing the raids, those doc­u­ments and seals were used to fraud­u­lent­ly re-reg­is­ter three Her­mitage Fund com­pa­nies into the name of a con­vict­ed felon, and then used to fraud­u­lent­ly obtain a $230 mil­lion tax refund, the largest in Russ­ian his­to­ry, which was grant­ed by the tax author­i­ties in one day.

Sergei Mag­nit­sky – the lawyer work­ing for Hem­ritage, inves­ti­gat­ed the fraud, uncov­ered the com­plic­i­ty of Russ­ian Inte­ri­or Min­istry offi­cers and tes­ti­fied against Lt Col Kuznetsov and his asso­ciate Major Pavel Kar­pov on 7 Octo­ber 2008. He was arrest­ed by the sub­or­di­nates of Lt Col Kuznetsov on 24 Novem­ber 2008.

Fol­low­ing Magnitsky’s arrest, Major Silchenko as the lead inves­ti­ga­tor, pres­sured Mag­nit­sky to with­draw his tes­ti­mo­ny against the offi­cers and to false­ly tes­ti­fy against him­self and his client. Sergei Mag­nit­sky refused and instead pro­vid­ed fur­ther detailed evi­dence against Lt Col Kuznetsov and Major Pavel Kar­pov and three of their sub­or­di­nates, in par­tic­u­lar expos­ing the fab­ri­ca­tion of the case against Kameya and Ivan Cherkasov. Sergei Mag­nit­sky tes­ti­fied, in a state­ment to the Inves­tiga­tive Pro­to­col on 13 Octo­ber 2009:

“In spring 2007 Mr. Kuznetsov, an oper­a­tive offi­cial of the Tax Crime Depart­ment of the Moscow Branch of the Inte­ri­or Min­istry,… orga­nized the fab­ri­cat­ed crim­i­nal case [against Kameya] on non-exis­tent grounds, ini­ti­at­ed search­es of the office of Her­mitage and Fire­stone Dun­can. I believe that the fab­ri­cat­ed crim­i­nal case, which was ini­ti­at­ed by Kuznetsov made it pos­si­ble to con­fis­cate the statu­to­ry doc­u­ments and the reg­is­tra­tion doc­u­ments of the stolen com­pa­nies and it made it pos­si­ble to deprive the legal own­ers of their con­trol over the said companies.”

On 22 Jan­u­ary and 1 Feb­ru­ary 2010, lawyers rep­re­sent­ing Her­mitage Cap­i­tal and Mr Cherkasov wrote com­plaints to both the Russ­ian Gen­er­al Pros­e­cu­tor office and Fed­er­al Tax Ser­vice.  The com­plaints exposed the involve­ment of offi­cers of the Silchenko’s team, in the theft of 11.2 bil­lion rubles (~US$ 500 mil­lion) from the Russ­ian gov­ern­ment. They also accused inves­ti­ga­tors of fab­ri­cat­ing evi­dence in order to raid Hermitage’s offices and arrest and detain Sergei Mag­nit­sky, who was sub­se­quent­ly tor­tured and killed with the com­plic­i­ty of those inves­ti­ga­tors. Major Silchenko was addi­tion­al­ly accused cov­er­ing up of the mas­sive theft of gov­ern­ment funds, of absolv­ing Inte­ri­or Min­istry offi­cials for their respon­si­bil­i­ty and instead lay­ing the blame for the largest fraud in Russ­ian his­to­ry sole­ly on a sawmill fore­man, pre­vi­ous­ly con­vict­ed for manslaughter.

A month after receipt of the com­plaints, on 5 March 2010, Major Silchenko issued a decree seek­ing the arrest of Ivan Cherkasov. On 24 March, two oth­er col­leagues of Lt Col Kuznetsov vis­it­ed Mr Cherkasov’s home as part of the oper­a­tion behind issu­ing the domes­tic arrest war­rant for Mr Cherkasov.

A Her­mitage Cap­i­tal spokesman said: “The offi­cers respon­si­ble for Sergei’s death  are now try­ing to find anoth­er hostage.”

The crim­i­nal case being brought against Mr Cherkasov by Russ­ian Inte­ri­or Min­istry for alleged under­pay­ment of div­i­dend with­hold­ing tax­es at Kameya is in direct con­tra­dic­tion to the mul­ti­ple audits con­duct­ed by the Russ­ian Fed­er­al Tax Ser­vice, which found Kameya’s tax affairs to be com­plete­ly in order and that no tax­es were owed but had in fact been overpaid.

In response to the death of Sergei Mag­nistky, Pres­i­dent Medevedev signed a pack­age of laws to pre­vent Russ­ian police offi­cers from rais­ing tax claims in cir­cum­ven­tion of the tax author­i­ties, and from arrest­ing the inno­cent vic­tims of police cor­rup­tion and attacks by “raiders”. This news came 12 weeks after the President’s state­ment. It direct­ly dis­re­gards the Pres­i­dent and con­tra­dicts the new law.

For more infor­ma­tion, please contact:
+ 44 20 7440 1777

info@hermitagefund.com
info@lawandorderinrussia.org
http://lawandorderinrussia.org

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