MAGNITSKY CASE FILES SHOW RUSSIAN FSB BEHIND THE MASSIVE BUDGET THEFTS HE HAD UNCOVERED AND HIS SUBSEQUENT PERSECUTION

April 12, 2012

MAGNITSKY CASE FILES SHOW RUSSIAN FSB BEHIND THE MASSIVE BUDGET THEFTS HE HAD UNCOVERED AND HIS SUBSEQUENT PERSECUTION

12 April 2012 – New­ly-released crim­i­nal case files from the posthu­mous pros­e­cu­tion case against Sergei Mag­nit­sky reveal for the first time the cen­tral role that the FSB, Russia’s secret police, and in par­tic­u­lar, Depart­ment K, the FSB’s Finan­cial Coun­teres­pi­onage Depart­ment, played in the bud­get thefts uncov­ered by Sergei Mag­nit­sky, his sub­se­quent per­se­cu­tion and the state cov­er-up since his death.

“The first bun­dle of the Mag­nit­sky case files show the web of cor­rup­tion and the merg­er between the FSB, law enforce­ment agen­cies and organ­ised crim­i­nals in the scheme to steal hun­dreds of mil­lions of dol­lars of bud­get funds, and to con­ceal the lia­bil­i­ty of gov­ern­ment offi­cials involved,” said a Her­mitage Cap­i­tal representative.

While the remit of the FSB’s finan­cial coun­teres­pi­onage unit is to safe­guard Russia’s nation­al secrets in the finan­cial sphere from for­eign spies, doc­u­ments from the Mag­nit­sky case file show that it has been inti­mate­ly involved in the embez­zle­ment of mon­ey from the Russ­ian trea­sury in col­lu­sion with orga­nized crim­i­nals. Depart­ment K has also shield­ed high-rank­ing offi­cials, and their crim­i­nal accom­plices, by using its sta­tus as a secret police organization.

The key fig­ure from the Mag­nit­sky crim­i­nal case files is Vik­tor Voronin, Chief of FSB’s Depart­ment K. Gen­er­al Voronin is No 26 on the U.S Helsin­ki Com­mis­sion List of Russ­ian offi­cials involved in the arrest and death of Sergei Mag­nit­sky and the cor­rup­tion in the Russ­ian gov­ern­ment he had uncov­ered (http://www.csce.gov/index.cfm?Fuseaction=Files.Download&FileStore_id=1744).

Accord­ing to the case files, on 22 May 2007, FSB Gen­er­al Voronin signed a report pre­pared by his sub­or­di­nate, Cap­tain Alex­ei Kuvaldin, autho­ris­ing the ini­ti­a­tion of a fab­ri­cat­ed crim­i­nal tax case (http://russian-untouchables.com/rus/docs/D413.pdf). It sanc­tioned Russ­ian Inte­ri­or Min­istry offi­cer Kuzn­tetsov to raid the offices of Her­mitage Cap­i­tal Man­age­ment and its law firm in Moscow, and seize all the cor­po­rate seals and doc­u­ments of the Her­mitage Fund’s Russ­ian companies. 

The doc­u­ments were then placed in cus­tody of Inte­ri­or Min­istry offi­cer Kar­pov. A doc­u­ment in the files dat­ed 23 Octo­ber 2007 signed by inves­ti­ga­tor Kar­pov shows that the files and items seized in the Inte­ri­or Min­istry raids on Her­mitage had in fact been trans­ferred to the FSB for “analy­sis”. Two months lat­er, on 24 Decem­ber 2007, the doc­u­ments were used to autho­rise an approval of the $230 mil­lion tax refund, with no checks by Moscow Tax Offices No 25 and 28. Fam­i­lies of both Inte­ri­or Min­istry offi­cers and tax offi­cials became inex­plic­a­bly rich after the $230 mil­lion theft (http://www.youtube.com/watch?v=4ZB3YoAvEro, http://www.youtube.com/watch?v=1TWhlPqVddc&feature=relmfu,

).

After Sergei Magnitsky’s arrest and death in cus­tody, his col­league Jami­son Fire­stone, filed a peti­tion with the Russ­ian Inves­tiga­tive Com­mit­tee on 15 April 2011 seek­ing to open a crim­i­nal inves­ti­ga­tion into the offi­cers of the two Moscow Tax Offices exposed by Sergei Mag­nit­sky in approv­ing the fraud­u­lent $230 mil­lion tax refund and whose fam­i­lies were found out to have $43 mil­lion in for­eign prop­er­ty and bank accounts, not com­men­su­rate with their offi­cial salaries. The inves­ti­ga­tion into Mr Firestone’s peti­tion about the tax offi­cials was direct­ed for an inves­ti­ga­tion on 25 May 2011 to the very same FSB Gen­er­al Voronin. On 6 June 2011, FSB Gen­er­al Voronin’s Deputy, Mr Kon­dratiev wrote a report stat­ing that the wit­ness­es and sus­pects “can­not be found and can­not be ques­tioned” (http://russian-untouchables.com/rus/docs/D419.pdf). The case has been stalled since that FSB report was writ­ten. As a result, not a sin­gle gov­ern­ment offi­cial has been charged in the largest known tax rebate fraud in Russ­ian history.

The Mag­nit­sky case files fur­ther show how the FSB’s Depart­ment K has been used to retal­i­ate against the whistle­blow­ers and repress Mag­nit­sky. The FSB does not have any legal author­i­ty in the tax sphere, or the respon­si­bil­i­ty for tax crimes. Yet, it engaged in mak­ing false alle­ga­tions of tax under­pay­ment and fab­ri­cat­ing crim­i­nal cas­es on that basis. Accord­ing to the Mag­nit­sky case files, FSB’s Depart­ment K played a key role in an oper­a­tion to fab­ri­cate a case under which Sergei Mag­nit­sky was arrest­ed and to fal­si­fy doc­u­ments for his arrest. The doc­u­ments show:

• On 27 Feb­ru­ary 2008, Gen­er­al Voronin’s sub­or­di­nate, FSB Cap­tain Alex­ei Kuvaldin (http://russian-untouchables.com/rus/docs/D421.pdf), joint­ly with Inte­ri­or Min­istry offi­cers Kuznetsov and Kar­pov, fab­ri­cat­ed a crim­i­nal case alleg­ing tax under­pay­ment by two Her­mitage Fund’s com­pa­nies in 2001, in spite of the absence of any tax claims. 

• On 24 Novem­ber 2008, anoth­er of Gen­er­al Voronin’s sub­or­di­nate, FSB Cap­tain Laguntsov wrote a let­ter (http://russian-untouchables.com/rus/docs/D416.pdf) alleg­ing that Sergei Mag­nit­sky had applied for a visa with the UK embassy in Moscow in spite of the fact that Magnitsky’s pass­port had been seized pre­vi­ous­ly by police and the UK embassy con­firmed that had not applied for a visa (http://russian-untouchables.com/rus/docs/D417.pdf). This FSB report was the key doc­u­ment to used to jus­ti­fy Mag­nit­sky’s arrest and detention. 

In May 2010, FSB’s Depart­ment K pro­duced a false report about Her­mitage Capital’s Russ­ian lawyer Alexan­der Antipov after he had filed a num­ber of com­plaints about the abuse of rights and law in the pro­ceed­ings try­ing to strip him of pro­fes­sion­al sta­tus and pre­vent him from per­form­ing his duties. The attempt was thwart­ed after the inter­ven­tion from the Moscow City Bar Association.

The Mag­nit­sky case files con­tain fur­ther doc­u­ments from FSB Gen­er­al Voronin dat­ed 2009 – 2010 refer­ring to his on-going “oper­a­tive sup­port” of the case.

“In the com­ing weeks, as the doc­u­ments become avail­able, Her­mitage Cap­i­tal will be expos­ing fur­ther infor­ma­tion con­tained in these case files, so the world can see the injus­tice done to Sergei Mag­nit­sky, and the abuse and cor­rup­tion inside the Russ­ian legal sys­tem,” said a Her­mitage Cap­i­tal representative.

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