Russian authorities plan to formally charge Hermitage Capital Management Ltd. founder William Browder with tax evasion as a possible step toward requesting his extradition from the U.K., an official said.
“He was summoned today to allow us to formally file charges against him,” Irina Dudukina, a spokeswoman for the Interior Ministry’s investigative arm, said by phone from Moscow, adding that Browder was represented by three lawyers. “To request his extradition, we will need to order his arrest through a court.”
Browder, 47, was the biggest foreign investor in Russia when authorities stripped him of his visa in 2005, citing national security concerns. He has been campaigning for the prosecution of Russian officials he blames for the death of Sergei Magnitsky, the Hermitage lawyer who died in November 2009 after almost a year in pre-trial detention. Before his death, Magnitsky said he was abused and denied medical care in an effort to force him to drop fraud allegations against officials.
“We have been fighting for the last year and a half to sanction and prosecute the officers who killed him and this latest action is a clear retaliation against us for doing so,” Browder said by phone from London today.
Swiss Probe, Safra
The action against Browder follows Switzerland’s announcement last month that it had opened a money-laundering probe at the request of Hermitage, the first criminal investigation outside Russia linked to the case surrounding Magnitsky’s death.
Russia in 2009 put Browder on its international wanted list, seeking to question the investor on suspicion of conspiring with Magnitsky to evade 500 million rubles ($18 million) of taxes. Browder, a U.S.-born British citizen, started investing in Russia in 1996 with $25 million from the late banker Edmond Safra. Hermitage at one point managed about $4 billion, mainly in Russian stocks.
President Dmitry Medvedev has made fighting corruption one of his key objectives as he seeks to attract foreign investors to help reduce Russia’s reliance on energy exports. Some EU and U.S. lawmakers are seeking to sanction the 60 officials Browder is accusing of involvement in the Magnitsky case with visa bans and asset freezes.
Hermitage says Interior Ministry officials seized documents from its Moscow offices in June 2007 that enabled them to re-register ownership of its three Russian funds and fraudulently claim $230 million in tax rebates in December 2007.
Medvedev’s human rights council, which investigated Magnitsky’s death, found that the 500 million-ruble tax evasion charges were fabricated by officials from the Interior Ministry and the Federal Security Service, the Vedomosti newspaper reported April 16, citing a copy of the council’s preliminary findings.
Alexander Bastrykin, who heads the federal Investigative Committee, said in a September 2010 interview with Rossiiskaya Gazeta, the government’s official newspaper, that there was “no reason” to believe Magnitsky’s death was connected to those prosecuting the criminal case against him.
The Interior Ministry in November made new accusations against Magnitsky, saying he orchestrated the $230 million tax-rebate scam on Hermitage’s instructions.
Dudukina said today that Browder until now had only been considered a “suspect” in the tax evasion case. Filing formal charges requires either Browder’s physical presence in Moscow or a Russian court decision, she said.
Browder said his lawyers were informed today that the case against him had been extended for another three months and that no formal charges were presented. Even if formal charges are forthcoming, Interpol is unlikely to act on any extradition request, Browder said.
“Interpol fully understands that acting on a Russian request in this case would effectively make them the long arm of Russian organized crime,” Browder said. “All of these latest attempts to attack us will in no way stop us from our campaign to get justice for Sergei.”