MOSCOW, October 8 (RAPSI) – A Moscow court rejected appeals Tuesday from defense lawyers acting for investment fund Hermitage Capital’s British CEO, against the initiation of criminal proceedings against him in Russia that led to him being convicted of tax evasion.
Hermitage has been at the center of the so-called Magnitsky case, in which a local tax lawyer who was working for the company, Sergei Magnitsky, died in custody in 2009 after allegedly being maltreated.
The company’s CEO and founder William Browder was found guilty in July on charges of evading taxes totaling 500 million rubles ($15.15 million) and sentenced in absentia to nine years in prison.
Investigators claimed Hermitage Capital, once the biggest portfolio investor in Russia, bought approximately 7 percent of the Russian gas monopoly Gazprom’s stock through illegal tax schemes thought to be devised by Magnitsky.
Hermitage Capital allegedly bought the stock using funds accumulated as a result of tax rebates, including in Russia’s Kalmykia Republic, according to the investigation. Investigators said these schemes also included the use of offshore companies.
Hermitage and Browder have consistently maintained that the investigation was a vendetta, motivated because Magnitsky had in fact uncovered a massive $230 million fraud by tax officials and Interior Ministry officers, some of whom were responsible for arresting him.
The company has claimed that its Russian subsidiary companies that received tax rebates illegally had in fact been taken over by corrupt Russian officials, who it branded “the untouchables,” who used them to embezzle the money.
Magnitsky was found guilty of tax evasion in July 2013 in the first prosecution of a dead man in Russian legal history.