fbpx

Medvedev Fires a Big Fish in Hermitage Case

The political fallout continues on the Hermitage case in Russia and the death in prison of lawyer Sergei Magnitsky.  First Medvedev fired 20 prison officials, the complaints and outrage continued, and today he sacked Anatoly Mikhalkin of the Interior Ministry, who is alleged to have had involvement (“indirect links”) in the massive tax fraud / corporate identity theft of Hermitage.

I wonder who is going to go down next?  Below is the press release they are sending around, while the Financial Times has also punched up a story.

President Medvedev Fires Major General Anatoly Mikhalkin of the Moscow Interior Ministry

– Mikhalkin headed the Department that coordinated the campaign against HSBC and Hermitage Capital and the persecution and illegal detention of Sergei Magnitsky –

15 December 2009 – President Dmitry Medvedev today signed a decree dismissing Major General Anatoly Mikhalkin, Head of the Tax Crimes Department of the Moscow Branch of the Interior Ministry.


In the summer of 2007 Major General Mikhalkin sent a number ofrequests, prepared by his subordinate, Lieutenant Colonel ArtemKuznetsov, to the Moscow branches of international banks seekingconfidential information about the holding companies of the HermitageFund. One month later these investment companies were stolen by anorganized criminal group using the materials seized by Kuznetsov in theJune 2007 raids of Hermitage’s and its lawyers’ Moscow offices. InDecember 2007, $230 million was ultimately stolen from the Russianbudget under the guise of refunds of supposedly “overpaid” taxes. Thiscolossal tax refund – the largest in Russian history – was approved andpaid out by Moscow Tax Inspectorates Nos. 25 and 28 in a single day.According to statements by tax inspectorate employees, they approvedthe tax rebate based on the results of a check conducted by the MoscowInterior Ministry into the validity of the tax refund requests.

In June and October 2008 Sergei Magnitsky testified about the roleof the Moscow Interior Ministry and in particular Kuznetsov in thetheft of the Hermitage Fund companies and subsequent theft of $230million from the state budget. One month later Magnitsky was arrestedby subordinates of Kuznetsov on false pretenses. One month before hisdeath, on 13 October 2009, Sergei Magnitsky again confirmed hisstatement regarding Lieutenant Colonel Kuznetsov and testified:

“Kuznetsov and other law enforcement officers who entered into aconspiracy with him, could be complicit in my opinion in the theft ofRilend, Mahaon, and Parfenion and in the subsequent theft of 5.4billion rubles ($230 million) from the state budget as described above.They were extremely interested in the suppression of my activities toassist my client in the investigation of the circumstances of thecrimes against my client, and that was the reason for my unlawfulcriminal persecution carried out by investigator Silchenko.”

“President Medvedev has taken an important step by going after thepeople who are directly responsible for the persecution of SergeiMagnitsky and the loss of $230 million in state funds. However, theloss of someone’s job can never be compared to the loss of an innocentman’s life. We are calling for all those individuals who were involvedin Sergei Magnitsky’s illegal detention and death – along with thoseinvolved in the $230 million theft he uncovered – to be brought tojustice,” said William Browder, CEO of Hermitage Capital, commenting ontoday’s firing of Mikhalkin.