Russia Moves Forward with the First Posthumous Trial in Russian History in the Magnitsky Case

November 29, 2012

Today, the Russ­ian Gen­er­al Prosecutor’s Office announced that they sent to court the case against Her­mitage Fund’s deceased lawyer Sergei Mag­nit­sky, and against William Brow­der, CEO of Her­mitage Cap­i­tal Man­age­ment, in absentia.

This will be the first posthu­mous tri­al in the Russ­ian legal his­to­ry and the third known tri­al against a for­eign cit­i­zen in absen­tia in Russia.
“This smacks of des­per­a­tion and is clear­ly a retal­ia­to­ry move by the Russ­ian gov­ern­ment against our quest to get jus­tice for Sergei Mag­nit­sky. We are back to the show tri­als of 1937,” said a Her­mitage Cap­i­tal representative.

The crim­i­nal case against Mag­nit­sky and Brow­der is a direct retal­i­a­tion for the Hermitage’s crim­i­nal com­plaints against Russ­ian law enforce­ment for their involve­ment with oth­er offi­cials and crim­i­nals in the unlaw­ful expro­pri­a­tion of Her­mitage Fund’s Russ­ian sub­sidiaries, which were then used to steal $230 mil­lion of tax­es that the sub­sidiaries had paid to the Russ­ian gov­ern­ment in 2006. 

In June of 2007, the Inte­ri­or Min­istry raid­ed the offices of Her­mitage and its law firm Fire­stone Dun­can in Moscow. The doc­u­ments seized by the police dur­ing the raids were used to steal Hermitage’s Russ­ian invest­ment hold­ing com­pa­nies and cre­ate approx­i­mate­ly $1 bil­lion of fraud­u­lent lia­bil­i­ties against them.

In Decem­ber 2007, Her­mitage wrote crim­i­nal com­plaints nam­ing Major Pavel Kar­pov and Lt. Colonel Artem Kuznet­zov of the Russ­ian Inte­ri­or Min­istry for being involved in abet­ting the theft of the com­pa­nies and the fraud­u­lent lia­bil­i­ties. Short­ly after that, Major Kar­pov, two sub­or­di­nates of Kuznet­zov and FSB offi­cer Alexan­der Kuvaldin trav­elled to Kalmykia to open the cur­rent tax case against William Brow­der which was orig­i­nal­ly ini­ti­at­ed by FSB in 2004 but closed in 2005 for lack of merit. 

In June and Octo­ber 2008, Sergei Mag­nit­sky tes­ti­fied about the role of Major Kar­pov and Lt. Colonel Kuznet­zov in the theft of the Her­mitage Fund com­pa­nies and the theft of $230 mil­lion of tax­es. Short­ly after that, two of Lt. Colonel Kuznetzov’s asso­ciates arrest­ed Sergei Mag­nit­sky in the same crim­i­nal case where they accused Mr. Brow­der. Mag­nit­sky was tor­tured in cus­tody dur­ing 358 days to force him to change his tes­ti­mo­ny against the offi­cers and to false­ly impli­cate him­self and Brow­der. Sergei Mag­nit­sky refused to per­jure him­self. He was found dead on a cell floor on 16 Novem­ber 2009 with signs of bruis­es and lac­er­a­tions on his arms and legs. The Russ­ian gov­ern­ment declared he had died of heart failure. 

“Hav­ing failed to break Sergei Mag­nit­sky, who was held hostage for a year and remained true to his integri­ty, the Russ­ian author­i­ties now want to use the fact that he can’t answer, to defame him after his death,” said a Her­mitage Cap­i­tal spokesperson.

Mag­nit­sky rel­a­tives have refused to par­tic­i­pate in the posthu­mous tri­al call­ing it a “sac­ri­lege”.

The posthu­mous crim­i­nal case against Sergei Mag­nit­sky and in absen­tia against Brow­der, accus­es them of cor­po­rate tax under­pay­ments in 2001, 11 years after the alleged tax under­pay­ment and one year past the 10 year statute of lim­i­ta­tions. The case has been filed in the absence of tax claims from tax author­i­ties who audit­ed the com­pa­nies nine years ago. Addi­tion­al­ly, Sergei Mag­nit­sky had no role with these com­pa­nies in 2001.

The posthu­mous pro­ceed­ing against Mag­nit­sky has been ordered by the Deputy Gen­er­al Pros­e­cu­tor of Rus­sia, Vic­tor Grin, who was per­son­al­ly respon­si­ble for the over­sight of the case under which Mag­nit­sky was arrest­ed and tor­tured in cus­tody. Pros­e­cu­tor Grin also played a key role in the cov­er-up of offi­cials impli­cat­ed in the frauds against Her­mitage by assign­ing the blame of the $230 mil­lion theft on a “sawmill employ­ee” and trans­fer­ring the inves­ti­ga­tion of the fraud against Her­mitage to the Inte­ri­or Min­istry, whose offi­cers were impli­cat­ed in the fraud.

In 2009, while Sergei Mag­nit­sky was still alive, the Par­lia­men­tary Assem­bly of the Coun­cil of Europe called this case an “emblem­at­ic exam­ple of the polit­i­cal­ly-moti­vat­ed abuse of the crim­i­nal jus­tice sys­tem” and rec­om­mend­ed that mem­ber states refuse the Russ­ian Fed­er­a­tion mutu­al legal assis­tance in this case. The British gov­ern­ment has already reject­ed var­i­ous requests for mutu­al legal assis­tance from the Russ­ian author­i­ties on this case

“The Unit­ed King­dom of Great Britain and North­ern Ire­land, of which [Mr Brow­der] is sub­ject, has refused mutu­al legal assis­tance on this mat­ter,” said the Russ­ian Gen­er­al Prosecutor’s Office in their announcement.

In 2010, Sergei Mag­nit­sky was posthu­mous­ly award­ed Integri­ty Award by Trans­paren­cy Inter­na­tion­al for his fight against Russ­ian corruption.

A glob­al cam­paign seek­ing jus­tice has been launched around the world giv­en the impuni­ty of the offi­cials involved in the arrest, tor­ture and death of Mag­nit­sky and the mas­sive cor­rup­tion he had uncov­ered in Russia.

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