“It is not sufficient just to gather people and dub them ‘mafia’.” Case against Mark Bronovsky charged with creation of organized criminal group collapses in court
Businessman Mark Bronovsky charged with embezzlement of some 4 billion rubles ($61.5 million) was acquitted and released from the courtroom. For several years, the investigation had tried to prove that he was the leader of an organized criminal group.
Games with value-added tax
The new trend very popular in the Investigative Committee of the Russian Federation (ICR) nowadays – charging prominent businessmen with creation of an organized criminal group – becomes increasingly irrelevant. In this particular case, the investigation failed to convince the court that Mark Bronovsky has created, jointly with Aleksander Shved and Tatiana Makarova, members of the St. Petersburg College of Lawyers, a criminal community and embezzled budget funds in the period of 2009–2014 through illegal value-added tax refunds. The court hasn't found any evidence of the criminal community’s existence.
The criminal prosecution of successful broker Bronovsky began in 2012 – at that time, law enforcement structures of the Leningrad region thought that they had uncovered a major organization specializing in illegal value-added tax refunds. It took the investigation two years to identify the suspects.
Initially, the operatives believed that a criminal organization has inflicted damages in the amount of some 400 million rubles ($6.1 million) to the state budget and attempted to embezzle additional 430 million rubles ($6.6 million). The above figures were announced in an official statement issued by the Prosecutor General’s Office of the Russian Federation. Shortly after that, Mark Bronovsky, Vice President of Sotrans Logistics Corporation, was arrested.
In 2015, the investigation has laid official charges against him. In fact, this was a declaration of war on foreign trade operators. Bronovsky, the most prominent customs broker, was accused of multibillion frauds. In January 2015, the Main Investigations Directorate in St. Petersburg of the ICR has charged the Sotrans Vice President under part 1 of Article 210 (creation of a criminal community (criminal organization) and participation therein), part 4 of Article 159 (swindling committed by an organized group on an especially large scale) (2 episodes), and part 3 of Article 30 and part 4 of Article 159 (attempted swindling by an organized group on an especially large scale) (2 episodes) of the Criminal Code of the Russian Federation. If convicted on all counts, Bronovsky could be locked up for up to 20 years.
However, the investigation had problems with evidence since the very beginning. The fraud scheme used by the alleged criminal community and actively discussed in the media had raised numerous questions: it did not involve governmental officials – while without their participation, illegal value-added tax refunds would be impossible. According to the investigators, taxmen authorizing these tax refunds were “sincerely errant”.
In the meantime, businessman Bronovsky was presented to the public as a fraudster. After his arrest, ICR representative Vladimir Markin said that damages sustained by the state treasury amount to at least 4 billion rubles ($61.5 million), that the criminal group consists of at least 15 members, while Aleksander Shved and Tatiana Makarova, members of the St. Petersburg College of Lawyers, were leaders of gang’s ‘subdivisions’.
The story was dubbed “a large-scale operation”. The media had broadly covered searches carried out in residences, country homes, and offices of the suspects. In total, the investigation has seized several tons of documents, dozens of jewelry items, and financial instruments for the total amount of 30 million rubles ($460.9 thousand).
Mark Bronovsky was born in 1980. Graduated from the University of Chicago. After graduation, worked in the USA specializing in stock market operations and logistics. In that period, Bronovsky has earned his first million dollars and obtained American citizenship. After the return to Russia, took charge of Sotrans company belonging to his father. By that time, it was one of the biggest international automobile freight carriers with its own fleet of trucks. The holding owns 46 ha of land in Krasny Bor. Its subdivisions are official dealers of Mercedes-Benz, Russian Buses – GAZ Group, and Ford Cargo. Bank Bereit is a part of the holding structure, too.
Two years later, the investigation has finally submitted the indictment to the court. In 2017, the trial of Mark Bronovsky and ten other suspects charged with embezzlement of billions of rubles from the state budget has commenced.
In 2018, the Primorsky District Court of St. Petersburg satisfied the motion brought by the defense of Bronovsky and changed his pretrial restrictions to home arrest for health reasons – the businessman has spent six previous months in Gaaza Regional Hospital of the Administration for St. Petersburg and the Leningrad Region of the Federal Penitentiary Service of Russia. Taking the poor quality of medical services rendered in penitentiary institutions, the court allowed the defendant to stay at home.
However, operatives of the Regional Administration for Combating Organized Crime of the Ministry of Internal Affairs (MIA) of the Russian Federation haven’t allowed sick Mark Bronovsky to return to his apartment and arrested him en route in the framework of another criminal case. This time, he was charged with fraud in the amount of 2 billion rubles ($30.7 million) committed during the construction of his own logistics hub.
The General Administration for Investigation of the MIA General Administration for St. Petersburg and the Leningrad Region has incriminated 14 new embezzlement episodes to the businessman. According to the operatives, Bronovsky had fraudulently claimed tax benefits during the construction of Sotrans City Transport and Logistics Complex in Krasny Bor. The investigation asked the court to return the suspect to Kresty Pretrial Detention Center – but the Krasnogvardeisky District Court of St. Petersburg opted not to contradict the decision of the Primorsky District Court and placed the oligarch under home arrest.
In the course of the investigation and trial – six years in total – sources had repeatedly stated that the case against Bronovsky was framed up. His holding was the leader of the logistics market, while the businessman was enviously named the main customs player in the Northwestern Federal District.
The result of this story was surprising for all its participants. The Primorsky District Court of St. Petersburg dismissed charges laid under Article 210 (creation of a criminal community (criminal organization) and participation therein) of the Criminal Code of the Russian Federation. The arguments presented by the prosecution and investigation were recognized ungrounded and unsubstantiated. In other words, the court established that the eight other defendants were not members of a criminal community.
Bronovsky was found guilty of a series of fraudulent value-added tax refunds totaling 377 million rubles ($5.8 million) and attempted embezzlement of some 500 million rubles ($7.7 million). Billions of rubles mentioned by the ICR in its statements turned out to be a myth. The businessman was sentenced to 6 years and 10 months in a general regime penal colony. By the time of the sentencing, he has spent the most part of this term in the pretrial detention center and was released from the courtroom. Other defendants were sentenced to conditional terms.
In one of its previous inquiries, The CrimeRussia found out that, after the arrest of Mark Bronovsky, Grigory Solovey, a long-standing partner of the businessman and his father, Aleksander Bronovsky, has taken control over their assets. According to our sources, in 2015, Solovey became the owner of 50% of shares in St. Petersburg-based Petropolis Limited Liability Company; the second half of its shares belongs to Lyudmila Bronovskaya since December 2017. Petropolis was founded by Sotrans Limited Liability Company and Pb-Trans Limited Liability Company; Aleksander Bronovsky was its sole proprietor since 1996.
In 2015, Grigory Solovey became the owner of PiterBusTsentr Limited Liability Company that used to belong to Mark and Ekaterina Bronovsky. In the last few years, this automobile company has won 162 governmental contracts totaling 2.4 billion rubles ($36.8 million).
In addition, Bereit Consulting Insurance Company Limited Liability Company and Tekhtsentry Sotrans Limited Liability Company founded by Bronovsky senior in 2014 and 2010 respectively have been transferred to Solovey in the same year of 2015.
However, the battle for his liberty was not easy at all. The defense team had to file a complaint with the European Court of Human Rights due to the violation of Article 5 of the European Convention on Human Rights (right to liberty and security). The claim was satisfied, and the court ordered the Russian Federation to pay a compensation of €17.9 thousand to Bronovsky for unreasonable 5-year-long detention. This decision of the European Court made it possible to commence review proceedings to annul all decisions of St. Petersburg courts extending the pretrial detention term for Bronovsky.
Despite the victory in this legal battle, the businessman has to rebuild his life from scratch. His business is nearly ruined – so, Bronovsky plans to recover compensations for moral damages and lost profits from the state through court action.
However, this case sends a clear message to the law enforcement system: real and proven facts are required to recognize somebody a member of a criminal community. It is not sufficient just to gather people and dub them ‘mafia’. The experience shows that framed-up cases often collapse in courts. This is a good sign for other businessmen charged with such crimes.