Lieutenant Colonel Dmitry Strykanov and more than 20 members of the criminal ring, including the leaders, were arrested in a special operation by the Federal Security Service (FSB) March 14.
According to investigators, Strykanov was the head of a criminal group, involved in human trafficking and illegal immigration from South East Asian and CIS countries to Western Europe through Russia.
Strykanov's arrest was sanctioned by the Kuzminsky district court March 15.
His lawyer Ruslan Kobylev told RIA Novosti the Moscow City Court provided no reason for quashing the appeal against the arrest citing "serious violations of the law" at the Kuzminsky court.
Kobylev said military courts should consider cases involving servicemen adding that the charges against Strykanov were absurd.
"My client claimed in court that all the charges were harassment," the lawyer said.
The FSB said the criminal group comprises Ukrainians and Moldavians.
It has been established that front companies were set up in Russian cities using fictitious employment contracts with Russians in a scam designed to obtain their foreign passports, the FSB said.
Criminals subsequently used the foreign passports to apply for European visas, change the passport data and illegally send people to Western Europe, the FSB said.
The case has been handed to the Military Prosecutor's Office.