Illegal seizures under cover of security forces
October 28, Vladimir Putin proposed to tighten the punishment for the takeover or destruction of business by law enforcers. It is proposed to increase the maximum liability under Art. 299 of the Russian Criminal Code (Knowingly Bringing an Innocent Person to Criminal Liability) to 10 years. The president admitted that raiders often act with the support of the siloviki. The example of once-successful Tomsk businessman Oleg Fedoseev proves this. He has suffered from a multi-move raider attack, lost his business worth at least 700 million rubles ($11.8 million), and has yet to see justice rendered neither within legal nor within public framework for 10 years now. How does the support of security officials guarantee the perpetrators of illegal seizures complete impunity?
Oleg Fedoseev is a well-respected Tomsk businessman. In early 90s, he independently developed cable television systems, which were then used in dozens of cities of the former USSR, established the production of amplifiers, transcoders, etc. With the money earned, he launched a modern food production in Tomsk, purchasing imported technological lines to produce mayonnaise, ketchup, ice cream, and mineral waters. He had been repeatedly honored with various awards for high quality products. In 1998, his company FOG, which generate employment in the city, was included in the 'Golden Register' of the best small and medium-sized enterprises in Russia.
Businessman Oleg Fedoseev
In 2004, Director General of Lama LLC Vladislav Levchugov and his long-time business partner Andrey Knyazev turned to the successful businessman. They offered Fedoseev to implement an ambitious project, namely, open a supermarket chain in Tomsk. A year later, the partners planned to reach a monthly turnover of 100 million rubles ($1.69 million). This is how Fedoseev became co-owner of Lama plus LLC (this company became the operator-retailer of the new trading network) and Kapital-grupp CJSC (all network’s property was registered in this legal person’s name). Fedoseev used to own 40% share in both companies. Levchugov's share was 36.7%, that of Knyazev— 23.3%. Levchugov became the director general of Lama plus LLC, and Fedoseev started to head Kapital-grupp. As a contribution to the development of a joint venture, he donated the building located at 48a Uchebnaya Street. In 2004, the first hypermarket Fog-City was opened there. Today, this trade center is called Smile-city.
At the very beginning of the joint project, Fedoseev invited specialists in the development of retail networks from Germany to Tomsk. They studied the urban infrastructure and determined where the shops should be located. It was there that Lama supermarkets and Abrikos neighborhood discounters began to open. But then, Levchugov and Knyazev decided to launch some of them through intermediaries, bypassing Fedoseev.
By mid-2006, a conflict began to unfold between the partners, which affected the structure of property. A part of Kapital-grupp’s property owned by Fedoseev was transferred to Sobor CJSC, where he was the only founder. The rest went to Dinastiya LLC and Semya LLC, owned by Levchugov and Knyazev. Fedoseev's share in Lama plus LLC was also transferred to Sobor CJSC, the director of which Sergey Sergeev, Fedoseev's proxy, was appointed.
In December 2006, the relations between the partners deteriorated to the brink of an outright war. Fedoseev was the first to apply to the law enforcement bodies. In November 2006, he filed an application in the name of Tomsk Region Prosecutor Sergey Panov on the initiation of a criminal case under Art. 201 and Art. 196 of the Russian Criminal Code (Abuse of authority and willful bankruptcy) against Director of Lama plus LLC Levchugov. The institution of criminal action was refused. However, after the intervention of the Prosecutor's Office in the Tomsk region in March 2007, the case was referred back to the Department for Combatting Economic Crimes for additional check. The inspection proved that the director's actions had caused damage to the company in the amount of at least 27 million rubles ($457 thousand). Nevertheless, it was decided not to bring criminal proceedings.
In January 2007, according to Fedoseev, Levchugov and Knyazev decided to con their partner using a fairly simple scheme. They made a fake agreement for the sale of Sobor CJSC's share to some Avteks LLC, and then forged Sergeev's signatures and seal under the contract using a color photocopier. Under the terms of this transaction, Sobor CJSC received only 80 thousand rubles ($1.35 thousand) for its share. Later, Otsenka Nedvizhimosti LLC ('Property valuation') assessed the damage inflicted to Fedoseev as a result of the fake contract at 704.7 million rubles ($11.9 million). In February 2007, the former partners removed Fedoseev from the post of Kapital grupp CJSC director.
In January 2007, being the sole founder of Sobor CJSC, Fedoseev submitted an application to the Arbitration Court of the Tomsk region on behalf of the society. The businessman demanded to recognize the agreement on the sale of a share in Lama plus LLC counterfeited, and the transaction null and void. In September, the court satisfied the claim and recognized the transaction as invalid. An examination showed that Sobor CJSC Director Sergeev's signature on the contract did not belong to him. The seal impression on the contract did not coincide with the original seal of Sobor CJSC.
Moreover, the court found that at the time the contract was signed, Sergeev was absent from the workplace and could not sign the contract.
One more year later, in May 2008, the Arbitration Court of the Tomsk region satisfied the following requirement of Fedoseev — namely, it obliged the tax inspectorate to restore the 40 percent share of Sobor CJSC in Lama plus LLC. However, on assurances of the injured businessman, Lama plus LLC had already turned into a dummy by that time. All of the company's assets were registered in front-line legal entities, and the company had numerous debts.
When Fedoseev realized that his partners had conned him, he appealed not only to the Arbitration Court, but also to law enforcement agencies. In March 2007, based on his application, the prosecutor of the Sovetsky district of Tomsk initiated a criminal case under part 4 of Art. 159 (Swindling committed by an organized group or on an especially large scale) of the Russian Criminal Code. Fedoseev was deemed a victim, and the case was referred to the MIA Directorate in the Tomsk region for investigation. The investigation was brought to the indictment stage, but at that very moment, the proceedings were suspended (although the examination proving that the signature and seal of Sergeev under the contract of sale and purchase of the share in Lama plus LLC had been forged was included in the case file). A detention order was issued against Levchugov. However, as Fedoseev claims, it is the contacts of the latter in law enforcement that helped him to to stop the investigation. Levchugov's goal, according to his opponent, was to stall the investigation for 10 years until the expiry of the statute of limitations on the crimes committed. Appeals of the victim to the court and the prosecutor's office did not help to get the ball rolling.
The CrimeRussia's source in the local law enforcement bodies describes the further events: Levchugov and Knyazev made sure that the scheme with the banal forgery of documents worked, and the contacts in law enforcement help to avoid responsibility. They decided to seize all other assets of Fedoseev. The next blow came on Traditsiya CJSC, where the businessman was the sole shareholder. The enterprise owned a number of attractive property units. Levchugov and Knyazev forged the contract of sale of the enterprise's shares and faked Fedoseev's signature under it.
This is how the raiders' former partner lost several more buildings.
Fedoseev once again sought the initiation of criminal proceedings into the falsification of documents, again without success. The investigator of the ICR Investigations Directorate attached to the Prosecutor's Office in the Tomsk region ruled on the refusal to institute criminal proceedings, although there was an expert opinion confirming the forgery of signature attached to the case files. The investigators found all indications of the crime provided for by part 4 of Art. 159 of the Russian Criminal Code, but the criminal case was never initiated. The materials were referred to the MIA Directorate in the Novosibirsk region for a pre-investigation check under Swindling, but were lost somewhere along the way.
According to Fedoseev, only the extensive contacts in law enforcement agencies and the protection of the region's top officials allowed his former partners to plunder his business with such impunity. One of Levchugov's 'rainmakers', who became a deputy of the Tomsk City Duma from the United Russia in 2005, was his colleague — ex-Deputy of the Tomsk Region Duma, Igor Skorobogatov. According to Fedoseev, Skorobogatov would hook Levchugov up with prosecutorial and judicial officials in order to obtain a suspension of the criminal investigation in exchange for a certain bribe.
Ex-Deputy of the Tomsk Region Duma, Igor Skorobogatov
Skorobogatov was caught red-handed in 2009. The Russian FSB arrested him while he was deceiving Fedoseev. The MP offered the entrepreneur changing sides and settling everything down "correctly" in the police for 20 million rubles ($342 thousand). The MP was arrested when taking 3.5 million rubles ($59 thousand). Skorobogatov was charged with part 4 of Art. 159 (Swindling Committed by an Organised Group or on an Especially Large Scale) of the Russian Criminal Code in March of 2010. However, the court only gave him a 4-year suspended sentence – an incredibly mild punishment.
There are detailed testimonies against a number of high-ranking police officers and court personnel in the investigation against Skorobogatov, according to Fedoseev. "(In the criminal case file) he goes into details about who was paid and how much they were paid to stop the investigation against Levchugov. We are filing documents to prosecutors once more; our documents are based on actual Skorobogatov’s testimony. We told them: "Here is the criminal case file with the witness’s testimony; Skorobogatov said who was paid to stop the investigation." I do not know why the Russian FSB Directorate in Tomsk Region did not continue the investigation. Anyway, the Russian FSB is to blame for this. Maybe it was bribed, I do now know," he said.
Fedoseev’s remaining possession was shamelessly stolen by the law enforcement bodies, according to the source. For example, the Moscow Court of Arbitration ruled the entrepreneur and his wife to pay Traditsiya CJSC 100 million rubles ($1.7 million). Fedoseev used to own the company. There have been several such rulings. However, not a single court acknowledged Fedoseev lost ownership of Traditsiya CJSC due to forgery of signature.
Tsentr Nedvizhimosti LLC used to own the Kirov Market at 19/3 Kotovskogo Street. Fedoseev, Levchugov, and Knyazev incorporated Tsentr Nedvizhimosti LLC in 2005. Fedoseev owned 40% of the company; Knyazev was the Director General. The former business partners rented the building out to Nedvizhimost LLC at a fixed rate for 25 years in 2008. Levchugov and Knyazev were the only Nedvizhimost LLC incorporators. Fedoseev filed a lawsuit to the Tomsk Region Court of Arbitration demanding the rent contract is nulled and the building returned to Tsentr Nedvizhimosti LLC. The Tomsk Region Court of Arbitration ruled in favor of the former and against the latter. There were a number of similar situations.
As the result, Fedoseev had only 1 mall left by the early 2017. It was Fog-City at 17 Kotovskogo Street. The owner ran into more than 200 million rubles ($3.4 million) of artificial debt due to his former partners. He filed for bankruptcy. The Tomsk Region Court of Arbitration ruled the building was to be handed over to bankruptcy manager Marina Groysman. Fedoseev claimed he learned the building will be immediately demolished once the Mall is sold due to the debts. "One of my former partners will buy it either directly or through a dummy and then immediately demolish it. Why immediately? Because I will prove I am in the right sooner or later. I will prove the ownership was taken away from me illegally. They will then have to return the mall to the legal owner – to me. But there will be nothing to return if they demolish the building," he said.
Fog-City Trade Center
It is worth mentioning people renting selling space in Fog-City sided with Fedoseev and are defending him. They held a rally holding signs that read "Putin! Pay attention to law violations in Tomsk!" and "Stop loosing criminal case files!" in front of the Prosecutor's Office in the Tomsk region. More than 40 people demanded the corporate raid of Fedoseev’s property is investigated. "We are officially announcing we are going on hunger strike. We are waiting for a criminal investigation," businessman Vasily Shipilov working in Fog-City told journalists.
Tenants of Fog-City Trade Center at a protest rally
Fedoseev lost all hope in the police in the 8 years of litigation. That is why the entrepreneur decided to go public. Fedoseev asked Tomsk Region Russia's Commissioner for Rights of Entrepreneurs Valery Paderin for help in 2016. Paderin said he investigated the complaint and "found proof the corporate raid and ineffective investigation did happen." Biznes Protiv Koruptsii (‘Business Against Corruption’) Public Procedures Center experts also confirmed Fedoseev lost his business due to illegal practices. Russian Presidential Commissioner for Rights of Entrepreneurs Boris Titov is one of the Biznes Protiv Koruptsii co-chairpersons.
Fedoseev asked Tomsk Region Duma MPs for help many times. He appeared before the Duma giving examples of racketing activities of the swindlers who seized his business. A Traditsiya CJSC inspection results suddenly disappearing is one such example, according to the entrepreneur. Fedoseev managed to arrange a meeting with Russian State Duma Chairman Vyacheslav Volodin and learned at least this accusation is valid. Volodin sent an official request to the Prosecutor's Office in the Tomsk region; the latter acknowledged the results of the procedural inspection instituted due to the Traditsiya CJSC stock fraud had in fact been lost. The inspections results were found and returned to Tomsk only after the Russian Prosecutor General’s Office got involved. However, no criminal investigation ensued yet again.
Fedoseev managed to prevail for the first time only in February of 2017. The Russian Prosecutor General’s Office acknowledged the criminal investigation of the Lama plus LLC sale was illegally stopped; Fedoseev was a defendant in the case. The Tomsk Region Prosecutor was ordered to make sure the responsible people are punished. However, Fedoseev learned about this at the same time as about a criminal investigation against him. Fedoseev said it was instituted following a complaint by Fog-City bankruptcy manager Marina Groysman. She accused the entrepreneur of stealing the Fog-City building from Traditsiya CJSC in 2004. He did not own the building back then. However, Fedoseev was the only Traditsiya CJSC incorporator at the time, as he justly noted. This means he is being accused of stealing the mall from himself.
Anyway, the entrepreneur is hardly surprised by legal twists and turns anymore. Fedoseev said the police have spent the last 10 years trying to invent reasons to investigate him instead of the case in which he is a defendant. The entrepreneur quoted his sources as saying initiators of these forgeries received orders from Tomsk Region Governor Sergey Zhvachkin and Tomsk Mayor Ivan Klyayn. He claimed the orders were conveyed to the local Russian MIA Directorate through its Head Aleksandr Budnikov.
Video: FOG - story in details - the first interview with Oleg Fedoseev in 10 years.
That is why Fedoseev filed a lawsuit to the Tomsk Region Court in April. He demanded the federal government paid him 704.7 million rubles ($12 million) for damage (the amount is stated in the criminal case file). He wanted the Russian Ministry of Finance to pay, to be more specific. "The case is now being investigated again. However, it is basically the same people who had closed it who have been tasked with the investigation. I am not sure the new investigation will be completed. What is more, it is too late to file lawsuits against people who had committed crimes against me. I want our federal government to pay damages to me since it basically has not done anything in the 10 years," the businessman explained.
However, the Tomsk Region Court dismissed the case against the federal government since the criminal investigation of damages inflicted on Fedoseev was reinstituted.
Fedoseev announced he would run for Tomsk Region Governor; he wanted to take his main antagonist’s place. Communists of Russia nominated him. Communists of Russia Tomsk arm Head Vasily Shipilov supported the decision. "Do you want to know why our party nominated Fedoseev? Here is what I have to say. I spent a month trying to schedule a meeting with Governor Zhvachkin after we learned the Commissioner for Rights of Entrepreneurs acknowledged Fedoseev had fallen victim to a corporate raid. A month! (The raiders) stole a huge Tomsk mall from the man and plundered several profitable companies employing more than 700 people. Yet, authorities pretend not to know anything about it. Do you think it is good for the local investment climate? The region is being torn apart by corrupt officials on every level. The “white house” repeatedly suggested I drop the idea and support the current Governor. I was blunt and told them I would support the devil himself if he takes care of the issue. Our party nominating Fedoseev is symbolic of our desire to attract attention to the Tomsk region law enforcement and judiciary overreach. The decision is thanks to you, dear prosecutors and police officers," Shipilov explained his motives.
As expected, Fedoseev failed to get through so called "municipal filter" and gather enough signatures from municipal MPs and local government bodies heads. That is not surprising given the majority of them are United Russia members. The entrepreneur dropped out of the election race.
The Prosecutor's Office in the Tomsk region ordered the Russian MIA Directorate in the Tomsk region to hand over criminal investigation of the theft of Lama plus LLC shares and results of the inspection of claims of the theft from Kirov Market and the theft of the Traditsiya CJSC stock to the ICR Directorate in the Tomsk region.
Criminal investigation of a theft of a half of the Smile-City Mall (Kirov Market) was instituted on October 21. The entrepreneur was only able to get the investigation going after coming to Moscow and seeing ICR Head Aleksandr Bastrykin; several dozen Tomsk residents literary jumped in front of his car. About 30 Tomsk residents made it to the meeting with Bastrykin afterwards. Fedoseev thinks the criminal investigation was instituted only to be able to report back to the Chief Prosecutor.
However, the Lama plus LLC investigation has stopped yet again, according to Fedoseev. He said he was issued a document stating the investigation had been suspended. The victim is being prevented from reading the case file yet again despite Levchugov and Knyazev having complete copies. Moreover, Fedoseev insists the police have not questioned MP Levchugov even once in the 10 years even though he personally submitted the forged documents to the tax police. "I am fully aware the swindlers are now going to try and bribe the police again. I am counting on these people being sensible," the entrepreneur has recently said.
Fedoseev still has hope; Russian Investigative ICR HQ Main Procedural Oversight Department Head Grigory Zhitenev met with the Tomsk residents that had stopped Bastrykin’s motorcade. They met on October 27. Here is Fedoseev’s summary of the meeting: "Grigory Yakovlevhich ordered Head of the Investigations Directorate of the ICR Directorate in Tomsk Region General Litvinenko to begin investigating all my petitions before the week is out and report back to him; an attorney and my representative were there and can confirm that. General Zhitenev said no one is untouchable in Russia and that there are no "local feudal lords" in the country." Fedoseev hopes local investigators will carry out Zhitenev’s order and he will finally win the 10-year war against the corporate raiders.
The Legal Initiative researcher Saida Sirazhudinova at the All-Russian Civil Forum asked the representative of the mufti of Chechnya about the "honor killings" in Caucasus. And soon after that, she found herself under surveillance.