Lawsuit to confiscate assets of Russian Railways Vice President’s son resumes in New York
After almost a year-long adjournment, the lawsuit against Denis Katsyv, son of Petr Katsyv, the Vice President of Russian Railways, is resumed in the Southern District Court of New York. This legal action is the first attempt to apply the Magnitsky Act in the US.
After a long adjournment, a court session has been held on January 25, 2017; it was chaired by a new judge, William Pauley III, while the defendant was represented by a new law firm, Kommersant writes.
In December 2015, previous judge Thomas Griesa has disqualified lawyer John Moscow and his firm BakerHostetler, which represented Prevezon Holdings owned by Denis Katsyv and structures affiliated with it. In its claim, Hermitage Capital Management stated that participation of John Moscow and BakerHostetler would violate the code of ethics because in 2008 this law firm and personally John Moscow had been representing Hermitage Capital, while in September 2013 they were retained to defend Prevezon Holdings.
The Prosecutor’s Office of the Southern District of New York has commenced the prosecution of Prevezon Holdings in September 2013, after a claim filed by William Browder and Hermitage Capital Management.
Prevezon Holdings and structures affiliated with it are suspected of laundering funds obtained through fraud in Russia. Allegedly, this money is a part of the sum of $230 million (5.4 billion rubles at the exchange rate of 2008) received through a swindling scheme uncovered by auditor Sergei Magnitsky who used to work with the Browder’s company. Russian law enforcement authorities believe that Browder and Magnitsky were accomplices in the embezzlement of these funds from the Russian budget. Magnitsky was arrested in November 2008 on tax evasion charges and died in the pretrial detention facility a year later.
According to the prosecution, two transfers for the total amount 250 million rubles had been made from Krainii Sever (High North) Bank to Moldavian companies Bunicon-Impex and Elenast-COM and converted into US dollars. These funds have been later transferred in two installments to an account in UBS Swiss Bank belonging to Cyprus-based Prevezon Holdings Ltd.
The defense for Katsyv claims that he has purchased Prevezon after the transfers referred to by the prosecution.
Hermitage Capital fund managed by US billionaire William Browder had been investing funds into Russian companies since 1996. In 2005, Browder was prohibited from entering Russia; in 2007, searches had been performed in offices of Hermitage Capital and Firestone Duncan, the law firm representing the fund. The law enforcement authorities had suspected companies controlled by the fund of tax evasion.
Hermitage lawyers have uncovered the machinations in fall 2007. Sergei Magnitsky, an auditor in Firestone Duncan, was the most persistent in his attempts to prove the illegitimacy of actions against Hermitage Capital affiliates. In November 2008, Magnitsky was arrested and accused of complicity to tax evasion offence committed by Browder. Almost a year later, he died in the pretrial detention facility. The official cause of death is acute cardiovascular insufficiency.
Since early February, there has been a preventive operation of the National Police of Ukraine in cooperation with the border and migration services called ‘Migrant’. Its aim is to identify and expel thieves in law and foreign crime lords out of the country.