The Largest Security-Cleared Career Network for Defense and Intelligence Jobs - JOIN NOW

Weapons of Mass Destruction (WMD)

[ rfe/rl banner ]

France Freezes Russian Accounts In Magnitsky-Inspired Case

June 25, 2015

French authorities have frozen millions of euros in bank accounts after launching an investigation into an alleged Russian fraud scheme uncovered by Sergei Magnitsky, a Moscow lawyer who died in a Russian jail.

A judicial official in Paris said leading investigative magistrate Renaud Van Ruymbeke was heading a team of three judges inquiring into the laundering of cash from Russia connected to the case Magnitsky was working on, news agencies reported on June 24.

The French investigation, which began last year, arose after a complaint filed by Magnitsky's employer, Hermitage Capital, an investment fund active in Russia.

Hermitage provided evidence that detailed a trail of cash into France and Luxembourg allegedly forming part of a $230 million fraud exposed by Magnitsky.

Magnitsky's former employer, Bill Browder, the head of Hermitage and a major financial player in Russia before he fled in 2005, has been testifying to French judges investigating allegations that some of the funds were laundered through France.

Chicago-born Browder, a grandson of a former leader of the American Communist Party, said after Russian authorities raided his company, he found an embezzled-money trail leading from Hermitage in Russia to several Moldovan banks, through the British Virgin Islands and Belize, and then across Europe including to France.

Browder in 2012 persuaded U.S. lawmakers to sanction Russian officials allegedly linked to the case by banning them from the United States and freezing their assets.

He has since continued his crusade, trying to persuade other countries to join the sanctions.

Magnitsky, who originally uncovered the scam, was arrested after filing a complaint alleging the forcible takeover of companies belonging to Hermitage which were then used to claim fake tax rebates.

He died in prison in 2009 at the age of 37. Human rights groups say he was beaten and denied medical help -- charges corroberated by the prison's medical records.

Safya Akorri, a lawyer for Hermitage in Paris, said Magnitsky was killed because he wanted a major crime exposed, and Russian authorities never rendered justice for his murder.

'It is good to see that justice can prevail here in France, and that money laundering and corruption will be taken with the seriousness it deserves,' Akorri said.

Two people with knowledge of the French case said several million euros in bank accounts in France had already been frozen.

Of particular interest to investigators has been a mysterious company in St. Tropez on the French Riviera specializing in the export to Russia of high-end French and Italian paints.

The owner, a 58-year-old woman with dual French and Russian citizenship, was charged with fraud and embezzlement last month, a judicial source said.

A probe into the company's accounts found transfers of more than 16 million euros ($18 million) from the British Virgin Islands and Belize between 2008 and 2013.

The woman in question, who police declined to name for security reasons, enjoys 'a high-flying lifestyle.' Investigators believe she helped organize a system for embezzling Russian public funds through tax scams and shell companies in tax havens.

With reporting by AFP and Reuters


Copyright (c) 2015. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036.

Join the mailing list