New turn in Magnitsky case

Investigators are accusing Sergey Magnitsky, a lawyer for the Hermitage Capital fund who died in a detention center in 2009, of being involved in the theft of $175 million of budgetary funds.

Magnitsky, 37, who worked for the law firm Firestone Duncan on behalf of Hermitage Capital Management, died in a Moscow detention center in November 2009 while awaiting trial for tax evasion. His colleagues claim he was deliberately deprived of medical help, an accusation denied by investigators.

The Magnitsky case has evoked a broad response from abroad and led to a number of high-level firings in the Russian prison system. President Dmitry Medvedev has proposed softening measures for gravely-ill suspects awaiting trial.

Earlier this month, the anti-corruption watchdog Transparency International named Magnitsky, a Sri Lankan journalist and a Gabonese activist the joint winners of a global award for integrity.

On Monday investigators insisted that Magnitsky was an accountant more than a lawyer and said he “helped three dummy companies fill in fake tax returns for 2008 alleging they had overpaid taxes in the total sum of 5.4 billion rubles ($175 million),” the Itar Tass news agency reported, quoting Irina Dudukina, the press secretary of the Interior Ministry’s Investigation Committee.

According to Dudukina, the charges have been “confirmed by the confessions of two accomplices in the theft, Khlebnikov and Markelov, who worked with these companies.”

Markelov has already been sentenced to five years behind bars for the crime, she said at a news conference on Monday, adding that Khlebnikov was detained in September.

The Interior Ministry’s investigators described Magnitsky as one of the authors of a tax evasion scheme, the Interfax news agency said. He was also accused of making documents with fake stamps for receiving tax deductions, according to Dudukina.

At the same time, the ministry’s Investigative Committee has denied embezzlement by investigators working on the Hermitage Capital case. Western media has speculated that the investigators working on the case have spent huge amounts of money out of proportion to their salaries.

According to Dudukina, the investigators mentioned in the media obtained the properties in question before they started work on the Hermitage case.

Interfax also quoted Dudukina as saying that the criminal prosecution of Hermitage Capital chief Bill Browder for tax evasion “will be dropped if he repays his debt of 500 million rubles.”

Browder told AP the accusations were “complete nonsense,” adding that “Sergey was not only innocent, but he was the person who discovered the crime and who was courageous enough to testify about it.”

Magnitsky’s former employer, Firestone Duncan, sent a complaint to Investigative Committee head Aleksandr Bastrykin after the committee refused to probe the conduct of Interior Ministry officials, Hermitage Capital said in a statement on Monday.

The company also said that Lyudmila Alekseeva, the head of Moscow Helsinki Group, sent a new open letter to Bastrykin last week. According to Interfax, she demanded that a criminal case be started against the Interior Ministry officials who investigated Magnitsky’s case.

Magnitsky informed law enforcement officials about the theft of budgetary funds “three weeks before the crime was committed,” Ekho Moskvy radio quoted Firestone Duncan as saying.

­Sergey Borisov, RT