Russian Supreme Court releases American investor Michael Calvey from house arrest, moves his trial to Moscow from remote Far East

Michael Calvey, along with a group of his business associates, has been released from house arrest following a court decision, on Thursday. Their trial has also been moved to Moscow from the remote Far Eastern Blagoveshchensk.

The American businessman, together with several other people, was arrested in February 2019 on suspicion of embezzling 2.5 billion rubles ($36 million) from Russia's Vostochny Bank. He and the other suspects have consistently insisted that the case is fabricated.

On Thursday, Russia’s Supreme Court ruled that the Calvey team pose no flight risk and may be released from house arrest. A previous request to ease his pre-trial living conditions was denied in June by a Moscow city court. Calvey’s defense team said he needed more freedom to arrange medical treatment for cancer,  with which he was diagnosed after his initial arrest.

Some restrictions will still apply however. The defendants are expected to spend their nights at home and are barred from communicating with each other or with case witnesses.

The Supreme Court also ordered the embezzlement case to be moved to Moscow's jurisdiction. Originally it was supposed to be reviewed by a court in Blagoveshchensk, a city in Russia’s Far East where the Vostochny Bank is registered. 

Both the prosecution and the defense asked for the change of jurisdiction. The prosecutors said Calvey and other defendants may tamper with the witnesses, many of whom live in Moscow and would have to be transported thousands of kilometres across Russia for proceedings in Blagoveshchensk.

His lawyers pointed out that the logistics of such a process would endanger the health of the witnesses due to the ongoing Covid-19 pandemic. The Supreme Court said it had no doubts that a fair trial could be arranged in Blagoveshchensk, but agreed with the health risk argument.

The case revolves around a stake in a subsidiary of Calvey’s company, which the bank accepted as repayment of a debt. The value of that stake was disputed by a minority shareholder, who claimed it was significantly lower than stated and that the operation was part of a financial scheme damaging Vostochny.

The companies have since agreed to resolve their conflict out of court. Incidentally on Thursday an arbitration court in Blagoveshchensk ordered the closure of a civil lawsuit filed by the bank, since its claims had been dropped.

Kirill Dmitriev, the boss of the Russian Direct Investment Fund (RDIF) - recently prominent in the news for his role in funding the Sputnik V coronavirus vaccine - expressed his delight at the decision. "The release of Baring Vostok’s founder and senior partner Michael Calvey and his colleagues from house arrest is an important signal for the investment community," he said in a statment. "All RDIF’s international partners positively received this news, which will reflect on their intention to invest in the Russian economy... we wish Michael good health and hope to see him and his colleagues at meetings on new projects very soon."

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