Omsk parliamentarian Shushubaev goes to court protected by his Mandate
Khabulda Shushubaev, a Deputy of the Omsk Regional Parliament and businessman, has been accused of swindling, illegal receipt of a credit, and embezzlement on an especially large scale. The investigation of this criminal case is completed, and it has been submitted to court. Would the Deputy’s Mandate save the parliamentarian – who was elected for the fourth term after the indictment? Would the 314 shareholders deprived of housing they are legally entitled to due to his actions be able to obtain justice?
A criminal case against Khabulda Shushubaev, the Deputy of the Legislative Assembly in the Omsk Region, has been submitted to the Pervomaysky District Court of Omsk. He is accused of several economic crimes. The indictment prepared by the Investigations Directorate for the Omsk Region of the Investigative Committee of the Russian Federation (ICR) incriminates him three articles of the Criminal Code of the Russian Federation: part 3 of Article 159 (Swindling committed by a person through his official position, as well as on a large scale); part 1 of Article 176 (Illegal Receipt of Credit that caused large-scale damage); and part 4 of Article 160 (Misappropriation or Embezzlement of other people's property entrusted to the convicted person committed by the person through his official position as well as on a large scale).
According to the investigation, in the period of 2008–2013, Khabulda Shushubaev, then-actual head of RoKAS Limited Liability Company, had been collecting funds from investors to construct three residential buildings in Yasnaya Polyana (Clear Glade) neighborhood of Omsk. In total, Shushubaev has collected some 333 million rubles from individuals and legal entities and transferred over 100 million rubles out of that amount to companies officially belonging to his relatives and subordinates and controlled by him. Then he spent the money for purposes not related to the construction of the housing in any way – purchased a Land Rover and parts for it, rented advertisement stands, paid for use of a swimming pool, covered the cost of education for his brother, etc. As a result, 314 shareholders were deprived of their apartments – although the residential buildings had to be completed back in 2008–2009.
Photo: Protest rally of Yasnaya Polyana shareholders
In 2009–2010, Shushubaev was the head of another company – Agro-Trust Corporation Closed Joint Stock Company. He provided misinformation about operations of this company to Kazakhstan-based ATFBank – the financial reports showed artificially high profits. Based on this misinformation, the parliamentarian opened credit lines for the total amount over 1.5 billion rubles. The most part of the sum – over 1 billion rubles – was provided for reanimation of the Yasnaya Polyana project that remained on hold since 2008. The Deputy said on a press conference that he will complete the construction using the borrowed funds. However, in September 2011, ATFBank requested to repay the loan of 1.5 billion rubles due to arrears incurred under the credit contracts. The parties managed to come to a settlement, but shortly after this, the structures controlled by Shushubaev refused to fulfill its terms.
In 2008, the parliamentarian had provided fake declarations to the tax authorities. At that time, Agro-Trust Corporation was renting a land lot and looked for an organization willing to undertake the lease agreement. The corporation signed a contract with Alternativa Limited Liability Company to search for a potential client. But in fact, no searches had been performed, and Agro-Trust Corporation found a new tenant by itself. Still, the payment for fictitious services had been transferred to Alternativa, and then Agro-Trust Corporation submitted a claim to the tax inspection for refund of the value-added tax in the amount of 915 thousand rubles. In fact, the classic cashing scheme was used – but it had been performed very blatantly. Normally companies that transfer funds to contractors for fake services do not risk to submit claims for value-added tax refunds because of inevitable audits by the tax authorities. Very good connections in the tax inspection were required to act so risky – and apparently, Shushubaev had such connections.
Pretrial restrictions imposed on Shushubaev by the investigation are limited to a written undertaking not to leave and behave properly. To compensate damages sustained by the shareholders, a conservatory attachment has been imposed on assets of RoKAS company for the amount of 133 million rubles.
It is necessary to note that in the past years, Shushubaev used to run all kinds of business: construction, agriculture, real estate, trades, finances, etc.
Charges have been laid against Shushubaev back in 2015. During the investigation, the newly-elected Deputy of the Legislative Assembly of the Omsk Region had declined to testify citing Article 51 of the Constitution of the Russian Federation. The Deputy started examination of the case file – 325 volumes of the criminal case and 370 volumes of evidence (financial and other documents) – in August 2015. The investigation believes that Shushubaev has been procrastinating the case on purpose: initially he was coming to the investigator for 2 hours a day, then he started coming only once a week. Therefore, the investigation had to address the court to impose a deadline for the examination of the case file by the suspect. Attorneys for the Deputy wanted 1.5 year for their client to examine the case file. However, the judge declined to extend the examination period until January 1, 2017 and imposed a deadline by September 2016.
Shushubaev denies any guilt in all the episodes of the criminal case. Andrey Khabarov, attorney for the defendant, believes that overall the charges laid against his client are evidence-free, while the “accusation of embezzlement of shareholders’ funds is totally unsubstantiated”: “The text of the indictment against my client, describing deeds incriminated to him, does not meet the legal requirements; therefore the defense has brought a motion to the court to conduct preliminary hearings in order to return the case to the prosecutor for elimination of substantial violations”. According to the lawyer, Shushubaev intends to “defend himself by all applicable means”, especially taking that the criminal liability limitations period for one of the charges has already expired by now.
Photo: Khabulda Shushubaev in the Legislative Assembly of the Omsk Region
Khabulda Zhuspekovich (Yuri) Shushubaev was born in 1969. In 2002, 2007, and 2011, was elected the Deputy of the Legislative Assembly of the Omsk Region. In 2013, there was an attempt to deprive Khabulda Shushubaev of the Deputy’s Mandate because during the elections he was introducing himself as Yuri Shushubaev – but the court has upheld him. Shushubaev is a member of the Omsk Chamber of Commerce and Industry and the Omsk Regional Union of Entrepreneurs. Since 2009, he is the Authorized Representative of the Commercial Consulate of the Republic of Kazakhstan in the Omsk Region. Since April 14, 2009, he is the founder and President of the Siberian Charitable Fund Agro-Trust. The declared income of Shushubaev for the year of 2015 was some 1.2 million rubles. He lives in an apartment with the living space of 160 square meters and, jointly with his wife and son, uses a residential home with the living space of 196.6 square meters. The declared income of his spouse for the last year was 681.3 thousand rubles.
The defrauded shareholders used to rally protest meetings and pickets in front of the Omsk Regional Government five years ago, during the previous elections to the Legislative Assembly. They tried to prevent another re-election of Shushubaev, but their voices have not been heard. This year they have demanded again to keep Shushubaev out of the elections and submitted a collective petition to Anastas Spiridonov, Prosecutor of the Omsk Region, requesting to initiate a criminal case against Shushubaev under Article 210 (Creation of a Criminal Community (Criminal Organization) and Participation Therein) and Article 174 of the Criminal Code of the Russian Federation (Legalization (Laundering) of Funds and other property acquired by other persons illegally). On September 6, 2016, when Alexey Miller, the Deputy Chairman of the Board of Directors and Chairman of the Management Committee of Gazprom, and Alexander Zhukov, the President of the Russian Olympic Committee, arrived to Omsk, Tatiana Chernenko, sister of one of the shareholders, had chained herself near the entrance to the Reception Office of the President.
On September 8, 2016, during a meeting of Shushubaev with residents, his aide has beaten journalist Vakhit Niyazov who tried to ask an awkward question to the Deputy. A criminal case has been initiated under Article 144 of the Criminal Code of the Russian Federation. Shushubaev attempted to use this incident for his benefit by presenting it as a provocation from journalists. He even managed to obtain a collective letter from residents of Tsaritsyno settlement where the incident has occurred.
Photo: Collective letter from residents of Tsaritsyno settlement
Shushubaev claimed that the protesting shareholders were fake and stated that a “constructive dialogue is ongoing” with real investors. Actually, this did not have any real significance: the people waiting for their housing for 8 years have not been heard again. Now Shushubaev has already got a Deputy’s Mandate. No one can say how this would affect the investigation and court verdict. Taking how long the story with defrauded shareholders is ongoing, the current term of the parliamentary might expire before the entry of the court decision into legal force.
It is possible that the Federal Law signed by Vladimir Putin and imposing criminal liability for embezzlement of funds belonging to investors of cooperative housing projects would be tested on the Omsk Parliamentary. If the amount of embezzled funds exceeds 5 million rubles, the punishment under this Law could be up to five years behind bars and up to two years of custodial restraint.