Swiss Authorities Freeze Accounts of Russian Government Officials Implicated in $230 Million Fraud Uncovered by Hermitage Lawyer Magnitsky

May 6, 2011

Accord­ing to Barron’s, Swiss author­i­ties have frozen the bank accounts and assets of Russ­ian gov­ern­ment offi­cials exposed for their role in car­ry­ing out the largest ille­gal tax refund in Russ­ian history.

The asset freez­ing was tak­en as an emer­gency mea­sure by Swiss Gen­er­al Pros­e­cu­tor as part of their crim­i­nal inves­ti­ga­tion opened on March 7, 2011 in response to a com­plaint filed by Her­mitage Cap­i­tal against the Russ­ian offi­cials involved in the theft of $230 million.

“The net around the cor­rupt Russ­ian offi­cials is tight­en­ing. Their access to illic­it wealth is being cut off step by step. Trag­i­cal­ly, Sergei Mag­nit­sky did not live to see the first results of his inves­ti­ga­tion — the freez­ing of assets stolen from the Russ­ian state. He would have want­ed to see all the stolen mon­ey returned to the Russ­ian peo­ple where it right­ly belongs after he had so brave­ly exposed the cor­rupt offi­cials who per­pe­trat­ed the crime,” said a Her­mitage Cap­i­tal representative.

The offi­cials exposed by Her­mitage Fund lawyer Sergei Mag­nit­sky for orches­trat­ing the theft of $230 mil­lion of gov­ern­ment funds, have since acquired $47 mil­lion in Swiss bank accounts, sports cars and lux­u­ry prop­er­ties around the world. These offi­cials who were impli­cat­ed as per­pe­tra­tors in the theft, were then appoint­ed by Russ­ian author­i­ties to con­duct the inves­ti­ga­tion into the stolen funds. Russ­ian inves­ti­ga­tors appar­ent­ly “can­not” locate the stolen funds because the truck car­ry­ing the bank records “explod­ed”, accord­ing to Iri­na Duduk­i­na, press sec­re­tary to the Russ­ian Inte­ri­or Ministry.

To date, not a sin­gle offi­cial has been pros­e­cut­ed for this theft in Rus­sia. Instead, the same inves­ti­ga­tor who false­ly arrest­ed Sergei Mag­nit­sky and kept him in deten­tion with­out tri­al for 358 days in order to pres­sure him to with­draw his tes­ti­mo­ny against gov­ern­ment offi­cials, was put in charge of the inves­ti­ga­tion into the theft. Mag­nit­sky died as a result of his tor­ture in cus­tody at the age of 37, leav­ing a wife and two children.

Two weeks ago, as part of the cam­paign seek­ing jus­tice for Sergei Mag­nit­sky, his for­mer col­leagues released a third video on YouTube in the “Russ­ian Untouch­ables” series. This video shows the huge wealth acquired by Russ­ian gov­ern­ment offi­cials and their fam­i­lies short­ly after the ille­gal tax refund was approved. The video expos­es mon­ey trans­fers into Swiss bank accounts and the use of those same Swiss accounts to pur­chase lux­u­ry real estate in Dubai and Mon­tene­gro. The video also shows how offi­cials of the Russ­ian Inte­ri­or Min­istry aid­ed the fraud­u­lent refund and sub­se­quent­ly silenced the whis­tle blow­er, Sergei Mag­nit­sky, by slow­ly killing him in detention.

This week, Russ­ian Inte­ri­or Min­istry offi­cials retal­i­at­ed against the video exposé and the Swiss crim­i­nal com­plaint by issu­ing an unlaw­ful arrest war­rant for a Lon­don-based exec­u­tive of Her­mitage Cap­i­tal, Ivan Cherkasov. Judge Kovalevskaya of the Moscow Tver­skoi court approved the peti­tion based on mate­ri­als shown to be fal­si­fied. In breach of the judi­cial pro­ce­dure, the judge also refused every one of the two dozen com­plaints filed by Mr Cherkasov’s lawyers to ver­i­fy the mate­ri­als sub­mit­ted by inves­ti­ga­tors and to review doc­u­ments request­ed by the defense.

The inves­ti­ga­tion by the Swiss Gen­er­al Pros­e­cu­tor continues.

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