Sergei Magnitsky, citizen of Russia, a 37-year old father of two and the head of the Moscow tax practice law firm Firestone Duncan, who had acted as an outside counsel for Hermitage Capital Management, was tortured to death by prison guards in â€Matrosskaya Tishinaâ€, one of the most notorious jails in Russia. He died in pre-trial detention on November 16, 2009. His death sped up the country’s prison reform but there was an unanswered question left: who was really responsible for his death? According to a Latin wisdom: â€done by the one who profits.†Dead Magnitsky could bring the dividends only to his former employer, owner of the Investment Fund â€Hermitage Capital Management†William Browder. From the safety of his London location, Browder hired influential attorneys for Magnitsky from the Moscow-based law firm â€Gridnev and Partnersâ€. These high-profile lawyers would have no problem arranging better conditions for Magnitsky in jail, but they did not spend a dime on it. Their real job was not to save Magnitsky, instead they were hired to protect Browder. Before Magnitsky died, no one spoke about his indictment. Browder and the lawyers made sure not to attract media’s attention to the case. After Magnitsky’s death, however, Browder made him a scapegoat. In 2003, American citizen and resident of the United Kingdom William Browder became the only western financier who publicly approved imprisonment of Michail Khodorkovsky, former chief executive of Yukos Oil. However, a year later, when the Russian Government charged Browder with tax evasion, he absolutely refused to admit that he previously criticized Khodorkovsky, and made the case against Hermitage Capital sound like the case of Yukos Oil. He called it â€the case of Magnitskyâ€. At some point, Browder was an active supporter of the Kremlin policy, but now he spends unlimited funds to oppose the Russian Government. He is also actively advocating against foreign investments into Russian economy. The Russian Government gives subsidies to those who create jobs for the veterans and the disabled, helps them get back on their feet and re-enter society. Browder was putting the disabled on payroll for fake positions of â€financial analysts†while in reality they were employed in other places as janitors, plumbers, and maintenance people. Using these people Browder made millions for himself, and created an investment portfolio worth 4 billion dollars. He paid the invalids 500 rubles a month (about $16) when minimum legal wage was 4,000 rubles (about $130). Now these people are considered criminals and they are testifying against him. Vladimir Tsedeev, Veteran of the Afganistan War of 1979-1988, â€Financial Analyst†of Hermitage Capital: â€In the beginning they made it look like they wanted to help us, the Afgan veterans. The Afgan veterans were the first ones that they approached with this scheme. But as their business and possibilities grew and expanded, there were not enough veterans available. They wanted more people, and as we told them that these new people were not real Afgan vets, they said it did not make any difference to them.†Viktor Byatkiev, disabled, â€Financial Analyst†of Hermitage Capital: â€For us even 500 rubles is money, to buy bread and other necessities. I am disabled and getting 3,500 rubles (about $112) pension. My wife earns 5,000 (about $160). My son is a student. Our rent is 2,000 (about $65). How can we survive? Of course we have to use any opportunity.†Avoiding the taxes was his main goal in hiring these people. If someone did not reapply for his disabled status in time, Browder simply threw them out. When direct foreign ownership of stock in Gazprom (the Russian Gas Monopoly) was prohibited, Browder opened nearly 20 companies in the offshore drilling territory of Kalmykia. These companies operated as special-purpose vehicles, allowing foreign investors to own Gazprom shares. Browder transferred his American investors’ money there covering it up as â€creditâ€. Through this scheme, instead of the assessed 15% tax on dividends, he paid only 5%. He avoided the 24% regional tax on income, and to cut the Federal tax in half, he â€hired†the veterans and the disabled. As a result, he paid 5.5% to the Russian Treasury instead of 38%. From just two of his Kalmyk firms Saturn Investments and Far Steppe, Browder was able to obtain fraudulent tax refunds from the Russian Treasury for $20 million. There are also Orient K, Oasis M, Reland, Cameo and others that no one looked into. But Browder did not only cheat Russia. He also cheated his own investors. In the memorandum of the investment fund Hermitage Capital Management, Browder declared to his investors that the taxes were 38%. Browder was able to close the Saturn Investments’ case with the help of bribing, but he wasn’t so lucky with Far Steppe, the judge handling the case turned out to be an honest one. So Browder filed bankruptcy for Far Steppe and stole the money of his investors by moving it through two small banks into â€temporary†companies. $25.8 million were lost in Browder’s endless Kalmyk Steppe. Vladimir Tsedeev (Veteran of the Afganistan War of 1979-1988), â€Financial Analyst†of Hermitage Capital: â€My daughter called me: â€Dad, investigators from Moscow, from the Federal Security Service came looking for you.†I was surprised and did not realize at first what it was about, but then I thought about it, the Federal Security Service was now involved, how they questioned others who were involved in this, and I thought that I must really be in trouble. What exactly was Browder’s â€business†about? Through these special-purpose Kalmyk firms he purchased papers of strategic Russian companies: Sberbank, Surgut Neftegaz, Rosneft, Gazprom. The money for this came not only from the Investment fund Hermitage Capital, but also from mysterious sponsors in New York, whose address matches with the corporate headquarters address of CitiBank, which is known for its connections to FBI. When Browder gained control of majority of stock of the Russian Corporations, he started blackmailing them with lawsuits and attempting to control their financial operations. Browder prohibited Sberbank from issuing additional shares. He did not let Rosneft raise its capital and interfered during its merge with Ugansk Neftegaz. He forced Surgutneftegaz to sell its dominant shareholders package. Just one of Browder’s Kalmyk companies, Reland, filed 4 lawsuits against Gazprom. Browder’s business strategy: the worst Russian economy is doing, the better it is for his American sponsors. In November of 2005 Browder was expelled from Russia and refused a re-entry visa. However as Head of the Moscow branch of Hermitage Capital, he found a way to work in Russia on a guest visa. He considered it unnecessary to comply with the laws and rules of this country. He was sure that he can solve all his problems with money. The criminal case against Browder for unpaid taxes in Kalmykia was opened in 2004. Eight times he was able to close it with bribes. Only in four years, in February of 2008 the case was finally reopened. He is scared to death of the open trial and international warrant, that’s why from his faraway London location he announced that anybody who had anything to do with discovering his fraudulent and criminal activities are corrupted and are Magnitsky’s murderers. He makes media appearances, and with his ally American Senator Benjamin Cardin he creates â€blacklistsâ€. Remarkably, he developed an amnesia regarding the disabled Russian veterans that he used and incriminated. But the name of Magnitsky, whom he left to die in jail, he repeats like a magic spell, every chance he gets. While Sergei Magnitsky was locked up in jail, Browder traveled the world. He visited South Africa and Arab Emirates. In the luxurious Carlton Towers hotel he held an extravagant farewell for the vanished in prison Magnitsky. Today Browder keeps lying to his investors and to the entire world, covering up his tax fraud and criminal activity with Magnitsky’s name. This is called the bloody PRâ€
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