Russian Federal Tax Service sues Bill Browder for $70m

Russian Federal Tax Service sues Bill Browder for $70m
Bill Browder Photo: Yuri Gripas / Reuters

Russian Federal Tax Service added more than half a billion rubles to its claims to the Hermitage Capital CEO against 3.5 billion rubles, the earlier estimated damage Browder and its business partner had done.

The Federal Tax Service (FTS) filed a lawsuit against Hermitage Capital Management CEO William Felix Browder and his partner Ivan Cherkasov claiming damages of over 4 billion rubles ($70m), the Russian Agency for Legal and Judicial Information (RAPSI) reported citing the case file read in the Moscow Tverskoy court Tuesday.

Both businessmen live in the UK, so the trial is conducted in absentia.

In July 2017 it was reported that the Federal Tax Service sued Browder and Cherkasov for more than 3 billion rubles. According to Alexander Antipov, the lawyer of the Hermitage fund CEO, the investigation then estimated the total damage from the actions of Browder and Cherkasov in the case of intentional bankruptcy and tax crimes at 3.5 billion rubles.

Antipov added that it was a criminal case initiated in 2004. Browder, according to the lawyer, is accused of tax evasion and deliberate bankruptcy.

In 2013, Browder was convicted in absentia by the Tverskoy court of Moscow, found guilty of tax evasion and sentenced to nine years in prison. As an additional punishment Browder was banned from any business activity in Russia for three years after the prison term would be over.

In early September 2017, Interfax reported citing an informed source that another case against Browder was terminated for lack of corpus delicti. He had been accused of illegal purchase of Gazprom shares.

Browder’s Hermitage Capital Management used to be one of the largest foreign investment structures in Russia between 1995 and 2006. Since 2010, Browder has been investigating tax thefts from Russia’s budget and the death of Sergei Magnitsky, the Fund’s lawyer.

The Russian authorities arrested Magnitsky in 2008 in connection with Hermitage Capital’s tax evasion. According to Browder, it was revenge to the lawyer for disclosing a scheme of money withdrawal from the country. In 2009, Magnitsky died in the pre-trial detention center. After that, some of the persons Browder considered involved in his death were included in the Magnitsky Act under which they were banned from entering the US and their assets in the country were frozen.

At the beginning of September 2017, the Moscow City Court granted the complaint of Pavel Karpov, a former investigator of the Ministry of Internal Affairs, who had been running the case against one of the Hermitage Capital firms evading taxes. The court then increased the claims against former State Duma deputy Dmitry Gudkov up to 100.000 rubles.

Karpov filed a lawsuit against NTV and Gudkov in June 2015, demanding 2 million rubles from them to make up for the moral harm he had suffered being falsely accused of his involvement in Sergei Magnitsky’s death and theft of 5.5 billion rubles ($95m).

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