MOSCOW, July 12. /TASS/. Despite finding Russian businessman Sergey Polonsky guilty of embezzling more than 2.6 billion rubles ($43 million) in real estate fraud, Moscow’s Presnensky court ruled to release him as the statute of limitations had expired, a TASS correspondent reported.
"(The court rules to) sentence Polonsky to 5 years in a general regime penal colony on several counts, and free him from penalty due to the expiration of the statute of limitations and release him from custody in the courtroom," Judge Yevgeny Naydenov said.
"Polonsky committed grand-scale fraud as part of an organized group," the court said in a verdict.
The businessman could have faced a maximum penalty of 10 years in jail. Polonsky, the former head of Mirax Group investment and development company was charged with two counts of embezzlement. He had pilfered investors’ funds in a shared-equity construction scheme for luxury residential condominiums in western Moscow.
His lawyer Alexey Tsaplin told reporters that Polonsky’s release became possible after the case was reclassified from fraud to fraud in business activity. "The statute of limitations under the new article allowed the court to release the defendants from custody," the lawyer said, noting that he was satisfied by the verdict.
Two other defendants in the case, head of Mirax Group’s Financial Department Alexander Paperno and CEO of Avanta LLC Alexey Pronyakin, were sentenced to three and two years in a general regime colony, respectively, but were also freed.
Polonsky’s relatives and supporters applauded the verdict, but the tycoon said he had mixed feelings and needed time to grasp what had happened. He also remained mum on his future plans.
In late June, the public prosecutor requested that Polonsky be sentenced to eight years in prison in his real estate fraud case and be slapped with a fine of 900,000 rubles ($15,000). Furthermore, he asked to find other defendants in the case - Paperno and Pronyakin - guilty of adding and abetting fraud and hand the former a five-year jail term, and the latter a three-year suspended sentence.
Polonsky skipped the proceedings as he was removed from the courtroom for disorderly conduct, contempt of court, talking to the public and disputing with the prosecutor. In his last plea, he pleaded not guilty and said the criminal case was the result of his company being artificially bankrupted.
Polonsky, who plunged into debt as a result of the 2008 financial crisis, fled to Cambodia in late 2012, shortly after a criminal case against him was launched in Russia. He was accused of embezzling funds from investors in a shared-equity condominium scheme, halting construction and initiating the bankruptcy of the Mirax company. The businessman denied his guilt insisting that he was a victim of a hostile takeover.
In October 2013, Russian prosecutors requested his extradition from Cambodia. A month later, the businessman was arrested in the jungle and the talks on his extradition to Russia began. However, in January 2014 Cambodia’s Supreme Court released Polonsky and halted the extradition procedure. In May 2015, Polonsky was deported to Moscow and jailed in the Matrosskaya Tishina detention facility. His fraud trial began in July 2016.