US Criminal Grand Jury Convened to Examine Involvement of Son of Senior Russian Government Official in $230 Million Fraud exposed by Sergei Magnitsky

May 27, 2016

PRESS RELEASE

For Imme­di­ate distribution

US Crim­i­nal Grand Jury Con­vened to Exam­ine Involve­ment of Son of Senior Russ­ian Gov­ern­ment Offi­cial in $230 Mil­lion Fraud exposed by Sergei Magnitsky

27 May 2016 – A US crim­i­nal grand jury has been con­vened to exam­ine the involve­ment of Denis Kat­syv, son of Russ­ian gov­ern­ment offi­cial Petr Kat­syv, in the US$230 mil­lion fraud uncov­ered by Sergei Mag­nit­sky.  In 2008, Pre­ve­zon, a Cyprus-based com­pa­ny owned by Denis Kat­syv, received funds traced by the US Depart­ment of Jus­tice and the Swiss Gen­er­al Prosecutor’s office to the US$230 mil­lion fraud uncov­ered by Sergei Magnitsky.

Since Sep­tem­ber 2013, Denis Katsyv’s com­pa­nies have been sub­ject to a U.S. civ­il for­fei­ture case brought by the US Depart­ment of Jus­tice for mon­ey laun­der­ing. Under that case the US gov­ern­ment has frozen $14 mil­lion of assets belong­ing to Kat­syv’s companies.

“The defen­dants [com­pa­nies owned by Denis Katsvy] were involved in the laun­der­ing of the pro­ceeds of the Russ­ian fraud, which itself amounts to an elab­o­rate series of crim­i­nal offences,” said US Jus­tice Depart­ment in its court fil­ing in New York.

“It is …entire­ly prop­er for the grand jury to inves­ti­gate whether the defen­dants [Katsyv’s com­pa­nies], who received pro­ceeds from the fraud, were involved in it,” said the US Depart­ment of Justice.

A Crim­i­nal Grand jury is a form of crim­i­nal inves­ti­ga­tion in the Unit­ed States used to deter­mine whether crim­i­nal charges should be brought against poten­tial defendants.

Pre­vi­ous­ly, Katsyv’s com­pa­nies tried to chal­lenge the US and Swiss asset freez­ing orders, but courts in the US and Switzer­land denied those motions and con­firmed that the freez­ing was justified.

The wire trans­fers to Pre­ve­zon from the $230 mil­lion fraud uncov­ered by Sergei Mag­nit­sky showed high­ly unusu­al pay­ments. Pre­ve­zon dis­guised incom­ing pay­ments for “san­i­tary equip­ment” and “auto parts,” which were sup­posed to be sup­plied but nev­er deliv­ered because Pre­ve­zon was in fact a real estate company.

Accord­ing to the US Depart­ment of Jus­tice, the fal­si­fied con­tracts used to jus­ti­fy Pre­ve­zon’s incom­ing wire trans­fers claimed that Pre­ve­zon was sup­posed to deliv­er 500 acrylic bath sets under the brand name “Doc­tor Jet,” man­u­fac­tured in Sicil­ia, Italy, with dimen­sions of 190 x ¹²⁰⁄₉₅ x 65, to two shell com­pa­nies in Moldo­va which did not do any legit­i­mate busi­ness and nev­er in fact pur­chased the bath sets.

Pre­ve­zon explained these sus­pi­cious wire trans­fers to the US Court stat­ing that an agree­ment exist­ed between its Russ­ian direc­tor, a stu­dent named Tim­o­fei Krit, and “investor Petrov,” and denied knowl­edge of false wire descriptions.

How­ev­er, dur­ing its inves­ti­ga­tion, the US Jus­tice Depart­ment iden­ti­fied fur­ther false and ques­tion­able wire trans­fers to Pre­ve­zon from com­pa­nies in Belize, BVI, etc. for an addi­tion­al amount of US$2 mil­lion. These wire trans­fers were sim­i­lar­ly dis­guised as pay­ments for com­put­ers, video, home equip­ment, etc. that again were nev­er delivered.

Pre­vi­ous­ly, Denis Katsyv’s firm Mar­tash paid US$8 mil­lion under the 2005 mon­ey laun­der­ing case by the State of Israel.

Denis Kat­syv’s father, Petr Kat­syv, has been Vice Pres­i­dent of OAO Russ­ian Rail­ways, a state trans­porta­tion monop­oly, since 2014. Before that, he was Vice Pre­mier of the Gov­ern­ment and Trans­porta­tion Min­is­ter in the Moscow Region. Con­tracts with Moscow Region’s gov­ern­ment struc­tures sup­port­ed the busi­ness of his son, Denis Kat­syv.

Sim­i­lar­ly, Denis Katsyv’s Russ­ian lawyer Natalia Vesel­nit­skaya devel­oped her busi­ness in part on con­tracts with Moscow gov­ern­ment agen­cies, where her hus­band is Deputy Min­is­ter of Trans­porta­tion (and was deputy to Kat­syv senior dur­ing his time as Min­is­ter of Trans­porta­tion), and pre­vi­ous­ly, between 1984 – 2000 was offi­cial with­in the Moscow Region’s Prosecutor’s Office.

Accord­ing to court fil­ings, Petr Kat­syv was pre­vi­ous­ly in con­tact with the FBI to pro­vide infor­ma­tion on Russ­ian orga­nized crime but with­drew his pro­pos­al, when he was informed by the US author­i­ties that his coop­er­a­tion would not help set­tle the mon­ey laun­der­ing and civ­il for­fei­ture case by the US Jus­tice Depart­ment pend­ing in the South­ern Dis­trict Court of New York.

Sergei Mag­nit­sky, who uncov­ered the US$230 mil­lion fraud and tes­ti­fied about the com­plic­i­ty of Russ­ian offi­cials in it, was tor­tured and killed in Russ­ian police cus­tody at the age of 37. The unprece­dent­ed events of this case are described in the New-York Timesbest-sell­er by William Brow­der, leader of glob­al ‘Jus­tice for Sergei Mag­nit­sky’ cam­paign, called “Red Notice. How I Became Putin’s No 1 Ene­my,” and in a series of jus­tice cam­paign videos on Youtube chan­nel “Russ­ian Untouch­ables.”

For more infor­ma­tion, please contact:

Jus­tice for Sergei Magnitsky

+44 207 440 1777

e‑mail: info@lawandorderinrussia.org

www.lawandorderinrussia.org

billbrowder.com

https://twitter.com/Billbrowder

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